Russia and Azerbaijan Forge Closer Ties to Boost Non-Oil Trade

On Wednesday, February 28, the XII Russian-Azerbaijani Interregional Forum is being held in Mineralnye Vody under the chairmanship of Deputy Prime Ministers of Russia and Azerbaijan Alexey Overchuk and Shahin Mustafayev. Representatives of Russia and Azerbaijan are discussing promising transport and logistics projects, opportunities to promote environmental dialogue on the eve of the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP29) in Baku, as well as new vectors of cooperation in industrial sectors.

In 2023, the Russian Federation topped the ranking of countries supplying goods to Azerbaijan, Vladimir Padalko, Vice President of the Russian Chamber of Commerce and Industry noted. Deliveries of Russian products to Azerbaijan in 2022-2023 increased by 15.6% to 3.1 billion US dollars. As a result, Russian goods accounted for more than 18% of the total imports of the republic. The structure of Russian exports to Azerbaijan is mainly formed by cereals, wood products, ferrous metals, food, paper and cardboard, as well as equipment and automotive equipment, fuel and petroleum products. According to V. Padalko, the leaders of export supplies to the republic in 2023 were enterprises of Moscow, Stavropol Territory, Moscow and Nizhny Novgorod regions.

Analyzing the prospects for bilateral trade, the Vice President of the Chamber of Commerce and Industry said that Russia is the main importer of non-oil (including fruits and vegetables) products from Azerbaijan: Russia accounts for 33% of this type of export.

"In 2023, Azerbaijan's non-oil exports increased by 9.8% compared to last year and amounted to 3.3 billion US dollars. This is a record figure in the entire history of observations. Due to the fact that the Azerbaijani economy faces the task of increasing non-oil production and exports, and Russia is the main market for non-primary goods, it is expected that the trade turnover of the countries, in particular the export of Azerbaijani goods to Russia, will continue to grow," V. Padalko said.

In addition, two important documents have been adopted over the past two years that have influenced the development of business between the two countries. This is a Declaration on allied cooperation and a roadmap, he noted.

"Now we face new challenges — the development of cooperation in the agro-industrial complex, in the field of industry in general and in the field of high technologies in particular," said V.Padalko.

Speaking about economic relations between the two countries, Azerbaijani Deputy Prime Minister Shahin Mustafayev noted that the trade turnover between Azerbaijan and Russia, which reached a record 4.4 billion in 2023, has every chance of exceeding this figure this year.

"In 2023, our trade turnover increased significantly and reached a record high of almost $4.4 billion. By the end of this year, we hope to reach new, higher indicators," he said.

According to him, in recent years it has been possible to make serious progress in almost all areas of cooperation — investment cooperation, industrial cooperation and cooperation in transport, energy, agricultural, cultural, humanitarian and many other areas.

"Azerbaijan has invested more than 1 billion US dollars in the Russian economy, and Russia has invested more than 8.7 billion US dollars in the economy of Azerbaijan. Currently, a large package of investment projects with Russian participation is being implemented in Azerbaijan," Mustafayev said.

He clarified that in June last year, a service center for trucks and agricultural machinery, created with the participation of KAMAZ, was opened in the Jabrayil region. "Among the landmark projects, we can also mention projects for the production and assembly of KAMAZ and Ural trucks, the GAZELLE car assembly plant put into operation, the “R-Pharm” company produces medicines in Azerbaijan. Today, a project is being implemented to invest in the “Sheki Sharab” enterprise (a project of the “Abrau-Durso” company)," Mustafayev said.

He noted that Azerbaijani companies are also actively investing in the Russian economy. Their projects included the sanatorium and tourist center "Istochnik" (Source) in the city of Yessentuki, a plant for the production of canned fruits and vegetables and tea in Krasnodar, the construction of a sanatorium and hotel complex in Kislovodsk.

The head of the Export and Investment Promotion Agency (AZPROMO), Yusif Abdullayev, in turn, said that the legendary Agdam port wine is produced in Sheki thanks to the investments of the Russian company “Abrau Durso.”

In general, according to him, the dynamics of the development of business relations between Azerbaijan and Russia is quite active and AZPROMO plans to participate in all major international exhibitions in the Russian Federation, including World Food.

It is worth noting that the signing of a memorandum of understanding between the North Caucasus Federal University (NCFU) and the Export and Investment Promotion Agency of the Republic of Azerbaijan took place at the Forum. The document is aimed at establishing cooperation between the parties in the field of training and retraining of specialists, considering personnel needs.