"Azerbaijan can serve as “transit and logistic hubs” to its region and beyond"

  15 December 2017    Read: 2459
"Azerbaijan can serve as “transit and logistic hubs” to its region and beyond"

"Huge trade potential exists between Azerbaijan and Pakistan, which incidentally has remained untapped", Sana Imran the Pakistani researcher, who is pursuing her ‘Doctorate in Economics’ from Khazar University, Azerbaijan told in her interview to AzVision.az.

How do you see the new world order emerging? How best can Azerbaijan & Pakistan integrate in the evolving paradigm?

The contemporary world has a fast-evolving milieu, which is characterized with the primacy of geo-economics over geo-politics. The eastward shift of global developmental potential raises alarm for the status quo forces, who seek to block the rise of emerging powers for retaining their pre-eminence in the world. This ‘Greater Game’ is being manifested through global power contestation & economic confrontation, particularly in the Asia-Pacific region. Ever increasing quest for energy resources, their security and regional connectivity are the new buzzwords. In a globalized construct, no state of the world can afford to live as a general global state alone, but has to work towards greater harmony and mutual understanding in its native region and the world at large, through focused multi-sector measures. The globalization of economies & consequent interdependence of countries has also reduced the space for large scale conventional wars considerably.

Owing to its distinctive geo-strategic location, Azerbaijan provides an ideal energy conduit to Europe for transportation of energy riches from the Caspian Sea. On the other hand, Pakistan is blessed with a unique geopolitical positioning that shapes its role as a unification factor between Central & South Asian regions. Interconnectedness of South Asia with Central Asia is expected to herald a new era of economic development and peace for Pakistan as well as other regional states. Both Azerbaijan and Pakistan can serve as “transit and logistic hubs” to their regions and beyond. If connected together through multimodal links, the potential of two countries is expected to rise exponentially. Moreover, the two states face identical threats of extremism, terrorism, drug pushing, human trafficking; border security issues and environmental degradation. To counter such transnational challenges, prudent internal, bilateral & regional approaches are needed. Maintenance of internal security and stability, persistent economic growth and predominance of democratic values remain essential ingredients of sustained success.

What is the value of connectivity? How can better intra-regional and inter-regional connectivity be achieved?

The geostrategic location of a country is one such reality, which cannot be changed. Connectivity emerges as the keystone of regional economic cooperation and integration. Production networks and value chains in today’s world are more closely interwoven. For the best unlocking of this potential, it is necessary to take a broader perspective of connectivity. Connectivity is no longer specific to a few sectors, but is an integrated whole, which circumscribes a range of networks like trade, transportation, ICT, energy conduits, people to people streams and technology. Currently, the countries from Asia-Pacific region are taking keen interest in determining fresh drivers of regional economic growth besides creating additional domestic and cumulative regional demand.

Azerbaijan and Pakistan are two forward looking, vibrant and developing nations, which enjoy the distinct advantage of their geostrategic locations. Currently, both the states seem to utilize this benefit amicably. While Azerbaijan serves as gateway to Europe from the East, Pakistan lies at the crossroads of South, West and Central Asia. In case the “Southern Gas Corridor (SGC)” is a signature project of Azerbaijan, “China Pakistan Economic Corridor (CPEC)” distinguishes Pakistan as the lynchpin of Chinese driven “Belt and Road Initiative (BRI)”. Similarly, when East-West Strategic Corridor, International North-South Transport Corridor (INSTC) and Baku-Tbilisi-Kars (BTK) railway projects remain peculiar to Azerbaijan, Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, Central Asia-South Asia (CASA-1000) power project and Central Asia Regional Economic Cooperation (CAREC) program signify the centrality of Pakistan. With such balanced interplay of geo-strategic location, energy resources and connectivity potential, Azerbaijan and Pakistan are likely to remain relevant in the regional and global matrices, during foreseeable future.

While many projects are already in the pipeline for intra-regional connectivity, still a need exists to enhance inter-regional connectivity. This can be done by connecting South Asia with Central Asia, Russia, Turkey and Europe via Iran. The best way to achieve desired connectivity is to link CPEC with North-South Corridor. The proposed routes are Pakistan-Iran-Azerbaijan-Russia, Pakistan-Iran-Azerbaijan-Turkey-Europe (via BTK) and Pakistan-Iran-Azerbaijan-Central Asia (via trans-Caspian ferry service). If materialized, these routes will become a win-win proposition for all counties involved in the project, bringing in substantial revenue, mutual profits and shared development.

The existing bilateral trade volume does not correspond with the excellent political relations between Azerbaijan and Pakistan. What can be done in this regard?

This is a neglected dimension of relationship that warrants immediate attention. During the visit of President Mamnoon Hussein to Azerbaijan in 2015, a business forum was arranged. Sequel to Prime Minister Nawaz Sharif’s visit in 2016, once again business forums were held in Baku and Islamabad. More recently, a high level trade delegation from Baku has visited Islamabad. All these developments indicate that the gap has been identified by concerned authorities, who are now trying to fill it. The importance of regional connectivity, transportation and people to people contact cannot be overemphasized. Huge trade potential exists between Azerbaijan and Pakistan, which incidentally has remained untapped, due to connectivity issues and absence of people to people contacts. Suspension of direct air link is another impediment that needs to be restored on priority basis.

The fast pace of growth of Pakistan’s economy (5.8% of GDP) and its market size (207 million population) affords great opportunities for investments in Pakistan. Recently, Pakistan has acquired full membership of Shanghai Cooperation Organization (SCO), which offers diversified opportunities in the realms of health, education, connectivity, trade and security. Similarly, Pakistani entrepreneurs can also learn and benefit from their Azeri counterparts, invest in Azerbaijani economy and further explore the markets of Central Asia and Russia through Azerbaijan. Business friendly trade environment, public-private partnerships, business-to-business linkages, harmonized laws and regulations for trade facilitation, removal / standardization of tariff & non-tariff barriers, tax exemptions and free trade agreements are some of the steps, which will optimize dividends of fast-tracking regional trade and connectivity.

What is the role of security towards economic development and prosperity?

Security and stability are the building blocks of state’s edifice. Without security, there cannot be any worthwhile economic activity; consequently no foreign investment will ever flow in. So, provision of safe, secure and stable environment remains a key state function to ensure economic development and prosperity. Security is an all-inclusive phenomenon that encompasses internal and external security, economic security, human security, environmental security, health security, food security and community security etc.

The total population of China, India, Pakistan, Iran, Afghanistan, Central Asian Republics (CARs) and other South Asian states is 3.5 billion (approximately 45% of global population). Nevertheless, such an enormous population bloc remains hostage to negative politics. The festering wounds of Nagorno Karabakh (NKB) and Kashmir pose the greatest threats to the security of Central Asia and South Asia. Besides impeding the growth potential, such unresolved disputes put extra strain on the economies of Azerbaijan and Pakistan, in terms of huge defence expenditures. With a growing spirit of regionalism across the globe, it is hoped that conflicts’ resolution will become easier and more likely, particularly in case of long standing issues.

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