Malaysia at the heart of Azerbaijan

By Qaley Allahverdiyev — December 10, 2020 @ 8:23pm

FOR millennia, Baku — Azerbaijan’s capital — was one of the world’s most important trading hubs, straddling the crossroads of Europe, Asia and the Middle East. Nestled on the shore of the Caspian Sea, this ancient juncture along the Silk Road has long served as a crucial bridge linking markets in the East and West.

However, the decades-spanning conflict with Armenia saw this bridge cut off at its most critical point, severely disrupting the passage for goods that runs through the region, from the Caspian Sea to Turkey, then onto Europe and beyond.

Now, in light of a cautious peace agreement, the world has a corridor through both Azerbaijani and Armenian territory, once again linking Turkey to Central Asia and onto the dynamic economies of Asia.

Road journeys across the region will be cut from months, and even weeks, to just days.

Once again, Baku can take up its mantle as both the world’s gateway to the region, and as a key transit hub for goods passing from East to West. And once again, Azerbaijan is reaching out to its international partners, with a view of bolstering commercial and economic ties at this time of unprecedented opportunity.

One such partner is Malaysia, one of the first countries to recognise Azerbaijan’s independence in 1991, with full diplomatic relations established soon after. Since then, ties have grown from strength to strength, in large part owing to Azerbaijan’s strategic location at the nexus of the world, and in particular, its unparalleled access and transport links to the 11 countries that make up the Commonwealth of Independent States (CIS) — including its largest market and Azerbaijan’s largest trading partner, Russia.

It was for this reason that the cargo arm of Malaysian Airlines chose Baku as its main transit hub in 2012, citing the state-of-the-art Baku Cargo Terminal — the region’s largest and most technologically advanced cargo centre — and Azerbaijan’s regional market access.

Trade between the two nations is flourishing, amounting to US$61.3 million in the first half of this year, up nearly two-fold from the same period last year.

Even before the Nagorno-Karabakh peace agreement, the Baku-Tbilisi-Kars railway line launched in 2017 had halved the transit time of goods between the Asia-Pacific region and western Europe.

Yet, the agreement and resultant return of lands to Azerbaijan long occupied by Armenian forces presents an unprecedented opportunity to expand further upon this fruitful partnership.

This peace deal can open a new land transit corridor which can cut time again.

For Malaysia, as an industrialised market economy, fast moving up the manufacturing value chain, the kind of market access that only Azerbaijan can now offer matters.

Already standing out in the region for its rapid pace of economic development and high literacy levels, Azerbaijan has made ease of doing business a priority.

An ambitious and comprehensive reform programme streamlining everything from obtaining a construction permit to securing credit saw Azerbaijan jump more than 30 places in the World Bank’s Ease of Doing Business report 2019 to rank 25th in the world.

Digitalisation has been a key focus, with the country’s «Digital Trade Hub of Azerbaijan» initiative set to transform the country into a regional and global hub for paperless, cross-border e-trade.

Azerbaijan is also steadily developing its bilateral relations with Asean countries — at which Malaysia is at its heart — from diplomacy to economic and humanitarian cooperation.

Only this year, Asean countries backed unanimously the proposal of Azerbaijan President Ilham Aliyev to convene a special session of the United Nations General Assembly by videoconference for heads of state and governments in response to Covid-19.

In a resource-rich region fraught with ethnic and religious tension, Azerbaijan has emerged from one of the world’s longest-running and most intractable conflicts as an oasis of peace and prosperity. The future is always uncertain, and never more so than now, as the world seeks to understand the full implications of the Covid-19 pandemic.