The economic relations between Russia and other EAEU countries with Azerbaijan, which are developing more actively, actually form a common and mutually beneficial economic space. Along with the accelerating growth of trade turnover between the parties and the expansion of its range, we also note that over 50 joint investment projects in about 20 industries are being implemented or prepared for implementation between the countries of the Union and Azerbaijan. More than two thirds of these projects are planned to be implemented on Azerbaijani territory.
The formation of this space is also facilitated by the participation of almost all the EAEU countries and Azerbaijan in the North–South ITC and in the Eurasian railway agroexpress (mutual supply of agricultural raw materials and ready-made food at high speed). Moreover, with the developing participation of Iran in them. Baku, as Prime Minister Ali Asadov stated in Minsk in early June, “is ready to develop mutually beneficial cooperation with the EAEU member states in ensuring food security.”
By now, the countries of the Union account for at least 40% of Azerbaijan’s total exports of fresh vegetables, fruits and berries, fresh herbs, and processed fruits and vegetables. Moreover, the Azerbaijani media periodically notes a high demand for this, as well as for Azerbaijan’s petrochemical products, in the EAEU region, while the West is still interested mainly in Azerbaijani oil and gas raw materials.
As for, for example, the Belarusian-Azerbaijani economic relations, President of Belarus Alexander Lukashenko noted at a meeting in Minsk on June 11 with the head of the Azerbaijani Parliament Sahiba Gafarova: “… we will be happy to participate in the work on the socio-economic restoration of the reunified regions of Azerbaijan, there are no obstacles.” Regarding trade relations, he noted: “Our trade turnover is not bad. But it is unbalanced: we need to buy more goods in Azerbaijan.” The parties also plan to more actively exchange technologies, including in the agro-industrial complex and the military-industrial complex.
As for the transit and infrastructure segment, Azerbaijani expert economist Aigul Tagieva notes that the geographical location of her country “contributes to the fact that each of the EAEU countries considers routes passing through the territory of Azerbaijan as an important logistics corridor for the export of its goods to foreign markets.” And after international transportation has undergone “a number of changes due to the geopolitical situation (since the spring of 2022. – Ed.), a number of countries, including the EAEU member states, have begun to establish regular cargo shipments through Azerbaijan.”
In 2023 alone, transit cargo transportation between Azerbaijan and the Russian Federation increased by 174%, and with Kazakhstan – by more than 4 times. This trend continues this year. And transit cargo flows along the North–South MTC through Azerbaijan (including its Caspian ports and ferries) more than doubled in 2022-23. Accordingly, Azerbaijani transit revenues are increasing due to the growth of transit cargo transportation, primarily with the EAEU countries.
It is also important that Azerbaijan participates in the creation of the Russian Federation–Transcaucasia–Iran electric power corridor (in both directions) with the prospect of this project reaching Iraq and Syria by the end of the 2020s. Since 2015, a new, moreover, indefinite agreement between Russia and Azerbaijan on the parallel operation of national electric power systems has been in force, which allows preventing electricity shortages in both countries in advance through mutual supplies. So, when creating a single electricity market in the EAEU, planned from the second half of the 2020s, the electrical system of this South Caucasian republic will automatically turn on to it.
These issues were among the main ones during SPIEF 2024, which took place in the first decade of June. The views of both sides expressed at this forum show their growing interest in a closer partnership.
Yusif Abdullayev, Executive Director of the Export and Investment Promotion Agency (Azerbaijan): “I’m not afraid to say: our relations are at their peak today. There is practically no area where we do not cooperate. About 1,900 Russian companies are registered in Azerbaijan, 1,300 of them are active. Russia has invested about $10 billion in Azerbaijan over the past 30 years, 2.5 billion of which is in the non–oil and non-gas sectors.” Plus, the Russian Federation “ranks first in Azerbaijan’s non-oil exports.” It is noted that “in just 4 months of this year, we exported goods to Russia worth $ 350 million. The total trade turnover for 4 months is $1.3 billion. These are serious figures.”
Dmitry Volvach, Deputy Minister of Economic Development (RF): “Over the past 1.5 years, the capacity of all checkpoints at the mutual border has been increased many times.” Therefore, “instead of queues of transportation vehicles, there is an increased turnover, an expanded and rich assortment, and business prosperity. This is a landmark example of serious cooperation.”
Mikhail Galuzin, Deputy Minister of Foreign Affairs (RF): “We feel Azerbaijan’s understanding and support in creating an environment that would be independent of negative external influences. This is the creation of an independent financial system (in mutual settlements. – Ed.), the transition to national currencies. It is important in this regard that the WORLD map is gradually being circulated in Azerbaijan.”
As for the use of the national currency, attention should be paid to the stable, moreover, high solvency of the Azerbaijani manat, thanks to the regulation of its exchange rate by the national National Bank. Thus, the exchange rate of one manat against the ruble of the Russian Federation, the US dollar and the euro in mid–June this year was 52.4 (rubles per manat); almost 0.59; 0.55. Such inter-currency proportions have existed for many years. And it is not surprising that the Azerbaijani manat has been used for many years in mutual settlements with many post-Soviet countries and is present in the exchangers of most countries of the former USSR, although so far excluding Russian ones.
In short, many interrelated factors and trends contribute to a more active economic partnership between Azerbaijan and the EAEU. The benefits are mutual and almost indefinite.
At the same time, Baku is not forcing the legal formalization of this partnership. As President of the Republic Ilham Aliyev stated in April, “Azerbaijan has no plans to join the EAEU… We were invited to some events (of this organization) at the level of the president and the Prime Minister.”
But in any case, Azerbaijan will definitely not be superfluous in the EAEU.
