Ukraine reveals priority directions for expanding interaction with Azerbaijan [INTERVIEW]
By Amina Nazarli
Azerbaijan and Ukraine which enjoy sustainable prospects of bilateral relations in political, economic, energy, transport and humanitarian fields plan to breathe a new life into the economic cooperation.
Azerbaijan, the largest nation in the South Caucasus with rich hydrocarbon resources, can offer a large variety of products, in particular oil and agricultural products, to Ukraine, which is very interested in their supplies.
Based on huge opportunities the two nations possess, Vadim Sidyachenko, Head of the Economic Department of the Ukrainian Embassy in Baku, told Azernews about the prospects of increasing the bilateral trade turnover this year.
Question: How can you describe the development of relations between Ukraine and Azerbaijan over the past 25 years?
Answer: Relations between Ukraine and
Azerbaijan were comprehensive and inclusive over the past 25 years
of establishment of diplomatic ties. Indeed, there were ups and
downs, even stagnation recorded in the early 1990's when Azerbaijan
experienced difficult time of war for its territorial integrity.
Ukraine fought on the side of Azerbaijan and helped both arms and
humans.
The relations developed more dynamically in 2010-2011, when the
trade turnover between the two countries amounted to over $1
billion per year, which was the most peak figure at the time.
In the end of 2015 Ukraine and Azerbaijan found a quick dialogue
and visit of Ukrainian President Petro Poroshenko to Baku in July
2016 significantly brought the positions of the two countries
closer. So, 2016 was a breakthrough in relations between the two
states.
Beginning from 2014 until the beginning of 2016 the trade turnover between the two countries tended to decrease by 30 percent a year compared to previous year. In the second half of last year this decline stopped and was stable.
During the negotiations in Davos this January President Ilham Aliyev and President Poroshenko held a friendly meeting, where they confirmed an interest in the projects which have been agreed. Also, it is planned to hold the 12th session of the intergovernmental commission under the chairmanship of First Deputy Prime Minister of Azerbaijan Yagub Eyyubov and Deputy Prime Minister of Ukraine Gennadiy Zubko.
Besides, an Azerbaijani delegation of 15 companies are scheduled to visit Ukraine.
Q.: What spheres are the most attractive and promising for the development of bilateral economic relations? Which fields of Azerbaijani economy represent particular interest for Ukrainian businessmen?
Answer: Analysis into the bilateral turnover
show that ferrous metallurgy. topped the exports to Azerbaijan. In
particular, Ukrainian rolled metal had a particular share, almost
50 percent, in construction market when Azerbaijan experienced the
construction boom during the preparations for Eurovision Song
Contest, housing building and Baku Shipyard in 2010 to 2015.
However, Ukrainian supplies reduced automatically following a
decrease by 30-40 percent in the volume of construction activities
beginning from 2014.
I would emphasize here a tremendous increase in the volume of
supplies of agricultural products, sugar, confectionery and meat to
Azerbaijan over the past few years. So, these products substituted
metal exports to some extent. At the same time, 18 percent of
Ukrainian exports to Azerbaijan account for cigarettes, which are
produced in Ukraine by world leading companies such as
British-American Tobacco and Japan Tobacco.
Ukraine, in turn, purchases products of chemical industry, polymers and plastics from Azerbaijan.
Q.: Ukraine is interested in Azerbaijan's oil and its transit to Europe. How do you assess the energy cooperation between Azerbaijan and Ukraine?
Answer: Ukraine is interested in importation of oil products from Azerbaijan, which Ukraine purchases mainly from Russia, and gasoline acquired from Belarus. So, Ukraine is much more interested in supply of high-quality Azerbaijani oil for its refineries, as well as further transit to Eastern Europe.
For instance, Ukrainian UkrTransNafta signed a three-year
agreement with SOCAR to purchase 4 million tons of Azerbaijani oil
for processing at Krichevsky refinery. It will be exported to the
refinery from Black Sea and Southern Port.
