BAKU, Azerbaijan, April 7. The significance of the South Caucasus is rapidly increasing on a global scale, thus, the role of the major players in the region – Azerbaijan and Georgia – is growing at a fast pace. In sight of the swiftly changing global geopolitics, the decisive, farsighted steps that President Ilham Aliyev has taken in relations with its closest neighbors have brought the region to a certain new level. Strong friendship ties between Georgia and Azerbaijan go back a long way. The relations between the two countries have been built on the foundation of friendship, brotherhood, and mutual respect.
An “Agreement on strengthening friendship, cooperation and mutual security between the Republic of Azerbaijan and Georgia” signed during the historic visit of national leader Heydar Aliyev to Georgia in March 1996, as well as the Declaration “On Peace, Security and Cooperation in the Caucasus”, or the so called “Tbilisi Declaration”, became the cornerstone of the strategic partnership between the two countries.
The Azerbaijani population in Georgia makes up 6.5 percent of the total population and is currently the second largest ethnic group in the country.
To date, Azerbaijani companies have invested more than $3.5 billion in Georgia’s economy. Azerbaijani State Oil Company (SOCAR) alone has invested nearly $1.5 billion in Georgia. At the same time, Georgia has put in $260 million in Azerbaijan.
Azerbaijani companies, including SOCAR, are the largest taxpayers in Georgia. Moreover, thousands of new job places have been created in the country through investments made by these companies. According to statistics, about 3,200 companies with Azerbaijani capital have been registered in Georgia. Those companies are engaged in various spheres, such as energy, transport, communications, construction, production, hotel and restaurant services, real estate, finance, mining, and many more.
In addition, more than 700 companies with Georgian capital have been registered, operating in various sectors of the Azerbaijani economy, including the non-oil sector, which are also successfully operating.
The trade turnover between Azerbaijan and Georgia over the last year totaled $1.3 billion, which is an increase of 18.1 percent year-on-year ($1.1 billion in 2021). Azerbaijan’s share in overall Georgia’s trade in 2022 accounted for 6.9 percent. Of this, Azerbaijani exports to Georgia amounted to $672.6 million, while imports totaled $642 million.
Furthermore, the number of mutual visits between the two countries is growing year-on-year. In 2022, 152,969 Azerbaijanis visited Georgia. This number has increased by 84.9 percent, compared to 2021, when 82,718 people traveled to Georgia from Azerbaijan. The number of Georgians visiting Azerbaijan in 2022, in turn, grew 1.5 times, and totaled 5.7 percent of all foreigners coming to Azerbaijan in the reporting period.
Energy cooperation between the two countries has been one the main pillars in the development of bilateral relations, since the two countries have gained independence.
The memorandum on increasing gas exports to Europe, signed between Azerbaijan and the EU in July last year, implies the expansion of supplies up to 20 bcm by 2027. In this regard, the capacity development of the Trans-Anatolian Pipeline (TANAP) that passes through Georgia is of utmost importance. Azerbaijan also plans to increase exports via the Baku-Tbilisi-Ceyhan oil pipeline. Moreover, it is planned to use the Baku-Supsa oil pipeline, which is not currently operational. Thus, amid the high need for Azerbaijani energy resources in Europe, cooperation with Georgia in this regard is of great potential.
One of the latest key steps taken by Azerbaijan to implement the start of alternative electricity exports to Europe was the signing of the "Agreement on a strategic partnership in the field of green energy development and transmission", in which Georgia is also included.
As part of this project, it is planned to lay a 1,195-kilometer power transmission line with a capacity of 1,000 MW between Georgia and Romania and install a digital connecting cable. To this end, with the support of the World Bank, it is planned to prepare a technical and economic justification of the project by the end of 2023.
At present, since there is a high demand for energy resources throughout the world and in Europe, Georgia and Azerbaijan will have to act in a coordinated manner on this issue and safeguard their national interests by focusing on one point.
Thus, fundamentally important agreements have been signed in energy, transport and a number of other areas, and all these agreements also affect the interests of Georgia, since most of them are connected with its territory.
Consistently coordinating efforts on this solid basis in the changing regional and global environment, Azerbaijan and Georgia have succeeded not only in creating the modern appearance of the South Caucasus, but also, in become a reliable “bridge” between East and West.