President of the Pakistan-Azerbaijan Economic Cooperation Chamber Khurram Bhatti’s interview with Report
- -How do you value economic relations between Azerbaijan and Pakistan? What should need to encourage the relations between two countries?
-The two brotherly countries - Pakistan and Azerbaijan - have great economic and political relations. Relations are very high; the two countries focus on more economic relations. As we see, the relationships between Turkiye and Azerbaijan are very great in terms of economic numbers. We want significantly increase economic trade between Pakistan and Azerbaijan. During the pandemic, the whole world significantly struggles in terms of trade. We believe that there is a huge potential between Pakistan and Azerbaijan to focus on trade and increase the economic relations to the level of political relations.
- -How many Pakistan companies are operating in Azerbaijan? What should be done to promote trade between the countries?
- If we look at the past few years, we’ll see that the overall trade volume between the two countries wasn’t very high. They are nearly 2,000 Pakistani companies registered in Azerbaijan.
There are one hundred Azerbaijani companies registered in Pakistan. It needs different, significant improvement. In terms of trade volumes, we have focused on some key areas to resolve the issues. The first issue was related to banking transitions. The Azerbaijani banks cannot transfer money to Pakistan. We have taken up this matter with different banks in Pakistan, including the State Bank of Pakistan.
The State Bank of Pakistan has also requested our Ministry of Commerce to review all the UN and US sanctions on using the Iranian route just as the transit root because this route is a very short and cheap route. We have border center Al-Taftan. From Taftan to Astara is only three days through the land road.
As you know, Azerbaijan and Turkiye signed Preferential Trade Agreement. This agreement gives a number of advantages to the countries in the trade. So, the leadership of the two countries have already taken up the matter. President Ilham Aliyev has already initially approved the idea of a Preferential Trade Agreement between Azerbaijan and Pakistan. Our Prime minister also endorsed the idea of a Preferential Trade Agreement. We aim to sign this agreement in 2022. This document allows a number of Pakistani products to enter the Azerbaijani market with low customs tariffs. These concessions will be applied to limited products. Initially, we prepared the list of products that we wanted to get concessions and shared it with the Pakistan Embassy in Baku. It included goods on 20 items from Pakistan and Azerbaijan. These items are on the discussion, it will take a few months to come to a conclusion on that.
Another area was logistics, luckily, three Pakistan companies have got licenses. This is an international regime license, based on which track from Pakistan can come to Azerbaijan and pass through the entire region and go to Russia without changing the containers. There is a national logistics company of Pakistan that has already sent two containers as an example of shipment. It was a very successful transaction. We are waiting for some approvals. After these approvals, we will also resolve this logistics issue. At the same time, we are trying to find out products that can be exported from Azerbaijan to Pakistan.
- What is being done in the field of oil and gas cooperation between Pakistan and Azerbaijan, and what other areas are of interest? What products can be exported from Pakistan to Azerbaijan?
- So, one of the important areas for us is the oil and gas sector. We had discussions with SOCAR. We also discussed the possibility of gas export. We also gave a proposal on LPG (liquid petroleum gas). One of the Pakistani companies already wants to invest in an LNG facility in Azerbaijan.
The Pakistan-Azerbaijan Chamber of Economic Cooperation (PAKAZCHAM) has already arranged a meeting to discuss the import of polymer to Pakistan. We are in discussions with some Pakistani importers who already import the polymer from Saudi Arabia and the CIS countries. SOCAR Polymer is a significant factor. If we conclude this deal, the volume of polymer to be exported from Azerbaijan will be very large. Currently, the import of polymer in Pakistan is $1 billion.
Another area of cooperation between Azerbaijan and Pakistan is agriculture. So, there is a possibility to export fresh foods and vegetables such as tomatoes, cucumber, vegetables. There are very special fruits in Azerbaijan like cherry, white cherry, apples, and many other fruits that can be exported. Then there is an industry of juices. Azerbaijan makes several juices. Recently, we had sent some examples to Pakistan.
Another area of cooperation between Azerbaijan and Pakistan is cotton. Azerbaijan also produces some cotton. Pakistan has one of the biggest textile industries. There is a possibility to export cotton (raw material) from Azerbaijan to Pakistan.
I visited some factories in Azerbaijan, which are engaged in the production of baby diapers. This is also another product that we can export. There are some chemicals in the Sumgait Chemical Industrial Park that we are focused on and have an interest in. These are some key areas that we focus on exporting from Azerbaijan to Pakistan.
A number of products can be exported from Pakistan to Azerbaijan. One of these products is rice. Rice is one of the most widely used products in Azerbaijan. Taking this into account, we organized a rice festival in Azerbaijan. At the rice festival, we brought together Pakistani importers, large chain stores, banks and logistics companies in Azerbaijan. We have established direct contacts, and I hope that the volume of rice exports to Azerbaijan will increase thanks to our initiatives for fraternal relations. Pakistan also has a large textile industry, and its products are also exported to Azerbaijan.
In addition, Pakistan has a large pharmaceutical market. Nearly 800 pharmaceutical companies operate in Pakistan. We want to invite a pharmaceutical delegation to Azerbaijan to coordinate them with their counterparts in Azerbaijan. Our goal is to increase the volume of pharmaceutical trade between the countries.