International Economic Relations

After Azerbaijan Republic gained independence, one of the important aspects of its foreign economic policy was relations with the financial-credit and economic organizations. Over the past period, enough work has been done in this area. Azerbaijan became number of nearly all influential international organizations, including International Monetary Fund, World Bank, European Bank for Reconstruction and development, and Islamic Development Bank in 1992, and Asian development Bank in 1999.

After Azerbaijan Democratic Republic lost its independence in 1920, foreign economic relations were under the state monopoly of the USSR. As the foreign economic relations of Azerbaijan were defined from Moscow, there was no need to establish any body for the management of this field. The economic relations of Azerbaijan were realized conventionally in the composition of the USSR. The product delivery on the fields of Azerbaijan economy was 12.2 million Rubles (with domestic prices), exporting to abroad comprised only 744.000 manats out of this total amount in 1991. Foreign economic relations of Azerbaijan were 16.7 times less than the exchange relations in the USSR. These relations were realized under the control of Moscow as well. The flow of technology and workforce was closed and-one-sided.

After Azerbaijan gained political independence, one of the main tasks of economic development was the necessity of establishing foreign economic relations on the right track. Now, Azerbaijan has mutual economic and trade relations with 84 countries of the world. Economic potential, rich raw material and mineral resources, natural conditions, and favorable economic-geographical position of the country increase opportunities for co-operation.

The mentioned facts are visual evidences of structural and quality changes that happened in the field of foreign economic relations and the sample of the fact that Azerbaijan joined international economic integration relations.

Economic cooperation with the foreign countries provides great advantages to ensure multilateral development of national economy. So, as the national economy of Azerbaijan Republic is on the way of formation, mutual economic relations with foreign countries and the strengthening of these relations are of great importance.

One of the main means of foreign trade is customs tariffs. After “Code of Customs” was adopted in Azerbaijan Republic on June 10, 1997, the legislation of Azerbaijan Republic on “Customs Tariffs” came into force on June 20, 1995. The legislation ensured effective relations between the domestic and foreign markets and defined the provisions for the establishment and application of customs tariffs, which is the main means of state regulation of foreign trade, and for the customs duty from goods that pass the customs border of Rip.

The main feature of foreign economic relations of Azerbaijan Republic is the country’s admission into international, regional, and local economic organizations, thus being integrated into these organizations in all aspects of social life. After our independence was restored, Azerbaijan established first co-operative relations with the following international economic organizations:

As Azerbaijan is one of the Muslim republics of the world, it became member of several international Islamic organizations. One of the most influential organizations, which connects all Islamic countries (28 countries) is the Organization of Islamic Conference. It is the first regional organization into which Azerbaijan was integrated after gaining its independence.

Islamic Development Bank and Islamic Solidarity Fund invested capital into three various fields of the national economy of Azerbaijan Republic. Thus, these foreign capital and investments were directed to the fields of melioration and water economy for the development of agriculture.

Azerbaijan is one of the co-founders and members of GUAM, an organization of democracy and economic development. The other members are Georgia, Moldavia, and the Ukraine. GUAM was established on October 10, 1997.

The Organization for Economic Co-operation (OEC) has special role in Azerbaijan’s integration into the world economy.

Azerbaijan is one of the co-founders of the Black Sea Economic Cooperation Organization (BSEC).

On September 20, Azerbaijan became member of CIS.

Since 1992, Azerbaijan has become member of International Monetary Fund and International Bank for Reconstruction and Development. IMF has a representative office in Baku in the turn of the XXI century. Azerbaijan Republic continued the process of internationalization and integration, and took successful steps that was the continuation of development in this direction on January 27, 2001, Azerbaijan became 43rd member state of the Parliamentary Assembly of the European Council.

In the early 1990s, as a political organization the Commonwealth of Independent States was targeted to the establishment of intergovernmental relations among former USSR countries; now, the organization is mainly directed to defining definite frameworks of economic integration among the member states. Azerbaijan Republic formed a free trade regime with several CIS countries and legal basis for free investment has been established.

In the early XX century, Azerbaijan exported only fish, caviar, petroleum, and silk to several neighboring countries. However, now, Azerbaijan has trade relations with many countries of the world.

Azerbaijan sends oil, oil products and equipments, cotton fiber, tobacco, alcoholic drinks (wine), refrigerator and air conditionings non-ferrous metals and chemical products to the foreign countries, and purchases food products (oil, flour, sugar, grains, citrus fruits), automobile and industrial equipment, metal and wood materials, light industry products (material, clothing, shoes), mineral fertilizer, and domestic appliances instead. 

In the future, Azerbaijan plans to export ready industrial products instead of raw materials.