FCHAIN Corporation, a globally renowned consulting company with branches in 14 countries, including Azerbaijan and Uzbekistan, continues to foster economic and cultural partnerships between these nations. With a focus on providing top-tier financial and legal services, FCHAIN has been instrumental in promoting the enduring business connections, shared traditions, and mutual understanding between the people of Uzbekistan and Azerbaijan.
The ties between Uzbekistan and Azerbaijan have deep historical roots, rooted in the commonality of national traditions, language, culture, and religion. The strength of their friendship and goodwill has persisted and flourished to this day. Uzbekistan has welcomed a thriving Azerbaijani community of nearly 40,000 individuals, establishing a strong bond between the two nations.
In recent years, the economic relations between Uzbekistan and Azerbaijan have experienced significant growth. The exports of domestic products from Uzbekistan to Azerbaijan have surged by 2.5 times between 2019 and 2022, leading to a notable increase in Azerbaijan’s share of Uzbekistan’s exports, rising from 0.3% in 2019 to 0.7%.
The bilateral trade turnover between the two nations reached $181.8 million in 2022, marking a remarkable increase of $62.9 million or 52.8% compared to the previous year. This growth encompassed imports amounting to $6.6 million (a 15.4% increase) and exports totaling $56.3 million (a 74.1% increase).
A significant milestone in the development of economic cooperation occurred on February 24, 2023, with the inaugural Uzbekistan-Azerbaijan Regional Forum held in Tashkent. This forum provided a platform for fostering direct business contacts and nurturing further bilateral collaboration. Several crucial agreements were signed during the event:
- Inter-governmental Agreement establishing the Uzbekistan-Azerbaijan Investment Fund
- Twinning agreements between the cities of Khiva and Shusha, Samarkand and Ganja, Bukhara and Lankaran, Kokand and Sheki
- Roadmap for expanding practical cooperation in trade, economics, science, technology, and culture between the executive authorities of Tashkent and Baku for 2023-2025
- Memorandum of Understanding between Azerbaijan’s Export and Investment Promotion Agency (AZPROMO) and Uzbekistan’s Agency for the Regulation of Alcohol and Tobacco Market and the Development of Viticulture
- Memorandum of Cooperation between Azerbaijan’s Agency for the Development of Small and Medium-Sized Enterprises and Uzbekistan’s Agency for the Development of Entrepreneurship
- Collaboration agreements between various companies, including AzerGold and the Ministry of Mining Industry and Geology of Uzbekistan, as well as Mega Invest Industrial and NABUCCO A&C
As of January 1, 2023, Uzbekistan hosts 266 enterprises with Azerbaijani investments, with 179 of these being wholly foreign-owned. Over the span of 5 months in 2023, an additional 22 joint ventures have been established in various regions of Uzbekistan. Notably, the number of joint ventures with Azerbaijani capital in Uzbekistan has quadrupled in the last 5 years.
The enterprises with Azerbaijani investments are predominantly engaged in wholesale and retail trade, construction, professional services, hospitality, education, healthcare, financial services, and ICT. This diversity reflects the strong foundation for collaboration between the two nations.
Both Uzbekistan and Azerbaijan present unique opportunities for each other in accessing new markets due to their geographical locations. Uzbekistan can facilitate Azerbaijan’s access to Asian markets, while Azerbaijan can provide Uzbekistan with entry points to European markets. Agreements signed between the two countries further enhance the prospects of this cooperation.
Uzbekistan’s inclusion in the European Union’s GSP+ preferences program and Azerbaijan’s experience in producing goods adhering to European standards contribute to the potential for even greater achievements through collaboration.
Economic representatives from both Uzbekistan and Azerbaijan believe that the potential of their countries’ economies is substantial, with expectations that mutual trade could reach $1 billion in the coming years. This goal is attainable through increased trade in demanded products and the establishment of platforms for direct business interactions.
According to UN Comtrade data, the trade volume of agricultural and food products between Uzbekistan and Azerbaijan reached $40.8 million in 2022, doubling compared to the previous year. Over the course of 5 years, the trade volume for such products between the two nations has nearly quintupled.
In 2022, Uzbekistan’s agricultural and food exports to Azerbaijan totaled $35.1 million. These exports mainly included tobacco, raisins, leguminous vegetables, peanuts, shelled walnuts, chocolate, and other cocoa-containing products.
Agricultural imports from Azerbaijan to Uzbekistan in 2022 amounted to $5.7 million, featuring items like hazelnuts, almonds, margarine, other vegetable fats and oils, cocoa-containing products, non-alcoholic beverages, animal feed, and clover seeds.
Azerbaijan has successfully developed a virtually waste-free pomegranate-based industry, producing juices, alcoholic beverages, the national sauce “narsharab,” and even cosmetics and pharmaceuticals from its peel and seed oil. The popularity of pomegranate products extends beyond national borders, with active exports to neighboring countries.
