Azerbaijan looks beyond energy successes for economic growth

Azerbaijan’s growing economy undoubtedly benefits from its oil and gas developments, but the country also has laid a strong foundation to move into other sectors that deserves closer attention, participants at a two-day conference agreed.

“The energy sector is not an end in itself, but a means to an end,” observed Jonathan H. Elkind, acting assistant secretary for international affairs at the US Department of Energy. “Energy serves as the backbone for our economies. It underpins many other activities.”

The US has a long relationship with Azerbaijan which it intends to maintain because it wants a diversified global hydrocarbon economy, Elkind said during a panel discussion at the 2014 US-Azerbaijan Convention organized by the Assembly of the Friends of Azerbaijan.

“Azerbaijan clearly has benefited from a huge body of work over 20 years, yet some of its most significant decisions still lie ahead,” Elkind said. “It has succeeded in attracting leading energy companies, but is ready to offer new opportunities for other businesses and industries.

Completion of the 2,500th tanker loading at the Ceyhan terminal in Turkey a week earlier underscored what Azerbaijan has achieved in opening a route for Caspian Basin crude oil to reach European customers, he indicated. “The coercive use of energy we’ve seen elsewhere in recent weeks has emphasized the importance of this,” Elkind said. “It underscores what Azerbaijan has achieved.”

In best US interests

Another panelist, Brian M. Lopp, who directs international operations and policy in Boeing Co.’s government operations division and is a member of the Azerbaijan-US Chamber of Commerce, noted, “There’s no mistaking that we have a very committed energy partner in Azerbaijan.”

He said, “But a lot is happening beyond energy. I think it would be in the best interests of the US to put more emphasis on trade and investment opportunities in Azerbaijan.” Lopp said he hoped the US Department of Commerce would do more to promote economic opportunities in Azerbaijan to more US companies.

Meanwhile, Nargiz Nasullayev-Muduroglu, executive director of the American Chamber of Commerce in Azerbaijan (AmCham), said, “There aren’t enough US companies in Azerbaijan, even in the oil and gas sector.” Forty such companies are there already, and there are others working in communications and transportation, she added.

“A key to success is a climate which allows businesses to survive,” said Nasullayev-Muduroglu, noting that a public-private sector dialogue has grown the last 25 years which encourages businesses to develop recommendations to the government, with more than half that were submitted in 2011 already adopted. “We’re in a constant dialogue,” she said. “It’s not always easy, but it’s constructive.”

Julia Nesheiwat, deputy assistant US secretary of state for implementation in the Bureau of Energy Resources, said, “We need to recognize we’re energy interdependent and quit talking about energy independence. We should be ready to engage more to make sure overseas markets are connected.”

Azerbaijan and its government need to attract more private sector companies with the necessary resources and expertise, she added. It was a point with which Elkind quickly agreed. “Many of the leading international oil companies actually are technologically savvy enterprises,” he said, adding, “It’s important to have partners with a global reach.”

Contact Nick Snow at nicks@pennwell.com.

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