|Abdullah Bozkurt Today's Zaman|
Azerbaijan Minister of Economic Development Shahin Mustafayev has said his country is approaching the European Union-backed Nabucco pipeline project “in a very positive manner.”
Mustafayev, speaking to Today's Zaman in Baku last week, said the Nabucco project, which aims to carry Caspian natural gas supplies to European markets while bypassing the Russian route, is very important in terms of diversification of Azerbaijani energy policies.
“We have to look at the supply side of gas and should enlist more suppliers for Nabucco. The rights of all producers, consumers and transit countries must be protected as well,” he explained.
Nabucco is in competition with two other alternative pipeline projects, namely Interconnector Turkey-Greece-Italy (ITGI) and the Trans Adriatic Pipeline (TAP). All three pipelines will have to pass through Turkey or link to the country's existing network. Following the examination of detailed proposals in October, Azerbaijan is expected to decide which project to prioritize before the end of 2011.
Turkish Prime Minister Recep Tayyip Erdoğan will be paying an official visit to Azerbaijan on Wednesday, and the issue will come up at the meetings. Talks between Baku and Ankara over the transit of Shah Deniz II gas supplies were suspended in May because of parliamentary elections held in Turkey on June 12.
The State Oil Company of the Azerbaijan Republic (SOCAR) signed a memorandum of understanding last June with the state-owned Turkish Pipeline Corporation (BOTAŞ) for the sale of additional gas volumes and the transfer conditions for volumes intended for the European market. SOCAR officials said most substantive issues were resolved and expect the contract to be signed soon.
No FTA with Turkey soon
Mustafayev has also ruled out the free movement of goods between Azerbaijan and Turkey any time soon, saying the priority is on the development of domestic economic enterprises.
He said Baku would approach a free trade agreement with Turkey very cautiously. “I think it will need some time. Our national businesses must be able to stand on their own feet first and foremost,” he explained, adding that there has been considerable improvement in the competitiveness and efficiency of Azeri companies in recent years.
The Turkish-Azerbaijani trade volume was around $2.5 billion in 2010. Turkey's exports to Azerbaijan totaled $731 million, while Azerbaijan's exports to Turkey were around $667 million in the first five months of 2011.
“We can easily raise our bilateral annual trade volume to $10 billion. We can also increase it to $3 billion by the end of this year,” Turkish Economy Minister Zafer Çağlayan said recently. He predicted Turkey and Azerbaijan could increase their trade volume to $5 billion if they signed the free trade agreement.
Referring to last year's agreement between Turkey and Azerbaijan on establishing a High Level Strategic Cooperation Council, Mustafayev said the mechanism will boost the economic and political cooperation to an unprecedented level.
“This would allow us to sort out problems at the highest level and move in areas that will benefit both countries quickly,” he said. “Turkey is our strategic partner,” he emphasized, adding Azeri industries can use Turkish companies to improve competitiveness and productivity.
Developing non-oil industries
Azerbaijan's economy minister also talked about the diversification of the country's economy and increasing the share of the non-oil industry in the overall economy.
“Our main purpose is the development of the non-oil sector and diversifying our economy,” he said, noting that growth in the non-oil sector was 7.2 percent in the first six months of 2011. The growth in agriculture was 6.2 percent over the same period compared to last year.
“Turkey may help us in diversifying our portfolio,” he said. About 1,300 Turkish companies operate in Azerbaijan, while some 1,000 Azeri companies operate in Turkey.
Mustafayev also talked about the possible role of Turkish companies in investment plans in Azerbaijan for construction of major infrastructure projects, setting up industrial centers and development of the information and communication technologies sector as well as the tourism and hospitality industries. A new terminal at Haydar Aliyev International Airport is being constructed, while another international airport will be built in Gabala. The country is building the biggest trade seaport in the Caspian Basin to haul freight from Central Asia to Western markets via Georgia and Turkey.
“We are also building a shipyard on the Caspian Sea,” Mustafayev said. Azerbaijan Investment Company's (AIC) joint venture with SOCAR began the ground work for the construction of the Baku Caspian Shipyard in March. The joint venture includes AIC and Keppel Offshore and is estimated to cost $465 million. Initially, four 15,000-ton tankers and support vessels are to be built. “This would allow us to ship oil from Central Asian countries to Western markets via the Baku-Tbilisi-Ceyhan [BTC] pipeline,” Mustafayev said.