1. AZERBAIJAN-GERMANY ECONOMIC RELATIONS: CURRENT SITUATION AND PERSPECTIVES
Lecturer Elshan BAGIRZADEH
Azerbaijan State Economic University
Turkish World Management Faculty
International Relations Department
Siegen-Germany, Mart 2010

2. Ukraine Kazakhistan Russia Turkey Mediterranean Sea Iran
Germany
Ukraine
Kazakhistan
Russia
Caspian
Sea
Black Sea
Uzbekistan
Georgia
Azerbaijan
Armenia
Turkmanistan
Turkey
Baku
Mediterranean Sea
Iran
Iraq

3. AZERBAIJAN GERMANY Official name – Republic of Azerbaijan
Official language – Azeri (Turkish of Azerbaijan)
Government – President Republic
Capital – Baku
Declaring of Independent – 18 October 1991
Area – 86,600 km2
Population – 9,000,000
Ethnic groups – 90.6% Azeri, 2.2% Dagestani, 1.8% Russian, 1.5% Armenian, 3.9% other
Labour force – 5,78 million
Labour force by occupation – services (48,6%), industry (12,1%), agriculture and forestry (39,3%) (2005)
Unemployment – 6%
Population below poverty line – 11.0%
Currency – Manat
GDP per capita – $5,346
GDP by sector – agriculture (6.7%), industry ( 65.0%), services ( 28.3%)
GDP Growth –9.3%
Inflation – 1.5%
Gini index – 36.5
HDI – (medium)
Main industries –petroleum and natural gas, petroleum products, oilfield equipment; steel, iron ore, cement; chemicals;petrochemicals; textiles; machinery; cotton; foodstuffs
Total investment – 21.3% of GDP
Exports – $14.2 billion
Exports goods – oil and gas 90%, machinery, cotton, foodstuffs
Main export partners – Italy 40.2%, US 12.6%, Israel 7.6%, India 5.1%, France 4.9%
Imports – $ 6.12 billion
Import goods – machinery and equipment, oil products, foodstuffs, metals, chemicals
Main import partners –Russia 18.8%, Turkey 11.2%, Germany 8.3%, Ukraine 7.9%, China 6.7%, UK 5.4%
Public debt – 4.6 % of GDP
Public revenues – $ 12.9 billion
Public expenses – $ 13.2 billion
External public debt – $3.4 billion
Reserves of foreign exchange and gold – $20.4 billion
GERMANY
Official name – Federal Republic of Germany
Official language - German
Government – Federal Parliamentary Republic
Capital – Berlin
Declaring of Independent -23 May 1949
Area – 357,021 km2
Population – 81,757,600
Ethnic groups – 91.5% German, 2.4% Turkish, 6.1% other
Labour force – 43.6 million
Labour force by occupation – services (67.5%) industry (29.7%), agriculture (2.4%)
Unemployment – 7.7%
Population below poverty line – 11%
Currency – Euro
GDP per capita – $ 44,729
GDP by sector – agriculture (0.9%), industry (30.1%), services(69%)
GDP Growth – 0.0% (2009)
Inflation – 0.0 % (2009)
Gini index – 27 (low)
HDI – (very high)
Main industries – iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles
Total investment – 19.2 % of GDP
Exports - $ trillion
Export goods – machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Main export partners – France 9.7%, US 7.1%, UK 6.7%, Netherlands 6.6%, Italy 6.4%, Austria 5.4%, Belgium 5.2%, Spain 4.4%, Poland 4%
Imports – $1.232 trillion
Import goods – machinery, vehicles, chemicals, foodstuffs, textiles, metals
Main import partners – Netherlands 12.5%, France 8.3%, Belgium 7.5, China 6.2%, Italy 5.7%, UK 5.4%, Austria 4.3%, Russia 4.2%, US 4.2%
Public debt – 64.4% of GDP
Public revenues - $1.591 trillion
Public expenses - $1.591 trillion
External public debt – $5.2 trillion
Reserves of foreign exchange and gold – $138 billion

4. FORMATION OF RELATIONS
In 12 January 1992 the Independence of Azerbaijan was recognized by Germany.
In 20 February 1992, it was formed the first relations between two countries diplomatically.
In 2 September 1992, the embassy of Azerbaijan was opened in Germany.
In 22 September 1992, the embassy of Germany was opened in Azerbaijan.
In 1-4 July 1996 Haydar Aliyev, former President of Azerbaijan visited to Germany.
In August 2004, February 2007, November 2009 and 4-6 February 2010, Ilham Aliyev, President of Azerbaijan visited to Germany.
From 1997’th year, the intergovernmental negotiations for development organize between Ministry of Economic Development of Azerbaijan and Ministry of Federal Economic Cooperation and Development of Germany every year.
From 2004’th year, it has been organized ten Azerbaijan-Germany Business Forums.
There are friendship groups in both parliament of countries.
In this day, Germany is one of the important political and economical partnership of Azerbaijan in Europe.
The relations between two countries have positive trends from 1992 year.

