On 13 November, the President of the Black Sea Trade and Development Bank (BSTDB) Dmitry Pankin spoken in an exclusive interview with report.az on the current economic situation in Azerbaijan, as well as the ongoing projects and spheres of interest.
Speaking on the global economic outlook and its impact on the Black Sea region, Pankin said that:
“the [current world-wide] situation… is developing according to an increasingly less predictable scenario. We are witnessing a slowdown in economic growth amid escalating trade disputes and weakening investment flows. The growth in the Black Sea region is mainly exposed to external risks, as the governments of our member-countries have sometimes undertaken quite difficult measures to ensure the stability of economies and protect their markets.”
On the current economic situation in Azerbaijan, Pankin told that:
“the economic growth rate in Azerbaijan has remained low, especially compared to the period before 2014. Nevertheless, the country is showing good macroeconomic stability thanks to, as we believe, the measures that the government took immediately after the rapid decline in oil prices. The first wave reforms led to a significant improvement in the business climate in the country, which was marked by a sharp increase in the international rating of Azerbaijan in the Doing Business report (Caucasus Watch reported). [However], the reform process slowed down somewhat amid restoration of the budget balance, including by external calculations. The manifestation of the definite economic results of the reforms takes time, especially in conditions of countries rich in natural resources, such as Azerbaijan or Russia.”
Speaking on the main sectors of the BSTDB’s investment activities in Azerbaijan, Pankin said that:
“given the task of reducing the government debt, our country strategy for Azerbaijan focuses mainly on operations in the private sector. The priority for us will be investments in sectors that have the greatest development effect, such as energy and energy efficiency, export-oriented production in the non-oil sector, agriculture and agribusiness, which are also among the national priorities. We expect that our financing will be important amid a weakened banking sector whose share in Azerbaijan’s GDP remains relatively low. We will be pleased to consider project proposals, especially in cases where sponsors are unable to obtain financing from commercial banks. The adopted targets for the growth of the BSTDB portfolio in Azerbaijan provide for additional financing of about EUR 300,000,000 by the end of 2022 (the current portfolio is EUR 106,500,000).”
Pankin also spoke on the most relevant projects in Azerbaijan and the future directions of the BSTDB’s activities in Azerbaijan. He said that:
“the bank has a strategic orientation towards expanding participation in regional infrastructure projects of Azerbaijan, whose implementation will largely depend on the demand for such participation from governments and sponsors of such projects. Among the existing regional projects, we… note our loans to SOCAR in Turkey: the Azerbaijani company operating in Turkey supports the development of trade between Russia, Turkey and Azerbaijan. We have provided a number of credit lines to Turkish banks in Georgia and Greek banks in Romania. It is also [important] to [mention] our projects in Ukraine [as they] expand the capacities of elevators in the Black Sea regions, [which is] necessary to increase the grain supplies to other member countries of the bank. As you may know, we are co-financing a large project of the second stage of the Shah Deniz gas condensate field development, together with a number of other development banks, which is also an important regional project. We would love to consider participating in projects related to the expansion or extension of existing pipelines in our region, such as the Trans-Adriatic Pipeline (TAP) and Trans-Anatolian Pipeline (TANAP), or in other projects to expand Azerbaijan’s access to international markets via the regional countries. Promoting the development of infrastructure that supports economic relations between the member countries of the bank is one of our main priorities. For example, we are ready to consider participation in increasing the capacity of the Baku-Tbilisi-Kars railway or in projects for the development of power lines between our countries, for example, between Azerbaijan and Russia, Georgia or Turkey.”
The Black Sea Trade and Development Bank is an international financial institution with headquarters in Thessaloniki, Greece. It was established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine. BSTDB started operations in June 1999 and has authorized capital of €3.45 billion. The Bank supports economic development and regional cooperation in the Black Sea Region through trade and project finance lending, guarantees, and equity participation in private enterprises and public entities in the member countries.
