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Azerbaijan showcases fresh produce

at New York food show

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Azerbaijani fresh produce was on show at the "Summer Fancy Food Show" from June 29-July 1 in New York.

Led by the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), Azerbaijani food companies were among the participants at the food exhibition, using the opportunity to introduce an expansive selection of produce from the country.

Holding meetings with US food buyers and brokers, Azerbaijani companies negotiated to

supply their products to food stores in the states of California, Washington, New York, Illinois and New Jersey.

Locally produced pomegranate and cherry juice from Az-Granata and AzNar Juice Factory, as well AzNar’s pomegranate sause Narsharab were showcased at the specialty food show. In addition, quince pear, peach and apple jams produced by the company Balakans were well paired with the red and white wines of Absheron Sharab, ASPI Wineries, Az-Granata, Caspian Coast and Sherq Ulduzu.

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Azersun, the largest food and drink maker in Azerbaijan, exhibited products from its subsidiary company Saville, highlighting the opportunities to export locally produced and manufactured food products, including aubergine caviar and a selection of fruit compotes.

Held every summer in New York since 1954, this exhibition is the largest speciality food and

The fifth Azerbaijan-Russia cross-regional forum was held on June 23 in Qabala. Organised by the Azerbaijani Ministry of Economy and Industry and the Russian Ministry of Regional Development, the forum attracted government agencies, members of parliament, private entreprises and media from both countries.

Attended by over 700 participants, the forum once again was an opportunity to strengthen existing ties and build new ones between various government agencies and private businesses.

Speaking at the forum, Azerbaijan's minister of economy and industry, Shahin Mustafayev, said that the presence of such a strong legal platform between Azerbaijan and Russia allows vast scope for a close cooperation between the two countries.

Russia’s minister of regional development, Igor Slunayev, said the forum will help encourage the

beverage show in the US. This year it brought together over 900 companies from 48 countries, giving foreign companies the opportunity to test the waters and weigh their chances of breaking into the lucrative US market.

growth in trade between Russian and Azerbaijani businesses, thus increasing investments from both sides.

A number of roundtable meetings were held during the two-day forum, which laid the groundwork for new contracts, agreements and joint projects between Russian and Azerbaijani companies and government agencies to be signed. The key areas of cooperation are energy, transport, tourism and agriculture. A number of new contracts were signed at the roundtables.

The meetings were also an opportunity for participants to voice their concerns or put forward suggestions directly to government bodies and members of parlament attending the forum from both countries.

Azerbaijan-Russia cross-regional forum

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Azerbaijan keeps its options open

Russia, emboldened by its success in attracting some of the former Soviet states into a Eurasian Economic Union (EEU), has been courting Azerbaijan in a bid to bring this oil and gas-rich nation back into its fold. Moscow fears Azerbaijan, which in the past was part of the "Guam group" of Georgia, Ukraine, Azerbaijan and Moldova, will follow the examples of the other members of that group, which in June all signed EU free trade and association pacts.

Baku has so far resisted the Kremlin's courtship, openly rejecting Russian officials' hints that Azerbaijan would eventually join the EEU. In early

June, Russian Economic Development Minister Alexei Ulyukayev annoyed Azerbaijani Economy and Industry Minister Shakhin Mustafayev by being first to suggest that Azerbaijan's possible membership of the EEU "remains a subject of discussion."

Dismissing such a prospect, Mustafayev said Azerbaijan was not considering membership of any bloc, be it the EU or EEU, because Baku sees no problem in bilateral trade relations and is satisfied with that system. According to Azerbaijan's Statistics Committee, in 2013 the country's trade with the Customs Union (the

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precursor to the EEU, comprising Russia, Belarus and Kazakhstan) stood at $3.1bn, compared with $15.3bn for the EU.

Two weeks later on June 18, after a meeting with his Azerbaijani counterpart in Baku, Russian Foreign Minister Sergei Lavrov backtracked, saying that "there was no formal" invitation to Azerbaijan to join the Customs Union or EEU. However, he added: "We've always noted that we will welcome any of our partners who show interest in joining the CU or EEU."

Russia's attempt to cajole Azerbaijan into its trade club unleashed a storm of anti-Russian and anti-EEU criticism among the Azerbaijani talking heads and media. "I believe Azerbaijan

should refuse" to join the EEU, former adviser to the Azerbaijani president, Vyafa Guluzade, told the Mediafax news agency. "The project under the name of the Eurasian Union, in my opinion, aims not at integration between CIS [Commonwealth of Independent States] countries, but at the restoration of a post-Soviet empire in the former Soviet space."

