TEHRAN: The report says that the nuclear deal and the associated lifting of economic and financial sanctions offer Azerbaijan the opportunity to boost foreign trade and investment with neighboring Iran.
In agency’s view, these new trade and investment opportunities could partially offset the credit negative effects from the nuclear deal, which, if implemented, will enable Iran to return to oil export markets, potentially leading to lower oil prices and pressures on Azerbaijan’s government and export revenues.
“Thanks to its close geographic location and strong trade ties in the pre-sanctions period, Azerbaijan could benefit from a lifting of sanctions on Iran by increasing foreign trade and investment with its neighbor.
Inhabiting around 78 million people and generating the 18th largest nominal GDP in the world in 2014 (based on a purchasing-power-party basis), Iran is the third largest economy in the Middle East, GCC and CIS regions, after Russia and Saudi Arabia, offering significant trade and investment opportunities to the smaller Azeri economy,” the rating agency considers.
Moody’s points out that Azerbaijan was among the first countries seeking new foreign trade and investment opportunities with Iran. In August 2015, a delegation from Azerbaijan’s government visited Iran to hold preliminary negotiations on a number of strategic projects. The talks focused mostly on cooperation in the oil and gas sector: swapping deliveries of their oil supplies, bilateral cooperation in oil and gas engineering and joint production of oil and gas equipment. Iran has also expressed an interest in co-operating with Azerbaijan in its Southern Gas Corridor project, which plans to bring natural gas from the Caspian Sea to the European Union. In addition, several infrastructure projects were discussed, such as the “North-South Railway” project and the construction of a common hydroelectric power station in the border region.
