In May, Azerbaijani Minister of Agriculture paid an official visit to France and met with his French counterpart to discuss agricultural issues. Foreign policy agenda of the country was dominated by a border dispute with Georgia. The European Bank for Reconstruction and Development has introduced its new strategy and recommendations for the country for the next five years.
DOMESTIC POLICY
Agriculture in the spotlight
After the introduction of the e-agriculture system, Azerbaijan’s domestic focus is again on agriculture. The government is trying to achieve cooperation with dominant agricultural economies of the world and learn their best practices.
In late May, Azerbaijani Minister of Agriculture Inam Karimov visited France and met with Didier Guillaume, French Minister of Agriculture and Food. Ministers exchanged their views about food safety, development of agriculture, and the general environment in their respective countries. In his speech, Karimov called on French entrepreneurs to take business opportunities in Azerbaijan and invited Guillaume to participate in Caspian Agro exhibition which will be held in May 2020. This exhibition is designed to enhance sustainable agriculture, implementation of cutting-edge technologies and strengthening cooperation between local and foreign farmers.
ECONOMY
Recommendations from the EBRD
The Board of Directors of the European Bank for Reconstruction and Development has approved a new strategy for Azerbaijan for the next five years. The 2019-2024 strategy discusses current vulnerabilities in the economic system of the country and puts forward three strategic priorities: endorsing economic diversification by stimulating competitiveness and good governance, enhancing resilience by developing financial markets, and reinforcing green economy transition and regional connectivity.
The EBRD is one of the biggest investors for Azerbaijan with a €3.3 billion investment to date. According to the ERBD, the main challenges for the implementation of the new strategy are but not limited to the difficult business environment, export complexity, weak labour market and vulnerable employment, underdeveloped financial system, unaccountable governance system and low renewable energy usage. “We see a huge potential in the renewables sector and aim to make a real impact in this area. Continued efforts by the authorities to reform the energy market and improve the business climate will be of great help in unlocking our own funds and mobilising financing from other sources,” said Ivana Duarte, Head of the EBRD’s office in Baku.
Moreover, a recent Regional Economic Prospects report published by the EBRD mentions that Azerbaijan’s economy is expected to grow 3.5% and 3.3% in 2019 and 2020, respectively.
Alat Free Trade Zone
One of the notable changes in the economic strategy of Azerbaijan has emerged after the foundation and launch of Alat Free Trade Zone which is regulated in accordance with the Law on Alat Free Trade Zone dated 18 May 2018. Many laws and decrees on the economic activities, as well as agriculture, trade, competition policy, and intellectual property rights, have been amended by the confirmation of the President of the Republic of Azerbaijan since early 2019. These laws have explicitly exempted the Alat Free Trade Zone from their scope of application. Targeting the market comprised of more than 130 million of people, the new free trade zone is aimed at the stimulation of national production via the promotion of “Made in Azerbaijan” brand and the reinforcement of the role of Azerbaijan in international logistics and main trade routes from Asia to Europe. The Alat Free Trade Zone includes the New Baku Port with the total area of 1000 hectare consisting of the 400-hectare area of the Baku International Sea Trade Port. Therefore, such a massive economic zone is predicted to make a cumulative impact to Gross Domestic Product by $57 billion.
FOREIGN POLICY
Border issue with Georgia
In May, Azerbaijan and Georgia experienced a border dispute around Keshikchidag historical monument. After Georgian President Zurabishvili visited the site and talked about the importance of continuing the demarcation process, Azerbaijani side closed access to the complex for a few days and increased the number of guards, which caused public outrage in Georgia. Some activists even gathered around the monument and started a protest “in defence of David Gareji”.
Keshikchidag is a historical site which is situated in the mountainous part of South Georgia along the border with Azerbaijan and has been included in the Tentative List of UNESCO World Heritage Sites. This ancient complex, which is called “David Gareji” in Georgia and “Keshishdag” or “Keshikchidag” in Azerbaijan, is located in the non-demarcated zone of the border between Azerbaijan and Georgia. According to the European organization Europa Nostra, the whole site consists of 21 temples and 5,000 cells.
Historically, there has been some tension about the borders; however, border authorities have reached an agreement to some extent. Both countries have different historical facts about the complex, thus more than a third of the border between the two countries has remained undivided. Problems have evolved especially around Udabno and Chichkhituri monasteries which are situated in the mountainous part of Georgia and are accessible via a path that crosses Azerbaijan border. The Azerbaijani side has tolerated visits by tourists to Udabno; however, it has been a problem for Georgian scholars to enter the area for research purposes. The latter monastery, on the other hand, is reachable by Georgians only under special circumstances.
Azerbaijani side blamed Georgian media for exaggerating the issue. “Creating such conflicts is in the interests of neither Georgia nor Azerbaijan. Only a third party is interested in this,” said Rizvan Huseynov, Chairman of the Center of Caucasian History. According to him, the issue does not need to be overemphasized. “I am calling on everyone to avoid emotional speeches about Keshikchidag,” stated David Zalkailani, the Minister of Foreign Affairs of Georgia in his interview with journalists.
The bilateral commission of the two countries met in Baku and decided to inspect the disputed zone together. After the discussion between the foreign ministers of Azerbaijan and Georgia, David Gareja was fully reopened; however, border concerns remain and need to be resolved. “Azerbaijan … is ready to finalize this process in the near future”, said Leyla Abdullayeva, a ministry spokesperson.
