Azerbaijan, Russia to ink investment protection agreement in July

By Nazrin Gadimova

The draft agreement on mutual promotion and protection of investments between Azerbaijan and Russia is ready and will be signed in the near future, Russian Economic Development Minister Alexei Ulyukayev said in Baku on June 2.

"The draft document is ready and will be finalized by late June, and the signing can take place in July," he said, adding that the sides have been moving towards this agreement for a very long time.

"The work took several years and the sides exchanged a lot of letters, but the process was moving slowly. During the meeting with my Azerbaijani counterpart, we removed all the contentious issues. We just needed to sit and talk. I am sure the signing of this agreement will spur the trade turnover and the exchange of mutual investments," Ulyukayev stressed.

The minister also added that Azerbaijan and Russia are viewing opportunities in the sphere of co-investment in mutually beneficial projects.

"During a meeting with my Azerbaijani counterpart, Shahin Mustafayev, we discussed a wide range of issues, including the possibility of co-investing by Azerbaijan's State Oil Fund (SOFAZ) and Russian National Welfare Fund, as well as Azerbaijan's investment company and Russian Direct Investment Fund in projects of mutual interest," Ulyukayev said.

The Russian minister underscored that the Russian side expects a significant amount of investments (billions of dollars) will be made in such projects.

"We also discussed the projects for creation of logistics centers, joint manufacturing of railcars, as well as creation of joint ventures (JV) for manufacturing equipment for oil and gas production," he said, adding that Azerbaijan is also interested in making investments in the construction of a logistics center in the Russian city of Yekaterinburg.

Ulyukayev pointed out that following the meeting with Mustafayev, the two sides signed a memorandum of understanding on cooperation between the economy ministries of Azerbaijan and Russia.

They also agreed on the draft program on the long-term economic cooperation and an agreement on opening Azerbaijan's trade and exhibition center at the All-Russian Exhibition Center, according to the minister.

"Trade turnover between Azerbaijan and Russia can increase up to $4 billion in the long term," Ulyukayev told reporters.

"The trade turnover is at a good pace, and by our estimates it has reached $3.6 billion but it doesn't reflect the existing potential," the minister said, adding that $3.6 billion is about 5 percent of Azerbaijan's GDP and less than one percent of Russia's GDP.

Ulyukayev said the logistical limitations and problems in the legal and contractual framework are the main factors hindering the development of trade relations between the two countries.

"It is necessary to settle these problems. And during the meeting with Azerbaijani Economy and Industry Minister Shahin Mustafayev, we also discussed issues such as the construction of logistics centers in the two countries, the mechanisms of developing the transit transportations by motor vehicles and railway, and other problems and prospects of trade and economic cooperation," Ulyukayev added.

Azerbaijani-Russian business forum will be held in Baku as part of the visit of a Russian delegation on June 4.