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Friday, 09 October 2015 21:00

I will pay a great attention to issues of economic cooperation – Latvian Ambassador Jirus Maklakovs Featured

If we connect Baku and Riga, it will be a good opportunity to fly to northern countries

 

Caspian Energy (CE): Mr. Ambassador, you have arrived in Azerbaijan just recently. Which opportunities have you seen for expansion of cooperation between Latvia and Azerbaijan?

Ambassador Extraordinary and Plenipotentiary of the Latvian Republic of Azerbaijan Juris Maklakovs: Development of relations requires a balanced approach which includes more than one separately chosen directions. I think we must develop economic relations in all spheres that have already been determined. Economy is a priority in cooperation between our countries.

But we should not forget that we also develop an active political dialogue and plan mutual visits of the heads of our states. In addition, we will also work on the various ways for developing of relations on all levels.

We need to develop cultural ties. For example, I visited the philharmonic in September, which hosted the concert of the Liepa symphonic orchestra. The orchestra has a very rich history, nearly 130 years, and I was glad to see the hall full and that our musicians were greeted with big ovations and were not allowed to leave the stage.

In addition, the sphere of tourism will also develop, Azerbaijan has places to see. Two months that I have spent here show that Azerbaijan has very many amazing historical places, which attract the most instant attention. 5-6 tourism companies already visited Azerbaijan a month ago. Conditions were created for them to see not only Baku but also other regions. The information was sent to Latvia and we expect to increase the interest to Azerbaijan among Latvians, I would even say, the interest of the Baltic region to Azerbaijan, which will expand the flow of tourists in this direction.

Answering your question in short, I would like to say that the opportunities do exist, and we will consider them. I will try to work in all directions and pay great attention to issues of economic cooperation.

 

CE: Which economic spheres seem most attractive to you?

Juris Maklakovs: When submitting credentials, I had a talk with President of Azerbaijan Ilham Aliyev during which he mentioned agriculture as one of the priority spheres for Azerbaijan this year. I have already prepared a letter to the Latvian Ministry of Agriculture on how to increase the trade and investments in this direction.

This is real at the moment, since I see mutual interest. Azerbaijan is interested in development of agriculture. There are good examples in production, processing, storage and conservation of agricultural products in Azerbaijan, and we can cooperate in this sphere. The trade between the countries currently makes $27-28mln. But this is mainly the Latvian export to Azerbaijan and a very small portion of Azerbaijani export to Latvia. The structure of trade is quite diversified. This includes milk, daily products, meat products, pharmaceuticals, but foodstuffs constitute about 30% of the trade turnover.

There is a good ground for cooperation between our entrepreneurs. Latvian dairy and fish products are widely sold in Azerbaijan. President Ilham Aliyev mentioned a very good example, when Latvian entrepreneurs took part in restoration of museums in Gobustan and the MaidenTower. All interactive applications in these museums are prepared by artists and entrepreneurs from Latvia. We have organized a meeting for our entrepreneurs engaged in rehabilitation of sick people just recently. Last year 120 people with disabilities, including about 80 children were sent to Latvian sanatoria for rehabilitation. That is, there are many such examples. At the meetings in the ministries of Azerbaijan we consider new trends for cooperation, which we have many. Transit is also among our main issues. We view Latvia as a country with three major ports and a broad network of railroads. The Riga airport connects it with 80 countries. If we connect Baku and Riga, this will be a good opportunity to fly to northern countries.

 

CE: Do you consider attracting the EU structures to your plans?

Juris Maklakovs: As for the EU investments, I would like to say that they rather have to do with investments in Latvia. If any businessman invests jointly with entrepreneurs from Azerbaijan in Latvia, it is possible to get funds for these investment projects, provided that this project is essential for the European Union. As for the investments in Azerbaijan, they are bilateral, and this scheme is preserved with any country. Certainly, the European Union is interested in investment, when it has to do with energy sources, since this is the diversification of supplies of gas, oil and various energy sources. But if the matter is about Latvia and Azerbaijan, the projects are viewed as bilateral.

 

CE: Will the global economic crisis affect Latvia’s economic relations and other countries with the resource economies?

Juris Maklakovs:  Crisis affects all spheres. And speaking about direct impact, I would not say it will have a negative impact on trade, though we will have to take  into account the indirect factors, since decline in oil prices influences the country’s budget. But I do not think that the drop in oil and gas prices will influence the relations between our countries.

