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Maxim Oreshkin: Russia and Azerbaijan Will Continue to Lift Restrictions and Barriers in the Bilateral Trade

02.10.17

September 28, 2017 – Maxim Oreshkin, Minister of Economic Development of the Russian Federation, participated in the 8th Russia-Azerbaijan Interregional Forum "Investments, Innovations, Tourism."

Issues of interregional cooperation between Russia and Azerbaijan in the humanitarian sphere, agro-industrial sector, and the areas of industry, health and tourism development were discussed during the Forum.

Maxim Oreshkin reminded that almost 78 constituent entities of the Russian Federation had already been involved in the Russia-Azerbaijan interregional cooperation.

The Head of the Ministry of Economic Development marked the positive trend in the trade and business relationships between Russia and Azerbaijan. "It was the first time since 2015, when we saw the increase in the trade turnover between our countries," he pointed out. The Russian export to Azerbaijan amounted to $1.1 bln. (+80%) import – more than $400 mln. (74%).

Nowadays, the investment cooperation is actively developing. The Azerbaijan market is represented by 650 joint companies, such as Lukoil Overseas, AVTOVAZ (more than 40 service stations,) KAMAZ (assembly at the Ganja Automobile Plant.) There are agreements between Rosneft and the State Oil Company of the Republic of Azerbaijan (SOCAR) on the joint exploration and production of oil and gas. VTB Group invested about $700 mln. for developing the economy of Azerbaijan. It also has its own subsidiary.

Moreover, the Minister paid more attention to the tourism industry, as well as the sanatorium and resort area.

The indicators of the tourist exchange in 2016 are growing in comparison with 2015. The number of trips from Russia to Azerbaijan: 626,000 (+ 7%).From Azerbaijan to Russia: 898,000 (+ 5%)."Russia and Azerbaijan are actively participating in the creation of common tourist area among ​​the CIS countries. Agreements on organizing cruises in the Caspian Sea with the use of public and private partnership mechanisms are reached," he added.

Speaking about further prospects, the Minister noted that the relevant systematic works to lift all restrictions and barriers in the bilateral trade would be continued.

And the increase in the efficiency of existing export support mechanisms, both financial and non-financial, would be continued. According to him, first of all, it was the matter of the Russian Export Center. It provided 68 Russian and Azerbaijan projects with the financial support in the total amount of about $0.5 bln. And 20 projects for more than $200 mln. to be under consideration.

"The continuation of cooperation at the level of business circles of our countries will allow us to effectively prepare new projects and to promote all existing projects, as well as to identify problematic issues and trade barriers that our entrepreneurs face," the Minister noticed.

Maxim Oreshkin: “I welcome everyone again!

Dear Mr. Mustafayev!

Dear friends!

I am very glad that the Forum takes place at such a high level. I am glad to welcome our Guests from Azerbaijan, here, in Russia. Both Mr. Minister and Mr. Ambassador visited this Forum. It is very important, because the relationships between Russia and Azerbaijan are actively developed in all directions. And the potential, in fact, is very high.

Today, with smaller number of participants, we’ve discussed the number of regions, having any connections with Azerbaijan. If I’m not mistaken, 78 regions. It means that almost all Russian regions are already actively involved in this process. It's very good that a number of additional agreements will also be signed today.

The very positive news is that the economic dynamics in our countries is changing its direction in the positive way. Indeed, we’ve seen several difficult years associated with the adaptation of both the Russian and Azerbaijan economies in order to decrease oil prices. But these difficult times have nothing in common with the present. And, indeed, positive dynamics and positive long cycle of economic growth are expected. It is important to work together in the following way: Russia shall help the growth of Azerbaijan, while Azerbaijan shall help the growth of Russia.

We see that the investment cooperation is being developed very well. About 650 joint companies represent the Azerbaijan market. There are large companies, such as Lukoil, AVTOVAZ, KAMAZ. Here, the movement takes place in the right direction. There are agreements between Rosneft and SOCAR on the joint exploration and production of oil and gas.

On the one hand, VTB Group invested about $700 mln. for developing the economy of Azerbaijan. On the other hand, the Azerbaijan fund is a shareholder of VTB Group.

Projects, with the total amount of about $1.5 bln. are developed on the territory of the Russian Federation within the partnership between Azmeco and Sberbank.

There are large and small projects. It is very good that active cooperation at the regional level allows maximum diversification of the relationships between Russia and Azerbaijan.

New production facilities are also developed. There is a good example in pharmaceutical sector. I mean, Hayat Pharm, long-term project, which is aimed at the development of the pharmaceutical sector in Azerbaijan.

I want to say more about the tourism industry, as well as the sanatorium and resort area. There are, indeed, many projects. Russia and Azerbaijan are actively participating in the creation of common tourist area among ​​the CIS countries. Agreements on organizing cruises in the Caspian Sea with the use of public and private partnership mechanisms are reached.

There is also a significant event for the Stavropol Krai. In June, Istochnik, the newest sanatorium of the Caucasian Mineral Waters, was opened in Yessentuki with the support of investors from Azerbaijan. Colleagues from Azerbaijan stayed there and said that everything was very well. In other words, they were satisfied with the investments made by the Azerbaijan partners. I think many Russians will also enjoy the sanatorium. It is designed in accordance with the highest international standards.

In general, the current situation is the following. There is a positive trend and it's good. But we need to do everything together in order to work not only on the relationships between Russia and Azerbaijan, but also to enter the markets of third countries, create added value chains and added value chains of new modern global economy with the help of our joint projects. We have everything to work together and help each other.

You can ask me what ways of further actions I may notice. It is very important to continue the relevant systematic works to lift all restrictions and barriers in the bilateral trade. The Intergovernmental Commission for Economic Cooperation is for this purpose. By the end of the year, 17th meeting is to be held. We will be happy to see our Azerbaijan partners in the Russian Federation. And we need to look systematically to decide what decisions, including the contractual basis, can be taken in order to ensure that the interaction between business and regions is as smooth as possible and without any barriers.

Then, it is very important to improve the effectiveness of existing mechanisms to support export: both financial and non-financial instruments. First of all, we spoke today about the Russian Export Center, which will soon start to work in Azerbaijan, and it will support the purchase of the Russian goods within the Azerbaijan market. But the more important thing is to try to create more complex structures through these mechanisms, when the Russian and Azerbaijan businesses work together to enter the markets of third countries.

Already, the Russian Export Center supported 68 Russian and Azerbaijan projects for the total amount of about $1.5 bln. and another 20 projects are under discussion.

In addition to the measures that the Russian Export Center provides the Russian companies with, there are additional advantages for the Azerbaijan side. In particular, easy access to the financing, as well as the provision of credit resources for such joint projects.

It is important to continue the cooperation at the level of business circles of our countries. Today, we’ve heard Alexey Repik, who is the Head of Delovaya Rossia, one of the largest Russian business associations. The discussion at the level of business associations and individual companies is very important. It is important to prepare new projects and to promote all existing projects, as well as to identify problematic issues and trade barriers. Some of them we’ve discussed today. We will work them out in every detail and will find joint solutions. And our entrepreneurs should be the source of information that signals that something is going wrong, or there are problems that can be solved.

In conclusion, I want to express confidence that the strategic partnership of our countries will continue the next dynamic development. For my part, I will do my best to reach it. I want to thank all participants of the Forum for their productive work. Thank you for attention.”

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