BAKU, Azerbaijan, March 15. Meetings between the leadership of Azerbaijan and Kazakhstan have consistently been characterized by a spirit of friendship and mutual respect. This occasion was no exception.
Once more, the discussions between the leaders of both countries resulted in significant progress, marked by the signing of nine important documents. Among these, a strategic partnership agreement between the Azerbaijani Investment Holding and Kazakhstan’s 'Samruk-Kazyna' JSC is particularly noteworthy.
The idea of establishing an investment fund between Azerbaijan and Kazakhstan was first discussed during the 20th session of the Joint Intergovernmental Commission on Trade and Economic Cooperation in Astana on March 5, 2024.
Over the past three decades since the establishment of diplomatic relations between Baku and Astana, investment cooperation between the two countries has entered a completely new phase. From 2005 to 2022, investments from Azerbaijan to Kazakhstan totaled $306 million, while those from Kazakhstan to Azerbaijan amounted to $95 million.
Azerbaijan is now in the league of the top 15 significant investors in the Kazakh economy. In Kazakhstan, over 900 companies with Azerbaijani capital are registered, primarily involved in trade, intermediary services, road and infrastructure construction, processing, and logistics. Conversely, approximately 150 companies with Kazakh capital operate in Azerbaijan, engaging in sectors such as industry, agriculture, trade, services, construction, and transportation.
Both countries have been successful partners within the framework of the Turkic Investment Fund based in Istanbul, which fosters economic integration across the wider region. The fund plays a crucial role in supporting intra-regional trade, aiding small and medium-sized enterprises, and executing joint projects with international financial institutions. However, in addition to this cooperative approach among Turkic states in the investment sphere, Kazakhstan and Azerbaijan have made the decision and initiated steps to implement a mutual bilateral initiative for establishing a commercial investment fund.
An Azerbaijani expert and PhD in Economics, Ilgar Velizade, noted the newly established investment fund between Azerbaijan and Kazakhstan has the potential to drive forward a range of significant bilateral projects.
"Both sides are keen on bringing specific projects to fruition across various sectors. During his recent visit to Baku, the President of Kazakhstan highlighted several areas of collaboration, including energy, transportation, high technology, agro-industry, tourism, and more. This investment fund will play a pivotal role in fostering bilateral cooperation in these fields. Additionally, there are hopes for fostering collaboration between small and medium-sized enterprises, thus allowing promising projects to receive funding through this fund," he remarked.
Velizade underscored the significance of the fund's outreach beyond Kazakhstan and Azerbaijan, noting its potential to undertake projects in third countries. This, he suggests, indicates a broader scope for cooperation between the two nations in the markets of third countries.
"All the countries mentioned are Turkic-speaking or Balkan nations, where Azerbaijani and Kazakh businesses have established a strong presence over the years, successfully executing various projects. As a result, Azerbaijani and Kazakh businesses are well regarded in these regions. The implementation of these pivotal investment projects in neighboring markets will allow businesses from both countries to thrive in familiar territories, offering our partners in these countries a mutually beneficial cooperation agenda, centered on the interests of both businesses and, of course, the local populations," he concluded.
In turn, Kazakh expert and Director of the Institute of Applied Ethnopolitical Studies, Talgat Kaliev, highlighted that the new investment fund would primarily finance infrastructure projects, especially those related to the development of the Trans-Caspian transport corridor.
"This project holds significance for both nations, as the improvement of bottleneck areas along the corridor directly impacts its overall capacity. Hence, the fund will support the construction, reconstruction, modernization, and expansion of key transportation routes and ports. Kazakhstan and Azerbaijan have pledged $300 million towards this fund, and I anticipate that they will be the primary investors. However, foreign investors may also join if there's interest. As for the regional fund, there's considerable potential, particularly among Turkic nations. It could serve as a platform for other countries like Türkiye, Uzbekistan, and Kyrgyzstan, which share an interest in corridor development and can influence each other economically, to contribute," he explained.
The visit of President of Kazakhstan Kassym-Jomart Tokayev has already reinforced the importance of bilateral relations both for Baku and Astana. The strategic partnership agreement between Azerbaijan and Kazakhstan to establish an investment fund will undoubtedly inject new momentum into bilateral relations. With such a fund in place, Azerbaijan can facilitate capital exports and undertake strategically important projects for the benefit of the broader region. Given the agreements reached during the visit, it's safe to say that the future of Azerbaijani-Kazakh relations looks promising and holds great potential for both nations.