 

CE: Azerbaijan has built the Baku-Tbilisi-Kars project, while Turkey has completed the Marmara project by the Bosporus shelf this year. Is there a plan to interact within the framework of the global corridor from China to London?

Juris Maklakovs: We are interested in the New Silk Way project. We position Latvia as a transit country, which can develop and use its ports and railroads to supply cargo. The potential is great. But if we consider the China-Latvia relations, we have already formed the Baltic Transit project via Russia. But at the same time there is the Zubr railway project which passes via Belarus and Ukraine to Georgia and which can be used with the aforementioned Baku-Tbilisi-Kars project.

 

CE: The Baltic states actively develop the LNG projects. Does Latvia plan to use the energy potential of Caspian littoral states in this sense?

Juris Maklakovs:  You were right to note that EU, Baltic and northern countries are dealing with the LNG projects. A new terminal which is gaining steam opened in Klaipeda (Lithuania) in 2015. This year we will connect Klaipeda with Estonia via Latvia, and we are working respectively to connect Estonia with Finland, where one of the terminals is planned to be built. As these terminals will need gas, we consider every opportunity for supplying gas in order to avoid monopoly in any direction.

 

CE:  The terminal is probably intended for the liquefied gas from the United States?

Juris Maklakovs:  No, the EU has worked out a special energy project (the third energy package – ed.), which prohibits any monopoly of supplies. It envisages opportunities for alterative supplies. We support this. The gas will respectively be accepted from the sources which will supply gas on the most favorable terms. This can be both the compressed natural gas and the pipeline gas.

As you know, Latvia has a big Inchukaln underground gas reservoir. There is a plan to modernize it, and if there is a chance to join this project with the Southern Gas corridor, it will be considered.

 

CE: Is Latvia ready to become a serious knot energy hub for EU?

Juris Maklakovs: I have mentioned the projects connected with liquefied gas reservoirs and transportation of this gas within the boundaries of the Baltic states and Finland  which are interested in diversification most of all, since Norway and Sweden have resources. We build and expand the Inchukaln underground gas reservoir. This issue is rather political, but we are interested in alternative sources of gas supplies. This issue is regarded as regional, since the three Baltic States and Finland have already concluded contracts, and the third economic package lays common duties on us within the EU framework. But we are ready to consider any alternative sources of gas supplies which could rival the existing ones.

 

CE: What opportunities does the LNG-terminal open up?

Juris Maklakovs: Supplies to LNG-terminal started on January 1, 2015. The capacities of the terminal will allow to ensure 90% demand of the three Baltic states by the end of this year. We plan to establish connection with Estonia via Latvia by the end of the year, which means Latvia will sell this gas to Estonia and the required capacity of 4 bn cubic meters a year, that is approximately 90% demand of all Baltic states, will be achieved. The Southern gas corridor will export 16bn cubic meters of gas a year of which 10bn are intended for Europe.

The economy of the countries is developing, and the need for energy sources will grow every year.

 

CE: Europe is currently experiencing a migration crisis. To what extent does it affect the Baltic States in economic sense, and how will this crisis influence the Shenghen zone?

Juris Maklakovs: I will agree with you that the European Union and the Shenghen zone are currently experiencing a migration crisis. Our government discusses this issue every day. Every day it is high on the agenda in the news. There have been very many discussions in Latvia. Different political parties are represented in our country, but no common opinion has been reached in the end. Most of the political parties in Latvia understand the need for solidarity in this issue. There is a need for solidarity of decisions among the EU states. If we do not show solidarity and unity, there will be no commonwealth. Therefore, Latvia has a decision about accepting a large number of refugees. Now Latvia agrees to accept nearly 750 refugees.

 

CE: What implications do you expect in this aspect for the Shenghen zone, the freedom of movement of people, money and cargo?

Juris Maklakovs:  Freedom of movement of people, money and cargo is the main principle of the EU and Shenghen zone. Therefore, no one will reject this principle, but it is necessary to bear in mind that this is a free movement for residents who live in the Shenghen zone, therefore, there are very many interpretations on this issue. I think there must be some rules which refugees must observe while entering the European Union.

This is the registration and other moments. The absence of acceptance mechanisms sometimes causes some problems, including construction of fencing. But all the same, I believe that the Shenghen zone will not reject these basic principles, the refugees will be accepted, the issue is just about the number and the way it all will take place.

Germany bears the main burden. Refugees want to live in good conditions in such countries as Germany, Great Britain and northern countries. They must receive benefits which are not that low. This, in turn, may lead to economic difficulties in receiving countries.

 

Thank you for the interview

 

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