PARTNERSHIP FOR INNOVATION

This year the Asian Development Bank (ADB) and Azerbaijan celebrate the 20th anniversary of the establishment of partnership. To celebrate the event, both sides are actively preparing a series of events to report on their activities and future plans for cooperation.

Our guest is the head of the bank’s permanent mission in Azerbaijan Nariman MANNAPBEKOV to tell us about the past, present and future partnership between Azerbaijan and ADB.

How would you rate the level of ADB cooperation with Azerbaijan over the past 20 years?

Indeed, this year is significant for both Azerbaijan and ADB. Soon we will begin a series of events dedicated to the 20th anniversary of establishing partnership. We approach this date with many achievements, which will be described in detail on ADB's official website.

ADB is satisfied with the level of cooperation with the government of Azerbaijan. Our cooperation covers many sectors of the country's economy, including drinking water and sewage services, energy and power, distribution networks, road and rail transport, as well as the development of the financial sector including public finance management and the development of commercial financing.

Do you plan to add new goals on your agenda?

This summer, we adopted a new cooperation strategy for the next five years. We have already established partnerships in certain areas, but we are ready for new goals. ADB will take into account the guidelines indicated by the Azerbaijani leadership, in particular on the introduction of high technologies and effective innovative solutions that are currently inaccessible or are not yet widely applied in the country.

There are innovative solutions in the irrigation sector such as the construction of canals using modern geomembrane technologies. Strength, durability, environmental friendliness of geomembranes, as well as laying efficiency are in many ways superior to conventional reinforced concrete reinforcements. We plan to study the introduction of this technology in Azerbaijan.

In addition, we have initiated a pilot project on the construction of solar power plants on the surface of water reservoirs. Azerbaijan can become the first country in the region using such innovative technologies. Detailed discussions on attracting foreign investment to implement a larger version of the project may begin next year. In August 2018, ADB allocated a grant to Azerbaijan, Afghanistan and Kyrgyzstan for the implementation of the pilot project.

In addition, over the next five years, we plan to expand cooperation with Azerbaijan in the fields of education, planning and urban infrastructure management through the use of high technologies and innovations.

What exactly do you plan for the education sector?

We work intensively with the newly formed Centre for the Development of Public-Private Partnerships. As part of this partnership, we will expand our areas of cooperation and are planning to start with the educational sector. At the same time, Azerbaijan may become the first country in the post-Soviet space to introduce a public-private partnership in education.

So, through our Asia Pacific Private Partnership Fund, ADB has allocated $1.8 million to the centre. Two universities have already been selected for grant support - Baku State University and Azerbaijan State University of Oil and Industry. The grant will cover the construction of dormitories compatible with international standards, which will be managed by a private operator.

The grant will cover the feasibility study of the project. In the next step, we will invite consultants to assist in the selection of construction companies and subsequent management of these dormitories.

Every year Baku receives about 50 thousand students, including 3 thousand international students. However, the existing dormitories provide accommodation for only 5-8 thousand students. This means that 90% of visiting students rent apartments, which costs them a monthly average of ₼160-200. Therefore, many of them will be happy to live in modern dormitories. It is also planned to rent out the rooms, but at an attractive price. Moreover, the dormitories will be located near colleges, which will reduce students' transportation costs. Commercial facilities such as a cinema, laundry, dry cleaning, supermarkets can also be opened on the ground floor...

In 2001, ADB initiated the Central Asian Regional Economic Cooperation (CAREC) program, which now involves 11 states, including Azerbaijan. What regional projects are implemented under the program?

Currently, intensive work is underway to develop tourism potential from China to Georgia. Azerbaijan is also involved in this program. We believe that tourism can help expand and deepen socio-economic and cultural ties between countries, strengthen dialogue by bringing people and countries closer. Tourism is also important for the development of private sector. There are many issues associated with tourism in the region that need to be addressed both individually between the regional states and through joint efforts. For example, in some countries, tourists experiencing problems if they come to one state for 3-4 days but wish to extend their period of stay in the country to visit neighbouring countries.

Last month, ADB approved a $2 million technical assistance project to assist CAREC countries in developing comprehensive strategic programs for regional tourism and enhancing the institutional capacity of tourism agencies.

These projects are also important for Azerbaijan because they focus on the development of the non-oil sector of the economy.

Exactly. Another important area is agriculture. CAREC member countries also deepening cooperation in this area. To support exports, imports and investments in Asia, we explore the possibility of creating Trade Credit and Investment Guarantee Agency (TCIGA).

ADB first introduced the draft TCIGA concept at a meeting held as part of CAREC Program in 2017. Subsequently, ADB decided to expand the scope of the study to include 18 developing countries, including ADB member states from Central and West Asia, as well as East and South Asia. In 2018, after consultations, these countries pledged to participate in the creation of TCIGA subject to a positive feasibility study.

The main objective of the agency is to help attract foreign direct investment and increase economic growth through intra-regional and inter-regional trade. If this agency is created, it will not only provide financial instruments related to trade, but also stimulate and support small and medium enterprises of the region, as well as other exporters for competitive trade in the local, regional and global markets. This is extremely important for the diversification of the economy and sustainable long-term economic growth by increasing the production of value added products and employment in the region.

Insurance of loans can be used among other risk reduction tools to create a sustainable production base between related enterprises separated by geographical boundaries. For example, food producers from one country may be in need of raw materials produced in a neighbouring country. Entrepreneurs will be able to buy the missing materials from their foreign partners on the terms of a deferred payment insured by the agency.

We expect that the feasibility study for this project is completed by April 2020 and distributed in interested countries, including Azerbaijan.

As you can see, cooperation with Azerbaijan will become even more multi-vectored, covering aspects of socio-economic development important for Azerbaijan.