IDB ready to render integrated assistance to Azerbaijan
The Islamic Development Bank (IDB), a Jeddahbased multilateral development financing institution, voiced readiness to support Azerbaijan in transition to non-oil-based economy, as well as in the implementation of different strategically important projects.
The Islamic Development Bank (IDB), a Jeddah-based multilateral development financing institution, voiced readiness to support Azerbaijan in transition to nonoil-based economy, as well as in the implementation of different strategically important projects.
IDB Vice-President Sayed Aqa stated that the Azerbaijani government has already taken steps to switch to an economic model which will not depend on oil.
"Azerbaijan is in the global economic system which, unfortunately, is not quite positive at the moment for political reasons, trade issues and commodity prices. So, all our member countries, including Azerbaijan, are affected in one way or another. We discussed [in the Azerbaijani Ministry of Agriculture] how we can support the agriculture sector not only in terms of agriculture improvements, but also how we can help with value addition for the products to be able to come for domestic market and also for export,” he said in an exclusive interview with Trend.
He noted that the IDB is ready to take part in financing of a number of the government initiatives and bring the experience of other IDB member countries that have gone through the similar transformation and transition to the non-oil-based economy.
Commenting on the plans for 2017, Sayed Aqa said that the Bank has already started discussions with the Azerbaijani government on implementation of projects in the spheres of agriculture, trade, transportation and energy.
"Since agriculture is a very high priority especially within the context of economic diversification, we will continue to invest in agriculture and irrigation systems," he noted, adding that the Bank also hopes for the implementation of some regional projects in 2017. Special Program for Central Asia
Sayed Aqa went on saying that one of the key goals of the institution is to enhance cooperation between member countries, while this can only be done through regional programs, regional cooperation and integration programs. In this regard, the Bank, with the contribution of the Azerbaijani government, developed the "Special Program for Central Asia" (SPCA) that includes six countries, including Azerbaijan.
The program aims at supporting cooperation efforts of its member countries in Central Asia --Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan -- to enhance competitiveness, increase trade and promote economic growth in pursuance of the Sustainable Development Goals.
"That program aims to enhance regional cooperation not only in terms of financing energy corridors, transport corridors, trade facilities and also agriculture products, but also to help reducing costs of cooperation in trade, in investment, in regional sectors," he said adding that regional programs and projects are important for the Bank.
Total cost of the SPCA is estimated $6 billion, while the projects within the program are planned to be implemented in 2016-2020.
Sayed Aqa further said that increasing the volume of trade and investment between OIC member countries, between the members of the IDB is one of its strategy priorities.
As a manifestation of its basic aim to help promote socio-economic and commercial cooperation among its members, the IDB Group has always supported the activities of the Organisation of Islamic Cooperation (OIC) and its affiliated institutions. Currently, the OIC has 57 member and 5 observer states North-South
The IDB may also consider financing the International NorthSouth Transportation Corridor (INSTC) which will connect tens of countries, linking Northern Europe to South-East Asia.
“We ready to support the project if it is requested by the Azerbaijani government,” Sayed Aqa said.
At the initial stage, the NorthSouth corridor will transport 6 million tons of cargo per year with further expansion of transportation to over 15 million tons. Along with making a great contribution to the diversification of Azerbaijan's economy the project is expected to turn the country into a major transport hub.
The project, which is considered to be a strategically important and advantageous in terms of time of transit cargo transportation, is also expected to bring great economic benefits.
Southern Gas Corridor
The IDB is also ready to participate in financing of the Southern Gas Corridor project, which envisages transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian region to Europe via Georgia and Turkey.
“The talks concerning this issue are still underway. A number of technical issues are now being discussed. As soon as they are solved, IDB will become a partner [of Azerbaijan] in this project," he said.
Sayed Aqa noted that not only export of energy resources but also the efficiency of their use is very important.
SGC is one of the most complex gas value chains ever developed in the world. Stretching over 3,500 kilometres, crossing seven countries and involving more than a dozen major energy companies, it is comprised of several separate energy projects.
A mission headed by IDB VicePresident Sayed Aqa was in Baku on January 17-20. A grant agreement which envisages the study of the possibilities of introduction of Islamic banking principles in Azerbaijan was signed during the visit.
While in Baku,the IDB vice president discussed cooperation between the institution and the government of Azerbaijan, as he held meetings with the country’s ministers of economy, finance, agriculture, the water authority, as well as Deputy Prime Minister Abid Sharifov.
The IDB also discussed with Azerbaijan cooperation in terms of capacity development and taking some of its experiences, like ASAN (state agency for government services to citizens in Azerbaijan) or other achievements to other countries or bring some best practices in agriculture and water management from other countries to Azerbaijan, IDB vice president said.
Azerbaijan joined the Islamic Development Bank in 1992. To date, the bank has invested more than $1.3 billion to Azerbaijan for implementation of various projects.