BIG REVIVAL IN GARABAGH

There is a rapidly growing interest in the development of the liberated territories. This was once again confirmed at the 3rd Azerbaijan International Exhibition for the Restoration, Reconstruction and Development of Garabagh, "Rebuild Garabagh-2023", held recently in Baku. The Big Construction in these lands supports both local builders and producers of construction materials, as well as contractors from states friendly to Azerbaijan actively involved in the construction of motorways, airports, the restoration of energy and utilities sectors and communication systems.

"Construction, reconstruction and reintegration processes successfully implemented in Garabagh and East Zangezur are an example of productive cooperation between public and private sectors," Azerbaijani President Ilham Aliyev said in his keynote address to the participants of the Rebuild Garabagh. He emphasised that the life was being revived in Garabagh today, and that the original owners of these lands were returning to native lands to live in peace forever. He also called on the participants of the forum to take advantage of opportunities to establish business ties.

Remarkably, the number of newcomers at construction exhibitions, mainly represented by foreign companies, has noticeably increased. This clearly shows the desire of global manufacturers of construction materials, construction service providers, developers of advanced technologies, design and consulting firms to take part in multi-billion dollar projects in the liberated territories. This is not surprising considering the unprecedented for the Caspian region scale and financing of the big Garabagh construction. Thus, in 2020-2022, about ₼6.6b was allocated from the state budget for infrastructure and other works in Garabagh and Eastern Zangezur. It is planned to allocate another ₼3.1b this year as well. Up to ₼10.5b of state funds will be attracted as part of the second stage of reconstruction and revival of the liberated lands in 2024-2026. It is not only about direct targeted budget financing. Additional state investments are also planned in the coming years. Works are underway to attract local and foreign private capital to Garabagh, including the implementation of technical projects through international donors, as well as investments of local residents (SMEs, individual entrepreneurs). The total investment is estimated at ₼30.5b.

This gigantic construction site has been keeping active many dozens of domestic construction companies, as well as contractors, design, consulting and transport facilities for three years. At the same time, the production of basic construction materials is stimulated, both due to increased market demand and government orders. In particular, according to the State Statistics Committee, last year local companies increased production by 12.6%. In January-July 2023, this indicator increased by almost 24.1%. As a result, Azerbaijan produced ₼592.9m-worth of construction materials.

It is crucially important to keep this demand for at least the next ten years, given the large scale of infrastructure and housing projects in Garabagh. The First State Programme Great Return states that by 2027 all the necessary conditions for the settlement of about 35,000 families should be created in the Garabagh and East Zangezur economic regions.  Therefore, there is an intensive construction of residential, social, administrative and commercial facilities, as well the development of agrarian-industrial clusters in Azerbaijan. Since the beginning of 2023, such projects have been actively implemented in Aghdam, Shusha, as well as the settlement in the districts of Lachin, Fuzuli, and Zangilan.   

In the next three years, it is planned to build about 2,330 apartments in multi-storey buildings in the administrative centre of Fuzuli, while 3,350 private houses will be constructed in the surrounding villages. "During the first stage of the State Programme Great Return, that is by the end of 2026, we expect 22,000 people live in Fuzuli and 140,000 people live in Garabagh and Eastern Zangezur," Ilham Aliyev said to the representatives of Fuzuli on the Day of Fuzuli.

The return of former residents of Lachin to the district continues. More than a thousand people have been resettled so far, while several hundred families are already living in the Zangilan district. By 2040, 25,000 former refugees will return to Shusha, and 13,000 former refugees will return to Kalbajar by the end of 2026.

Thus, the construction projects successfully implemented in the liberated territories not only become a driver of co-operation between the public and private sectors, but also attract foreign investors. In 1H2023, over 1,200 individual entrepreneurs began operations in the liberated territories of Azerbaijan. The number of new jobs increased by 2.4 times. By 2030, several tens of thousands of jobs are expected to be created in the Karabakh region, mainly in industrial parks, agriculture, mining and tourism.

In fact, this process is underway. The number of proposals from businesses to join the reconstruction of Garabagh reaches 1,500. Slightly less than a third of these proposals came from foreign companies. Turkish entrepreneurs are the leaders here, who plan to develop mineral resources, gold and copper deposits, tourism, agriculture, textile production, etc. About 65 proposals have been received from the Kazakh companies to realise business initiatives in Garabagh. There are also a number of proposals from entrepreneurs from Hungary, Uzbekistan, Britain, Israel, Pakistan… In total, from 40 countries.

The willingness of foreign partners to participate in these projects is very important, as it will make it possible to carry out all operations in the most transparent manner, with clear technical parameters and time-frames, and, most importantly, to ensure the transfer of modern technologies. The participation of foreign investors is an important condition for attracting grants from international donor organisations, technical and consulting assistance, and the use of venture capital.