Azerbaijan-Pakistan Bilateral Relations: Prospects & Opportunities (I)


Mehmood Ul Hassan Khan

Azerbaijan and Pakistan completed 25 years of bilateral relationship. The cooperation between the two countries extends to every sphere ranging from political, economic, technological, security to cultural arenas. It is based on holy concept of “shared prosperity”. It is based on rigorous commercial diplomacy. It is consolidated on greater socio-economic connectivity, better political understanding and geo-strategic cooperation. Increasing military cooperation has further strengthened their bilateral relations and transformed a “strategic partnership”. Both countries share brighten prospects and unlimited opportunities for the further strengthening of bilateral relations.
According to a high level diplomatic source, Pakistan’s Prime Minister Nawaz Sharif will make an official visit to Azerbaijan on Oct. 13-15 2016 during which thorough discussion on the further prospects of development of bilateral cooperation between Azerbaijan and Pakistan will be discussed. Pakistan wants to strengthen relations with Azerbaijan in various fields, to raise their level from friendly relations to strong economic partnership. Further strengthening of socio-economic ties and the development of trade and business relations between Azerbaijan and Pakistan will also be discussed.
The current level of cooperation provide win-win proposition for both the countries. For Pakistan, the strategic alliance with Azerbaijan offers a degree of recognition of Pakistan’s bid or become a more active, assertive and powerful regional actor. For Azerbaijan, Pakistan is also an important diplomatic supporter and more recently, as key military partner.
In the near past, due to series of high level visits of both the countries, political relations between Azerbaijan and Pakistan are now at a high level. Both states have always supported each other on the international forum. Pakistan brotherly supports Azerbaijan’s position on the Nagorno-Karabakh conflict, condemning the aggressive policy of Armenia. Moreover, Pakistan was the first country to adopt a resolution, which strongly condemns the genocide committed by Armenian Armed Forces against the civilian population of Azerbaijan’s Khojaly town and to urge the international community to force Armenia fulfill the UN Security Council resolutions. The upper house of its parliament the Senate of Pakistan also recognized the events in the Azerbaijani town of Khojaly as genocide. Pakistan fully supports Azerbaijan’s territorial integrity, and it has not yet recognized Armenia as an independent state in connection with the occupation of Azerbaijani lands. Azerbaijan supports Pakistan on the dispute of Kashmir.
Azerbaijan and Pakistan bilateral relations were established 25 years ago. Now both are strategic partners. The Azerbaijan-Pakistan friendship was founded by two great leaders of the two countries, H.E. Heydar Aliyev, the Father & Founder and first president of Azerbaijan and Benazir Bhutto. Now H.E. Ilham Aliyev wants a strategic partnership with Pakistan.
Both countries had cultural, social, religious and above all civilizational ties through famous Silk Route in the past. Caravans from both regions used this route extensively for trading purpose. Now, a corner of Azeri culture has been established in Look Versa in Islamabad and Azeri students are studying in Pakistan. Pakistani students are also taking education in Azeri institutes. These bonds will be further strengthened during the three day official visit of primer Nawaz Sharif to Azerbaijan.
Bilateral relations between Azerbaijan and Pakistan are constantly on the move adding trade and economic ties which have already been given new dimensions. Exchange of visits of Azerbaijan and Pakistani leaders as well as the other high level delegations played a pivotal role in cementing the links between the countries and people alike. Agreements in political, economic, strategic, social, humanitarian, cultural and other sectors signed during these visits formed a solid legislative base.
Both countries have reiterated to further strengthen existing bilateral ties through enhanced interaction between the parliaments and people through rigorous commercial diplomacy, regional connectivity and the last but not the least greater socio-economic integration.
Meetings at the highest level
Both countries are keen to further enhance its bilateral, economic and commercial relations with special focus on improving the deteriorating energy situation in the country. Economic diplomacy is the mantra of both the countries in this regard effective measures and mechanism have already been initiated to take advantage comparative advantages of each other.
At present, the political relations between Pakistan and Azerbaijan are at the highest level. The bilateral trade between the two countries is only US$ 22 million in 2012-2013 that is far below their potential. It is hoped that taking effective trade facilitation measures, including easing travel by improving communication and transportation links would be instrumental for further enhancing of trade volumes.
Azerbaijan would increase its airline fleet to establish direct air-link between Islamabad and Baku which would bring people of the two countries closer to each other. It is hoped that Pak-Azerbaijan Business Forum would open new avenues of cooperation.
The construction sector is one of the fastest growing areas of Azerbaijan’s economy as it is in process of constructing huge buildings and a new island that provide investment opportunity of about $130 billion. The two countries also have a potential of joint ventures in pharmaceutical, agriculture and manufacturing sectors.
Pakistan can export to Azerbaijan its value-added agricultural products like mangoes, dates, fruits, sports and surgical goods. Pakistan s Basmati rice has a huge demand in Azerbaijan. The establishment of joint businesses between Pakistan and the Republic of Azerbaijan could enhance the trade volume between these two countries 100 times greater than the existing minimum level of trade. All the chambers of commerce in the country are of the view that our energy deficit could be overcome by trading with Azerbaijan.
To be continued
Pakistan could import lubricants, oil and gas, and other petroleum products from Azerbaijan.
