A ZERBAIJAN-GERMANY ECONOMIC RELATIONS : CURRENT SITUATION AND PERSPECTIVES

1. AZERBAIJAN-GERMANY ECONOMIC RELATIONS: CURRENT SITUATION AND PERSPECTIVES Lecturer Elshan BAGIRZADEH Azerbaijan State Economic University Turkish World Management Faculty International Relations Department Siegen-Germany, 6 Mart 2010

2. Germany Ukraine Kazakhistan Russia Caspian Sea Black Sea Uzbekistan Georgia Azerbaijan Armenia Turkmanistan Turkey Baku Mediterranean Sea Iran Iraq

3. AZERBAIJAN Official name – Republic of Azerbaijan Official language – Azeri (Turkish of Azerbaijan) Government – President Republic Capital – Baku Declaring of Independent – 18 October 1991 Area – 86,600 km2 Population – 9,000,000 Ethnic groups – 90.6% Azeri, 2.2% Dagestani, 1.8% Russian, 1.5% Armenian, 3.9% other Labour force – 5,78 million Labour force by occupation – services (48,6%), industry (12,1%), agriculture and forestry (39,3%) (2005) Unemployment – 6% Population below poverty line – 11.0% Currency – Manat GDP per capita – $5,346 GDP by sector – agriculture (6.7%), industry ( 65.0%), services ( 28.3%) GDP Growth –9.3% Inflation – 1.5% Gini index – 36.5 HDI – 0.787 (medium) Main industries –petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore, cement; chemicals;petrochemicals; textiles; machinery; cotton; foodstuffs Total investment – 21.3% of GDP Exports – $14.2 billion Exports goods – oil and gas 90%, machinery, cotton, foodstuffs Main export partners – Italy 40.2%, US 12.6%, Israel 7.6%, India 5.1%, France 4.9% Imports – $ 6.12 billion Import goods – machinery and equipment, oil products, foodstuffs, metals, chemicals Main import partners –Russia 18.8%, Turkey 11.2%, Germany 8.3%, Ukraine 7.9%, China 6.7%, UK 5.4% Public debt – 4.6 % of GDP Public revenues – $ 12.9 billion Public expenses – $ 13.2 billion External public debt – $3.4 billion Reserves of foreign exchange and gold – $20.4 billion GERMANY Official name – Federal Republic of Germany Official language - German Government – Federal Parliamentary Republic Capital – Berlin Declaring of Independent -23 May 1949 Area – 357,021 km2 Population – 81,757,600 Ethnic groups – 91.5% German, 2.4% Turkish, 6.1% other Labour force – 43.6 million Labour force by occupation – services (67.5%) industry (29.7%), agriculture (2.4%) Unemployment – 7.7% Population below poverty line – 11% Currency – Euro GDP per capita – $ 44,729 GDP by sector – agriculture (0.9%), industry (30.1%), services(69%) GDP Growth – 0.0% (2009) Inflation – 0.0 % (2009) Gini index – 27 (low) HDI – 0.947 (very high) Main industries – iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles Total investment – 19.2 % of GDP Exports - $ 1.498 trillion Export goods – machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles Main export partners – France 9.7%, US 7.1%, UK 6.7%, Netherlands 6.6%, Italy 6.4%, Austria 5.4%, Belgium 5.2%, Spain 4.4%, Poland 4% Imports – $1.232 trillion Import goods – machinery, vehicles, chemicals, foodstuffs, textiles, metals Main import partners – Netherlands 12.5%, France 8.3%, Belgium 7.5, China 6.2%, Italy 5.7%, UK 5.4%, Austria 4.3%, Russia 4.2%, US 4.2% Public debt – 64.4% of GDP Public revenues - $1.591 trillion Public expenses - $1.591 trillion External public debt – $5.2 trillion Reserves of foreign exchange and gold – $138 billion

4. FORMATION OF RELATIONS • In 12 January1992 the Independence of Azerbaijan was recognized by Germany. • In 20 February 1992, it was formed the first relations between two countries diplomatically. • In 2 September 1992, the embassy of Azerbaijan was opened in Germany. • In 22 September 1992, the embassy of Germany was opened in Azerbaijan. • In 1-4 July 1996 Haydar Aliyev, former President of Azerbaijan visited to Germany. • In 24-26 August 2004, 14-16 February 2007, 21-22 November 2009 and 4-6 February 2010, Ilham Aliyev, President of Azerbaijan visited to Germany. • From 1997’th year, the intergovernmental negotiations for development organize between Ministry of Economic Development of Azerbaijan and Ministry of Federal Economic Cooperation and Development of Germany every year. • From 2004’th year, it has been organized ten Azerbaijan-Germany Business Forums. • There are friendship groups in both parliament of countries. • In this day, Germany is one of the important political and economical partnership of Azerbaijan in Europe. • The relations between two countries have positive trends from 1992 year.

