The recent conclusion of the comprehensive economic partnership negotiations with the United Arab Emirates marks a significant milestone for Azerbaijan. Azerbaijani Minister of Economy Mikayil Jabbarov confirmed that the agreement is not only finalized but also ready for signing, awaiting an opportune political moment. As the discussions wrap up, the implications for trade and investment flow between both nations could be transformative, underscoring the strengthening ties between Abu Dhabi and Baku.
A Transformational Partnership
In an exclusive interview with CNN Business on the sidelines of the 2025 OPEC annual meeting in Vienna, Jabbarov stated that the comprehensive economic partnership agreement is set to come into effect by late 2025 or early 2026, contingent upon approval from both sides. He emphasized that “the agreement will serve as a significant boost to trade and investments between the two countries, marking the culmination of growing relations between Abu Dhabi and Baku.”
Strategic Collaboration Beyond Energy
The UAE has been actively involved in various energy projects in Azerbaijan through companies like Masdar and ADNOC. One notable initiative is a massive offshore gas field in the Caspian Sea, projected to produce 5 billion cubic meters of gas annually by 2028. This development is anticipated to solidify Azerbaijan’s position as a reliable energy supplier in the region.
Broader Emirati Investments and Shared Regional Interests
The partnership extends beyond energy, encompassing sectors such as artificial intelligence, data centers, real estate, transportation, and digital banking. Leading Emirati companies like ADQ, IHC, Abu Dhabi Ports, and DP World are actively engaging in investment projects within Azerbaijan. Both countries are also increasingly interested in expanding into third markets, particularly in Central Asia and the Gulf region. In this context, they have established a $1 billion joint investment fund aimed at financing strategic projects domestically and in select regional markets.
Diversified Economic Growth
Discussing the local economic landscape, Jabbarov highlighted that Azerbaijan’s non-oil sector registered a 6% growth in 2024, driven by industrial expansion, infrastructure improvements, and increased investment in sectors like agriculture, tourism, and information technology. He affirmed that this growth is part of the government’s broader efforts to diversify income sources and reduce reliance on oil and gas, which is reflected in the structure of government revenues—over 80% now comes from the private sector.
Regional Tensions and Economic Stability
In response to queries about the impact of the recent Iran-Israel conflict and the subsequent fluctuations in global energy prices, Jabbarov noted that Azerbaijan is not altering its economic plans based on short-term developments. “We are a producing country, not speculators; we prefer stable markets over temporary price surges,” he stated. He underscored that major economic initiatives, including reconstruction programs in liberated areas and infrastructure spending, remain unaffected by sudden market changes. Additionally, he pointed out that Azerbaijan maintains a strong financial position, backed by significant foreign currency reserves, ensuring a buffer against potential crises.