Pakistan-Azerbaijan bilateral relations new phase of development has been revolutionized after the recent visit of President of Pakistan Mamnoon and it would be further strengthened after the Nawaz Sharif visit to Azerbaijan. Prospects of greater economic integration, speeding-up of FDIs, joint ventures and cooperation in the diverse fields of economy, industry, production, science and technology, ICT and the last but not the least, education would be further deepened and strengthened. The Azerbaijan stressed the need to collectively work on legal tax regime in order to avoid double taxation. A large number of traders and industrialists of two countries attended the forum.
Establishment of Pakistan-Azerbaijan Business Forum was established which would facilitate businessmen, investors and industrialists of both the countries in their future decision making. It would be a game-change in further deepening of bilateral relations in the fields of economic integration, trade & commerce, energy cooperation, and the last but not the least, educational exchange in the days to come. It is hoped that private sector of both the countries would now in a better position to invest and initiate joint ventures in the diverse filed of economy and production. Both countries would also extend their mutual expertise in the fields of oil and gas, garments, construction material, pharmacy, agriculture, sports, and science & technology.
There exist tremendous opportunities for Azerbaijani and Pakistani investors in each other’s country. In terms of economic relations between Azerbaijan and Pakistan, there exist multiple unutilized opportunities that could have been worked well for strengthening the relations between the two states. For instance, the level of annual trade between the two countries in the last 5 years remained between US$ 17 to 25 million only, which does not correspond with the level of existing bilateral political goodwill between the two nations. We countries must move in the direction of non-tariff arena in order to accelerate socio-economic relations in the right direction. Introduction of multiple joint ventures can be initiated in the field of pharmaceutics, textiles, ICT, infrastructure and education etc. Energy cooperation must be central theme of primer Nawaz Shairf visit to Baku. Both the governments can facilitate companies to get registered to make them able to introduce their products.
In terms of infrastructure development, Azerbaijan lies ahead of Pakistan and currently the Government of Pakistan is undertaking massive mega infrastructure projects attracting the investors. Being in a better position, Azerbaijan can invest and earn from Pakistan’s infrastructure development.
A direct areal-link would be game changer. Both the sides share perception that such flight are vital for the enhancement of bilateral ties, people to people contact, promotion of tourism and also business activities, thus both the states are working over an alternative proposal linking Istanbul-Baku-Lahore which is under serious considerations.
Now Azerbaijan and Pakistan agreed to expand bilateral cooperation in the fields of trade, gas and electricity besides introducing road and air connectivity. Pakistan-Azerbaijan Joint Commission (PAJC) must initiate meaningful dialogue for further strengthening of bilateral relations. Both sides decided to enhance business-to-business contacts through a Joint Business Council.
They also agreed to facilitate talks and subsequent signing of MoU between the State Oil Company of Azerbaijan (SOCAR) and the Pakistan State Oil Company (PSO) and other nominated entities of Pakistan under the inter-governmental agreement (IGA) for trading crude oil, refined oil products, LNG and Liquefied Petroleum Gas (LPG) as well as joint development of new facilities for their import. SOCAR will execute activities through the SOCAR Trading S.A, which is SOCAR’s wholly-owned affiliate.
Azerbaijan has a huge demand for Pakistani agricultural products especially, Basmati rice and fruits, including mango, dates and others. The two countries also have a potential of joint ventures in pharmaceutical and manufacturing of surgical goods which must be explored and jointly invested and financed.
Formation of Joint Ministerial Commission cultural forums like Pakistan-Azerbaijan Friendship Association, existence of Multani Caravanserai in Ichiri Sheher Baku, reconstruction of the High School for Girls donated by the Heydar Aliyev Foundation of Azerbaijan in Azad Jammu and Kashmir and the adoption of resolution by Foreign Relations Committee of Senate of Pakistan recognizing Khojaly massacre as genocide and demanding Armenia to leave Azerbaijan’s internationally recognized territory of Nagorno-Karabakh and its adjacent regions has already formed a strategic partnership between the two countries.
Trade and investment ties with Pakistan would be further cemented to enhance bilateral relations between the two countries. Both countries already have close bilateral cooperation and hopefully it would touch new highs after Pakistani Prime Minister Visit to Baku.
Military cooperation with Pakistan is increasing year by year. Pakistan actively participated in the recently concluded ADEX 2016 held in Baku. Officers of Azerbaijan have already participated in different training activities in educational facilities of Pakistan’s armed forces. Similarly, Pakistani officers participate in courses of the Azerbaijan War College.
The two countries signed a defense agreement in late January 2013 and naval officers subsequently held discussions on military-technical issues. In addition, Azerbaijani naval personnel participated in a Pakistani-led exercise, Aman-2013, held in March on the Arabian Sea. Pakistan is also seen as a potential arms supplier to Baku. Over the past few years, for instance, Azerbaijan has shown interest in obtaining JF-17 aircraft, a multi-purpose combat jet developed jointly by Pakistan and China.
Azerbaijan and Pakistan are two Muslim brother countries, having profound love and regard for each other. Pakistan supports Azerbaijan on the dispute of Armenia and likewise, Azerbaijan supports Pakistan on the dispute of Kashmir.
Azerbaijan has a liberal investment policy and Pakistani can invest there. Azerbaijan also has a strong industrial base and textile industry. Pakistan urged the Azerbaijani investors to invest in oil and gas exploration sector in Pakistan and highlighted the possibilities of trade in agricultural value-added products.