Tase: Baku's impressive reforms have made it to headlines of global newspapers

Sat 10 October 2015 05:50 GMT | 10:50 Local Time

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News.Az interviews Peter Tase, a political analyst.

The Foreign Minister of Azerbaijan Elmar Mammadyarov paid his first official visit to Panama. What do you think about the future bilateral relations?

On October 5, 2015 the Foreign Minister of Azerbaijan Elmar Mammadyarov began his official visit to the Republic of Panama. Mr. Mammadyarov had an official meeting with Isabel de Saint Malo de Alvarado, Vice President and Minister of Foreign Affairs of the Republic of Panama.  On this occasion the head of Azerbaijan’s Diplomacy gave a special priority to the development of bilateral relations with Panama especially to explore economic partnership opportunities and expand cooperation in the energy sector, industrial development and energy infrastructure projects. Indeed, Minister Mammadyarov’s visit is an historic moment in the bilateral relations between the two countries. 

In this visit, Minister Mammadyarov and his counterpart signed a Memorandum of Understanding for the establishment of political consultations between the two countries.  In Panama City, minister Mammadyarov had also a series of fruitful meetings with the President of the National Assembly of Panama, Mr. Ruben De Leon Sanchez; with Deputy Minister in charge of International Commerce in the Ministry of Commerce and Industries, Mr.  Néstor González; and with Mr. Francisco José Miguez Pérez, who is the Executive Vice President for Administration and Finances in the Panama Canal administration. 

These meetings where a great opportunity for Mr. Elmar Mammadyarov in order to share with Panamanian Government officials all the accomplishments and successful experiences of Azerbaijan. Indeed Baku’s impressive reforms have made it to the headlines of major global newspapers. There is no doubt that bilateral relations of Azerbaijan with Panama have a brighter future in the horizon. This cooperation will take a new impetus while taking into consideration these two important factors: 1. the signing of the first MOU with a focus on bilateral political dialogue; 2. the economies of Panama and Azerbaijan have placed a different emphasis in regards to their respective economic sectors and each country has gained unequal momentum on a specific sector (for example in 2012 the industrial sector occupies 16 percent of Panama’s economy, meanwhile in 2014 Azerbaijan’s industrial sector has absorbed over 61 percent of its economy).  

What are some of the specific areas of cooperation between the two countries?

Panama and Azerbaijan are both ranked by the World Bank as upper middle income countries: the first has a Gross Domestic Product (GDP) of US$46 billion and the second has reached a GDP of US$75 billion. As we can see Azerbaijan, despite its geographical limitations (being one of the four European Landlocked Developing Countries), has a much higher Gross Domestic Production. On the same vein Azerbaijan’s main industries are oilfield equipments, petroleum, natural gas, steel, petrochemicals and textiles. 

Panama, on the other hand imports large quantities of steel, fuel products and vehicles, its largest import partners are Japan, China, Singapore and Brazil. The Republic of Azerbaijan has earned a worldwide reputation for manufacturing and developing most of the products that Panama imports today. The products of Azerbaijani steel industry, petrochemical, fuel and natural gas industry equipment can be exported to Panama and its neighboring countries: Colombia, Costa Rica and Venezuela.  Azerbaijan’s natural gas technology may also be very useful to the Venezuelan investments that consist on the construction of oil refineries in Panama.  

Pipeline technology that is currently used by Azerbaijan can very well be adopted by the Trans Caribbean Pipeline - its first construction of 225 km. began on July 8th, 2006 and was inaugurated on May 2007 - which connects Venezuela and Colombia; this project on a second stage (2012) would proceed to reach Panamanian territory. Although it remains uncertain whether such a project has been finalized, Azerbaijan can certainly play a significant role to help Panama reach its energy goals and make this regional project a success and enable it to gradually reach most of the Central American Nations. 

Another important contribution where Azerbaijan’s Energy Companies - such as SOCAR and others - can share their successful experiences is a possible cooperation with Chicago Bridge and Iron Company, in the maintenance and expansion of Trans-Panama Pipeline facilities, the first phase of this project was worth over US$100 million and it started to take shape in 2008.  Trans-Panama Pipeline aims to store over 5.4 million barrels of crude oil and will have additional mechanical and electrical work in the facilities of Chiriqui Grande on Panama's Atlantic coast, and Puerto Armuelles on the Pacific coast. In the ongoing second phase of this project, Azerbaijan’s energy and natural gas transportation companies should explore opportunities of strategic cooperation with various local companies in Panama.

During this visit Azerbaijan was invited to explore possible benefits in the areas of The Panama Canal. Can you share a few prospects on this possible cooperation?

The Panama Canal is a strategic location where the Atlantic and the Pacific oceans are connected, it is the commercial and logistics center of the Western Hemisphere. Azerbaijan’s active role in such a vital logistics hub – that has an impact of global proportions - can have a tremendous positive impact towards expanding the reach of its food, textile and petrochemical products in the competitive markets of the Western Hemisphere.  Many business leaders from South American nations come to Panama to attend large business conferences and summits joined by the regional heads of states and governments.  Panama has become one of the eight countries of Latin America with the largest amount of Foreign Direct Investment (FDI) funds, reaching in 2012 over US$ 3 billion in FDI inflows and over US$ 28 billion in FDI stocks.  Panama has a great potential for growth and is the perfect shoreline to be used as a distribution platform for all the products that are manufactured in Azerbaijan.   

Minister Mammadyarov noted that Azerbaijan pays a great importance to the development of comprehensive relations with the Central and South America countries. What are some of the benefits of this cooperation for Baku?

A stronger presence of Azerbaijan in Central and South American Countries will have a significant effect in the following sectors:

1. The national economy of Azerbaijan will further grow due to the fact that many oil rich countries in South America (Argentina, Brazil, Colombia, Venezuela, Paraguay, Ecuador and Peru) and natural gas nations such as Bolivia will become potential customers of Azeri petrochemical technology and natural gas pipeline companies that have an excellent worldwide reputation for their expertise in building international mega projects of natural gas pipelines.    

2. Central America is home of the Central American Integration System (SICA); Inter-American Court of Human Rights (in Costa Rica); The Latin American Parliament (a consultative assembly that has 23 member parliaments from Central and South American nations).  These international organizations could play an important role in taking forward the foreign policy agenda of Azerbaijan and boosting Baku’s multilateral political dialogue with reliable countries in Latin America and the Caribbean.

3. South America has also a set of regional alliances that are focused towards the region’s political and economic integration. They are: the Union of South American Nations (UNASUR); Southern Common Market (MERCOSUR), MERCOSUR Parliament; the Pacific Alliance (Alianza del Pacifico), Bolivarian Alliance for the Peoples of Our America (ALBA), Latin American Integration Association (ALADI) and the Community of Latin American and Caribbean States (CELAC). Azerbaijan’s participation - as an observing member country - in such a large number of multilateral organizations in South America would be a unique opportunity to defend its strategic, economic and political interests in this part of the world.

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