DEVELOPING THE UNITY

At the General Assembly of the Union of Chambers of Commerce and Industry of Turkic States, held in Baku, the chairmanship of the organization transitioned from Türkiye to Azerbaijan. The Union was founded in May 2019 in Astana with the support of employers' organizations from the member countries of the Organization of Turkic States (OTS), including the National Confederation of Entrepreneurs' (Employers') Organizations of Azerbaijan (ASK). The primary objective of the Union is to unify the efforts of the Turkic business community, with the aim of facilitating trade transactions in the region by eliminating factors that hinder the exchange of goods and services between member countries. During the general assembly, opportunities to promote the development of the investment environment, as well as to ensure mutual cooperation to resolve commercial disputes that may arise between companies of Turkic states, were discussed.

Joint Projects

The economic integration of Turkic countries has already had a positive impact on each country's development and on the region as a whole. According to statistical data presented at the General Assembly, the GDP volume generated by OTS countries in the first half of 2024 reached $900.4 billion, accounting for 1.7% of global GDP. ASK President Mammad Musayev highlighted the notable economic growth of OTS countries, which reached approximately 6% during this period, more than double the global rate of 3.1%. "The economic growth in Turkic states nearly doubled the global rate, underscoring the dynamic development and strengthening of the region's economic influence, demonstrating that Turkic states are steadily reinforcing their position as an emerging economic bloc," Musayev remarked.

The volume of mutual investments is equally impressive: from 1995 to 2024, around $17 billion was invested in Azerbaijan's economy from OTS member countries. Azerbaijan has also directed significant investments to member countries of the organization, with this figure exceeding $20 billion during the reporting period. Azerbaijan has signed agreements on the promotion and protection of investments with all Turkic states, laying the groundwork for further strengthening and expanding the legal framework.

First Deputy Minister of Economy of Azerbaijan Elnur Aliyev has indicated that OTS countries have the potential to enhance trade and economic ties and has emphasized the need to intensify efforts in this direction. The inaugural meeting of the Turkic Investment Fund, established by Turkey, Azerbaijan, Kazakhstan, Kyrgyzstan, and Uzbekistan, took place in Istanbul this year. The launch of this fund marks a significant milestone in fostering broader economic cooperation and integration among our nations." He underscored the importance of the Middle Corridor, asserting that comprehensive energy and transport cooperation among OTS countries influences not only regional dynamics but also global processes. Aliyev noted that joint energy projects have transformed the regional energy landscape.

Digital projects aimed at facilitating cargo transportation along the Middle Corridor are underway, as noted by OTS Secretary General Kubanychbek Omuraliyev. He reported that cargo transportation volume along this corridor is consistently rising: "In this context, it is particularly important to highlight the southern section of this corridor—the China-Kyrgyzstan-Uzbekistan railroad project—which will be a key component of regional integration. Overall, successful cooperation in the transportation sector fosters economic development within OTS countries."

Baghdad Amreev, the President of the Turkic Investment Fund (TIF), has stated that the fund he leads will provide financial support for national, joint, and regional projects that foster trade and investment, enhance transportation, energy, and digital connectivity, as well as offer technical assistance to SMEs and startups. He believes that OTS should invest in future industries and develop necessary skills accordingly. Amreev reiterated the crucial nature of accelerating the green transition, emphasizing that there are no viable alternatives to doing so, as highlighted during COP29.

Targeting Increased Turnover

Rifat Hisarciklioglu, Chairman of the Turkish Chamber of Commerce and Industry, underscored the imperative for collective action among OTS member countries in the face of escalating global trade tensions. He advocates for increased trade turnover between Turkic countries and the removal of existing barriers: "In this regard, it is vital to ensure streamlined customs procedures. A pressing priority is the establishment of a special subcommittee within the Turkish Chamber of Commerce and Industry to address these challenges."

From January to June, trade turnover among OTS countries amounted to $508.8 billion, representing 3.2% of global trade turnover. Azerbaijan's trade turnover within the bloc from January to November 2024 reached $6.3 billion, including $3.7 billion in exports of Azerbaijani products. However, Aliyev believes that existing potential is even higher and emphasizes that enhancing efficiency in initiatives related to this area is essential.

Baghdad Amreev noted that mutual exports among OTS countries currently account for 6.8% of total exports. "This is a promising indicator; however, it remains below the desired level. During meetings with leaders of international financial institutions, the question of why trade turnover among Turkic states remains low is frequently raised. We attempt to explain that during the Soviet Union era, the economic model was highly centralised. The republics primarily specialized in specific industrial or agricultural products, resulting in a one-sided economic system where some focused on heavy industry while others concentrated on agriculture and raw material extraction. This specialization diminished the incentive for trade diversification," he explained.

Additionally, TIF President Amreev noted that high costs associated with transportation, logistics, customs, and similar factors are a significant reason for low trade turnover among OTS countries. "Due to their geographical proximity, Central Asian countries naturally engage in more trade with China and Russia. To enhance trade, it is crucial to strengthen the integration of transportation and energy networks, and to improve mobility, logistics, and customer service. Consequently, efforts are being made to tackle challenges in this area. "Our economies and societies are undergoing profound technological and digital transformations, necessitating a focus on activities in this domain," Amreev stated.

Orkhan Mammadov, Chairman of the Board of the Small and Medium Business Development Agency (KOBIA) under the Ministry of Economy, expressed support for projects aimed at fostering innovative entrepreneurship development, scientific research, and technological innovation. "We can also assist in expanding access to financial resources for startups and entrepreneurs. We value the opportunity to exchange incentive mechanisms and share experiences successfully applied in development promotion and innovative entrepreneurship," he expressed. He proposed establishing close cooperation between industrial parks and technoparks across member countries.

A notable moment at the General Assembly was Northern Cyprus's application for full membership in the Union of Chambers of Commerce and Industry of Turkic States. The Union currently includes Azerbaijan, Kazakhstan, Kyrgyzstan, Türkiye, and Uzbekistan, with Hungary and Northern Cyprus serving as observers.

According to participants in the bloc, the Turkic states should establish a broader trade cycle by collaborating across all sectors, including production, agriculture, tourism, and technological innovations. To achieve this goal, it is necessary to enhance mutual investment opportunities, initiate joint projects, and strengthen cooperation in logistics and transportation.

The diversification of trading partners and the augmentation of intra-regional trade are projected to consolidate the bloc's standing within global trade networks in forthcoming years.