These comments reflect wider public opinion in Azerbaijan about integration with the EEU: according to the "EDB Integration Barometer 2013" study conducted by the Eurasian Development Bank's Centre for Integration Studies, support for Eurasian integration in Azerbaijan is the lowest among CIS countries at 37%, while opposition is the highest at 53%.

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Azerbaijan emerges as

a regional logistics hub

Located at a nexus between Russia, Western Europe, the Middle East and Eurasia, Azerbaijan is targeting transport as one of its strategic development directions. Investments of more than $14.5bn over the last six years have already gone a long way to transforming the country into a regional logistics hub.

"Almost $12bn of the total investment has been allocated to the development of road transport infrastructure," the head of the Transport Sector Policy and Economics Department at Azerbaijan's Transport Ministry, Heydar Turabov, said at a recent conference on developing the road infrastructure.

The most ambitious project on the docket is to develop a new seaport at Alat, some 65km from the capital Baku, and construction has already begun in November 2010.

The joint venture partners signed a memorandum of understanding in August

2013 to begin the construction and set up the management of the port.

The port will be developed in three stages, the first of which – two ferry and three cargo berths – will be built to receive "roll-on/roll-off" containers and universal dry cargo ships. The second phase of the project involves the construction of three cargo berths, while the third will consist of the construction of two more cargo berths. Ultimately, the port will be able to receive up to 11.6m tons of cargo a year.

One of the main functions of this port will be to facilitate increased trade between Azerbaijan and its neighbour Kazakhstan. The two governments have repeatedly expressed disappointment with their low levels of bilateral trade, which has stagnated at under $500m for years. According to Kazakhstan’s embassy in Baku, the two countries’ trade turnover was $209m in the first nine months of 2013. Azerbaijan's main imports from Kazakhstan consist of oil and gas, raw chemicals, grain and barley, tobacco products, rolled carbon steel and electrical equipment. Azerbaijan's main exports to Kazakhstan include oil products made of bituminous materials, ethylene polymers, and components for machinery. The two countries also exchange food products.

In parallel to the construction of the new port, Azerbaijan completed a new shipyard that officially opened in September 2013. Named Baku Shipyard, the 62-hectare yard built by a joint venture between Keppel Offshore & Marine, SOCAR and Azerbaijan Investment Company is designed to undertake the construction of a wide range of specialised vessels and merchant

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ships, including subsea vessels, tankers and cargo vessels. The yard also has ship repair and conversion capabilities.

"Construction of the new shipyard and the new port in Azerbaijan indicates the great importance given to the industrial development of the country in accordance with modern standards and requirements," head of the State Maritime Administration, Gudrat Gurbanov, said in a speech to mark Sailor Day on June 25.

In addition to the sea connections, the government is also focusing on developing the

road system; the state invested $2.4bn into the road network in 2013 alone.

The burgeoning middle-class are buying new cars and putting pressure on the existing road system. The bulk of car ownership is confined to the capital of Baku, but the roads connecting the cities have been improved, which hopefully will act as an economic multiplier, says Turabov.

"A large portion of traffic in the country falls on Baku. If the length of roads is 1550km today, their length should be increased to 4000km to 5000km in future to ensure this stream," Turabov said.

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Volume of deals in Azerbaijani

real estate expands by 40%

in first quarter

The real estate sector in Azerbaijan is growing fast once again with the turnover for real estate construction between January and March up by 29.8% on year, according to the central bank of Azerbaijan. However, that's still less than the

40% rate turnover grew in the same period in 2013. The volume of deals for the purchase or sale of real estate totalled reached AZN3.983bn ($5.078bn) for 2013 versus AZN2.828bn a year earlier, which is an increase of 40.4% year-on-year.

More interestingly the share of bank mortgage loans in the total turnover on the market has reached 41.7% in the same period – consumer lending is developing quickly on the back of the emergence of the middle class. Last year, the banks issued mortgage loans in the amount of AZN112.9m against AZN75.2m a year earlier, which was given to a mere 5% of total real estate transactions.

