Hazar Raporu - Issue 02 - Winter 2012

land-based traffic through Azerbaijani
territory. Moreover, the new state-of-theart
Baku International Sea Trade Port and
Logistics Center at Alyat and the new
Baku Heydar Aliyev International Airport
will both have a central place in the
vision of Azerbaijan as a global transport
hub. Last, but not least, the government
plans to establish Free Economic Zones
(FEZs) and invest more than $60 billion
in real estate projects in and around
Baku, essentially aiming to transform the
national capital into the “Dubai of the
Caspian.”
These projects will genuinely strengthen
Azerbaijan’s position in the region and
enable it to become a magnet for land- and
air-based trade between and among the
states of Europe and Asia. Baku will act
as a gateway to Central Asia for Europe
and a door to Europe for Central Asia and
China. It has the potential to become a
“hub of hubs” on the Caspian Sea, but this
will require articulation of a clear vision
today for the Azerbaijan of 2030.
The Need for an Integrated
Development Strategy
Close examination of the ongoing and
planned infrastructure and transportation
projects in the region, including
Azerbaijan, would reveal a lack of
coherence in the development strategy for
the non-oil economy. Important and useful
projects are being planned and initiated
independently of one another, without
the necessary cross-sector and intrasector
coordination. In other words, these
projects do not seem to be guided by a
unified objective. Unless a clear, integrated
“big picture” strategy is set forth today, the
development trajectory of Azerbaijan, or
of any other country in the region, for that
matter, is likely to be halting and subject to
chance. This is not to say that Azerbaijan
could not achieve high per capita income
or social-welfare advancement without
such a vision. The “trial and error”
approach certainly offers one type of
problem-solving strategy. But in addition
to being risky, such an approach would
consume far more in terms of resources,
time, and energy in the long run, and its
success would not be guaranteed.
The report you are about to read has been
written in the hope of contributing to
the vision of the future of Azerbaijan and
the Caspian region. It focuses on Euro-
Asian trade, transportation and logistics,
FEZ, and port development, and draws
some lessons for Azerbaijan and other
countries in Central Eurasia aspiring to
become regional commercial hubs and
take advantage of the growing regional
as well as continental trade between two
major economic blocs, namely Europe and
Asia. In particular, it proposes a specific
development scheme for Azerbaijan’s hub
strategy. As is noted throughout the report,
the opportunities for Azerbaijan are many,
and the realization of this potential will
benefit the whole region, not just a single
state. This means that for Azerbaijan to
achieve its national objectives, it needs
to coordinate its efforts with those of
neighboring countries in the region.
CASPIAN REPORT
109 107