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Trade missions play an instrumental role in the development of trade and economic relations between the countries. Their mission is to assist local exporters with access to new markets, attract investments, and form long-term economic partnerships between the states.

Russian Trade Mission in Azerbaijan has successfully implemented its mission, with over 500 requests from entrepreneurs in Azerbaijan only in 2020. According to Ruslan Mirsayapov, Trade Representative of the Russian Federation in Azerbaijan, the volume of export transactions in Azerbaijan reached almost $30 million. This is a real product of the work of the Russian Export Support Group in Azerbaijan created on the basis of the Russian Trade Mission and the representative office of the Russian Export Center.

"What are the indicators of trade and economic cooperation between Russia and Azerbaijan? What major Russian investment projects have been implemented or are underway in Azerbaijan?"

"The dynamics of trade turnover between our countries has great potential for development. The lion's share of this volume is currently non-raw materials, non-energy products: the final products of mechanical engineering, metal rolling, food processing, agricultural production. Everything is diversified through a large number – several hundreds of medium and small enterprises. I think that in the first half of this year, we will be able to reach the level of 2019.

“A large number of companies with Russian capital operate in Azerbaijan. Several dozen of them are large enough and provide new jobs for Azerbaijani nationals. LukOIL, KDV Group, VTB Bank have been actively working in Azerbaijan for a long time.

“Russian companies in Azerbaijan receive the full state support and take part in the project of Azerbaijani industrial parks. This year it is planned to complete the construction of the R-Pharm plant in the Pirallahi Industrial Park and start a full-scale production of medical supplies in Azerbaijan. Thanks to the transfer of technologies, R-Pharm will be able to produce modern highly effective medical supplies for the treatment of oncological, hematological, autoimmune and endocrine diseases, treatment of HIV / AIDS, viral hepatitis of various types and other diseases. The design capacity of the plant will be 250 million packages annually.

“A joint plant of GAZ Group and Azermash for the production of commercial and special-purpose vehicles was constructed in the Hajigabul Industrial Park. The plant will soon start assembling light commercial vehicles Khazar-NEXT, with the annual capacity of up to 1,000 vehicles.

“A plant for the production of thermal insulation materials for housing, Penoplex, will be constructed in the same industrial quarter. This is also an important project for Azerbaijan. Initially, it is planned to supply final products to neighbouring Georgia, Iran, and southern regions of Russia.

“A joint service centre for the maintenance of helicopters, ASG Helicopter Services, is constructed in Zabrat. The centre will be fully operational within two years.

“We are also discussing a couple of other projects for the joint production of agricultural and road-building equipment.

“In other words, Russian companies are ready to work in Azerbaijan on a long-term basis to create local production, open jobs and pay taxes to Azerbaijan’s state budget.”

"In 2020, Azerbaijan liberated the territories of Garabagh. President Ilham Aliyev called on all friendly countries to help restore the infrastructure and economy of the region. What is the reaction of Russian business and government agencies to this call? Is the Russian side interested in this restoration project?"

"A trilateral Working Group has been created to develop joint projects to unblock all economic and transport links in the region. This is a product of the talks held on January 11 in Moscow.

“According to the statement of the presidents of our countries, the Working Group should prepare and present a specific plan of activities by March 1.

“Russian business is certainly interested in developing economic cooperation with Azerbaijan. The Russian Trade Mission receives daily offers for the provision of services, supply of goods and technologies. This also applies to infrastructure development, industrial and civil construction, as well as the development of transport corridors.

“At the first stage, the key thing is to ensure complete security for the operation of companies in Garabagh. This work is carried out jointly by the Russian Ministry of Emergencies and their colleagues from Azerbaijan. The second important step is the unblocking of transport corridors. In particular, Azerbaijan Railways CJSC (ADY) and Russian Railways OJSC (RZhD) are constantly in touch to develop a detailed work plan for the construction and operation of railways in this area.”