In parallel to the growth of the domestic real estate market, Azerbaijan's construction materials sector is also expanding fast and has become a major export product. In the first quarter of this year, Azerbaijan exported almost $30m worth of construction materials to its neighbour Georgia, a 13.5% rise on year.

Sector

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Azerbaijan to establish national

payment system

The Central Bank of Azerbaijan has decided to set up a its own national payment system, CBA General Director Rashad Orujov said in an interview.

The system is needed to support the development of non-cash payments systems such as debit cards and online transactions.

The government could support the move to cashless transactions by making all social payments via a card scheme. All pensions, student loans and other state benefits would be moved to the national payment system, according to local reports, which will lower costs and approve accountability.

As of May 1, 2014, some 5.91m payment cards were in operation in Azerbaijan, mostly Visa and MasterCard.

Azerbaijan ranks 4th in per-

capita GDP among CIS states

Azerbaijan's per-capita GDP rose to $7,812 in 2013, up from $7,394 a year earlier, to give it the fourth highest income in the Commonwealth of Independent States, according to the World Bank.

Azerbaijan now ranks 67th in the world in terms of income and trails only the Russian Federation ($14,612), Kazakhstan ($13,172) and Turkmenistan ($7,987) in the CIS.

The WB referred to official statistics in its reports and Azerbaijan's State Statistics Committee said the country's GDP for 2013 amounted to ANZ57.7bn ($73.55bn).

Azerbaijan's population has hit 9,511,100 people, the Committee reported. Some 53.2% of the population live in towns, while 46.8% in the rural areas.

Azerbaijani bank lending up

a fifth in first five months

Azerbaijani banks increased net lending to the domestic economy by just over a fifth (20.2%) between January and May from the same period a year earlier, the Central Bank of Azerbaijan reports.

As of 1 June, the total loan portfolio of the country's banks amounted to AZN16.595bn ($21.159bn). Net bank lending totalled AZN256.235m compared with AZN213.145m a year earlier. It was AZN40.085m in January, AZN42.178m in February, AZN76.75m in March, AZN42.9m in April, and AZN54.299m in May.

Consumer leading grew the fastest with cash and express unsecured lending to private persons at AZN1.696bn, up 27.21% on year in the period. Last year, the issuance of cash loans to individuals and legal entities by the banks totalled AZN3.423bn, which was 29.75% more than in 2012.

Azerbaijani banks' assets increased more than 23% in the period, with deposits of the Azerbaijani population up almost 13% in the period. Deposits provide 40% funding of Azerbaijan`s banking system.

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Chart

Azerbaijan attracted $83.8bn worth of foreign direct investment from 1995 to 2013, some $35bn of which went into the non-oil sector, Economy and Industry Minister Shahin Mustafayev said in a statement on July 16.

Mustafayev said that one of the main priorities of Azerbaijan's government was to promote its non-oil sector, attracting investments, advanced technologies and management experience from abroad. The latest figures suggest this policy has been successful, he said.

Political and macroeconomic stability, secure protection of investors' rights, favourable geographical location, rich natural resources and

Azerbaijan attracts $84bn in foreign investment in 1995-2013

highly skilled workforce have turned Azerbaijan into one of the most attractive countries for foreign investments. "Over a quarter (26%) of the foreign direct investment was made by Turkey. Azerbaijan's second and third largest direct investors are Great Britain (16%) and the US (12%). As for investment in fixed capital, Great Britain invested $18bn in Azerbaijan, the US $7bn, and Japan $4bn," the minister said.

Azerbaijan's State Statistics Committee said the total volume of foreign investment made in Azerbaijan's fixed capital in the first half of 2014 amounted to AZN2.2bn, up 15.8% from the same period last year.

58% OIL SECTOR INVESTMENTS

42% NON-OIL INVESTMENTS

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Talks with WTO continue

Azerbaijan's Deputy Foreign Minister Mahmud Mammadguliyev was in Switzerland at the start of July to attend bilateral negotiations on Azerbaijan's cooperation with the World Trade Organization (WTO).

Azerbaijan is interested in joining the global trade body since a working group was formed in 1997 and serious consultations began in 2004 when Azerbaijan was granted observer status at the WTO meetings.

Talks on joining have already been completed with Turkey, the Sultanate of Oman, the United Arab Emirates, Georgia, and Kyrgyzstan.

