WNAM REPORT: Azerbaijan and Pakistan have cultivated a robust and enduring partnership, underpinned by a shared commitment to mutual support on both bilateral and multilateral platforms. Over the years, their relationship has evolved into a strategic alliance, with a particular focus on enhancing economic cooperation. As both nations continue to strengthen their diplomatic and cultural ties, the expansion of economic collaboration has emerged as a cornerstone of their partnership, highlighting their shared vision for long-term prosperity and regional stability.
Presidential and Prime Ministerial support for economic partnership
The most recent meeting between the leadership of Azerbaijan and Pakistan, held on February 24, 2025, underscored the growing commitment both countries have to each other’s economic success. During this high-level discussion, President Ilham Aliyev emphasized the importance of advancing the economic relationship to match the political and diplomatic level of cooperation. He remarked that, despite the historic political ties between the nations, the economic partnership had not yet reached its full potential. In this regard, President Aliyev proposed a broad economic agenda, discussing the various opportunities for investment and cross-border projects.
Highlighting Azerbaijan’s commitment to enhancing economic cooperation, President Aliyev declared that Azerbaijan is ready to invest $2 billion in Pakistan across a range of strategic sectors. This follows the commitment made during his visit to Pakistan in July 2024, where he reiterated his country’s willingness to invest significantly in Pakistan’s development. These investments, according to President Aliyev, are not just for the economic growth of the two countries but will also serve as a catalyst for the development of the entire region, further deepening the bond between the people of Azerbaijan and Pakistan.
Among the issues discussed in the recent meeting, President Aliyev emphasized the importance of cooperation in the fields of defense and the defense industry. He noted that Azerbaijan had already purchased equipment manufactured by Pakistan’s defense industry and expressed satisfaction with its quality. He stated, “We are unequivocally continuing this work,” and highlighted the possibility of joint production of defense industry products as another crucial area for collaboration. He added, “Azerbaijan is already exporting defense industry products to more than 30 countries, and with joint production, our export-oriented supply will increase even more.”
Another important area of discussion was connectivity and transportation. President Aliyev informed Prime Minister Shahbaz Sharif about Azerbaijan’s plans and agreements related to international transport corridors, particularly the North-South and East-West corridors. He noted, “This is an important element of connectivity and transportation, economic development, as well as political stability,” emphasizing how such multilateral cooperation would make regional situations more predictable and contribute to overall regional stability.
Prime Minister Muhammad Shahbaz Sharif reciprocated the sentiment, expressing his gratitude for the Azerbaijan President’s visit to Pakistan, which had, in his words, greatly strengthened bilateral relations. He described the people of Azerbaijan and Pakistan as “one in heart,” symbolizing the deep-rooted friendship and shared aspirations of the two nations. The Prime Minister acknowledged Azerbaijan’s leadership and enduring friendship, emphasizing the mutual respect that defines the partnership.
Prime Minister Sharif also addressed the $2 billion investment commitment, saying, “I was extremely grateful to you when you announced that Azerbaijan intends to invest $2 billion in joint ventures in Pakistan. These are mutually beneficial investments and bring dividends to both countries.” He noted the significant progress made by both delegations in finalizing this agreement, and added, “God willing, in April, after everything has been discussed and a decision has been made, I will have the great honor and joy of receiving you again in Islamabad to finalize these $2 billion agreements.” The Prime Minister expressed that this would mark “the first qualitative leap in our trade and investment relations” and emphasized that the cooperation, political understanding, and unity between the countries had now found its true reflection in their economic ties.
Key developments in economic cooperation
Azerbaijan’s willingness to invest in Pakistan is part of a broader framework for economic cooperation between the two nations. The two countries recently agreed on a comprehensive economic agenda, which includes a series of strategic investments and projects designed to promote mutual growth. The exchange of various memorandums and agreements during the visit underscored this commitment. Key agreements in the fields of energy, agriculture, and trade were signed, including:
• Memorandum of Understanding (MoU) between SOCAR (State Oil Company of Azerbaijan Republic) and Pakistan’s Frontier Works Organization (FWO) and Pakistan State Oil Company Limited.
• Agreement on Cooperation in the Field of Plant Quarantine and Protection, which aims to boost agricultural ties and ensure food security.
• MoUs in the areas of culture, tourism, urban planning, education, science, and economy, which are indicative of the growing multidimensional cooperation between Azerbaijan and Pakistan.
These agreements are expected to enhance bilateral trade, create new job opportunities, and further foster the transfer of technology and expertise between the two countries.
Expanding investment opportunities
One of the core themes emerging from these discussions is the expansion of investment opportunities in both directions. Azerbaijan, with its thriving oil and gas sector, sees Pakistan as a strategic partner for energy-related investments. In return, Pakistan is keen on attracting Azerbaijani investment in various sectors, including agriculture, energy, pharmaceuticals, and infrastructure.
In addition to direct investments, the trade potential between the two countries remains underdeveloped, with the trade turnover in 2023 standing at just $27 million. This figure, while a starting point, highlights the vast untapped potential in the trade relationship. There are several areas for growth, particularly in sectors such as energy, agriculture, and pharmaceuticals, where both countries have complementary needs.
The way forward: Bridging the economic gap
While Azerbaijan and Pakistan have made considerable progress in establishing strategic political and cultural ties, there is still significant room for growth in economic and trade relations. Both nations recognize the need to expand beyond their political and diplomatic ties to more robust economic cooperation.
The key to unlocking this potential lies in identifying sectors that offer the greatest opportunities for collaboration. Energy is a natural starting point, with Azerbaijan’s oil and gas reserves presenting a clear opportunity for joint ventures and investments. Furthermore, sectors such as agriculture, pharmaceuticals, and infrastructure development also offer substantial opportunities for collaboration.
Azerbaijan’s goal of investing $2 billion in Pakistan’s economy is a promising sign of future growth, but it will require both sides to deepen their engagement in the areas of trade facilitation, investment climate improvement, and economic diplomacy. By fostering stronger economic links and continuing to support each other in multilateral institutions, Azerbaijan and Pakistan can create a mutually beneficial environment that will serve as a model for broader regional cooperation.
The strategic partnership between Azerbaijan and Pakistan continues to thrive, with recent developments showing an increasing focus on economic collaboration. While political and diplomatic ties have been robust, the economic aspect of the relationship is now moving to the forefront. The commitments made by both countries during high-level visits, coupled with significant investment pledges and trade agreements, signal a new era of bilateral cooperation. If both countries can effectively leverage their shared political goodwill and economic potential, Azerbaijan and Pakistan can create a partnership that not only benefits them but also contributes to regional stability and prosperity.