FCHAIN Corporation’s relentless dedication to nurturing these economic ties has helped unlock tremendous potential for both nations. As they continue to collaborate, Uzbekistan and Azerbaijan are poised to embark on a path of economic growth and prosperity, underpinned by historical bonds and shared visions for the future.
A notable aspect of Uzbekistan’s culture is its reverence for the pomegranate. Tourists frequently scour markets in Uzbekistan for ceramic pieces featuring pomegranate motifs, including decorative figurines and dishware. This trend signifies the significant cultural value attributed to the fruit. Notably, Uzbekistan annually produces around 70,000 to 80,000 tons of pomegranates, with the Sherabad pomegranate variety garnering considerable acclaim.
Despite its cultural prominence, pomegranate processing in Uzbekistan remains limited, mainly focusing on fresh consumption. This inefficiency often results in substantial product spoilage and waste. Consequently, Uzbekistan imports pomegranate juice and “narsharab” – a traditional pomegranate sauce – from Turkey and Azerbaijan.
Collaborative ventures in pomegranate processing emerge as promising prospects for Azerbaijan and Uzbekistan. Their synergy can fill regional markets with joint products, offering substantial competition to Russian and Turkish counterparts.
Both nations boast rich agricultural resources. Uzbekistan’s reputation for producing delicious fruits, berries, and melons in fresh and dried forms resonates globally. In 2022 alone, Uzbekistan’s exports of fruit and vegetable products surged by 18.5% compared to the previous year, reaching 1,730,600 tons valued at $1,134.3 million USD. The share of these products in Uzbekistan’s total exports was 5.9%.
The export highlights include grapes (including dried grapes) at 24.7%, mung beans at 8.2%, peaches at 6.0%, tomatoes at 5.1%, persimmons at 4.6%, onions at 3.7%, and melons and watermelons at 3.3%.
Conversely, industrial fruit and berry preservation – including jams, compotes, and confections – is less developed in Uzbekistan compared to vegetable preservation. Azerbaijan, on the other hand, has amassed extensive experience in industrial fruit and berry preservation. This exchange of expertise holds the potential to establish joint ventures, offering fierce competition in both regional and global markets.
Another area of potential cooperation lies in the electrical industry. Uzbekistan boasts a robust history of producing electrical products, including household appliances, electrical generators, instruments, and communication equipment.
Today, Uzbekistan is a reliable supplier of diverse electrical products to Azerbaijan, equipped with significant industry experience and ample raw material resources. Specifically, the exports of electrical generators accounted for 5.7% ($7.5 million) of Uzbekistan’s total exports to Azerbaijan, followed by communication apparatus and equipment at 6.0% ($7.9 million), and electrical machinery and appliances at 2.4% ($3.1 million).
In parallel, Azerbaijan has recently witnessed rapid growth in the production of computer hardware and electronics, establishing large-scale conveyor production for export. The country’s strategy involves attracting foreign investments, technologies, and brands. The establishment of technology parks further supports innovation, projects, and technological advancements.
The Sumgait Chemical Industrial Park, with its extensive chemical production and machinery manufacturing, provides a strong foundation for cooperation. The fusion of Azerbaijan’s expertise in electronics production and Uzbekistan’s electrical engineering capabilities forms the cornerstone for a significant conglomerate, capable of vying for international market share.
This cooperative spirit can also be harnessed to bolster traditions such as silk production and to unlock potential in mutual tourism, healthcare, and sanatorium treatments. The global tourism landscape unites people through cultural exploration, fostering understanding through direct exposure to traditions, history, and values.
Azerbaijan’s ancient history, rich traditions, captivating landscapes, and vibrant culture make it a global attraction. The country boasts petroglyphs, Zoroastrian temples, grand palaces, modern museums, serene seas, expansive beaches, numerous festivals, and concerts. In 2022, among foreign visitors, 1,602,300 came from Uzbekistan, constituting 1.6% of total tourists.
Similarly, Uzbekistan, situated at the heart of Central Asia, boasts architectural marvels and stunning palaces in its ancient cities of Samarkand, Khiva, and Bukhara. Its remarkable natural landscapes, ancient fortress ruins, vibrant cultural events, culinary delights, and renowned craftsmanship attract tourists from around the world. Pilgrims are drawn to sacred sites of two world religions. In 2022, Uzbekistan welcomed 5.2 million foreign visitors, including 10,400 from Azerbaijan.
Amidst these opportunities, the economic collaboration between Azerbaijan and Uzbekistan holds tremendous potential. Both nations, sharing ties in multiple spheres, including economics, language, and history, can tap into Asian and European markets, bolstering mutual economic cooperation.
In summary, the collaboration between Azerbaijan and Uzbekistan, deeply rooted in shared history and mutual aspirations, has the potential to expand into new markets, enriching the region with their joint contributions.