Negotiations are on going with the USA, Japan, Brazil, Ecuador, Sri Lanka, European Union, Norway, India, South Korea, Taiwan Province of China, Canada, Switzerland, and Honduras.

Tourist sector growing as

holiday season starts

The number of tourist vising Azerbaijan's resorts has increased five-fold between 2001 and 2013, up from 400,000 visitors to 2.4m respectively. The average spend is now some $700-800 a week for accommodations, food, and cultural programs.

However, the Ministry of Tourism is hoping to give the sector a boost with a project twinning

resorts in Azerbaijan with some in Europe that is being organised in cooperation with the European Union and overseen by the Federal Procurement Agency of Austria and the State Department of Tourism of Lithuania.

"Azerbaijan's tourism industry has entered a new phase of development," Azerbaijan's Culture and Tourism Minister Abulfaz Garayev said at a conference on the results of the EU's twinning-project.

The twinning project will run over 16 months and cost ¤900m. One practical result is that new agreements between the EU and Azerbaijan to make getting visas easier will come into force this autumn.

Azerbaijan celebrates 20 years

as a NATO partner

Azerbaijan celebrated 20 years as a member of NATO's Partnership for Peace programme on June this year.

The occasion was celebrated in Washington by the think-tank the Atlantic Council, which hosted an event titled: "NATO in the Caucasus: Example of Azerbaijan." The cooperation plan between Azerbaijan and the NATO is set out in the Individual Partnership Action Plan (IPAP) on Azerbaijan.

Azerbaijan is seeking to get closer to Euro-

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Atlantic institutions and instituting reforms in the security sector as well as establishing democratic institutions that are the key elements of the NATO-Azerbaijan cooperation.

Azerbaijan already plays a role in the international security and supports the international peace keeping operations in Afghanistan, where 90 soldiers from Azerbaijan are serving as part of the international security forces.

Azerbaijan has one of lowest

crime rates in world

The crime rate in Azerbaijan is 231 per 100,000 people, one of the lowest crime rates in the world, according to Azerbaijani Interior Minister Colonel-General Ramil Usubov.

"Azerbaijan has been one of the leading countries in the field of public order and safety in the past several years," he said, during a speech at the Police Academy of the Ministry dedicated to the Day of Police on July 2.

Usubov said that the crime detection rate had increased to 90%, of which 10% were serious, in 2013 following reforms to the police service and government spending was increased 11-fold last year.

"Three thousand criminal groups were neutralized, 12,000 firearms were confiscated which were illegally kept by the population. All these achievements are the results of successful works made in the legal sphere, the economic growth in the country and cooperation with civil society," Usubov said.

Azerbaijan's ICT sector

revenues up 12% in first

quarter

Revenues earned from information and communications technology (ICT) services services increased 12% in the first quarter of this year to AZN594.5m ($758m), according to the State Statistics Committee.

Some 72.5% of the total volume of information and communication services was generated from services sold to the public, including 60.3% that was generated by mobile phone services, worth AZN358.5m ($456.8m) in January-May, which is 8.1% more than in the same period of 2013.

The revenues from e-commerce still made a small proportion of the total, but rising faster, up by 20.6% in the first five months of this year to AZN1.1m ($1.4m) compared with the same period in 2013, according to the committee.

The total volume of the retail trade in Azerbaijan amounted to AZN8.3bn ($10.5bn) in the mentioned period. Over 51% accounted for consumer goods, while 48.7% belonged to the non-food products.

Azerbaijan main market for

Georgian exports

Azerbaijan accounts for just over a fifth (20.5%) of Georgia's total exports in the first five months of 2014, making Azerbaijan one of the country's most important trade partners.

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Goods worth $240.42m were exported from Georgia to Azerbaijan in the period. Export to Azerbaijan decreased by 10.38% compared to the same period in 2013; Georgia's exports to Azerbaijan amounted to $268.26m in the first five months of 2013.

Armenia takes second place on this indicator; since the beginning of the year, Georgian products worth $129.7m have been exported to this country (11% of total exports), the report added.

The third largest importer of Georgian goods is Russia. Some $108.39m or 9.2% of the total exports of Georgia went to Russia in the first five months of 2014.

Trade turnover between Georgia and Azerbaijan since the beginning of 2014 amounted to $489.44m. Some 10.9% of Georgia's total foreign trade turnover accounts for Azerbaijan, amounting to about $ 4.5bn.

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