Standing room only at the TEAS London Business Forum in London

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The fourth London Business Forum, organised by The European Azerbaijan Society (TEAS), has taken place, attended by over 300 diplomats, politicians and decision-makers. The event focused on the ICT and financial services sectors, together with the implications of the recent groundbreaking on the Southern Gas Corridor.

Tobias Ellwood MP

Tobias Ellwood MP, Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs

The UK is the largest FDI contributor to Azerbaijan, and there is opportunity to further demonstrate our commitment to the country with more frequent visits by Ministers and even the Prime Minister, bringing political engagement of the highest level.

More than 300 diplomats, politicians and decision-makers attended the fourth Business Forum in London on 5 November, organised by The European Azerbaijan Society (TEAS). This year’s business forum was subtitled 'Economic Diversification is the Key'.

Opportunities in the burgeoning information and communications technologies (ICT) and financial services sector were particularly in the spotlight. The energy panel of world-renowned experts also attracted a great deal of interest, not least because the past year has seen the signing of the $45bn final investment decision (FID) between the Azerbaijani government and the BP-led Shah Deniz Consortium.

Tobias Ellwood MP, Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs, thanked TEAS for organising the conference and said: “With significant volumes of both oil and gas, Azerbaijan is a key player in the energy world and is a strategic energy partner for the UK and the rest of the EU. The development of the Shah Deniz field and construction of the Southern Corridor to Europe is something that we all welcome and fully support. We appreciate that energy security benefits the entire EU. The UK is the largest FDI contributor to Azerbaijan, and there is opportunity to further demonstrate our commitment to the country with more frequent visits by Ministers and even the Prime Minister, bringing political engagement of the highest level.”

Energy panel chair Mehmet Ögütçü, Chairman, Global Resources Partnership, asked the Minister to extend an invitation to UK Prime Minister David Cameron to visit Baku, which he promised to do.

Shahmar Movsumov, Executive Director, State Oil Fund of Azerbaijan (SOFAZ), commented: “Azerbaijan has achieved great political and macroeconomic stability, and these remain pillars of our development. The catalyst for Azerbaijani development was the signing of the 'Contract of the Century' with a BP-led consortium 20 years ago. The Azerbaijani economy has tripled during the past decade. We anticipate around seven per cent annual GDP growth during the next five years, much of which will be generated by the non-oil private sector. Diversification has been declared as a priority for the country by the Azerbaijani government.”

H.E. Tahir Taghizadeh, Azerbaijani Ambassador to the UK, commented: “We are currently at a new stage of our development. We are now looking forward to hosting the European Games in 2015, and the following year Formula 1 cars will race through the streets of Baku. This will place Baku in the radar of ordinary citizens across Europe. It will also showcase the diverse opportunities in the country.

“The UK has never passed a piece of anti-Azerbaijani legislation, recognises the importance of stability in the region, and has never been confused about the balance of its own economic and political interests. Azerbaijan accounts for 70 per cent of the South Caucasus. It is the hub for the region and serves as a bridge between East and West, serving as the new border of Europe.”

Tale Heydarov, Chairman, TEAS, said: “The hydrocarbons sector currently employs one per cent of the Azerbaijani working population, and that is why we try to focus on other sectors at the TEAS Business Forum. For example, the financial services sector is quickly developing in Azerbaijan and needs UK expertise from the City of London. During 2013, over 40 industrial enterprises were opened, and the Azerbaijani government is actively seeking to cultivate private enterprise.”

Lord Risby, Prime Ministerial Trade Envoy; Vice-Chairman, All-Party Parliamentary Group for East Asian Business, explained: “Azerbaijan is a very reliable energy supplier and of great strategic importance. I look with admiration upon that which has been achieved in Baku and across the country. Azerbaijan deserves to be the focus of attention and investment. There are great opportunities in the financial services industry. During the recent downturn, Azerbaijan remained unaffected, and stability of the economy has been recently reaffirmed by Fitch Ratings. There is a programme of improvement across the regulatory structures of the financial services industry in the country and there are great opportunities for collaboration between UK and Azerbaijani banks.”

