Davos is expected, as traditionally, to focus on important policy issues and particular developments that had a direct impact on the world economy and politics. The discussions will grasp particular attention as the world is ongoing through quite critical transformation following the obvious damage that COVID-19 pandemic and the war in Ukraine produced. The world’s largest economies are facing stagnation in their economic growth, while food and energy prices continue rising.
This is happening on the backdrop of increasing geo-economic fragmentation, vulnerabilities in financial sector, including overvalued asset prices and high debts, and a climate crisis that could exacerbate any slowdown, especially in emerging markets.
Notably, Azerbaijan is one of the two countries which hosted the forum outside of Davos (the other being the US).
The 2013 WEF on “Strategic Dialogue on the Future of the South Caucasus and Central Asia” in Baku is regarded as a high historical assessment and great trust in Azerbaijan, which is the result of a correct and purposeful policy of President Ilham Aliyev. Within 10 years of the Baku gathering, Azerbaijan has undergone significant development gaining particular achievements in some fields, which might be of interest for the participants of the largely anticipated 2023 forum.
President of Azerbaijan Ilham Aliyev has always noted the importance of consolidating the power of all countries to tackle the existing problems through joint efforts. The experience of Davos Forum well portrays that addressing such vital topics the Davos Forum is helpful in this context.
Containing the energy crisis
The energy crisis will be one of the main topics to be discussed at the event. Azerbaijan, in this regard, continues to play an increasing role in mitigating the consequences of the energy crisis in Europe. Azerbaijan plans to export to Europe at least 11.6 bcm of natural gas in 2023. The EU and Azerbaijan have agreed to double gas supplies along the Southern Gas Corridor to 20 bcm per year by 2027, based on a Memorandum of Understanding on strategic partnership in the energy field between the European Commission and Azerbaijan, signed last July between President of Azerbaijan Ilham Aliyev and President of the European Commission Ursula von der Leyen.
Following this agreement, five EU countries have prepared a specific project on increasing the supply of Azerbaijani gas, which is going to be presented in Baku on February 3. This project will allow to immediately start pumping additional volumes of natural gas from Azerbaijan to Europe. Initially, Bulgaria, Romania, Hungary, Slovakia, and Austria have joined the project. Additional gas supplies from Azerbaijan will evoke rivalry in the European market, hereby enabling to lower prices for consumers. The Interconnector Greece-Bulgaria (IGB) can serve as a good example in this context, since its launch in October 2022, gas prices in Bulgaria have decreased by 34 percent.
Transition to green energy is also one of the front topics of the forum. The abovementioned memorandum also provides for cooperation in this area. Both Azerbaijan and the EU recognize the importance of the Global Methane Commitment, which requires its signatories to collectively reduce methane emissions by at least 30 percent by 2030, and are committed to taking the necessary steps to reduce the emissions in supply chains.
Since Azerbaijan produces natural gas and the EU imports it, the parties recognize that it is a collective responsibility to make this supply chain as efficient, clean and climate-friendly as possible. The sides recognize the importance of producing green electricity in terms of combating global warming and mitigating the effects of climate change, as well as enhancing the security and sustainability of energy systems. The parties agree that there is a potential for cooperation in the field of renewable energy and energy efficiency, including the green electricity supply.
In this regard, Azerbaijan is strengthening its position in the European market of “clean” energy. The “Agreement on a strategic partnership in the field of green energy development and transmission between the Governments of the Republic of Azerbaijan, Georgia, Romania and Hungary” signed in Bucharest on December 17, 2022, was the cornerstone of this cooperation. More and more EU countries are interested to join this deal, as the supply of electricity from Azerbaijan will contribute to Europe’s energy independence, thus helping combat climate change.
Routes solve food problems
While the world is facing a severe food crisis, the Davos Forum perceives the depth of this sticky situation. Nearly 830 million people face food insecurity and more than 3 billion cannot afford healthy food. These challenges are compounded by rising costs, supply chain disruptions, and climate change.
Azerbaijan provides one of the most optimal routes for transit, which enables to save time and costs. Located at the intersection of North-South and East-West transport corridors, Azerbaijan is recognized as an important transport and logistics center of the region. International transport corridors through the country are advantageous for both distance and time. The Baku-Tbilisi-Kars railway and the Baku International Sea Trade Port will further expand the capacity of these transport corridors.
The Trans-Caspian International Transport Route (TITR), or the so-called Middle Corridor, in which Azerbaijan represents an important link, is becoming more and more actual in the international agenda as the transportation links between Europe and Central Asia are very limited. The Middle Corridor ranging from China to Europe is the shortest and least expensive way.
Being a key part on the route between Europe and China, and having a developed aviation, rail, pipeline and maritime infrastructure, Azerbaijan is becoming a new leading logistics center in terms of reorganization of global supply chains in Eurasia, and making a huge contribution to overcoming the difficulties related to food supply.
Geopolitical risks and growing credibility
Addressing current geopolitical risks through a new system of dialogue and cooperation in a multipolar world is another topic on the agenda of the Davos Forum. Azerbaijan has repeatedly provided a platform for international events of high importance that have attracted global attention. The choice of Baku for such important meetings is not accidental. The growing credibility of President of Azerbaijan Ilham Aliyev in the international arena strengthens the country’s political power, and has a positive influence on the processes taking place in the region.
Having become the economic, cultural, as well as scientific and intellectual hub of the region, Azerbaijan hosts international events, where the most urgent problems of the contemporary world are discussed and gathers influential scientific, cultural and political elite of the globe.
As Davos Forum is about to take place, the world is impatient to hear answers to a number of issues of concern. Azerbaijan is ready to share its unique experience for the safety and security of today’s troubled world.
Laman Zeynalova
