Eastern partner

[b]Apart from our common Soviet history, Belarus and Azerbaijan share many other features: an approximately equal population and GDP per capita and similar human potential index — annually calculated by the UN [/b]Over the past decade, our states have lead within the CIS regarding economic development. Belarus’ success revolves primarily around its processing industry while Azerbaijan has become a large supplier of energy to the global market. In this respect, our economies complement each other. Our bilateral co-operation has gained even greater impetus following top level meetings between our countries. Since 2006, Alexander Lukashenko and Ilham Aliyev have exchanged visits regularly.
Apart from our common Soviet history, Belarus and Azerbaijan share many other features: an approximately equal population and GDP per capita and similar human potential index — annually calculated by the UN

Over the past decade, our states have lead within the CIS regarding economic development. Belarus’ success revolves primarily around its processing industry while Azerbaijan has become a large supplier of energy to the global market. In this respect, our economies complement each other. Our bilateral co-operation has gained even greater impetus following top level meetings between our countries. Since 2006, Alexander Lukashenko and Ilham Aliyev have exchanged visits regularly.
From July 7th-8th, a Belarusian governmental delegation — led by Prime Minister Mikhail Myasnikovich — visited Azerbaijan. Top level contacts have resulted in the intense development of our relations with this Caucasian republic. On meeting Mr. Myasnikovich, the President of Azerbaijan, Ilham Aliyev, spoke of how best to promote our bilateral collaboration, saying, “Everything which we’ve agreed upon is being realised.” In particular, Baku has confirmed its interest in further oil supplies to Belarus. About a week after the Belarusian delegation’s visit, Azerbaijani ‘black gold’ was already pumped to Mozyr Refinery.
Over the past five years’, relations between our two countries have made a serious breakthrough. Belarusian diplomacy has apparently failed to achieve similar progress with any other state — except perhaps Venezuela. Figures confirm this, with Belarus-Azerbaijan turnover rising from $30m to $150m over the past five years. This could reach a billion dollars in 2011 — owing to supplies of Azerbaijani oil. Meanwhile, Belarusian exports have reached $140m, with the share of Belarusian products on the Azerbaijani market rising to 2.23 percent; our sour cream and cheese are sold in Baku shops.
However, figures alone do not fully reflect the scale of Minsk-Baku co-operation. Our capitals have exchanged embassies and launched a direct flight while Azerbaijan assembles Belarusian tractors and trucks. From February 2011, Belarusian refineries will also be pumping oil from this Caucasian republic — aiding the country’s energy security. Moreover, it’s well known that Azerbaijan allocated a $200m loan to Belarus a year ago, spent on satisfying Gazprom’s invented financial claims. It is an act which won’t be forgotten...

Building relations
On meeting Mr. Aliyev, the Belarusian Prime Minister noted that projects realised jointly by Gyandzha Auto Plant and Belarusian machinery producers are examples of successful bilateral liaison. On July 7th, the Belarusian delegation attended the launch of a workshop to assemble MAZ chassis-based waste collection vehicles. The project is overseen by Gyandzha Auto Plant, Minsk Automobile Plant and German Haller. Mr. Myasnikovich believes the facility could one day transform into a successful transnational corporation — profitable for everyone.
The Chairman of Gyandzha Auto Plant’s Supervisory Council, Khanlar Fatiev, tells us that tri-lateral co-operation could raise the number of the plant’s employees to 1,000. “Every year, we increase production volumes; in 2010, production was up 40 percent on 2009. Our jointly manufactured machinery has made a name for itself on the Azerbaijani market and we’re now studying sales elsewhere — in particular, Turkey. Six of our tractors are currently undergoing adaptation in Turkey and we plan to receive certification by late 2011, allowing us to sell our joint products there,” he notes.
Gyandzha Auto Plant has been assembling Belarusian tractors and MAZ trucks for several years, also jointly producing automobile cranes. In this respect, the city of Gyandzha is a unique hub for Belarusian exports to the Azerbaijani market. During Mr. Myasnikovich’s visit, contracts were signed to dispatch 300 MTZ tractor sets and 300 MAZ vehicle sets to Azerbaijan.

Green light for co-operation
The recent Belarusian visit has also inspired another interesting project: a contract for joint production of LED equipment in Azerbaijan, with $10m of initial investments. Moreover, we are envisaging supply of the first batch of sets for assembly of modern lamps. The Ambassador Extraordinary and Plenipotentiary of Belarus to Azerbaijan, H.E. Mr. Nikolay Patskevich, comments, “The project is being jointly run by Belarus’ National Academy of Sciences and Azerbaijan’s Aviation Academy. We forecast serious production volumes and sales. Meanwhile, Azerbaijan is to produce other manufactures by Belarusian scientists; we have great hopes for this science intensive production.”
Production will be launched in several stages. Initially, LED lamps — street, office and communal — will be produced. As the Deputy Chairman of the Belarusian National Academy of Sciences’ Presidium, Sergey Rakhmanov, explains, “The scale will be enlarged after the pilot project finishes in September. A technopark will be established at the Azerbaijani Aviation Academy later on and I think our joint production will form a serious section of this new establishment.”
Relations between Azerbaijan and Belarus are moving beyond pure trade now, shifting towards investment and innovative collaboration. Belarus plans to help modernise Transcaucus carriage making (300 out of Azerbaijani Railways’ 370 passenger carriages need replacing). In turn, Mr. Myasnikovich has proposed that Azerbaijani companies take part in privatisation in Belarus. “We invite your state structures and businesses to participate in the privatisation of Belarus’ companies,” he explained, adding, “It’s good to own assets in the geographical centre of Europe, to help diversify capital; we’ll ensure that your money is safely protected and that you enjoy harmonious development.”
Sales of hydrocarbons in recent years have enabled Azerbaijan to generate profits worth many billions of dollars, making it a promising investor. Its new energy strategy goes beyond oil and gas transportation to global markets, with Baku showing keen interest in oil processing assets and networks to distribute oil products. Azerbaijan’s Industry and Energy Minister, Natiq Aliyev, states that Baku is ready to liaise with Minsk on oil supplies, privatisation of oil refineries and establishment of a network of petrol stations.

