New era kicks off: Azerbaijan, Israel building economic ties and regional influence

Economy Materials 18 April 2023 09:00 (UTC +04:00)
New era kicks off: Azerbaijan, Israel building economic ties and regional influence
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, April 18. Over the past three decades, friendly interstate relations between Azerbaijan and Israel have reached the level of a strategic alliance based on mutual understanding on most international issues. Strong ties have been created starting from the field of defense to energy sector. Today, the two countries are making every effort to bring trade and cooperation in various fields to a qualitatively new level.

In November 2022, Baku announced a historic decision to open an Azerbaijani Embassy in Tel Aviv. The decision to open a diplomatic mission reflects the depth of relations between the two countries and is the result of the efforts to build strong diplomatic bridges.

The upcoming visit of Israeli Foreign Minister Eli Cohen to Azerbaijan, which is scheduled for April 18-19, is yet another proof of rapidly evolving bilateral relations.

Azerbaijan's trade turnover with Israel from January through February 2023 amounted to $334.1 million, which is 26.36 percent more year-on-year. The country's share in Azerbaijan's total trade turnover accounted for 4.66 percent. According to Israeli Ambassador to Azerbaijan George Deek, the trade turnover between Azerbaijan and Israel is expected to double this year.

One of the areas with high potential for development is high-tech industry. In July 2022, Azerbaijan Investment Company and Israel’s OurCrowd company, the leading global capital crowdfunding platform have signed an investment agreement. In February this year, Azerbaijani Economy Ministry announced that the first investment in the amount of $1 million has already been made from the Azerbaijani side, particularly, in Israeli LARGIX startup, which specializes in the development of industrial products.

The Azerbaijani-Israeli partnership in the innovation and IT sector has huge potential and will expand further within the framework of joint projects aimed at creating startup ecosystems, developing specialized incubation centers and technology parks, or cybersecurity, and much more.

Cooperation in the energy field between the two countries is another pillar of successful relations development. Israel already imports one third of its oil needs from Azerbaijan. There is, of course, always more to offer. Azerbaijani State Oil Company (SOCAR), having vast experience in the oil and gas industry, can hugely contribute to the growth of this sphere in Israel.

Naturally, cooperation in the field of green energy is probably one of the most important areas on the expansion of which both the countries will concentrate on in the coming years. Having got tremendous experience in the field of renewables, Israel has repeatedly expressed its readiness to take part in the implementation of green energy projects in Karabakh or in other parts of Azerbaijan.

So far, according to the latest data, some 10-15 Israeli companies have already applied to take part in projects in Karabakh through the Israeli Embassy in Azerbaijan. The actual number of companies willing to contribute to the restoration of Azerbaijan’s liberated lands is even higher. In this regard, Israel has a lot to propose in several fields, beside green energy, such as water management, agriculture, health, innovations, or smart cities.

Another very promising and rapidly developing field in bilateral cooperation is agriculture sector. There are already several projects that are in the pipeline with the Israeli agricultural private sector, which include grain and stock storage project, some projects on dairy farms, orchid cultivation and many more. Azerbaijan-Israel Innovation Forum on the "Agriculture and Education" held recently in Baku is another confirmation of how this cooperation is important for both the countries. With its innovative technologies, Israel will contribute to the increase in Azerbaijan’s agriculture production and export.

Indeed, the two countries can already be called the biggest players of their own regions. Despite the fact that geographically Azerbaijan and Israel are not so close, both countries have been able to establish such strong and successful ties, which is sometimes not possible for the nearest neighbors to do so. Azerbaijan is now a forefront actor when it comes to such global issues as transport connectivity or energy security. Here is where Israel’s experience and technology is vital. By strengthening bilateral ties, the two countries can exploit new opportunities for the benefit of all countries in the wider region, opening new horizons.