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MEMO/09/183

Brussels, 23 April 2009

European Neighbourhood Policy – AZERBAIJAN

Benita Ferrero-Waldner, External Relations and Neighbourhood Policy Commissioner, said. “As an important partner to the EU, I would encourage Azerbaijan to advance efforts to fulfill the objectives of the jointly agreed Action Plan. We should continue to work to enhance our co operation, and the visit of President Aliyev next week is a sign of the mutual interest in such a dialogue.”

EU – Azerbaijan relations: basic facts

The EU-Azerbaijan Partnership and Cooperation Agreement (PCA) entered into force in 1999, with the goal of promoting respect for democracy, the rule of law and human rights, as well as market economy reforms, trade liberalisation and cooperation in a wide number of sectors.

The ENP Action Plan was adopted in November 2006 and its implementation is being monitored and guided principally by the PCA bodies (Cooperation Council, Cooperation Committee and two Sub-Committees). The opening of the Delegation of the European Commission in Baku in February 2008 further contributed to the strengthening of the EU-Azerbaijani bilateral relations.

Major developments in 2008 and overall assessment

Despite a continuing strong performance in economic development, there was no or limited progress in the implementation of many aspects of the ENP Action Plan, particularly in the areas of political dialogue and reform, including protection of human rights and fundamental freedoms, many areas of cooperation in justice, security and freedom, a number of aspects of market and regulatory issues, as well as sectoral issues.

The ratification of the Optional Protocol to the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment in January 2009, the withdrawal of the charges of libel against a human rights defender in March 2009, and significant increase of funding for the civil society from the Azerbaijani Council for State Support to NGOs are encouraging signs. However, some of the amendments to the Constitution of Azerbaijan, adopted at a National Referendum in March 2009, may constitute a reason for concern.

In November 2008 a positive step in the OSCE Minsk Group peace talks on the Nagorno-Karabakh conflict was taken, through the signing of the first political declaration by the Presidents of Armenia and Azerbaijan since 1994.

Some progress was made in the field of judiciary reform, notably in the area of selection and training of judges. 102 new judges were recruited and the Academy of Justice was established to improve training for judges and other lawyers.

Progress was made in the area of economic development and business environment, notably the establishment of a ‘one-stop-shop’ for the registration of business in January 2008, and the adoption of the legislation on the “Single Window” concept of customs clearance, started since January 2009. Azerbaijan received recognition as “Top Reformer” by the World Bank in its international surveys on the ease of doing business.

Azerbaijan is a strategic partner for the EU on Caspian oil and gas resources both as a producer and as a transit country. Azerbaijan has performed a leading role in the framework of the Baku Process on Energy and Transport and organised an Energy Summit on 14 November 2008.

The economy of Azerbaijan continued growing sharply in 2008, with overall GDP growth reaching approximately 10.8% (25% in 2007), mainly due to oil and gas export revenues. However the non-oil sector responded to the strong fiscal stimulus and grew by 15.7% led by a robust expansion in construction, services and agriculture. Diversification of the economy will be critical for the country’s long term development.

EU has progressively become Azerbaijan's main trade partner (nearly 30% of Azerbaijan's overall external trade). In 2008, the total turnover of bilateral trade with the EU reached €12.6 billion, with Azerbaijani exports to the EU at €10.55 billion (almost exclusively of mineral fuels) and EU exports €2 billion (mainly machinery and transport equipment, as well as base metals and products made from them and chemicals). Azerbaijan qualifies for the special incentive arrangement for sustainable development and good governance (GSP+) for 2009-2011.

Some examples of EU support to reforms in Azerbaijan

Following the endorsement in January 2008 by the Azerbaijani President of a concept for reforming health financing and compulsory medical insurance and the subsequent action plan, the European Commission invited Azerbaijan to participate in the EU Network of competent authorities in health information and knowledge.

Azerbaijan remains committed to alignment of its higher education system to the principles of the Bologna process. The new draft law on education, approximating relevant Bologna provisions, passed the second reading in the Parliament in December 2008. Higher education reform continued to benefit from cooperation under the Tempus programme. Apart from scholarships under Erasmus Mundus and a special pilot project for the academic year 2008-9, the Azerbaijan State budget funds provided in 2008 for 1130 students to study abroad, of which 360 chose to study in European universities. Currently the Ministry of Education of Azerbaijan has signed agreements on bilateral co-operation with nearly 20 countries, including several from the EU (notably UK, Latvia and Romania), as well as Turkey.

Technical cooperation was strengthened. A number of twinning projects were launched in areas like food quality and safety assurance and certification requirements and fishery products, legal approximation and structural reform in the energy sector, and strengthening of standardisation, metrology, conformity assessment and accreditation. Further twinning projects are under preparation, including on statistics and national accounts.

Assistance to Azerbaijan

In 2008, the Commission continued to support national reform efforts and programmed assistance for a total amount of €22 million under the European Neighbourhood Partnership Instrument (ENPI). The 2008 Annual Action programme, adopted by the Commission in December 2008, focuses on support for justice reform and on twinning operations in support of the implementation of the ENP Action Plan.

This support was a part of an indicative amount of €92 million, which has been allocated for the period 2007-10 under the ENPI.

The Communication from the Commission to the Parliament and the Council Implementation of the European Neighbourhood Policy in 2008 (23 April 2009) and a country report on Azerbaijan are available at

http://ec.europa.eu/world/enp/documents_en.htm

More on Azerbaijan and ENP

http://ec.europa.eu/external_relations/azerbaijan/index_en.htm

http://ec.europa.eu/world/enp/index_en.htm

See also IP/09/625 EU reinforces ties with its neighbours and continues to support their reforms.


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