Pakistan-Azerbaijan: it’s time to raise trade to a new level

November 28, 2018

(Seymur Mammadov) azerbaijan

Azerbaijani-Pakistani relations are developing dynamically, expanding comprehensively, covering all new areas of cooperation. Fraternal and friendly countries today are interested in further expanding cooperation in the trade-economic, military, military-technical, energy, tourism, etc. Azerbaijan and Pakistan maintain the tradition of exchanging high-level visits. A good example of this is the October visit of the head of the State Border Service of Azerbaijan, Colonel-General Elchin Guliyev to Pakistan, where he met with Pakistani President Arif Alvi, who said that Baku and Islamabad have common positions on all key global and regional issues and support each other at all international platforms, which is evidence of fraternal relations between the two countries. The President of Pakistan spoke in favor of supporting the creation of new industrial zones, and also noted the importance of increasing trade turnover between the countries.

Here I would like to dwell on this issue in more detail. Politically, the dialogue between Azerbaijan and Pakistan is at a very high level, but in economic terms both countries should make efforts to increase trade turnover. The current volume of mutual trade between Pakistan and Azerbaijan does not match the available opportunities. The annual trade turnover between the two countries is 10 million dollars. According to the State Customs Committee of Azerbaijan, in January-September 2018, the trade turnover between the two countries amounted to $ 8.34 million, of which most of the exports were of Pakistani products to Azerbaijan. Compared to the same period last year, the trade turnover grew by 22.46 percent, but despite this growth, the trade turnover between our countries is small, since the potential of mutual relations has not yet been fully disclosed. There is a great potential for the expansion of Azerbaijani-Pakistani cooperation both in the military sphere and in the fields of energy, agriculture, logistics and tourism. Azerbaijan and Pakistan should actively work to increase bilateral trade. About 270 companies with Pakistani capital have registered in Azerbaijan today, investing $ 4.2 million in the Azerbaijani economy.

Let’s try to figure out how to achieve an increase in trade growth between the two brotherly countries?

 Transport and logistic. Pakistan could join the North-South transport corridor, which is designed to connect Northern Europe with South-East Asia, including the railways of Azerbaijan, Iran and Russia. At the first stage, it is planned to transport 5 million tons of cargo per year along the corridor, in the future – more than 10 million tons. During his official visit to Pakistan in 2017, Azerbaijani President Ilham Aliyev offered Islamabad to join the North-South transport corridor. Pakistan is considering joining this transport corridor, but a final decision on this issue has not yet been made. Pakistan’s participation in this project would expand communications in the areas of trade and tourism.

Azerbaijan could become a participant in the project “China-Pakistan Economic  Corridor”. As part of this project, Pakistan has rebuilt and improved its infrastructure. Beneficiaries of this can be all neighboring countries, the priority is the members of the SCO. Azerbaijan in the SCO has the status of a dialogue partner. Our country has applied for observer status in the organization. Pakistan may invite Azerbaijan to take part in the project of the China-Pakistan economic corridor. Azerbaijan, located at the crossroads of the East-West and North-South international transport corridors, plays a key role in expanding the region’s transit capacity and is becoming its important transport and logistics center. Projects such as the Baku-Tbilisi-Kars railway, Baku International Sea Trade Port, Absheron Logistics Center, etc. have already been implemented in this direction.

Energy. Azerbaijan has large reserves of oil and gas. Pakistan, in turn, is in dire need of fuel, especially for generating electricity. In February 2017, an intergovernmental agreement on cooperation in the field of energy was signed between Pakistan and Azerbaijan. This agreement provides for the supply of crude oil, petroleum products and liquefied natural gas to Pakistan. SOCAR has become one of the winners of the tender for the supply of liquefied gas for Pakistan LNG Limited. In October Pakistan was to receive two batches of reduced natural gas from SOCAR. The volume of each batch is 140 thousand cubic meters. Cooperation in the field of energy has already been put on rails and in the short term this factor will positively affect bilateral trade.

 Military technical cooperation. Pakistan and Azerbaijan should further expand military-technical cooperation. Pakistan is one of the owners of nuclear weapons and a state with high rates of development of the military industry. Pakistan is interested in further strengthening cooperation in the defense industry and is ready to provide the Azerbaijani army with the necessary products of the defense industry. The federal minister of Pakistan for defense production Zubeida Jalal Khan said this at a recent meeting with Azerbaijani ambassador to Pakistan Ali Alizade. Azerbaijan is also interested in further expansion of military cooperation with Pakistan and the acquisition of an even greater amount of military equipment from the brotherly country. Last year, Azerbaijan purchased ten Super Mushshak training aircraft for the Air Force from Pakistan. In 2019, Azerbaijan and Pakistan may sign an agreement on the purchase of JF-17 fighter-bomber. In the years 2019-2020, the mass production of JF-17 Block 3 fighters is planned.

Tourism. Azerbaijan and Pakistan have great potential in the field of tourism. In 2017, the number of Pakistani citizens visiting Azerbaijan was 25,000, and it is expected that this number will gradually increase by the beginning of 2019. Pakistani interest in Azerbaijan and Azerbaijanis in Pakistan is growing, and all this happens in the absence of direct flights between Baku and Islamabad. Today, unfortunately, the flight from Baku to Islamabad is possible only with a transfer (via Bahrain, Dubai, Doha, Istanbul), and also from Islamabad to Baku. Pakistan and Azerbaijan should seriously consider opening direct flights. The launch of direct flights will not only increase tourist ties, but also increase trade and economic activity and cooperation between the two countries.

Agriculture. Pakistan could be interested Azerbaijan with its wheat. Moreover, today the need for wheat in Azerbaijan is covered by imports. In January-September 2018, Azerbaijan increased wheat imports by 11%. Pakistan is an industrial-agrarian country with a mixed economy. Wheat is one of the four main crops (rice, cotton, sugar cane) grown in Pakistan. The key export destinations for Pakistani grain are Bangladesh, Indonesia, Vietnam, the United Arab Emirates, Oman and others.

P.S. Pakistan and Azerbaijan have always supported and will continue to support each other at the diplomatic level. If Islamabad supports Baku’s fair position on the Karabakh issue, Baku also supports Islamabad’s position on the Kashmir issue. In political terms, bilateral relations are at a high level, and now countries should also bring trade and economic relations to a high level. It is time to raise the trade relations of the two fraternal countries to a new, higher quality level. I am sure that in the near future the government of Azerbaijan will invite the new Prime Minister Imran Khan to visit our hospitable country. The visit of the Pakistani Prime Minister will give an additional impetus to deepen bilateral relations both in trade and economic and in the field of military-technical cooperation.

 

The writer is the director of international expert club “ EurAsiaAz“, and editor-in-chief of the Azerbaijani news agency Vzglyad.az