"The presidents of Russia and Azerbaijan discussed the possibility of creating a new format of cooperation in the region. How realistic is this initiative in the future?"

"This is a serious geopolitical task that requires synchronization of the strategies and plans of a number of regional states. Russia and Azerbaijan have a positive experience of cooperation in a multilateral format, for example, as members of the CIS.

“I think different countries will join different projects. For example, the North-South project will be joined by Azerbaijan, Russia, Iran, while Azerbaijan, Turkey, Georgia will join the construction of railways as part of the East-West corridor.

“Considering the intersection of routes, broad prospects of cooperation open up for all the interested countries. I think an ideal format will be selected for each specific project.”

"What are Russia's expectations from the implementation of transport corridors passing through the territory of Azerbaijan, in particular North-South?"

"The involvement of Russian companies in logistics projects in Azerbaijan will leverage Russia's leading position in exports to Azerbaijan, providing new opportunities for working in the markets of regional states. RzhD is already involved in the logistics projects of Azerbaijan. Cargo transportation, including transit through the territory of Azerbaijan to third countries, is carried out by transport and logistics companies under the umbrella of the Association of International Road Carriers.

“The easier and faster it will be for producers and exporters to cross borders, the better it will be for everyone.

“In 2019 we observed a positive trend (30%-70%) in cargo flows through Azerbaijan, including through North-South, TRACECA, Trans-Caspian International Transport Route (TCITR), and Baku-Tbilisi-Kars. We have not received statistical data on these projects for 2020 yet.

“At the end of last year, the first train from Turkey reached China. Chinese railways reported that they had delivered the first train with goods to Europe. All this work has been possible thanks to the transport corridors passing through the territory of Azerbaijan. I believe that 2021 should bring us new positive results.

“We live in an era of rapid and great changes, including in logistics. The faster the products reach the end consumers, the better is the quality, lower are the costs, and higher is the competition. I do not see any serious obstacles that could impede the development of transport corridors.”

"We will remember the past year for the global crisis associated with the coronavirus epidemic. What were the implications of the crisis in terms of the volume of trade between the countries this year?"

"Indeed, the pandemic has somewhat adjusted the plans of companies to increase mutual trade between our countries. According to the State Customs Committee of Azerbaijan, in 2020 we recorded a decrease in Russian-Azerbaijani trade turnover by 11.6%. At the same time,  the decrease in the volume of trade between Azerbaijan and other countries of the world was 26.5%. Trade turnover between Russia and foreign countries has decreased by 16.3% in 11 months of 2020.

“Nevertheless, we have been in daily contact with our colleagues from the Export and Investment Promotion Foundation (AZPROMO), Azerbaijan’s Trade Mission in Russia, customs services, and exporting companies. Thus, we were able to prevent the sharp drop in turnover. During the first half of this year, we expect our turnover volumes to recover, at least to the levels of 2019.”

"Recently, Russia introduced yet another ban on the import of Azerbaijani vegetables and fruits to the country. Could you solve the issue? What measures should be taken to avoid similar situations in the future?"

"Food security is an instrumental issue for any country. This is normal. Respective authorities of Azerbaijan also restrict food supplies, including from Russia, when they detect pests in imported products.

“Agricultural and food products have a significant share in the turnover of our countries. Therefore, the conditions of production, storage and transportation are very important. To further reduce the implications of the import ban, it is necessary to strengthen cooperation. For example, Food Safety Agency of Azerbaijan and Rosselkhoznadzor have established a direct dialogue.

“We expect that an official representative (attaché) of the Russian Ministry of Agriculture will start working on a permanent basis in Baku soon. This will make it possible to improve contacts between our respective departments and solve the problems in a timely manner, before they become critical.

“This is a worldwide practice, yet it is new for Russia. Our country is in the process of dispatching agricultural attachés to the first 25 countries topping the list of importers of Russian agricultural products.

