Why and how to contribute to the Turkish economy?

The Azerbaijani army is waging a patriotic war. There are passive supporters and active participants in this war. Some countries express their solidarity with Azerbaijan with their silent positions. The "diplomatic silence" strategy of some of them (for example, Russia) is also in our interests. We also have opponents. But there is a state of which comprehensive support is heavier than the friendly assistance considered by Azerbaijan. This is the Republic of Turkey!

At the beginning of the century, we did not only see the commitment of the Turkish state to its strategic alliance. Nuru Pasha entered Baku as a promising person and destroyed the foreigners. He showed them the places they deserved. What the commander of the Caucasus Islamic Army at that time, Nuru Pasha, did a century ago, Turkish commanders do now.

One of the philosophers said that it is impossible to enter a river twice. Twice in the first century, the brave Turkish army came not only to the "river" but also to the lake called the Caspian Sea. Without fear and by dicing with death. It was not just a matter of religion and language. In the region of the South Caucasus, which is controlled by an ambitious state like Russia, brotherly Turkey has stubbornly spread its "wings" in the skies of Azerbaijan. Thanks, Turkey!

What should we do?

The series of questions are lined up:

What is the value of this relationship, which is above the level of a strategic alliance? What should we do? Should we unite with Turkey? Should we create a confederation?

Nasib bey Yusifbeyli¹  gave a more adequate answer to this situation a century ago. At the beginning of the century, there was a Turkish citizen whose name was Husameddin Tukac. He was even imprisoned in Russia and endured many hardships. In his memoirs, he spoke about his conversations with Nasib bey Yusifbeyli in Ganja. At that time, the Caucasian Islamic Army was in Ganja. In his conversation with Nasib Bey, Tukac bey made an interesting remark about Azerbaijan's unification with the Ottomans. Nasib bey Yusifbeyli gave a very profound answer to the idea of uniting Azerbaijan with Turkey, which was very popular at that time: "The Ottomans are our big brothers but let's not forget that Baku cannot be ruled from Istanbul."

It is a very instructive answer. But we have such common values, regional interests, and strategic goals that we can solve them together without a single state umbrella. In many cases, our better political and geoeconomic "duets" can be obtained as separate state entities. The valuable opinion of the great sociologist Karl Popper is very true: "We are united in diversity." Yes, in fact, we can decorate a better "spectrum" in different "colors".

What we should do!

The most important point that Azerbaijan can do with Turkey is to raise the quality of economic partnership to a higher level. We need to play a very important role in Turkey's energy supply. It is true that some of Turkey's economic difficulties will end by improving energy supplies. By the way, promising processes have already begun to improve the energy supply. Two months ago, 85 billion cubic meters of gas were discovered in the Sakarya field discovered in the Black Sea of Turkey. The reserves of "blue fuel" in this field are even 5 times higher than the declared figure. This could have a positive impact on Turkey's energy supply for nearly 10 years.

As the state of Azerbaijan, we must take steps to encourage more investment flows into the Turkish economy. As we know, there are 3,400 companies with Turkish capital operating in Azerbaijan, and 2,400 companies with Azerbaijani capital in Turkey. According to data a year ago, Azerbaijan's investments in Turkey are estimated at $ 14.5 billion, of which $ 13 billion is in the oil and gas sector. In turn, Turkey has invested $ 11.8 billion in Azerbaijan, of which $ 9.1 billion was invested in the oil sector. Turkey has invested $ 2.7 billion in Azerbaijan in the non-oil sector.

We must increase the investment opportunities of Azerbaijani companies in the Turkish economy. SOCAR's investments in Turkey alone will reach $ 17 billion by the end of this year.

SOCAR's investments in the Turkish economy 

Petkim is one of the largest petrochemical companies in Turkey. It is the 20th largest company in Turkey in terms of export opportunities and can sell its products to more than 50 countries. It has about 150,000 workers in Turkey.

The STAR Refinery will process 10 million tons of crude oil annually. The plant will produce 1.6 million tons of naphtha, 1.6 million tons of jet fuel, 4.8 million tons of low-sulfur diesel fuel, 700,000 tons of petroleum coke, 420,000 tons of mixed xylene, and 160,000 tons of sulfur per year. As part of the STAR Refinery project, it will supply Turkey's petrochemical industry with a staff of 12,000. In total, more than $ 6 billion has been invested in STAR.

SOCAR Gas has been selling 1.3 billion cubic meters of gas since its establishment in 2012. SOCAR Energy's investment opportunities are growing. The TAP and TANAP projects have been implemented with Turkey as very serious energy ties in this context. In the early days of these projects, after the agreement between Turkey and Azerbaijan on TANAP, Iran and Russia had expressed concern. With 6 billion cubic meters of gas from TANAP (10 billion cubic meters to Europe), Turkey will be able to reduce gas imports from Russia and Iran. The discovered gas reserves of Turkey, including the TANAP project, will serve to minimize its import quota. Adding energy carriers to goods and services at lower prices will stimulate exports.

Why should Turkey be the main importer of Azerbaijan?

The Turkish economy has undergone various changes in recent years. Today, if you ask what is the number one economic problem in the Turkish economy, they will say "the current deficit" without hesitation. Because the country's export potential compared to imports causes the inflow of dollars outside the Turkish economy. Foreign exchange inflows are a serious concern as they have a negative balance of payments. The private sector, which is in the structure of public and company debts (over $ 465 billion), owes more than $ 220 billion to foreign respondents. As an importer, there is an influx of ready-made dollars outside of Turkey.

Azerbaijan, as the main buyer of goods imported from Turkey, should focus more on the trade vector to Turkey. Only 12% of $ 13.7 billion worth of goods imported by Azerbaijan last year falls to the share of Turkey. Turkey indeed is one of the two main importers of Azerbaijan. After importing $ 2.290 billion worth of goods from Russia, Azerbaijan imported about $ 1.7 billion worth of goods from Turkey over the past year (2019). As a state, we cannot play a direct role as an importer of these products. The share of the state in the market economy, the main producer of goods and services of the private sector, participates as a market player. However, it can partially meet the state's own order-based needs (materials for military units, participation in state-based megaprojects, etc.). However, if we focus on the implementation of various incentives for the private sector, then they can choose Turkey as the main market for imported products. We can expand the range of imports through promotional campaigns to meet the personal consumption needs of our citizens. Because as a result of our measures in three directions, we can bring Turkey to the level of the first country in terms of imports. This, in turn, means an increase in foreign exchange earnings of brotherly Turkey. The currency that does not flow abroad will benefit the Turkish economy by creating lasting value, which will be our greatest contribution to the brotherly state.

1. Nasib Bey Yusifbeyli is an Azerbaijani statesman, educator and publicist. He served as Minister of internal Affairs, Finance and Chairman of the Council of Ministers of the Azerbaijan Democratic Republic (March 14, 1919-March 30, 1920).