Dirk Schuebel, Head of Division, Eastern Partnership – Bilateral (Division for Relations with Ukraine, Moldova, Belarus and the Southern Caucasus), European External Action Service (EEAS), commented: “EU member states have substantial and growing business relationships with Azerbaijan. It is important to the EU, as a growing economic power and the focus of a great deal of trade. Given its location in a troubled neighbourhood, it is also an important security partner. Our joint objectives are stability, security and prosperity.”

The selection of Baku to host the inaugural European Games in 2015 has resulted in an unprecedented wave of construction across the country. William Louis-Marie, Practice Director, Communications, Baku 2015 European Games Operation Committee, said: “This will be the biggest sporting event – in fact, the largest event ever – to be hosted in Azerbaijan. It will be attended by 6000 athletes, 10,000 officials and 1000 journalists across 17 days of competitions. Azerbaijan has taken on a great challenge – to organise the inaugural European Games in 30 months. President Aliyev has decided that sports are the ideal vehicle to promote his country. It will serve to root Azerbaijan firmly in Europe.”

As Azerbaijan tries to diversify its economy, ICT is taking centre-stage as the country transforms into the regional ICT hub. Zaur Hasanov, Director, Trans-Eurasian Information Super Highway (TASIM) project said: “TASIM passes through 20 countries, including Georgia, Turkey and Turkmenistan, connecting Europe and Asia. We have direct support of the UN General Assembly – three resolutions have been passed in support of TASIM.”

Farid Ismayilzade, Founder and CEO, GoldenPay said: “The ICT sector is a very young sector in Azerbaijan, and all the panellists for this session are under 30 years of age. It is noteworthy that the Azerbaijani ICT Ministry has been renamed as the Ministry of Communications and High Technologies. We want to export our technologies and also attract foreign investment. The Azerbaijan Diplomatic Academy has recently opened an ICT department to train the new generation of software engineers.”

Vugar Farman Aliyev, Country Managing Partner, KPMG Azerbaijan, commented on the current state of the financial services market: “The banking assets versus GDP ratio has increased in recent years, but still only accounts for 31 per cent of GDP. In Switzerland, this is 700 per cent – we have much to do in developing the banking sector, but we have one of the highest GDP growth rates in the region, so there is great potential.”

Fariz Azizov, Chairman, Baku Stock Exchange, said: “Baku Stock Exchange was created to support the privatisation process. The country is now entering a new stage of capital market development.”

The energy session focused on the implications of the Southern Corridor, which will bring Azerbaijani Caspian Gas direct to Italy and provide the EU with a major source of secure energy.

Joe Murphy, Vice-President, Southern Corridor, BP, commented: “This a series of mega-projects. This represents $45bn of investment, bringing 16bcm per annum of gas from Azerbaijan to Turkey and then into Europe. The scale and size of such a project would have been inconceivable until recently. This is being developed within five years, with first gas coming to Europe in 2020.”

Magsud Mammadov, External Relations Manager, Trans-Anatolian Pipeline (TANAP) acknowledged: “The Southern Corridor project is 3,500km long and will initially deliver 16bcm by 2020, and be upscaled to deliver 31bcm by 2026. TANAP is capable of delivering 100bcm per annum. Construction will begin next year, and take five years to complete.”

Christopher Pincher MP, Chair, Azerbaijan All-Party Parliamentary Group and Member of the Energy and Climate Change Select Committee revealed: “The world and Europe are hungry for gas. Between 1970 and today, the demand for gas in the UK has doubled. Our coal-fired power stations are being decommissioned over the next four years, despite the fact that 38 per cent of UK energy comes from coal. Energy security will become more important as we become more reliant on gas. Azerbaijan represents a secure source of this energy.”

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