Elmar Mammadyarov: "Azerbaijan is in the moment of reflection about what EaP gave and where it is going"

"Azerbaijan is in the moment of reflection about what EaP gave and where it is going; what the next decade of EaP can bring; how attractive its instrument or mechanism will be for Azerbaijan; how a structured dialogue can be different from the previous kind of dialogue; will there be more commitments or real, tangible opportunities. It is absolutely obvious that we ask such questions and take a time to reflect on what the value-added was of EaP for Azerbaijan’s relations with EU for the past 10 years. We hear various ideas, including some thoughts about expanding EaP or creating its institutional framework. Azerbaijan prefers the one-at-a-time approach. We must be pragmatic and to some extent realistic," Azerbaijani Foreign Minister Elmar Mammadyarov said speaking at the High-Level Ministerial Seminar on “A New Political vision for Eastern Partnership”.

The Minister said that Azerbaijan is often associated with oil and natural gas.

"I will try to bring a new element of the importance of our energy resources. First, because our natural gas is a much cleaner molecule of a fossil fuel than a pollutant coal. Second because our natural gas can serve as a perfect transition fuel for EU in its campaign to become more green, more energy-efficient. It is also about climate policy objectives. So, our gas pipeline to EU is a direct contributor to EU’s climate policy goals. See, it is both trade, connectivity (infrastructure), and environment issue."

"Connectivity should be a driver for multilateral cooperation in EaP. Today it is a source of stability and instrument for strengthening resilience in partner countries. This topic attracts attention, investments, financial institutions, private sector. And this is about trade. A creative trade. Not protectionism. The launch of an international multi-stakeholder initiative - Europa Connectivity Forum by the EU pinpoints the critical role of Azerbaijan and countries en route in achieving wider objectives of connectivity across continents.

"Perhaps Azerbaijan is not a big market for EU. So there is not much of competition coming from Azerbaijan to EU companies. But it is the economy and market which has elevated contracts with foreign investors into the status of national law. Investors are comfortable about their capital and business in Azerbaijan. We are proud that we respect the contracts. We have a high degree of sanctity of contracts. We succeeded in so doing back in 1994 with the Contact of the Century, when we opened up to the world with our natural resources. We will do so again in the new era of putting our country on the map of Eurasia as a logistics hub. Where else in EU or in EaP region can a foreign investor come and enjoy the same liberal fiscal / investment regime for 30-40 years? This is pretty a long time. This is a big commitment. It also requires a political will. Stability is essential. Everybody can gain. Azerbaijan is an investor-friendly country. Not a coincidence that many EU businesses and investors choose Azerbaijan for that purpose. In fact, EU is our number-one trading and investment partner.

"Certainly, physical interconnections are not self-sufficient, it is equally important to render them commercially viable. For this purpose, Azerbaijan works on tariff unification with Central Asian countries to ensure increased trade through Baku-Tbilisi-Kars railway connection. We appreciate EU’s statement of support to this regional backbone project and its perspective for future links with EU countries. It is not a surprise that several big logistics companies from Austria, Germany, Hungary and other EU countries are keen to participate with us in using this BTK railway to transport goods between Asia and Europe.

"In his recent visit to Azerbaijan, President Tusk confirmed that impressive steps have been taken to transform Azerbaijan into a transport and logistics hub and hailed the country’s ambition also to its northern and southern neighbours. This is how we put our name on the map – Azerbaijan not only as enabler of a multi-billion Southern Gas Corridor, but also as a promoter of several trade corridors between Europe and different parts of Asia.

"However, we don’t stop there; we are materializing the prerequisites for more investments by ensuring fiscal, economic, social and environmental stability in the country. Not surprisingly, 2020 World Bank Doing Business Report positioned Azerbaijan on the 9th rank for starting business and 1st for access to credit/finance.

"SME development is likely to remain the cornerstone of our cooperation for boosting the sustainable economic development and welfare of our citizens. Targeted economic reforms, on improving the business climate, including limited price control, lifting restrictions on repatriation of profits and technology transfer, setting no discrimination between national and foreign investors, no foreign exchange restrictions and the absence of prior authorization of foreign investments create SME-friendly environment in Azerbaijan.

The EU support of small family businesses in the regions with close collaboration with “ABAD” Public Entity seeks to enhance local capacity building in rural areas fosters the formation of modern and sustainable business models in Azerbaijan. As these reforms start to deliver, the gap between the existing labour force and business requirements deserves high attention. Hence, we would welcome the EU increased support on strengthening vocational education and talent portfolio of labour force in the years ahead.

"Our priority is to diversify away from oil and gas, and in doing so, to invest more in tourism, SME development, logistics, high-tech, and agriculture.

"Digitalization of the economy is at full pace with the introduction of Digital Trade Hub which represents a huge pool of untapped potential of harmonization of digital markets in EaP. EU businesses acknowledged the effectiveness of ASAN which envisages the centralization of digital services and complete integration of all state agencies’ information systems into a single electronic platform. On the other, ongoing reforms in this sector by default improves good governance which serves to preconditions of citizens’ trust in the state."