Along with crude imports Ukraine is also interested in transit of
Azerbaijani oil. Another memorandum of UkrTransNafta with
Azerbaijan provides for supply of Azerbaijani oil to the refineries
of Eastern Europe. Of course it should have commercial interest for
Azerbaijan and be attractive for SOCAR. Today SOCAR delivers oil
mainly to Europe including Eastern Europe via the Mediterranean
sea.
Belarus is also considering the ways to diversify its oil supply
sources and regards Azerbaijani oil supplies through Ukraine as a
possible option.
Q.: How can you assess the current level of Azerbaijani-Ukrainian economic cooperation? Can we call the current level of trade turnover between the two sides satisfying? What can you tell about the prospects of increasing bilateral trade?
A.: Ukraine takes an interest in import of
Azerbaijani agricultural products such as pomegranate, tangerine,
persimmon, hazelnut, tomatoes and cucumbers. Now, Ukrainians can
easily differ Azerbaijani pomegranate from other countries’ as
Azerbaijani are sweeter and tastier. We also know that Azerbaijan
hazelnut is precisely one of the most high-quality varieties.
However, many people alongside the quality also pay attention to
its price, which is higher compared to hazelnuts from other
countries.
Today grand part of Azerbaijani tomatoes and cucumbers is exported
to Russia, but I think that it would be in demand in Ukraine as
well. And now we are working on export of Azerbaijani products to
Ukrainian market.
Besides goods export, Ukraine is also interested in development of
tourist trips between the two sides. Recently, Ukrainians began
paying increasingly much attention to Azerbaijan, especially Baku
-- a romantic capital with beautiful infrastructure and different
restaurants. But we also advise our tourist companies to organize
tours to the regions of the country including Gabala, Sheki, Guba,
Gusar, Shahdagh, and Mingachevir.
Ukrainian International Airlines are also engaged in this process.
Two flights are carried out between Kyiv and Baku on a daily basis.
One is performed by Azerbaijani side and the other one by
Ukrainian. There is also increase in passenger flow, which
increased from 150 a day in 2014 to 220-240 a day. Now we work on
increasing the number of flights and directions.
Q.: How do you assess the prospects of participation of the two countries on major international projects? What are your predictions about the economic profitability of these projects?
A.: Azerbaijan is developing as a transit
country. Azerbaijani and Ukrainian railways, as well as Baku Sea
Port and Caspian Shipping Company seriously cooperate in
development of New Silk Road.
In January 2016 the first train functioned through the
Ukraine-Georgia-Azerbaijan-Kazakhstan-China route, thus testifying
for competitiveness of the route. The train smoothly passed the
territory of Azerbaijan (Alat Port), whilst a little problem
occurred in Aktau port, Kazakhstan, which is carrying out definite
work to fix the shortage.
In 2016 Ukraine joined Trans Caspian Transit route together with
Azerbaijan, Georgia, Kazakhstan and Turkey. And this project is
very important for Ukraine and the country is planning to actively
participate in it.
The second route passing through Azerbaijan is the North-South
Transport corridor in the direction of Iran, the Persian Gulf, and
India. Ukraine is also interested in this project, though there is
still no goods in demand in this direction compared to eastern
route. However, the project is still interesting on terms than to
import goods around the whole of Africa.
Talking about investments between the two sides, we consider not
only trade, but the most interesting is the establishment of
industrial cooperation on the basis of mutual investments.
As Ilham Aliyev underlined at a meeting with President Poroshenko
in Davos this January, Azerbaijani investments amounted to $200
million in Ukraine, in particularly, in construction and
automaintenance. One of the expected projects is construction of
asphalt plant in Ukraine by Azerbaijani investments. Today Ukraine
has established itself in the construction and reconstruction of
roads.
Ukraine also plans to invest in Azerbaijani market in particular in joint production of medicines. And this is the nearest projects that the two sides are expected to implement. The two countries plan to build a plant for production of infusion solutions.
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Amina Nazarli is AzerNews’ staff journalist, follow her on
Twitter: @amina_nazarli
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