6. ADOPTED DOCUMETS ON ECONOMIC RELATIONS (1995-2009)
DOCUMENTS
NUMBER
PROJECTS
The intergovernmental agreement on air transport between Azerbaijan and Germany, 27 July 1995 -
The intergovernmental agreement on encouragement and protection of investments, 22 December 1995
The intergovernmental agreement on formation of found of researches and specialists, 2 July 1996
The intergovernmental agreement on removing of doubled taxation related to incomes and wealth, 25 August 2004
The intergovernmental agreement on technical cooperation
(GTZ) 2
Improvement of private sector
Agrarian policy
Reforms of system of Law court and jurisprudence
Health, agriculture, education, system of bank, improvement of body of current law
The agreement on intergovernmental financial cooperation 14
Project of aid for refuges
Project of aid for Baku Airport
Project of buying of share of Germany Investment and Development Organization (DEG) in Microfinance Bank (1.5 million Euro)
Project of Construction of AzDRES-Imishly electric line
Project of Formation of Credits Guarantee Fund
Project of Opened Communal Infrastructure
Project of Improvement of Small and Medium Entrepreneurship and Reparation of Systems of Electricity
Project of Struggle with Tuberculosis
Project of Formation Samur-Yalama National Park
The agreement on credit and finance from Germany Reconstruction and Credit Bank 3
Total credit: 244,58 million Euro
Reparation of infrastructure of electric, water and other
Improvement of system of finance and bank

7. AID TO AZERBAIJAN Type of aid 1994-2009 Financial aid
24,5 million Euro
Technical aid
44 million Euro

8. INVESTMENT RELATIONS GERMAN INVESTMENTS TO AZERBAIJAN ECONOMY
2000
2003
2004
2005
2006
2007
2008
2009
Total foreign investment
(million $)
927
3371
4575,5
4893.2
5052.8
6674.3
6847.4
1846.6
Germany
1.7 -
2.1
21.6
17.4
22.9
48.2
0.375
Share of Total
(%)
0.2
0.04
0.4
0.3
0.7
0.02
Today, there are 112 German companies in Azerbaijan.

9. COUNTRIES AND INTERNATIONAL ORGANIZATIONS WHICH INVESTED T0 AZERBAIJAN ECONOMY
2009’th YEAR
thousand manat
SHARE OF TOTAL
(%)
Total ,3
100,0
United Kingdom
726626,5
49,2
U.S.A.
216769,5
14,7
Japan
113147,1
7,7
Norway
70526,3
4,8
Turkey
55929,2
3,8
France
40432,2
2,7
Czech Republic
34581,3
2,3
Switzerland
31370,3
2,1
Republic of Korea
12222,0
0,8
United Arab Amirates
3654,4
0,2
Suudi Arabia
2549,8
Austria
2183,3
0,1
Kazakhistan
1680,6
Russia
864,2
Italy
803,7
Germany
300,5
0,0
The World Bank
93857,5
6,4
The Asia Development Bank
39383,6
The Europe Reconstruction and Development Bank
21287,5
1,4
Kuviet Economic Development Fund
5620,7
0,4
The Islamic Development Bank
3470,1

11. FOREIGN TRADE RELATIONS
AZERBAIJAN – GERMANY FOREIGN TRADE INDICATORS ( )
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Export
(mil.$)
3,9
3,1
6,2
6,6
7,6
8,3
12,9
28,8
7,3
37,6
34,8
9,0
19,7
205,5
86,8
Import
(mil. $)
43,8
77,2
38,8
46,7
46,2
67,5
72,8
83,4
170,0
198,4
256,3
403,8
471,2
598,6
550,9
Total
47,7
80,3
45,0
53,3
53,8
75,8
85,7
112,2
170,3
236,0
291,1
412,8
490,9
804,1
637,7
Source: The Statistical Committee of Azerbaijan Republic

13. THE FIRST TEN PARTNERS OF AZERBAIJAN IN FOREIGN TRADE AND GERMANY
EXPORT (2009)
IMPORT (2009)
Million $
Share of %
İtaly
3 788,44
25,77
Russia
1 070,93
17,50
U.S.A.
1 746,81
11,88
Turkey
905,98
14,80
France
1 326,11
9,02
Germany
550,97
9,00
İsrael
1 236,20
8,41
Ukraine
511,65
8,36
744,95
5,07
China
484,82
7,92
Taiwan
680,39
4,63 UK
274,77
4,49
Canada
660,65
264,22
4,32
Indonesia
587,48
4,00
Japan
146,21
2,39
Malaysia
395,01
2,69
Italy
142,12
2,32
Georgia
387,56
2,64
Belarus
136,66
2,23
Other
3 144,90
21,40
1 631,40
26,67
Total
14 698,50
100,00
6 119,73
Source: The Statistical Committee of Azerbaijan Republic

