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Azerbaijan: For Austria Azerbaijan is the Most Important Trading Partner in the Southern Caucasus Region

Azerbaijan: For Austria Azerbaijan is the Most Important Trading Partner in the Southern Caucasus Region

An Interview with Mr Reinhold Mitterlehner, Minister for Economic Affairs and labour of the Austria. 

By Rovshan Pashazadeh 

AT: The diplomatic relations between Austria and Azerbaijan do not cover a very long period of time. But despite that, the foundations of economic cooperation between the two countries have already been laid. How would you characterize cooperation in the economic sphere? 

 In view of the growing importance of the Black Sea and the Southern Caucasus-region, Austria is very interested in strengthening its economic ties with the whole region and especially with Azerbaijan; for Austria Azerbaijan is the most important trading partner in the Southern Caucasus Region. 

Last year we marked a historical milestone in our bilateral relations. In October 2011 I accompanied H.E. Dr. Heinz Fisher, Federal President of the Republic of Austria, who paid his first official state visit to Azerbaijan. Both sides held successful high level political dialogue and organized a business forum with participation of more than 100 executives of Azerbaijani and Austrian companies. 

During recent years we have seen the bilateral trade volume steadily growing; in the year 2011 bilateral trade volume almost reached 150 million €. In the first half of this year trade volume amounted to 84 million €. I am confident that an all time high of our bilateral trade will be reached in the year 2012. The main reason for these figures is the positive developmet of exports. In 2011, Austrian exports to Azerbaijan rose by 23% to 90 million € and the first six months of the year 2012 show a further increase in exports by 61%. 

AT: Azerbaijan exports oil to Austria. OMV has operated an office in Baku for several years, and in the near future, Austria may turn into one of the main buyers of Azerbaijani gas. Could the two countries tend to boost the role of the oil and gas sector in economic cooperation? 

The oil and gas sector already represents an important sector in the economic relations between Austria and Azerbaijan. Azerbaijan is of strategic importance for the European energy market as it has the potential to provide this liquid market with natural gas deliveries. 

OMV, Austria’s biggest company has been active in Azerbaijan for several years now and is interested in further investments in this region. I support OMV’s intentions to strengthen its upstream position in the Caspian region as it will be for the benefit of both, Austria and Azerbaijan in the field of energy cooperation. Our bilateral energy relations shall be further strengthened. I regard it as an important area of Austria’s international energy policy. 

AT: Are you satisfied with cooperation in the non-oil sector between Austria and Azerbaijan? 

Austrian companies have been active on the Azeri market not only in the oil and gas sector but also in other economic sector as construction, engineering, medical technology, environmental technology, renewable resources, energy production and tourism. In this regard I would like to mention only a few of successful projects of Austrian companies in Azerbaijan – e.g Planing and construction of the Central Bank, the Mariott Hotel, the steel construction of the airport and the carpet museum in Baku; the construction of cable cars in the Rayon Gusar; delivery and assembly of ventilation and climate control facilities for different buildings in Baku. 

However, I am convinced that our countries have not yet fully exploited their whole economic potential. There are many opportunities for further development and there is an enormous interest from the Austrian business community to deepen and intensify the economic cooperation with Azerbaijan. 

AT: How does Austria see economic relations in the short- and long-term? 

Our economic relations are on a very good path and I am convinced that we are moving in the right direction. One important step on this path was the Ministerial Conference on “Caucasus and Central Asia – Promoting sustainable growth in times of economic challenges” which was held on the 26th of September 2012 in Vienna. This international Conference brought together various Ministers of the CCA region, high-ranking representatives of international and European key institutions as well as CEOs of selected top companies. It intensified the economic relations between Austria and the Caucasus and Central Asia Countries – especially between Austria and Azerbaijan and gave a new stimulus to economic links for the future. 

I am convinced that foreign trade and investment between Austria and Azerbaijan will be expanded and that projects will prosper and bear fruits. My goal is to strengthen and to intensify the bilateral economic cooperation and to double our trade volume, especially the Austrian exports to Azerbaijan, within five years. 

AT: At a time when the economy of a number of EU countries is in the grips of the financial crisis, the Austrian economy stands out for its stability. How can you explain this? 

It is indeed true, the Austrian economy has weathered the crisis relatively well. In 2012, growth figures are for the eleventh time in a row above the Euro zone level and Austria has still the lowest unemployment rate within the EU27. 

One of the reasons for this success definitely lies in our export-orientation – about 60% of the Austrian GDP is driven by the export-industry. While Austria benefited a lot from past decades of European integration, export diversification is now high on the agenda. We follow the aim to reduce dependency on European markets and focus more on growth markets overseas instead. Our strategy, “go international” is the key to put more effort in the further diversification. Furthermore, diversification is also fostered with regard to the products and services of the export industry: exports of sustainable products and knowledge based services might prove to be our new competitive advantage. 

Moreover and also confirmed by the OECD, Austria has a highly skilled and motivated labour force which leads to our generally good labour market performance. The apprenticeship system is the main reason for the constantly low youth unemployment. 

Finally, Austria is also known for its well-functioning social partnership. Social partners take responsibility for preparing reform proposals for the government as well as organizing social security services thereby going beyond the traditional role of negotiating wages and work conditions. The social partners have al long-standing tradition of setting wages in a manner which takes into account the overall macro-economic situation. 

AT: Do you think that 2012 could play a decisive role for EU countries in overcoming the economic decline? 

Economic policy in the euro area is confronted with major challenges. 2012 will certainly be a decisive year for many EU countries – and for the euro area as a whole. The countries currently highly at risk will have to put all efforts together to implement quickly the necessary fiscal, financial and structural reforms. However, those countries not immediately concerned also must use this crisis as a window of opportunity and get their budgets right. 

AT: Do you think that the decisions proposed by the German-French tandem are able to lead Europe out of the crisis? 

Germany and France are the two biggest economies within the euro area and therefore also very powerful in setting the agendas. However, the euro area consists of 17 economies and important decisions have to be made on a broad basis as far as possible, although one-size-fits-all solutions certainly will be difficult to reach.