Trade and Economic Relations between Azerbaijan and Iran: Problems and Prospects

Abstract

The article is devoted to the study of trade and economic relations between the Republic of Azerbaijan (AR) and the Islamic Republic of Iran (IRI). The author analyzes the factors that influenced the pace of development of Azerbaijani-Iranian trade and economic relations, considering the volume of trade turnover between the two countries. It is noted that the Second Karabakh War, which took place from September 27 to November 9, 2020, and ended with the victory of Azerbaijan, became a turning point in bilateral relations. On the one hand, by restoring Azerbaijan’s full control over the entire border with Iran, new documents were signed on the implementation of road and railway projects connecting the East Zangezur Economic Region of Azerbaijan and the Nakhichevan Autonomous Republic through the territory of Iran, and on the other hand, the results of the war, including the strengthening of Turkey’s influence in the South Caucasus, caused an aggravation of political relations between the Azerbaijani and Iranian authorities. If in previous years, during the tension between Baku and Tehran, the volume of trade turnover between the two countries decreased, this time an increase in bilateral trade turnover is observed, which is actually a new phenomenon in the history of Azerbaijani-Iranian relations. Thus, a new regional dynamic is being formed in the South Caucasus after the Second Karabakh War, which forces both countries to maintain and increase the level of economic relations.