“We also expect the arrival of a Russian customs representative to Azerbaijan. We have a corresponding agreement already signed between our countries. The Customs Committee of Azerbaijan also has the opportunity to send its representative to Russia.

“In other words, these specialists will make it possible to resolve many issues quickly.”

"There are many small and medium-sized Azerbaijani enterprises trying to enter large markets, including the Russian one. What would be your advice to them?"

“Considering my own experience in supporting the export of small enterprises, I can say that this work is quite effective in Azerbaijan. We are in constant contact with AzPromo, Agency for Support of Small and Medium Business, and the Ministry of Economy of Azerbaijan.

“For export, one needs to meet a certain set of competencies. This is a more complex type of activity than working in the local market. One should know the respective legislation of countries for regulating customs and currency operations, to say the least, and many other things. I would advise such companies to contact the specialized organizations of Azerbaijan for advisory support. This is the first yet very important step. In the next stage, the manufacturers of certain products could be brought together under an association, which will collectively defend their rights, help them in various fields and share experiences. By uniting for export, it is easier to resolve issues related to logistics, customs procedures and so on.

“On the other hand, there are a large number of Russian companies wishing to access the Azerbaijani market, as it is very interesting and understandable for Russians. The competition here is very high, even between the Russian companies. And then there are companies from the CIS, Europe, Turkey. Azerbaijani consumers are scrupulous of what they choose by price, quality, packaging, etc. Therefore, it is not easy to enter the Azerbaijani market right away.”

"Russia and Azerbaijan also develop trade and economic relations at the regional level, including interregional forums Russia-Azerbaijan held annually. How is this cooperation developing and what will be the benefits for the regions of Russia and Azerbaijan?"

"In 2020, we planned to hold many events in this area. But due to the pandemic, the exchange of delegations was not possible, everything went online. We conducted a large number of consultations for the regions of Russia, as well as online business meetings. The main result was the signing of foreign trade contracts between our countries.

“The regions of Russia are different in terms of their economic potential, but Azerbaijan is one of the key partners for many of them. These projects include the trade sector, as well as the humanitarian and educational sectors.

“We recently had an online meeting with the companies of the Primorsky Krai, which want to work with Azerbaijan. They traditionally work with China, Japan, and Korea. But now they are interested in the CIS market, and Azerbaijan is a priority in this respect.

“The role of regions in Russian-Azerbaijani cooperation will steadily increase in the future. Along with the Russian Export Center, there are export support centres in the regions aimed at further cooperation with Azerbaijan.

“We expect a new interregional forum Russia-Azerbaijan, which has been traditionally held annually. It did not take place last year due to the global lockdown. The last one was held in November 2019 in Moscow. The opening of Azerbaijan’s pavilion at VDNKh together with the First Vice-President of Azerbaijan Mehriban Aliyeva coincided with the date of the forum.”

"What is the forecast for trade and economic relations in the coming years?"

"The main focus is on the operation of the trilateral working group. Presidents of Russia and Azerbaijan pay great attention to the implementation of the planned projects to restore the regions of Azerbaijan as soon as possible.

“In the near future, the Russian-Azerbaijani intergovernmental commission on economic cooperation will hold a meeting in Moscow. The commission is co-chaired by the vice-prime ministers of our countries Shahin Mustafayev and Alexey Overchuk. The commission meets annually to wrap up the results of the implemented projects in industry, logistics, energy, transport, agriculture, etc., as well as to discuss new projects for the future. Unfortunately, this meeting did not take place in 2020 due to the lockdown restrictions.

“Russian companies are ready to join the large-scale and ambitious projects Azerbaijan is going implement in the coming years. The Russian Embassy to Azerbaijan, Russian Trade Mission,  Representation Office of the Russian Export Centre are aimed at providing comprehensive assistance to business circles in the development of mutually beneficial trade, economic and investment cooperation. The leaders of our countries are setting an example for us to work together, and we are happy to follow their example.”