Tashkent, Uzbekistan (UzDaily.com) -- The state visit of the head of Uzbekistan Shavkat Mirziyoyev to the Republic of Azerbaijan is a historic and significant event and, in fact, launches a qualitatively new stage in further deepening the multifaceted, mutually beneficial Uzbek-Azerbaijani cooperation. At the same time, industrial cooperation has become a key aspect in the issue of building up bilateral cooperation.

For this reason, during the talks, the presidents of Uzbekistan and Azerbaijan noted the need for joint implementation of large projects in the automotive industry, metallurgy, energy, agriculture, electrical engineering, the textile industry, etc.

The issues of cooperation in the field of industry formed the basis of the adopted Roadmap for deepening a comprehensive strategic partnership between the Republic of Uzbekistan and the Republic of Azerbaijan for 2023-2024, which stipulates strengthening industrial cooperation and increasing mutual trade.

The results of the business forum held the day before in Baku, where a portfolio of new cooperation projects and trade contracts worth over US$4.5 billion in energy, engineering, metallurgy, transport, production of building materials, electrical engineering, agriculture, textile and other fields.

It is also important to emphasize that today Uzbekistan and Azerbaijan are very successfully cooperating in this direction. Thus, in recent years the number of joint ventures has increased significantly. At present, 203 enterprises with Azerbaijani capital operate in Uzbekistan, of which 66 are JVs and 137 are enterprises with 100% foreign participation.

Their main areas of activity are trade, mechanical engineering and metalworking, finance and insurance, real estate transactions, energy, services, jewelry production, food industry, and light industry.

In turn, more than 70 Uzbek companies operate in Azerbaijan, with the participation of which numerous projects are being implemented in Azerbaijan.

The automotive industry has become a vivid example of fruitful bilateral cooperation. Thanks to joint cooperation over the past two years, this industry has become one of the key links in the Uzbek-Azerbaijani partnership. In 2021, UzAuto Motors, together with the Azerbaijani automobile plant Azermash, launched a SKD assembly plant for Chevrolet cars in Hajigabul region of Azerbaijan. The line's capacity allows to produce up to 5,000 vehicles per year. In May 2023, in the same Azerbaijani region, the foundation was laid for a plant to localize the stage of painting, welding and assembly of automotive products, the project of which is estimated at US$51.8 million.

Another area in which Uzbekistan and Azerbaijan have a huge potential for cooperation is energy. Cooperation in this area is moving into a pragmatic and practical plane.

Thus, the Uzbek delegation took part in the 28th International Exhibition and Conference “Oil and Gas of the Caspian Sea”, which was held in Baku in June this year. In turn, the Azerbaijani side also participated in the 25th International Oil and Gas Exhibition of Uzbekistan (OGU) - 2023, held in Tashkent in May 2023.

In addition, in June 2023, an agreement was reached between Uzbekneftegaz and the Azerbaijani company SOCAR on the joint development of fields in Uzbekistan and Azerbaijan.

The long-term interests of the two countries also coincide on the issue of mutually beneficial cooperation in the field of production and construction of photoelectric power plants in Uzbekistan. In the future, cooperation between the parties in the field of renewable energy will increase the export opportunities of the two states.

It is very important in this context to note the signing during the visit of an intergovernmental agreement on further deepening cooperation in the energy sector. The document is intended to promote the development of cooperation between state and business entities in the oil, gas, and electric power sectors. The main areas of cooperation are oil and gas production, geological exploration, petrochemistry and oil refining, production and export of electricity, generation of electricity based on renewable sources.

This will undoubtedly make a great contribution to the energy security strategy of Uzbekistan, and will also serve to deepen industrial cooperation between the two countries.

In turn, cooperation in the field of agriculture between Uzbekistan and Azerbaijan plays an important role in ensuring their food security and sustainable development. The exchange of agricultural goods, experience and technologies helps to strengthen economic ties, as well as increase the efficiency of the agricultural sector.

According to available data, in 2022, the turnover of agricultural products between the two states reached about US$41 million, increasing 2 times compared to 2021. In many ways, this is facilitated by the free trade regime established between two states. At the same time, the export of Uzbek agricultural products to Azerbaijan amounted to US$35.1 million.

At the same time, despite the fact that over the past five years, bilateral trade in the agro-industrial complex has increased almost 5 times, Uzbekistan and Azerbaijan have all the necessary resources for its further multiple growth.

As part of the first meeting of the ministers of agriculture of the Organization of Turkic States in July last year, the ministers of agriculture of Uzbekistan and Azerbaijan signed a roadmap for cooperation in the agricultural sector. The document penvisages the exchange of experience in the field of digitalization of agriculture, the creation of state support mechanisms for this industry, the introduction of an agricultural insurance system, and the launch of a joint venture in the field of sericulture.

Taking into account the fact that Uzbekistan is one of the largest producers of raw silk in the world, which accounts for about 2% of world production, work is underway to create a silk production cluster in Azerbaijan.

The basis of cooperation between Uzbekistan and Azerbaijan is the desire to use the huge potential for complementarity of the economies of the two countries by combining efforts and identifying new points of growth.

The interests of expanding close ties are determined by the accelerated development of the industrial sector of Azerbaijan. Thus, at the end of 2022, the share of industrial products in the structure of the country's GDP amounted to 43%.

In turn, thanks to cardinal reforms and measures taken in recent years to develop the real sector, our country has managed to achieve significant results in industrial development. Thus, high industrial growth rates ensured an increase in the contribution of the industry to the economy of Uzbekistan from 20.6% in 2016 to 30% in 2022.

In general, the deepening of industrial cooperation between Uzbekistan and Azerbaijan will have a positive impact on the sustainable development of their economies, serve as an effective mechanism for increasing exports, creating new jobs and improving the welfare of the population of the two countries.

Utkir Siddikov,

Chief Researcher at ISMI

under the President of the Republic of Uzbekistan