Azerbaijani President Ilham Aliyev paid a one-day visit to Türkiye on June 10 and met with President Recep Tayyip Erdoğan. Geopolitical developments in the region were on the agenda of the presidents of the two allied countries. In addition to regional and global geopolitical developments, energy, economy and transportation issues were also expected to be discussed.
Especially in the last two months, the developments between the two countries in the fields of economy, energy and transportation have been more remarkable. It should be noted that the important decisions taken at the 11th meeting of the Joint Economy Commission of the two countries on May 11, the agreements signed in the field of energy on May 14 and June 4, and the resumption of the Baku-Tbilisi-Kars (BTK) railway following the completion of a large-scale reconstruction of the Georgian section of the railway will ensure that cooperation in these areas is in line with new targets.
Results of the meeting
On May 8, the 11th meeting of the Joint Economic Commission between the two countries was held in Ankara. At the end of the commission meeting, a 120-article protocol was signed between the two countries. This protocol includes exchanging experiences in the field of public-private partnership, signing a new agreement in the field of transport, strengthening cooperation for the Middle Corridor, organizing the 4th Energy Forum Meeting, developing inter-university cooperation, organizing a youth forum and strengthening cooperation for the restoration and reconstruction of the liberated territories.
In addition to the protocol, a memorandum of understanding between the Foreign Economic Relations Board (DEIK) of the Republic of Turkiye and the Small and Medium Enterprises Development Agency (SME) of the Republic of Azerbaijan, an agreement on the establishment of a joint working group on trade facilitation, an agreement on cooperation in the water sector and a declaration in the field of combating animal diseases was signed between the sides.
At the news conference held after the meeting, Azerbaijani Prime Minister Ali Asadov noted that more than 20 Turkish companies have implemented projects amounting to $4 billion for the restoration and reconstruction of the liberated territories. According to official figures 3,000 Azerbaijani companies operate in Turkiye and Turkish contractors have implemented 526 projects worth $19.3 billion in Azerbaijan. According to him, Turkiye’s investment in Azerbaijan is $13 billion, and Azerbaijan’s investment in Turkiye is $21 billion. Yılmaz also announced that a free trade agreement will be signed between the parties in the medium-term perspective.
The parties signed a preferential trade agreement in 2020 and an additional protocol in 2023. According to official statements after this agreement, the trade volume between the two countries has increased to $7.5 billion, and the aim is to increase this number to $15 billion.
Resumption Baku-Tbilisi-Kars railway capacity
The capacity of the Baku-Tbilisi-Kars railway, which connects Azerbaijan and Türkiye via Georgia, was increased from 1 million tons to 5 million tons in 2024. The first agreement for this railway line, which is an important component of the Middle Corridor, was signed in Tbilisi in 2007 and its opening took place in Baku in 2017. During the opening ceremony of the BTK in 2017, Aliyev stated that the capacity of the BTK could be increased to 5 million tons in the second stage and then to 17 million tons. Thus, the work to increase the capacity of the BTK to 5 million tons in 2023 was initiated and was completed in May 2024, and started to operate at a capacity of 5 million tons as of May 20.
Some of the geopolitical developments that occurred with the start of the railway, especially the closure of the borders of Russia, through which the northern corridor passes, and Iran, through which the southern corridor passes, due to COVID-19, the closure of the Suez Canal, which is an important passageway of the waterway where 90% of the cargo is carried between east and west, by a Japanese-flagged cargo ship and eventually the Russia-Ukraine war in 2022 increased the importance of the Central Corridor as a transportation route between East and West.
As a matter of fact, after these geopolitical developments, freight transportation began to increase via the Middle Corridor. According to the figures provided by Azerbaijan railways, the cargo flow from BTK in 2019 was 3.8 million tons, and in 2023, after the Russian-Ukraine war broke out, the figure was 6.8 million tons. In parallel with the increase in cargo volume from the Middle Corridor, BTK’s capacity comes to the fore.
New agreements and targets in energy sector
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