Strategic importance for Russia is to cooperate with Azerbaijan in development of "North-South" international transport corridor: interview with Russian Economic Development Minister

Strategic importance for Russia is to cooperate with Azerbaijan in development of "North-South" international transport corridor: interview with Russian Economic Development Minister

Azerbaijan, Baku, July 28 / Trend , N.Ismayilova/

Russian Economic Development Minister Elvira Nabiullina spoke with Trend in an exclusive interview.

Trend : As to You, what are the prospects for further development of economic cooperation between Azerbaijan and Russia? Does it need to expand the legal framework?

Elvira Nabiullina: The two countries have established strong ties in various sectors of the economy. Nomenclature of mutual trade is extensive and includes more than 1,700 products.

Since Russia is a leading exporter of goods of machine-technical team, building materials, wood, rolled ferrous metals, chemical products in Azerbaijan, which accounted for more than 90 percent of the Russian exports, it is possible to predict a further increase in volume of shipments of the nomenclature of the Russian products

The issues on increasing and diversifying mutual trade, as well as the development of a regulatory legal framework for bilateral cooperation is traditionally in the focus of attention in both countries. Further improvement of the legal framework of Russian-Azerbaijani relations plays an important role in the development of mutual cooperation.

It should be possible to expedite signing the intergovernmental Agreement on promotion and mutual protection of investments, absence of which adversely affects the level of Russian-Azerbaijani investment cooperation.

Q: How do You assess the dynamics of trade turnover between Azerbaijan and Russia? What may contribute to its increase?

A: The dynamics of trade turnover between our countries is certainly a positive. We managed to bring the volume of mutual trade turnover in 2008 to $2.4 billion, of which $2 billion fell to the Russian exports to Azerbaijan. Imports from Azerbaijan reached $411.4 million. Compared to 2005, the trade turnover between Azerbaijan and Russia increased 2.3 times.

Unfortunately, under the world crisis, the volume of mutual trade has declined: in January-May 2009, the turnover fell by a quarter compared to the same period in 2008 and amounted to $638.5 million.

Successful pre-crisis development of the Russian-Azerbaijani trade and economic relations and increase of trade was possible largely due to inter-regional and cross-border cooperation. Over 30 papers were signed on trade-economic and cultural cooperation at the interregional level and 9 more regions intend to sign such agreements. At present over 500 branches and representations of the Russian companies are actively working on the Azerbaijani market. Russian President Dmitry Medvedev's recent visit to Baku and agreements reached during this visit will give new impetus to bilateral cooperation. Azerbaijan will export gas to Russian on Jan. 1 in 2010.

We look forward to the growth of the Azerbaijani export, connected with the supply to the Russian food market which is traditionally demanded and meets the quality standards, especially fresh vegetables and fruits, wine, brandy products, fruit juices and vegetable, animal and vegetable oils, nuts, tea and many other products.

Q: How do You think, which sectors of the Azerbaijani economy may be most attractive for the Russian investors?

A: In 2008, Russian investments in the Azerbaijani economy totaled $12.4 million, indicating a need to intensify work in this direction. In the future, we see a continued mutually beneficial cooperation between Russia and Azerbaijan, especially in the energy and industrial complex, non-ferrous metallurgy, communications and information, tourism, and road construction. It is very promising for the Russian investors to establish joint ventures in the field of petroleum engineering, medicine production, processing and storage of agricultural products, as well as financial and banking fields.

The strategic importance for Russia is to cooperate with Azerbaijan in the development of international transport corridor "North-South cooperation" to organize the through railway communication from Europe through Russia, Azerbaijan and Iran to India and Southeast Asia. This project will allow the participant-countries to receive substantial dividends from the transit of goods, which in future will reach 15-20 million tons a year.

Q: The export of which sector of the Russian economy to Azerbaijan can be expanded?

A: Russia is traditionally one of the largest suppliers of goods in Azerbaijan. The greater part of Russian supplies to Azerbaijan comprise engineering goods, chemicals, wood, iron and steel industry, agricultural products. It is necessary to emphasize the importance of the Azerbaijani market for the Russian manufacturers of power equipment. It is natural that the nomenclature of the supply of the economy's sector which corresponds to the abovementioned goods, first, has the best chance to be expanded, as there is demand for them on the Azerbaijani market.

Q: What do you think whether Russian entrepreneurs show interest in Azerbaijani market? What is this interest? 

A: At present, over 170 companies with 100 percent Russian capital and 237 in the form of joint ventures operate on Azerbaijani market. This fact testifies interest of Russian entrepreneurs towards Azerbaijani market. Increase of registered enterprises with Russian capital in Azerbaijan is the result of investment climate improvement in Azerbaijan. Purchase of Baku-Kastel brewery by Russian company Baltika in 2008 can be example of Russian businessmen's interest in Azerbaijani market. Roughly $20 million was invested in modernization of the brewery.   

Russian companies are interested in increasing share holding in the second stage of Shah Deniz gas field developing. Shah Deniz has up to 1.2 trillion cubic meters of natural gas.

Investments in Azerbaijani non-ferrous metallurgy, as well as participation in privatization of small hydro electric stations, enterprises on keeping and processing of agricultural production can be named among other prospective spheres of our enterprises' possible interest.  

Q: What trends of cooperation between Azerbaijan and Russia and economic spheres in terms of world crisis must be preferred?  

A: Two criteria on economic cooperation are advanced for the first place in terms of world crisis between partners of any level. These criteria include pragmatics and mutual profit. In our case, we are likely to cooperate in spheres final product of which remains essential even in terms of crisis. Fuel-energy complex can be cited as example. Azerbaijan needs supplies of oil and gas producer's equipment and tool, as well as rendering of services on drilling, overhaul of wells, etc. But Russia is capable to provide these needs. We can indicate other mutually profitable spheres.

Fore example, fulfillment of Azerbaijani Caspian Sea Steamship's big order by Russian enterprises. This order included construction of dry cargos and tankers or purchase of special Russian made air technique for Azerbaijani Emergencies Ministry.  

Establishment of joint ventures in light industry, medicaments production, leasing companies serving agricultural and road-construction technique is urgent. Moreover, cooperation in nanotechnologies is urgent. Both sides have already considered interaction in this sphere.

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