Egyptian expert: Joining BRICS would strengthen Azerbaijan's ties with major global economies - INTERVIEW
Shadi Abouzeid, an Egyptian expert and Director General of the Global Strategy Institute for Sustainable Development (GSISD), shared his insights with AZERTAC on Azerbaijan’s interest in joining BRICS.
- What economic benefits can Azerbaijan get from joining BRICS?
Increased Trade: Azerbaijan can expand its markets by trading more with BRICS countries, especially with large economies like China, India, and Brazil. This can help reduce its reliance on traditional markets.
Market Access: By joining BRICS, Azerbaijan could gain better access to the large and diverse markets of the BRICS countries. These nations represent a significant portion of the global GDP and population, which can open new trade routes for Azerbaijani products, including energy, agriculture, and non-oil sectors.
Diversified Trade Partners: Azerbaijan could diversify its trading partners beyond Europe and its traditional markets, reducing its dependence on a single region or set of countries. This would help mitigate risks associated with geopolitical and economic fluctuations in other areas.
Access to Development Funds: Azerbaijan could benefit from loans and investments from BRICS’ New Development Bank, which supports infrastructure projects and economic development.
Foreign Direct Investment (FDI): BRICS membership may attract FDI from its members. China and India, in particular, have increasingly sought to invest abroad, and Azerbaijan could capitalize on this trend to bring in investment in critical sectors like transportation, technology, and tourism.
Currency Cooperation: With BRICS exploring the possibility of creating alternatives to the US dollar for international transactions, Azerbaijan could benefit from more excellent currency stability and reduced exposure to fluctuations in major currencies like the USD or Euro. This can lower transaction costs and improve trade balances.
Banking and Financial Integration: Joining BRICS could enable Azerbaijan to integrate its financial sector with other BRICS countries, fostering cooperation in banking, financial services, and fintech, which can facilitate trade and investment flows.
Energy Sector Collaboration: Azerbaijan is a significant energy exporter, and BRICS countries, especially China and India, have high energy demands. Membership could lead to long-term energy supply agreements, joint ventures in oil and gas exploration, and infrastructure development, further boosting Azerbaijan's role as a key player in global energy markets.
Investment in Energy Projects: BRICS membership might attract investment from BRICS nations, particularly in Azerbaijan’s energy infrastructure. Russia, China, and India have companies with expertise in energy development, refining, and renewable energy, which can help Azerbaijan modernize and expand its energy sector.
Stronger Political and Economic Partnerships: Joining BRICS would strengthen Azerbaijan's relationships with some of the world's biggest economies, opening the door to more cooperation on global issues.
- Which sectors of the Azerbaijani economy can benefit the most from cooperation with the BRICS economies?
Energy: Azerbaijan’s oil and gas exports could find new buyers in BRICS countries like India and China, which need a lot of energy.
Agriculture: Azerbaijan could export more agricultural products, like fruits and vegetables, to BRICS nations, helping diversify its economy beyond oil.
Tourism: Tourism could grow as more people from BRICS countries travel abroad, particularly from China and India.
Transportation and Logistics: Improved cooperation with BRICS countries could lead to more investments in Azerbaijan's transport corridors, such as the East-West and North-South corridors, essential for trade between Europe, Asia, and the Middle East.
Technology: To boost its tech sector, Azerbaijan could benefit from technology cooperation with BRICS countries, especially China and India.
- What prospects for cooperation in "green" energy can Azerbaijan have within the BRICS framework?
Renewable Energy: BRICS countries, especially China, are leading in green technologies like solar and wind power. Azerbaijan could work with them to develop its renewable energy sources.
Green Financing: BRICS offers financial support for environmentally friendly projects. Azerbaijan could use this to develop more green energy and reduce its carbon footprint.
Green Hydrogen Production: Due to its renewable energy sources, particularly wind and solar power, Azerbaijan has the potential to become a significant player in green hydrogen production. BRICS nations like Russia and China are investing in hydrogen as a future energy solution, and cooperation in this area could enable Azerbaijan to develop a green hydrogen industry for both domestic use and export to international markets.
Collaboration in Carbon Capture and Storage (CCS): Some BRICS countries are exploring carbon capture technologies as part of their transition strategies. Azerbaijan could collaborate on CCS projects to reduce carbon emissions, particularly from its oil and gas sectors, while transitioning to greener energy solutions.
Smart Grid Technologies: Another area in which Azerbaijan could cooperate with BRICS countries is developing intelligent grids that integrate renewable energy sources and improve energy management. China and India have invested heavily in innovative grid technologies, which could be applied in Azerbaijan to integrate renewables into its national grid better and enhance grid stability.
- How can joining BRICS affect the inflow of foreign investment into Azerbaijan?
New Investment Sources: Joining BRICS could attract more investment from member countries like China and India, reducing Azerbaijan's dependence on Western investors.
Boost in Investor Confidence: Being part of a large, influential group like BRICS could make foreign investors feel more confident about investing in Azerbaijan, leading to more capital inflows for infrastructure, energy, and technology.
- What role can Azerbaijan play in the development of BRICS?
Energy Supplier: Azerbaijan can supply oil, gas, and renewable energy to BRICS countries, helping them meet their growing energy demands.
Trade Hub: Azerbaijan’s location between Europe and Asia makes it a strategic point for trade and logistics, helping BRICS countries transport goods more efficiently.
Strategic Location: Azerbaijan is geographically situated at the crossroads of Europe, Asia, and the Middle East, making it an important transit and logistics hub. Its membership in BRICS could strengthen the group’s trade and transportation links between these regions. Azerbaijan’s infrastructure projects, such as the Baku-Tbilisi-Kars railway and the expansion of its seaports, could help BRICS countries gain more accessible access to European and Central Asian markets.
Economic Diversification: Azerbaijan can share its experience in diversifying its economy, moving from oil to other sectors like agriculture and technology. This can be a valuable lesson for other BRICS members.
Sustainable Development Goals (SDGs): Azerbaijan’s commitment to the United Nations Sustainable Development Goals (SDGs) aligns with the broader goals of BRICS, which seeks to promote sustainable and inclusive development. Azerbaijan could proactively shape BRICS policies that focus on environmental sustainability, poverty reduction, and economic resilience.
Natural Resource Cooperation: Azerbaijan has other natural resources, such as minerals and metals, beyond hydrocarbons. These resources could be valuable to BRICS members in high demand for raw materials in their industrial sectors.