6. ADOPTED DOCUMETS ON ECONOMIC RELATIONS (1995-2009)

7. AID TO AZERBAIJAN

8. INVESTMENT RELATIONS Today, there are 112 German companies in Azerbaijan.

11. FOREIGN TRADE RELATIONS Source: The Statistical Committee of Azerbaijan Republic

13. THE FIRST TEN PARTNERS OF AZERBAIJAN IN FOREIGN TRADE AND GERMANY Source: The Statistical Committee of Azerbaijan Republic

14. THE FIRST TEN FOREIGN TRADE PARTNERS OF AZERBAIJAN IN EUROPE UNION AND GERMANY Source: The Statistical Committee of Azerbaijan Republic

15. MAIN GOODS AND SERVICES IN FOREIGN TRADE BETWEEN AZERBAIJAN AND GERMANY Source: The Statistical Committee of Azerbaijan Republic

16. THE DEVELOPMENT STAGES OF AZERBAIJAN ECONOMY Crisis period ( 1991 -1995) Stabilityand reform period ( 1995 -1998 ) Progress period ( 1998 -2004) Raising period ( 2004 - ?)

17. MAIN STATE PROGRAMMES (2004 - ?) Struggle against poverty Rural development Public investments Improvement and supporting of private sector Struggle against corruption and shadow economy Improve of ecological situation Improve of sources of alternative energy

18. MAIN ECONOMIC INDICATORS OF AZERBAIJAN ECONOMIC DEVELOPMENT PROCESS • Azerbaijan economy has increased 8.4 times from 1995 to 2009. • State Budget has increased 10 times from 2003 to 2009. • Poverty level has gone down from 49% to 11% from 2003 to2009. • Average monthly salary has increased 3.5 times from 2003 to 2009. • Middle monthly pensions have increased 3.8 times from 2003 to 2009. • Azerbaijan has been the leader country according to indicator of economical growth in the World in 2006-2008 years.

19. PERSPECTIVE OF AZERBAIJAN ECONOMY • “Doing business-2009”: Azerbaijan is the reformist country of the world in area of improve of the business environment. • “Doing business-2010”: The measures implemented in area of improve of the business environment in Azerbaijan are valued positively. • World Economic Forum: Azerbaijan Economy is the first according to ‘Global Competitiveness Index -2009-2010’ in among CIS countries. • IMF: Azerbaijan has economy that durable to crisis and the least undergoesed to influence of the foreign factors. • IMF: It will be real economic growth of 12.3 % in Azerbaijan in 2010. • The Economist: It will be real economic growth of 9.5 % in Azerbaijan in 2010. And this indicator will be the 3’rd in the World. • The Banker: Azerbaijan is 4’th in the World according to indicator of ‘Economic Perspectives’. • The Economist Intelligence Unit: It will be per capita GDP of 11.4 thousand U.S. dollar according to PPP in Azerbaijan in 2010.

20. PERSPECTIVE OPPORTUNITIES OF GERMANY-AZERBAIJAN ECONOMIC COOPERATION • Formation of the intergovernmental commission on trade and economical cooperation, • Cooperation between German and Azerbaijan banks in areas of finance and credit, • Cooperation between Azerbaijan banks and KWF and other German banks in the area of financing of the small and medium enterprise, • Creation of the joint ventures in areas of equipments of machine building, steel mill, telecommunication, electrical engineering, textile and pharmaceutics, • Cooperation in areas of bring up, processing and packing up of the agriculture products, • Creation of the joint ventures in area of organizing of production of equipments of electrical engineering, • Participation of German companies and application of German experience in developing of service sector of Azerbaijan, • Cooperation with German companies on formation of paid roads in Azerbaijan. • Cooperation in area of adapting of Azerbaijan products to European standards.

21. Azerbaijan State Economic University İstiglaliyyat No. 6, Baku Mail: Az 1001 Web: www.ekoelsen.tr.cx E-mail: e.bagirzade@gmail.com elsen_bagirzade@hotmail.com GSM: (+99450) 374 41 33 Business: (+99412) 492 59 14 Fax: (+99412) 492 59 40

22. THANKS!

23. APPENDIX 1:PROJECTS OF NEW BUILDINGS AND SHOPPING CENTRES TO CONSTRUCT IN BAKU CITY

40. APPENDIX 2: PHOTOS FROM AZERBAIJAN