Azerbaijani oil
Every country has its own focus, with Azerbaijan known for its oil derricks. Of course, there is far more to this beautiful nation: its picturesque landscapes, ancient history, the blue Caspian Sea, juicy fruits and hospitable people. However, Apsheron’s iron towers are a sight to behold: the first oil well in the world was drilled in Baku — on July 14th, 1848.
The volume of proven hydrocarbon stocks in Azerbaijan stands at 4.2bn tonnes of conventional fuel, while forecast reserves amount to 10bn tonnes. From 1997-2010, oil extraction rose 5.6-fold, reaching 50.6m tonnes. Experts predict that Azerbaijan’s place in ensuring Europe’s energy security will steadily enhance. Meanwhile, Belarus is at the forefront of aiding the diversification of Europe’s energy consumption.
After his meeting with the Belarusian delegation, the Industry and Energy Minister announced, “We’re ready to increase oil supplies to Belarus; I’m personally optimistic about this. We have a great deal of oil, so entry to Belarus and the Baltics is of great significance for us. As soon as these issues are settled, supplies will be renewed — being even more safe and efficient.” At present, 4m tonnes a year are aimed for Belarus, although the figure might rise in the future — depending on our two states’ economic interests and ‘to what extent these operations are profitable, proceeding from the market situation’.
“Everything must be based on solid economic ground and mutual interests. These interests coincide at present,” noted Natiq Aliyev. “Our pilot projects, first contracts and testing of a complicated transport infrastructure system are complete. Azerbaijan is primarily interested in the transport corridor — focusing on the Odessa-Brody oil pipeline. We aim to deliver primarily crude oil to the European market.”
Mozyr Refinery began receiving Azerbaijani ‘Azeri Light’ oil on July 15th, a week after the Belarusian governmental delegation’s visit to Baku. Tankers take it to Yuzhny Port and it later travels to Mozyr via the Odessa-Brody pipeline. Mozyr Refinery first pumped Azerbaijani oil through the Ukrainian Odessa-Brody pipeline (in the averse mode) and through the Mozyr-Brody section of the Druzhba pipeline in January of this year. Azerbaijani oil would replace Venezuelan ‘Santa-Barbara’ oil, which would be supplied to the American market instead. This would save money, as it’s costly to ship hydrocarbons from Venezuela to Odessa Port by tanker.
The contract exchange brings more than financial profit, since it also supports Belarus’ desire to diversify fuel supplies. We have contributed to the shift of the Odessa-Brody pipeline to transporting oil in the opposite direction from previously, making it an important part of the Eurasian oil transportation corridor. Prior to the agreement between Belarus, Azerbaijan and Venezuela, it only operated in the reverse mode, pumping Russian oil. Those who created this 700km pipe planned to avoid such dependence; now, the Odessa-Brody operates in line with their initial plans. Belarus has ‘laid the road’ for other countries, since further capacity exists beyond Minsk’s contract for 14.5mln. tonnes a year.

Close East
This year, Azerbaijan sent two participants to the Slavonic Bazaar Festival: young singer Aynishan Quliyeva and ten year old Yasin Gasaev (who won a 2nd class diploma in the Children’s Musical Contest). “Three hundred Azerbaijanis were present, all supporting us. Meanwhile, the Belarusians knew about me, recognising me on the street. I could hardly walk about without people asking me for photos,” Aynishan told journalists on returning home. Our warm Belarusian welcome, which is nothing unusual to us, delighted her.
Humanitarian ties occupy a special place in Belarusian-Azerbaijani relations, ensuring enduring and stable co-operation. During his visit to Baku, the Belarusian President attended the Baku Slavic University, launching the Centre of Belarusian Language and Culture. Diplomats, translators and journalists are taught there, gaining the opportunity to learn more about Belarus. Such knowledge should definitely help them in their future work.
According to Mr. Myasnikovich, Belarus and Azerbaijan enjoy great potential for interacting in the field of education and staff training. Minsk has places open at its colleges and vocational educational establishments. “We’ll create the necessary conditions for your citizens to receive a worthy education, including offering English language classes,” the Prime Minister promised.
Three Belarusian higher educational establishments — the Belarusian State University, the Belarusian National Technical University and the Belarusian State University of Informatics and Radio-electronics — are to be included on Azerbaijan’s programme for foreign studies for young people. An agreement was signed during our delegation’s recent visit, alongside another guaranteeing mutual recognition of diplomas. Belarus will benefit from the export of its educational services — financially and in goodwill. At present, over 150 Azerbaijanis study at Belarus’ educational establishments, laying the foundation for further fruitful co-operation between our two countries.

By Igor Kolchenko
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