Speeches: Gusein Guseinov, President, Azeroautonegliat, Azerbaijan

7th IRU East-West Road Transport Conference Budapest, 15-16 May 2003 Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary

message delivered by Mr Abdullayev, vice-President, Azeroautonegliat, Azerbaijan

Gusein Guseinov
President, Azeroautonegliat, Azerbaijan

Mr Chairman, Ladies and gentlemen

Allow me to welcome you on behalf of the government of the Republic of Azerbaijan and to express my sincere gratitude for the invitation to participate in such an authoritative conference.

Esteemed colleagues, since 1996, we have gained an understanding transport’s role in the economic development of Azerbaijan, in terms of foreign trade and tourism. In accordance with the road transport development programme agreed with the government of Azerbaijan, our concern has been carrying out goal-specific work in the area of integration of the republic’s road transport infrastructure into the international transport system.

Naturally, it was no easy task for Azerbaijani transport operators to gain access to the European market. To achieve this, serious obstacles had to be overcome and a raft of sector-based organisational measures implemented.

Not updated since 1991, the condition of the republic’s road transport fleet has deteriorated.. Due to financial difficulties, our enterprises were unable to maintain this fleet in an operational condition.

A decision was therefore taken to abandon economic functions, in other words, to take all road transport enterprises out of state hands by means of privatisation, to refocus the sector’s activities on executing directive functions and to introduce a single transport policy.

The sector was successful in coping with this task. Between 1996 and 1999, more than 280 enterprises, numbering more than twenty thousand transport entities, were privatised and reorganised into joint-stock companies.

For the first time in 1997, a system based on the experiences of developed European countries was established and successfully implemented whereby international carriage by road within the republic was regulated.

In this way, by mid-1998, Azerbaijan had already established a legal basis e for unhindered transport activities of both national and international carriers.

At the same time, from 1996 onwards, with the aim of protecting the interests of national carriers, Azerbaijan acceded to a range of international conventions and agreements and joined a number of international transport organisations, membership of which established favourable conditions for the realisation of international carriage by road.

One of the principle developments in this area was Azerbaijan’s acceptance in November 1993 as a member of the International Road Transport Union (IRU) while, in the same year, the Azerbaijan Road Transport Association was founded, enabling Azerbaijani road carriers in possession of a “TIR carnet” to proceed freely from their departure point to their destination without intermediate examination of their loads at the various customs points en route when crossing national borders.

Joining the ECMT [European Conference of Ministers of Transport] in 1998 enabled Azerbaijani carriers to transport loads freely in 42 States, using the multilateral permits issued by the ECMT.

In 1999, foreign carriers completed more than 60,000 trips to Azerbaijan while Azerbaijani carriers completed no more than 2,000 journeys abroad, mostly to countries of the former USSR, Iran and Turkey. The reason for this discrepancy was that Azerbaijan did not have freight vehicles with engines corresponding to the requirements of EURO-I, EURO-II and EURO-III.

Azerbaijan’s membership of the ECMT and the presence of corresponding laws have attracted the interest of foreign investors in the development of this sector.

Today road transport is developing apace with national road transport carriers completing more than 15,000 trips internationally, including 8,500 to European countries, in 2002, and this figure is continuing to rise.

As a member of the Council of Europe, the Republic of Azerbaijan is guided by the extensive experience of developed countries, including in the sphere of international carriage by road, and adheres to the conditions and requirements laid down in international conventions and intergovernmental agreements.

Having become a member of such authoritative international organisations as the IRU, the ECMT and FIATA [the International Federation of Freight Forwarders Associations], Azerbaijan has, to all intents and purposes, integrated itself into Europe’s transport system.

Azerbaijan’s geopolitical location logically corroborates the fact that any link between Europe and Asia must pass through its territory. Transcaucasia is naturally the shortest bridge between Europe and Asia. The main rail and road links connecting the basins of the Black and Caspian Seas, in other words, the shortest route from Europe to the countries of Central Asia and the East, pass through Transcaucasia.

Azerbaijan occupies one of the key positions in terms of establishing the shortest transport corridors in the Euro-Asia region and, at the same time, is a significant hub within this transport system. In terms of land borders and those with the Caspian Sea, our country shares borders with seven States (Russia, Turkey, Georgia, Kazakhstan, Turkmenistan, Iran and Armenia). The North-South transport corridor also passes through the territory of Azerbaijan.