14. Source: The Statistical Committee of Azerbaijan Republic
THE FIRST TEN FOREIGN TRADE PARTNERS OF AZERBAIJAN IN EUROPE UNION AND GERMANY
2009 (million $)
Countries
Export
Share of %
Import
Total
İtaly
3 788,44
25,77
127,73
2,09
3 916,17
18,81
France
1 326,11
9,02
142,12
2,32
1 468,23
7,05
Germany
86,75
0,59
550,98
9,00
637,73
3,06
United Kingdom
196,88
1,34
274,77
4,49
471,65
2,27
Spain
316,60
2,15
14,86
0,24
331,46
1,59
Greece
179,75
1,22
5,68
0,09
185,43
0,89
Bulgaria
128,47
0,87
8,63
0,14
137,10
0,66
Sweden
4,08
0,03
118,00
1,93
122,08
Niderland
66,10
0,45
54,53
120,63
0,58
Malta
83,47
0,57
0,20
0,00
83,67
0,40
Source: The Statistical Committee of Azerbaijan Republic

15. MAIN GOODS AND SERVICES IN FOREIGN TRADE BETWEEN AZERBAIJAN AND GERMANY
STRUCTURE OF IMPORT FROM GERMANY (2008)
Type of goods
Thousand $
Share of %
Automobiles and their parts ,0
27,2
Equipment and mechanical devices and their parts ,0
26,3
Tobacco
97 834,0
16,3
Optician, photographic, measure, supervision, medical tools and apparatuses
49 406,0
8,3
Electric machines and equipments, apparatus and their parts
37 770,9
6,3
Ferrous metals and its products
30 025,2
5,0
Other
63 663,1
10,6
Total: ,2
100,0
STRUCTURE OF IMPORT FROM AZERBAIJAN (2008)
Type of goods
Thousand $
Share of %
Raw oil ,7
95,9
Hazelnut, caviar and other
8 342,9
4,1
Total: ,6
100,0
Source: The Statistical Committee of Azerbaijan Republic

16. THE DEVELOPMENT STAGES OF AZERBAIJAN ECONOMY
Crisis period ( )
Stability and reform period ( )
Progress period ( )
Raising period ( ? )

17. MAIN STATE PROGRAMMES (2004 - ?)
Struggle against poverty
Rural development
Public investments
Improvement and supporting of private sector
Struggle against corruption and shadow economy
Improve of ecological situation
Improve of sources of alternative energy

18. MAIN ECONOMIC INDICATORS OF AZERBAIJAN ECONOMIC DEVELOPMENT PROCESS
Azerbaijan economy has increased 8.4 times from 1995 to 2009.
State Budget has increased 10 times from 2003 to 2009.
Poverty level has gone down from 49% to 11% from 2003 to 2009.
Average monthly salary has increased 3.5 times from 2003 to 2009.
Middle monthly pensions have increased 3.8 times from 2003 to 2009.
Azerbaijan has been the leader country according to indicator of economical growth in the World in years.

19. PERSPECTIVE OF AZERBAIJAN ECONOMY
“Doing business-2009”: Azerbaijan is the reformist country of the world in area of improve of the business environment.
“Doing business-2010”: The measures implemented in area of improve of the business environment in Azerbaijan are valued positively.
World Economic Forum: Azerbaijan Economy is the first according to ‘Global Competitiveness Index ’ in among CIS countries.
IMF: Azerbaijan has economy that durable to crisis and the least undergoesed to influence of the foreign factors.
IMF: It will be real economic growth of 12.3 % in Azerbaijan in 2010.
The Economist: It will be real economic growth of 9.5 % in Azerbaijan in And this indicator will be the 3’rd in the World.
The Banker: Azerbaijan is 4’th in the World according to indicator of ‘Economic Perspectives’.
The Economist Intelligence Unit: It will be per capita GDP of 11.4 thousand U.S. dollar according to PPP in Azerbaijan in 2010.

20. PERSPECTIVE OPPORTUNITIES OF GERMANY-AZERBAIJAN ECONOMIC COOPERATION
Formation of the intergovernmental commission on trade and economical cooperation,
Cooperation between German and Azerbaijan banks in areas of finance and credit,
Cooperation between Azerbaijan banks and KWF and other German banks in the area of financing of the small and medium enterprise,
Creation of the joint ventures in areas of equipments of machine building, steel mill, telecommunication, electrical engineering, textile and pharmaceutics,
Cooperation in areas of bring up, processing and packing up of the agriculture products,
Creation of the joint ventures in area of organizing of production of equipments of electrical engineering,
Participation of German companies and application of German experience in developing of service sector of Azerbaijan,
Cooperation with German companies on formation of paid roads in Azerbaijan.
Cooperation in area of adapting of Azerbaijan products to European standards.

21. Azerbaijan State Economic University E-mail: e.bagirzade@gmail.com
İstiglaliyyat No. 6, Baku
Mail: Az 1001
Web:
GSM: (+99450)
Business: (+99412)
Fax: (+99412)

22. THANKS!

23. APPENDIX 1: PROJECTS OF NEW BUILDINGS AND SHOPPING CENTRES TO CONSTRUCT IN BAKU CITY

40. APPENDIX 2: PHOTOS FROM AZERBAIJAN