Azerbaijan's President Ilham Aliyev forming new economic map of region

Politics Materials 15 January 2021 13:29 (UTC +04:00)
Azerbaijan's President Ilham Aliyev forming new economic map of region

Baku, Azerbaijan, Jan.15

By Asif Mehman – Trend:

The statement signed after the meeting of the Presidents of Russia, Azerbaijan, and the Prime Minister of Armenia in Moscow on January 11, 2021, creates new economic realities in the region, Trend reports.

As the President of Azerbaijan stressed, Azerbaijan created a new reality, which has already started to form the new economic relations and economic map in the region.

The mentioned statement envisages the restoration of transport communications in the region.

Opening of the communications and development of trade and economic relations will benefit both the region and individual countries

As a result of the opening of communications, the share of Turkey in Armenia's trade turnover may increase from three percent to 13 percent while the share of Azerbaijan - to 1 percent. At the same time, Azerbaijan's export may grow by 1.2 billion manat ($705 million).

Armenia will be able to establish communication with Russia, which accounts for 25-30 percent of its trade turnover by using the transport capabilities of Azerbaijan in two directions (Gumri-Nakhchivan-Meghri-Baku and Yerevan-Gazakh-Baku). This statement is a great opportunity for Armenia, which has been under blockade for many years, to boost its economy.

South Caucasus enters a new economic era

According to Russian expert Vasily Koltashov, in the long term, in the next 20 years, the trade turnover will grow. “We’re entering a period of economic recovery, where the era of crisis ends. It’s already possible to begin the development of this region, which connects a number of Eurasian markets,” said the expert. “First of all, here we are talking about the Turkish market, the market of Russia and Iran. Obviously, there are some contradictions between these three states, Russia and Turkey, Turkey, and Iran. Consequently, these regions will be interconnected.”

Azerbaijan’s President Ilham Aliyev has created a great opportunity for Armenia to develop

According to Azerbaijani parliament’s member, economic expert, Professor Rufat Guliyev, the opening of economic and transport communications in the region will lead to a significant reduction in the cost of cargo transportation.

“Armenia should be most interested in the opening. The agreement between the countries will positively affect the economy of Armenia, the welfare of its people,” he said commenting on the agreements reached by the Presidents of Azerbaijan, Russia, and the Prime Minister of Armenia on the details of opening the communications on January 11, 2020.

He reminded that currently logistics between the Nakhchivan Autonomous Republic and other territories of Azerbaijan is carried out by air and through the territory of Iran, but owing to the agreements a direct land communication will be also created between them and Turkey along the borderline between Armenia and Iran (Meghri corridor).

Business in Azerbaijan, Russia, and Armenia will develop

The Russian political analyst Darya Grevtsova stressed that as new logistics routes will pass through Azerbaijan, it will be beneficial for Azerbaijan, Russia, and Armenia. All these infrastructure projects will have a positive impact on its economic development as new roads mean an inflow of investments and business development wherever they pass.

Grevtsova added that the working group will need to solve several tasks.

“First, it is necessary to determine on the map where these roads will pass and how difficult it is geographically, in terms of the landscape, to build them,” the analyst said. “Secondly, it is necessary to determine the main contractors who will build the roads - Russian, Azerbaijani, Armenian or Turkish companies.”

Azerbaijan created a new reality that defines the economic architecture of the region

Head of the Azerbaijani Center for Analysis of Economic Reforms and Communication, Doctor of Economic Sciences Vusal Gasimli said that the opening of communications in the region can increase Azerbaijan's non-oil GDP by two percent, processing industry by three percent, and mining industry by 2.7 percent.

"The calculations based on the general equilibrium model show that the reintegration of the Nagorno-Karabakh region into the Azerbaijani economy in the medium term will have a positive impact on agriculture (an increase of 10.4 percent), tourism (an increase of 5.5 percent), the mining industry (an increase of 5.3 percent), transport services (an increase of 4.9 percent), manufacturing industry (an increase of 4.3 percent) and other services (an increase of 1.4 percent) while the formation of non-oil GDP as a whole will increase by 5.1 percent," Gasimli said.

He noted that the European Union used to be based on coal mining and steel production agreement.

"The opening of communications in accordance with the new reality created by Azerbaijan in this region lays the foundation for peace, security, stability, prosperity and mutually beneficial cooperation, which means an inflow of investments and sustainable development," the head of the Center said.

"Now, the projected communication projects will form the future transport and energy map of the region, as well as the economic, political, and strategic architecture in general," added Gasimli.