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Baku, London need to expand relations beyond energy

31 October 2014 10:39 (UTC+04:00)
Baku, London need to expand relations beyond energy

By Sara Rajabova

Azerbaijani and English diplomats and businessman sat for talks to focus on the business ties between Baku and London.

The European Azerbaijan Society (TEAS) has collaborated with CATBIG - a business-to-business network for UK-based companies, focusing on the countries of Central Asia and the Trans-Caucasus - to organize a briefing for more than 60 diplomats and international delegates from UK energy, financial services, information technology, infrastructure and agricultural sectors, AzerTag news agency reported.

"An excellent state of relations exists between the countries, and it is imperative for British businesses to see where the opportunities lie and understand how UK and Azerbaijani governments and partner organizations can collaborate to help UK businesses optimize their revenues," Charles Hendry, an MP and Prime Ministerial Trade Envoy to Azerbaijan, Kazakhstan and Turkmenistan, said.

Hendry said the relationship is currently overwhelmingly centered on oil and gas, and BP was significantly the first international investor in Azerbaijan, following its independence.

"Azerbaijani President Ilham Aliyev has spoken of BP as being the partner of choice for another 20-30 years. The final investment decision (FID) between the Azerbaijani government and the BP-led Shah Deniz Consortium, signed in December 2013 in the presence of William Hague MP, former UK Foreign Secretary, can be seen as the next stage of this relationship. This marks the first step in the Southern Gas Corridor, which will bring Azerbaijani Caspian Gas to Southern Europe and ensure European energy security and energy supply diversification," Hendry said.

He noted that around 500 UK companies and 5000 UK citizens are working in Azerbaijan, most of them linked with BP and its partners.

"We now need to take this relationship beyond energy, and help build the skills base amongst local people in Azerbaijan. The Sumgait Chemical Industrial Park is currently under construction, and British investment and the skills that British companies can bring are highly necessary. The White City Project has transformed an area of heavily contaminated land into a world-class location for top-quality hotels. British companies can certainly contribute in terms of design, architecture and project management. There is also collaboration in the information technology sector, and more students are being sent to the UK on Presidential scholarships than any other country," Hendry said.

He also added that there are great opportunities in the financial services sector, which remains underdeveloped.

"Baku is preparing to host the inaugural European Games and many companies and specialists who were involved in the London 2012 Olympics are now working in Baku. Azerbaijan will be on the world stage for the first time, and Formula 1 will be held in Baku in 2016. I am certain that Baku will successfully hold the event due to the drive and determination of the Azerbaijani government. Azerbaijani ministers are pro-British, keen to see further engagement and want British business in their country," Hendry said.

Tahir Taghizade, Azerbaijani Ambassador to the UK, said the Azerbaijani ministers are pro-British and are also pro-Azerbaijani, and their economic, political and security interests almost coincide.

"We want our relationship with the UK to outlast our hydrocarbon resources. Since 2003, due to political stability and sound macroeconomic policies, the country has transformed and the economy has grown 3.2 times by 2013. Last year, AzerSpace-1, the first Azerbaijani satellite was launched, and will soon be followed by the second satellite. There are also many projects aimed at developing the tourist industry," he said.

Taghizade said Azerbaijan accounts for 70 percent of the South Caucasus GDP, and trades with around 150 countries.

"Azerbaijan was ranked 38th in the Global Competitiveness Report 2014-15, published by the World Economic Forum. Azerbaijan applies the same principles as the UK in terms of economic development and political ideals. Economic issues will remain at the top of my ambassadorial agenda. I am committed to bringing easy access to the Azerbaijani economy for UK businesses, whether in the energy or non-energy sector," Taghizade said.

Lionel Zetter, Director of TEAS, said Azerbaijan is a very prosperous and stable country, but it has a long-running conflict with neighboring Armenia and has to pay attention to the living conditions of around 875,000 refugees and Internally Displaced Persons (IDPs).

Armenia occupied over 20 percent of Azerbaijan's internationally recognized territory, including Nagorno-Karabakh and seven adjacent regions, after laying territorial claims against its South Caucasus neighbor that caused a brutal war in the early 1990s. Long-standing efforts by U.S, Russian and French mediators have been largely fruitless so far.

"This is a considerable financial burden, even for a wealthy country such as Azerbaijan. It is our job to remind people that the conflict is ongoing and that these people are unable to return to their rightful homes," Zatter said.

The meeting was followed by a question-and-answer session which covered such topical issues as flights and visas; the status of the Caspian Sea; the Trans-Eurasian Information Superhighway (TASIM) project; and educational development in the country.

The United Kingdom remains the greatest contributor of Foreign Direct Investment (FDI) to Azerbaijan, equating to 32.2 percent of all FDI ($1.3bn) during the first half of 2014, according to the Azerbaijani State Statistics Committee.

The relevance of Azerbaijan to the UK and across Europe has increased considerably since the signing of a $45bn agreement in 2013 between the Azerbaijani government and the BP-led Shah Deniz Consortium. From 2018, this will see Caspian gas from the Shah Deniz II development being transported to an interconnector in Italy.

The UK recognized Azerbaijan's independence in December, 1991. Diplomatic relations between the two countries were established in March, 1992.

Azerbaijan and the UK have benefitted from close bilateral partnership and cooperation since 1992, in the framework of international organizations such as the United Nations, OSCE, Council of Europe, and NATO. The relations have covered a wide range of issues, from high-level political dialogue to growing trade and investment, as well as strengthening cultural and humanitarian ties.

Economic cooperation between the two countries, especially in the energy sector, is at the core of relations between Azerbaijan and the UK. The UK is the largest foreign direct investor in Azerbaijan, followed by the U.S. and Japan.

Azerbaijan is cooperating with the UK in the exploration and transportation of oil and natural gas from the Azerbaijani part of the Caspian Sea.

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