An interview with Mr. Mario Baldi , Italian Ambassador to Azerbaijan

AT: Mr. Ambassador, could you please share with our readers your ideas about the establishment and development of Italy -Azerbaijani relations?

Our relations find their roots in the history, in the Middle Age when Florentine and Venetian merchants crossed Azerbaijan on the “Silk Road”. In modern time – after independence – bilateral economic relations have constantly strengthened leading in 2004 to the signing of a Joint Declaration which established the Italian-Azerbaijani Council for Economic Industrial and Financial Cooperation. Today, energy is the milestone of our partnership and Italy has become the first trade partner of Azerbaijan and one of the main clients of its oil.

Let me add however that – although energy is the milestone of our partnership – it is a different kind of energy that fuels the deep friendship between our two nations: an energy made of cultural respect and admiration. These feelings are deep and sincere; they represent the most solid and reliable foundation of our partnership and they are also the most important reason for optimism about the future relations between Italy and Azerbaijan.

AT: What is your estimate of interaction degree between Italy and Azerbaijan on key foreign policy issues?

Since the establishment of diplomatic relations in 1992, our two countries have created a growing number of opportunities for intensifying political dialogue both at bilateral and multilateral level. Azerbaijan’s membership in the OSCE and in the Council of Europe – strongly supported by the Italian Government – has further widened the scope of our dialogue and has represented a historic step in the process of gradual integration into European Institutions. Azerbaijan’s active participation with NATO over the last few years, through participation in the most important military operation in Afghanistan, is also remarkable. Italian and Azerbaijani soldiers work daily, side by side, to bring peace in that country and to fight against terrorism.

AT: Mr. Baldi, in Azerbaijan it is believed that the current level of bilateral turnover does not reflect the quality of the economic cooperation between our countries. How do you think it is possible to change this state of things? What do you think prevents Italian investors from cooperating with Azerbaijan?

Dynamic growth rates, rich energy sources and significant government investment projects make Azerbaijan a market of great interest for our businessmen. Bilateral relations are strong and growing. We are the first client of Azerbaijan, accounting for 23% of Azerbaijani exports (for a value of € 5.3 billion in 2012) and we represent his ninth supplier (for a value of $ 401 million in 2012). The estimates for 2013 confirm the trend – though still weak – of a rebalancing of the commercial interchange, with a progressive reduction of Italian imports (from 8.2 billion euro in 2011 to 5.3 billion in 2012) and rising Italian exports (by 347 million euro in 2011 to 401 million in 2012, an increase of 15%). The primary destination of Italian investments remains the energy sector (Saipem- ENI Group) and the construction sector (Todini-Salini Group). However, the Italian presence is growing in the field of interior design, hotel infrastructures and sport facilities (Leitner Group-Skiing), as well as in the fields of high-technology (Agusta and Finmeccanica Group), in the food industry, as well as in the financial sector (Unicredit Bank).

Nevertheless, there is still a huge potential to be exploited. Several new areas of co-operation can open new chapters in the relationship between our countries, for example in agriculture, tourism, ICT, renewable energies. This is the reason why we constantly encourage our small and medium sized enterprises to come to Azerbaijan and to take part in the process of diversification carried out by the Azerbaijani government. From this point of view, business missions to Azerbaijan or country’s presentation in Italy are two useful tools. I put a lot of effort in convincing Italian businessmen to establish contacts with local companies and to discover the good potential of the Azeri market. Azerbaijan is a safe, stable country with good infrastructures. It deserves more attention from business circles, especially in a time of crisis when companies in Italy and in Europe need to find new markets for their products and new opportunities for their investments.

AT:What is your estimate of the cooperation between Azerbaijan and Italy in energy sector?

Being one of the first oil suppliers of my country, Azerbaijan plays a fundamental role in ensuring energy security of Italy. From the Azeri-Chirag-Gunashli field through the Baku-Tbilisi-Ceyhan pipeline we receive huge quantities of oil that help our economy to work. Now a new generation of investments in the gas field is appearing on the scene and I am confident that this will help Europe to further diversify its supplies of energy through the Southern Corridor. We are watching closely what is happening in Azerbaijan and we are looking forward to the decisions that the Shah-Deniz Consortium will make in the near future about the infrastructure designed to channel Azeri gas towards Europe. Italy – as a consumer country – is generally interested in reliable and cost-effective energy supplies and in diversifying suppliers and routes. From this point of view, I am confident that the SD Consortium will choose the best project.

AT: It seems that relations between Azerbaijan and the EU are standing still for several years: no new frame agreement, no visa-free regime. However, the establishment of visa-free regime is more a political than a technical question? Do you agree that Azerbaijan and the European Union have very different approaches to the issue of human rights?

As all other EU members Italy strongly supports efforts aimed at bringing Azerbaijan closer to the European institutions. More specifically, we consider the Eastern Partnership to be an important tool to strengthen and widen the scope of cooperation between Azerbaijan and the European Union, both at the bilateral level and in multilateral platforms. Experience says that getting closer to the EU greatly contributes to encourage harmonization of legislation, improvement of standards and sharing of values by third countries. In this context, we encourage further progress of Azerbaijan in the implementation of joint projects, as well as in the enhancement of political dialogue envisaged by the Eastern Partnership initiative. We also believe that the EU can play a positive role in bringing peace and stability in the Region.

It is also our view that it is in the interest of both sides to increase human exchanges and the opportunities of contacts at level of civil society. In this sense, the progress of current negotiations on the Agreement with the EU on Visa Facilitation and Readmission is a good sign, while a Visa free Regime cannot be excluded in the future.

Having said that, I do not want to underestimate the current difficulties in the dialogue with the EU. No relation is perfect, but our relation is strong enough – I think – to resist today’s turbulences and to leave space to a frank and honest exchange of views even on the most sensitive issues like human rights and democracy.

Azerbaijan Today Magazine 2013