Arab nations identify sectors to develop cooperation

Adelegation representing the Arab Gulf Cooperation Council states’ companies specializing in various sectors of the economy gathered in Baku to participate in the joint business forum held on October 20.

Interest in the first business forum between Azerbaijan and the GCC entrepreneurs was extremely high. About 100 entrepreneurs from the GCC countries and 120 local businessmen took part in the forum.

To date, about 280 companies mainly from Kuwait, Bahrain, Qatar, and Saudi Arabia are doing business in Azerbaijan. Some $1.3 billion were invested by businessmen from the Council countries in the Azerbaijani economy, while Azerbaijani entrepreneurs invested $300 million in the GCC countries.

Economy Minister Shahin Mustafayev addressing the event said, despite the close political relations of Azerbaijan with the GCC countries, economic ties have not yet reached the proper level. At the end of 2016, the trade turnover amounted to only $86 million, while in the eight months of 2017 this figure stands only at $40 million.

“This is a very low figure, given that the population of the GCC countries is about 40 million people and total GDP is about $1.36 trillion,” he said.

Azerbaijan is a country favorable for investments, said Mustafayev, linking it with political stability, security and understanding between the authorities and the people.

He added that at the same time, economic cooperation should be based on strong political ties.

“Azerbaijan pays a lot of attention to the development of political ties with the GCC countries. Our political relations are very strong, have great prospects and are based on friendships,” he said, adding the level of economic cooperation between the countries should also be raised as there is great potential that has not been fully used.

The minister noted that over the past two years, Azerbaijan has simplified the visa issuing for citizens of the Council countries and, given the existence of nine out of eleven climatic zones in the Republic, there is great potential for the development of tourism, cooperation in the production of agricultural products and establishment of production in industrial parks created in the country, where investors are offered various tax and customs benefits.

Speaking at the forum, Abdul Rahim Hassan Al Naqi, Secretary General of the Federation of Chambers of the GCC proposed to create a joint investment fund.

He noted that the fund can help strengthening the cooperation and stimulate the investment flow between countries.

Currently, Caspian International Investment Company (CIIC) that was co-founded by the Islamic Corporation for the Development of the Private Sector (ICD, a part of the Islamic Development Bank group) operates in Azerbaijan.

The investment company, which has been operating since 2008, invests funds in the real sector of the economy, with the exception of oil and gas production, on the basis of Islamic law principles (Shariah).

Moreover, Azerbaijan and Qatar are currently working to create a joint investment fund.

Naqi went on saying that Federation of the GCC Chambers offers Azerbaijan to eliminate double taxation, reduce customs duties for the import of products from the Arab countries and simplify financial transactions between the countries.

He noted that Azerbaijan is one of the promising markets for investment, and proposed to organize an exhibition of Arab companies’ products in Baku in 2018 for expanding investment and trade relations.

Naqi added that a list of projects can be created, which are being carried out or planned to be implemented, that could involve Arab companies.

“We would like to offer the creation of a special portal through which our companies could study local legislation,” he said.

Naqi further said that the Islamic Development Bank may finance business projects between Azerbaijan and Arab States of the Gulf. He said the bank is capable of allocating funding for joint projects between Azerbaijan and the Gulf countries.

Among other proposals, he noted the possibility of creating maritime routes, simplifying the visa regime and abolishing visa fees, saying visa fees can be added to the cost of the ticket.

The Arab countries are also interested in developing relations with Azerbaijan in tourism, hotel business, agriculture and trade.

Within the meeting, the Azerbaijan Export and Investment Promotion Foundation (AZPROMO) signed three memorandums [MoU on cooperation with the Federation of Chambers of GCC and MoU on cooperation with the Yanbu Chamber of Commerce and Industry (Saudi Arabia)] on development of trade cooperation with the Arab states of the Persian Gulf. The third memo was signed between the standardization institute of Azerbaijan and the GCC Standardization Organization.

Within the visit the delegation also met with Foreign Minister Elmar Mammadyarov, whete the sides discussed the recent increase in the number of tourists coming to Azerbaijan from member states of the Gulf Cooperation Council and opening of direct flights, emphasizuing this as positive developments.

It was noted that the Memorandum of Understanding signed between Azerbaijan and the Gulf Cooperation Council plays an important role in the development of bilateral relations on institutional basis.