Azernews.Az

Qabil Ashirov

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Over the past three and a half decades, Azerbaijan has witnessed a remarkable transformation in its economy. Since regaining its independence, the country’s economy has grown approximately 175 times, a milestone that reflects not only its rich natural resources but also the successful navigation of a complex post-Soviet transition. Central to this success story is the historic “Contract of the Century” signed in the mid-1990s, which launched Azerbaijan on a path of sustained economic growth and global integration.

While many observers highlight the significant role played by British Petroleum (bp) and the British companies involved in the contract, since bp held a lion’s share in the contract, a closer examination reveals a more nuanced reality. In fact, American companies hold a larger share of the Contract of the Century, with U.S. firms owning 40% of the shares compared to the 19% held by British companies. Moreover, it was an American company, McDermott, that became the first foreign firm to arrive in Azerbaijan shortly after its independence, playing a pivotal role in facilitating the country’s transition from a centrally planned economy to a market-oriented one.

The contribution of American firms in bringing new technologies, know-how, and managerial expertise to Azerbaijan’s nascent oil sector cannot be overstated. This collaboration laid a foundation not only for the development of hydrocarbon resources but also for the gradual modernisation of the entire economy.

Unfortunately, despite these substantial investments, trade relations between Azerbaijan and the United States remained modest for many years. This was largely due to the dominance of oil and gas exports in Azerbaijan’s trade profile and the fact that Europe has traditionally been Azerbaijan’s primary market. However, this dynamic is now changing in a very promising way.

In the last four years, Azerbaijan’s non-oil sector has nearly doubled, growing from around $1.8 billion to $3.4 billion. This rapid diversification has coincided with a significant increase in Azerbaijan’s trade with the United States. Today, the US market ranks among the top ten destinations for Azerbaijani non-oil and gas exports, with export volumes showing a steady upward trend year after year.

This shift is not only a positive indicator of economic diversification but also a meaningful signal of Azerbaijan’s integration into one of the world’s largest and most reliable consumer markets. The entry of Azerbaijani products into the US market carries more than just commercial value—it brings prestige, credibility, and the trust of one of the world’s most discerning markets. For Azerbaijani companies, this is a vital step towards long-term growth and international recognition.

It is also worth noting that the US market is unique in its openness and opportunities for emerging economies like Azerbaijan. The implementation of reduced tariffs following the re-election of President Donald Trump, which included preferential treatment for Azerbaijani goods, has further facilitated this growth. This policy development, while just one factor, has added momentum to the already growing trade relations and opened doors for even greater non-oil exports to the United States.

The recent visit of President Ilham Aliyev to the United States underscores the increasing importance of this bilateral relationship. During his working visit, the Azerbaijani delegation held important meetings. These discussions focused on the sustainable development of Azerbaijan’s economy and the deepening of economic diversification efforts.

The dialogue between Azerbaijan and the United States also highlighted the implementation of new tools to expand trade and explored future steps to deepen collaboration. This strategic engagement is a testament to both countries’ commitment to forging a resilient and multifaceted economic partnership.

For Azerbaijan, these developments mark a significant chapter in its ongoing journey toward economic resilience and global integration. The expansion of trade with the United States complements Azerbaijan’s broader efforts to diversify its export markets beyond its traditional partners—Russia, Turkey, Georgia, and Switzerland, which historically accounted for nearly 60% of its non-oil exports. As new markets like the US emerge, Azerbaijan is naturally reducing the concentration risk in its export geography, positioning itself for a more balanced and sustainable economic future.

In conclusion, the deepening economic ties between Azerbaijan and the United States are a source of optimism and mutual benefit. Azerbaijan’s dynamic growth in non-oil sectors, combined with the strength and reliability of the US market, creates fertile ground for continued expansion and collaboration. The successful partnership in the energy sector has set a strong foundation, and now the rising non-oil trade promises to elevate this relationship to new heights.

As Azerbaijan continues to diversify and innovate, its partnership with the United States will undoubtedly remain a vital pillar supporting the country’s sustainable economic development. With shared interests and growing cooperation, the future of Azerbaijan-US economic relations looks brighter than ever—a win-win scenario fostering prosperity, trust, and strategic partnership on the global stage.