Azerbaijan: Emerging as a Key Partner for the Persian Gulf States
Recent developments highlight Azerbaijan's growing importance as a strategic partner for countries in the Persian Gulf, particularly the United Arab Emirates (UAE). A recent official visit by Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, to Azerbaijan signals a strengthening of bilateral relations and a broader commitment to regional cooperation.
UAE's Recognition of Azerbaijan's New Regional Role
The visit of Sheikh Mohamed bin Zayed to Fuzuli, located in the Karabakh region, underscored the UAE's recognition of the new territorial realities following the restoration of Azerbaijan's territorial integrity. This demonstration reinforces the UAE's willingness to strengthen its presence in the South Caucasus, acknowledging Azerbaijan's advancements in shaping the post-conflict landscape. President Ilham Aliyev's leadership in this process was consistently highlighted.
Economic and Investment Ties: A Growing Partnership
The economic dimension of the visit was particularly significant. The UAE has emerged as the largest Arab investor in Azerbaijan, with total investments exceeding USD 1 billion. In the first nine months of 2024 alone, USD 356 million was invested. Non-oil trade increased by 43 percent in 2024, reaching USD 2.24 billion, representing half of Azerbaijan's total trade with Gulf Cooperation Council (GCC) states. This robust growth demonstrates how cooperation between the two countries is driving Azerbaijan's non-oil economic expansion.
Diversifying Energy Cooperation: From Oil & Gas to Renewables
While energy cooperation initially focused on oil and gas, the emphasis is now shifting towards diversification and renewable energy. ADNOC, the UAE's energy company, acquired a stake in the Absheron project, while SOCAR, Azerbaijan's state oil company, participates in the development of the SARB and Umm Lulu fields in the UAE. More notably, Masdar, in collaboration with SOCAR, is implementing large-scale renewable energy initiatives, including solar power plants in Bilasuvar (445 MW) and Neftchala (315 MW), and a wind farm in Absheron-Garadagh (240 MW). These projects will enable Azerbaijan to save natural gas for export, reduce CO₂ emissions, and progress towards its energy transition goals.
Strategic Partnership Agreement: A Foundation for Long-Term Cooperation
The signing of a Comprehensive Strategic Partnership Agreement signifies a new chapter in Azerbaijan-UAE relations. This agreement facilitates increased investment in Azerbaijan, especially in energy, infrastructure, agriculture, and technology sectors. It also mitigates short-term risks and establishes a framework for collaboration in both traditional energy and the burgeoning renewable sector. Azerbaijan aims to diversify its economy by developing new industries such as digital technologies, innovation, agriculture, and tourism, and solidify its position as a key transit hub.
Benefits for the UAE: Expanding Influence in the South Caucasus
For the UAE, this strategic partnership expands its sphere of influence and solidifies its economic presence in the South Caucasus. The UAE gains access to projects in green energy and sustainable development, reinforcing its trade and logistics chains through access to Caucasus and Central Asian markets. Azerbaijan serves as a platform for the UAE to implement investments and transfer technological and managerial expertise.
Humanitarian Support and Restoration Efforts in Karabakh
The humanitarian aspect of the cooperation is crucial. The UAE's support in demining and restoring liberated territories lays the groundwork for future construction projects, including housing, roads, and social infrastructure for displaced persons. This participation contributes to the broader revival program for Karabakh and adjacent areas, transforming humanitarian assistance into long-term investment for regional economic development.
Personal Connection: A Foundation for Strong Bilateral Ties
The strong relationship between President Ilham Aliyev and Sheikh Mohamed bin Zayed reflects a shared understanding of complex political processes in the South Caucasus and the Middle East. This personal bond serves as a foundation for bilateral interaction, shaping its trajectory for years to come.
UAE President's Visit to Karabakh Landmarks
During his visit, Sheikh Mohamed bin Zayed Al Nahyan, accompanied by President Ilham Aliyev, toured landmarks in the Karabakh region, including Shusha Fortress, dating back to the 1750s; Shusha Mosque; and the Jidir Duzu Plain, known for its natural beauty and cultural events. He also visited monuments dedicated to Azerbaijani figures and the Shusha branch of the National Carpet Museum of Azerbaijan. President Aliyev also presented Sheikh Mohamed bin Zayed with a Karabakh horse named "Ergunesh".
