Azerbaijan-Russia: Strategic Partners in Trade

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The head of the Russian Export Center’s representative office in Azerbaijan, Mr. Nuri Guliyev, tells Azeri Observer about the current trends in the trade between the two countries, the impact of the coronavirus pandemic on the export activity and business support measures.

BY OXANA VALIYEVA

AZERI OBSERVER STAFF WRITER

Question: What are the main tasks and goals of the Russian Export Center?

Answer: Being a state institution of the Russian Federation to support non-primary export, Russian Export Center (REC) provides Russian exporters and foreign importers of Russian products, with a wide range of financial and non-financial supports. REC’s main goal is to increase the volume of Russian export to the international markets. Azerbaijan, being Russia’s strategic partner in the trade, economic and humanitarian spheres, is a reliable and important counterparty for the development of our export potential. It was a fundamental factor to make a decision on the opening of the REC Representative Office in Azerbaijan in December 2017.

Q.: How do you assess the current state of the trade between Azerbaijan and Russia?

A.: The analysis of the REC Representative Office shows that the share of non-primary, non-energy export in the total Russian export to Azerbaijan increased by almost 5% in the first and second quarters of 2020, compared to the same period of last year, despite the COVID-19 pandemic. In August, the export increased by 13% compared to July, mainly due to agro-industrial goods and metals. Fortunately, the expected decline in the growth rates did not happen, and we witnessed an increase in total export and diversification of supplies.

Q.: The COVID-19 pandemic broke the customary links between manufacturers and consumers around the world, and brought major changes to the operation of transport companies. What are the new trends in  exports to the Azerbaijani market?

A.: The logistics has certainly undergone certain changes during the pandemic. The REC Representative Office in Azerbaijan is in constant contact with the Azerbaijani State Customs Committee, in order to monitor the situation. Road transport is the riskiest type of transport during the pandemic – there can be some problems while crossing the borders, and the truck drivers returning to Russia are subject to a 14-day quarantine. The railway transport is more sustainable now, with no serious difficulties. Meanwhile, we witnessed a slight shortage of containers and tanks. Therefore, we recommended exporters to bid on the rail transportation and to reconsider delivery terms in the contracts, in order to minimize the risks.

Q.: How did the work of the Russian Export Center change during the pandemic?

A.: We have revised the list of exhibitions and business missions for this year. A significant part of our events now operates online. In the first half of 2020, we held a number of successful online missions of Azerbaijani businesses to the Russian regions and Russian regional export support centers. In September, a large-scale online business meeting took place in the sphere of education, which was attended by about 20 Russian and Azerbaijani companies, as well as representatives of the Azerbaijani Education Ministry.

Q.: What agreements between Russian and Azerbaijani enterprises demonstrate the success of REC in Azerbaijan?

A.: We support a number of Russian-Azerbaijani joint ventures operating in the country, such as R-Pharm pharmaceutical plant and GAZelle and GAZelle Next vehicles assembly facility, founded in February 2019. Furthermore, a joint service center for Russian Mi helicopters was created by Russian Helicopters and Azerbaijani Silk Way Group, and a foundation has been laid for the Penoplex construction materials plant.

Q.: The appeal of the Azerbaijani market for Russian companies is increasing…

A.: This appeal is defined by close historical and cultural ties and of course, the absence of the language barrier, as well as the Free Trade Agreement between the governments of the two countries from 1992 – ensuring duty-free bilateral trade – which undoubtedly gives preferences to Russian products in the Azerbaijani market. It is also worth mentioning the Intergovernmental Agreement on cooperation in the standardization, metrology and certification signed in 1995, which makes it possible to fully equate Russian certification with the Azerbaijani one.

Q.: To conclude the interview, can you give some examples, showing the dynamics of the Russian Export Center activity in Azerbaijan?

A.: The volume of the supported export to Azerbaijan amounted to $283 million in 2018 and rose to $511 million in 2019. In the first quarter of 2020 – the shock period at the start of the global pandemic – we supported Russian exports to Azerbaijan in the amount of $151 million. In the second quarter of 2020, dynamic forces enhanced further, reaching the figure of $219 million. The lion’s share of this sum fell on machineries ($131 million) and agro-industrial products ($59 million). So, the opening of the REC Representative Office in Azerbaijan became an additional, powerful tool assisting the increase of trade turnover between our countries, thus providing a new impetus for the exporters of Russian non-primary goods to enter the Azerbaijani market.