Nor is it by chance that, on 7-8 September 1998, under the aegis of the European Union, an international conference attended by representatives and heads of 40 States was held in Baku, the capital of Azerbaijan, on the revival of the “Great Silk Route”. At this conference, a multilateral agreement on the international transportation of freight and persons was signed, while the “Baku declaration”, which makes provision for the development of the TRACECA [Europe Caucasus Central Asia Transport Corridor] and attaches great importance to the development of interconnected national and regional transport infrastructures, was adopted. The desire for mutually beneficial economic cooperation was also expressed at this conference.

Azerbaijan is one of the active participants in the implementation of the ТRАСЕCА programme. This project has unquestionable economic benefit, first and foremost on account of the reduced transport times achieved by reducing the distance to be travelled by 2,000km, year-round traffic schedules, the lowering of transport tariffs and the guarantee that goods will arrive safely. For the duration of this programme, the European Union has earmarked a budget of EUR 14.1 million for Azerbaijan to finance investment projects. In addition, the European Bank for Reconstruction and Development (EBRD) and other credit and financial organisations have earmarked soft credit for these objectives to the tune of EUR 43.6 million.

We have tabled a number of proposals regarding development of the findings concerning the “Pan-European” transport corridors.

In September 1997, a meeting of Transport Ministers of countries through which the “Silk Route” passes was held in Burgas (Bulgaria). The signed memorandum noted that the “Silk Route” is the natural extension of the “Pan-European transport corridor” connecting Europe with the Black Sea and must be extended in the direction of Central Asia through Georgia-Azerbaijan-Turkmenistan-Uzbekistan-Kyrgyzstan and thereafter through China to the countries of South-East Asia.

In this connection, Baku seaport is currently being redeveloped and a rail transportation infrastructure established. 27,000 km of fibre optic cable is being laid along the West-East corridor, including 810 km in Azerbaijan. Baku now has a new, operational international airport equipped with a modern navigation system.

All this work is being undertaken with the help of credits from foreign banks and internal funds.

Our proposals to extend 5 of the 9 “Pan-European” transport corridors were brought before the Pan-European Conference on transport which was held in Helsinki in June 1997.

We believe that extending the transport corridors to incorporate new States with low levels of economic development will promote rapid economic growth in these countries. In addition, developed European countries which fund projects to extend these corridors will, in the long run, acquire new markets and gain access to substantial reserves of natural resources, as borne out by the example of Azerbaijan.

The republic is creating favourable conditions for foreign road transport carriers.

We are systematically introducing measures to simplify procedures for crossing the Azerbaijani border.

Since January 2003, road duties for foreign road transport carriers have been reduced three-fold (Table № 2).

Scale of charges levied on foreign road transport carriers for use of motor roads in the republic of Azerbaijan (2002, 2003)

Totals in US dollars

Ladies and gentlemen

The Azerbaijani President, Mr. G. Aliyev has pursued goal-specific policies, to achieve political and economic stability, which is one of the cornerstones of socio-economic development within the republic (including in the transport sector), .

It is precisely this political and economic stability which has served as a basis for the year-on-year increase in the volume of inward capital investment from foreign investors in the country over the last 6 years.

While, in 1996, the volume of investment earmarked for the development of transport in Azerbaijan as a whole totalled USD 12,186,000, by 2001, the corresponding level of investment had increased to USD 61,484,000 (Table № 1).

Table № 1

The country’s privatisation process has been concluded successfully. Nowadays, Azerbaijani industry is largely concentrated in the private sector, as a result of which a trend towards we are observing growth in the volume of goods produced.

Agricultural reform in Azerbaijan is complete, promoting growth in the volume of agricultural products produced.

Azerbaijan currently has 12 large-scale oil contracts at the realisation stage. The sum total of direct investment in the country’s oil sector alone is not less than USD 30 billion.

The volume of capital investment in the republic’s economy is increasing and the figures concerning the turnover in foreign trade (Table Nos. 3, 4) are also improving. It should be noted that the rates of growth in the volume of industrial and agricultural production as well as national income over the 10 years since Azerbaijan gained independence have been achieved in spite of the unlawful occupation of 20% of its territory by Armenian military units. The infrastructure of this area wastotally destroyed and 1 million law-abiding citizens exiled and are now living as refugees and forced migrants.

Table № 3

Volume of capital investment in productive and non-productive spheres

  (USD 000s)

Table № 4

Figures concerning foreign trade turnover (imports/exports) for Azerbaijan for the period 1995-2001 (USD 000s)

Azerbaijan’s level of economic development during this period of transition has been low compared with Western European countries. However, given the country’s intention to pursue a policy of developing democracy and political freedom, the next few years will see a sharp upturn in Azerbaijan’s economy, the opening up of its rich natural resources, and further growth in the levels of production and the turnover of goods, all of which cannot be achieved without a dynamically functioning transport sector.

Thank you for your attention

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