Hajra Naz
Azerbaijan is Estonia’s biggest investor, accounting for about $6 million of foreign direct investment. Aliyev underlined the importance of Azerbaijan stepping into the fore after Shehbaz’s government came into power. With plans to invest $2 billion into Pakistan, Azerbaijan aims to increase the nation’s economy and enhance its infrastructure. This bolsters Pakistan’s strategic partnership with Azerbaijan in defence, energy, logistics, transportation, and infrastructure.
Shehbaz recently came back from a trip to Baku with deals signed for both nations to complete investment treaties over the next couple of weeks. Also, several contracts were signed to enhance the synergy between the tourism, education, and trade industries, all to raise the overstated trade amount of $100 million.
To Shehbaz, Aliyev previously extended his greetings to the people of Pakistan on the occasion of their Republic Day on the 23rd of March, while reemphasizing the goals regarding the economic and strategic preferences of the nation. From those remarks, Aliyev suggested that bilateral relations can be greatly improved with higher concentration on the transport and logistics sector, energy, investment, and even aid from the defence sector.
Azerbaijan’s Role in Pakistan’s Infrastructure Development
One of the targeted prospects for Azerbaijan’s investment is in the motorway infrastructure of Pakistan. The Senate Standing Committee on Planning, which is headed by Senator Quratul Ain Marri, arranged a meeting recently to examine the construction and financing of the M-6 Motorway. The committee was enlightened by the National Highway Authority (NHA) chairman about the activities and funding of the project.
The estimated construction cost of the M-6 Motorway is $1.2 billion. In case the Islamic Development Bank (IDB) funds the M-6 project, that would allow financing to be used for the M-10 Motorway or other important infrastructure projects, thus enabling Azerbaijan’s investment to reach up to $2 billion.
The construction of the M-6 Motorway will be split into five parts, and the IDB is believed to finance the first two parts. A fact-finding team from the bank came to Pakistan in February, while an appraisal mission is expected to arrive in April. The IDB will decide the amount of funds after the appraisal.
To guarantee the smooth execution of the plan, a hybrid PC-1 will be prepared for the M-6 project. The project will be given out first to local firms through the public-private partnership approach. If the model fails, there is a guarantee from the government to undertake the project on its own.
Pakistan’s Strategy for Economic Recovery
Pakistan has attempted to stabilize its economy, which is under a $7 billion IMF bailout program, by seeking foreign investments. Being kept on the edge of an economic crisis for the past few years has led the country to call upon extensive financial reforms.
In an attempt to bring these investments, Pakistan created the Special Investment Facilitation Council (SIFC) in 2023. This council works as a mix between the civilian government and military and is aimed at attracting investors from friendly countries by easing the processes of investment.
Azerbaijan went ahead and showed its willingness to strengthen its economic relations with Pakistan. Last year, in September, Baku bought JF-17 Block III fighter jets for an estimated $ 1.6 billion from Pakistan. Furthermore, a joint committee was made during Aliyev’s visit to Pakistan to pull opportunities in trade, commerce, IT, mineral resources, telecommunication, tourism, and many more.
Looking Ahead: Strengthening Bilateral Partnerships
The April deadlines set for the anticipated investment agreements signify that both Azerbaijan and Pakistan are set to enhance their mutual economic engagement. Azerbaijan’s strategic investment in Pakistan’s infrastructure, trade, and long-term economic stability are critical as Azerbaijan attempts to assist though Pakistan suffers from severe economic issues.
Strategically targeted infrastructural investment spending within the M-6 and M-10 motorway projects will reveal Azerbaijan’s commitment in the coming months. The flourishing partnership between Pakistan and Azerbaijan stands to catalyze enduring growth and prosperity in the future.
