Azerbaijan and Tajikistan, two nations connected by centuries of shared history and cultural ties, are forging a path toward stronger economic and trade relations in the 21st century. With the backdrop of increasing regional cooperation under the Organization of Turkic States, both countries are actively pursuing new opportunities to enhance bilateral ties, particularly in areas like transportation, logistics, industry, and trade. As Central Asia's strategic crossroads, Azerbaijan plays a pivotal role in facilitating trade and connectivity between Europe and Central Asia. This article explores the growing partnership between Azerbaijan and Tajikistan, highlighting key developments, future prospects, and the strategic importance of their cooperation within regional frameworks such as the Middle Corridor.

Expanding Trade Cooperation

During the ongoing official visit of Tajik President Emomali Rahmon to Azerbaijan, significant steps have been taken to strengthen the economic and trade ties between the two nations. At the Azerbaijan-Tajikistan Business Forum, agreements valued at over $700 million were signed, including commercial contracts and memoranda of understanding. These agreements demonstrate a clear commitment from both countries to significantly enhance their trade relations.

As part of this effort, Azerbaijan and Tajikistan are focused on expanding the range of goods exchanged, exploring new approaches to increase trade flows and diversify their economic collaboration. This growing partnership reflects the countries' shared goals of leveraging their strategic positions in Central Asia and the broader Eurasian region to drive mutual prosperity and secure stronger ties in key sectors such as industry, transport, and natural resources.

Tajikistan views Azerbaijan as a reliable partner and is particularly interested in industrial cooperation. Azerbaijan is investing in the modernization of Tajikistan’s aluminum plant, with plans to help fund the renovation of the Tajik Aluminum Company (TALCO). According to the agreement, Tajikistan will import aluminum and chemical products from Azerbaijan. TALCO is the largest aluminum plant in Tajikistan, holding a significant position in the country's industrial sector. With a designed annual capacity of 517,000 tons of aluminum, TALCO plays a central role in Tajikistan's economy, particularly in the export sector.

TALCO, often described as "Tajikistan’s business card" by President Emomali Rahmon, has demonstrated notable growth in recent years. In 2023, the plant produced over 66,000 tons of aluminum, reflecting a 7% increase compared to the previous year. This upward trajectory continues into 2024, with output projected to rise to 84,000 tons. However, despite this growth, the plant faces significant challenges that limit its full potential. Production bottlenecks, stemming from outdated infrastructure and technological inefficiencies, have hindered TALCO’s ability to expand at the desired pace. To overcome these limitations and maintain its growth momentum, the company is actively seeking external investment. This presents an opportunity for international partners, such as Azerbaijan, to engage in collaborative efforts aimed at modernizing the plant’s operations, which could lead to increased production capacity, enhanced efficiency, and strengthened bilateral economic ties.

Despite its considerable production capacity, the plant has faced challenges related to outdated infrastructure, technological inefficiencies, and the need for modernization. Given the strategic importance of aluminum production in global markets, there is substantial potential for expansion and improvement at TALCO, which could lead to increased production, enhanced competitiveness, and deeper industrial cooperation between Tajikistan and its international partners, including Azerbaijan.

Azerbaijan’s investment in the modernization of TALCO is a significant step toward addressing these challenges. By providing financial support for the plant’s renovation and technological upgrades, Azerbaijan can help boost production efficiency and reduce operational costs. This collaboration will not only contribute to the development of Tajikistan's industrial sector but also strengthen the economic ties between the two nations, positioning both as key players in the global aluminum market.

Key Sectors for Future Cooperation

Several key sectors are already witnessing tangible cooperation between Azerbaijan and Tajikistan, including metallurgy, agriculture, energy, light industry, transportation, telecommunications, and finance. However, there remains untapped potential in the trade domain. In 2023, trade turnover between the two countries reached $6.1 million, a 2.98% increase compared to the previous year, which stood at $5.9 million. While this marks progress, the total trade volume remains modest considering the broader scope for expansion in various sectors.

Table 1. Azerbaijan-Tajikistan Trade Turnover (USD millions)

Source: State Statistical Committee

During the first quarter of 2024, trade turnover between the two nations exceeded $1.4 million, representing a 40% increase compared to the same period in 2023, which stood at $1.03 million. Key exports from Azerbaijan to Tajikistan include white sugar (sucrose), kerosene fuel for jet engines, chocolate and confectionery products, and lubricants, while Tajikistan primarily exports non-ferrous metal products to Azerbaijan.

Enhancing Logistics and Digital Trade

One of the critical areas for further cooperation is transportation. Both countries emphasize the need to improve logistics and integrate Tajikistan’s railway and road networks into the Middle Corridor transport system. Tajikistan has expressed its intent to utilize Azerbaijan's efficient transit infrastructure to increase cargo volume. Additionally, favorable transit tariffs offered by Azerbaijan to Tajikistani carriers are expected to further increase cargo traffic between the two nations.

The signing of a memorandum of understanding on digital trade cooperation aligns with this goal, paving the way for a more streamlined and efficient trade system. Additionally, the memorandum on environmental protection aims to foster cooperation in line with international climate action efforts, notably the COP29 agenda.

Over 80 agreements form the backbone of the bilateral relations between Azerbaijan and Tajikistan, covering diverse areas from economic cooperation to cultural exchanges. This growing legal framework reflects both countries' commitment to enhancing their partnership across various domains.

Another promising area is tourism, with the signing of a roadmap to enhance bilateral tourism cooperation. The resumption of direct flights between Baku and Dushanbe in May 2023 is a significant milestone, contributing to the development of trade, investment, tourism, and cultural ties. In 2024, additional flights are expected to further strengthen these connections.

Strengthening Strategic Partnerships

The official visit of President Emomali Rahmon of Tajikistan to Azerbaijan is expected to further solidify bilateral relations. President Ilham Aliyev's vision for strengthening partnerships in the region and fostering mutually beneficial cooperation positions Azerbaijan as a reliable partner, both in Central Asia and on the global stage. With continued dialogue and enhanced cooperation, Azerbaijan and Tajikistan are well-positioned to unlock their full potential in the spheres of trade, transportation, culture, and beyond.