MOLDOVAN PRESIDENT PURSUES ECONOMIC TIES DURING

C O N F I D E N T I A L BAKU 000422

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E.O. 12958: DECL: 05/01/2018
TAGS: PREL PGOV ENERG ECON AJ
SUBJECT: MOLDOVAN PRESIDENT PURSUES ECONOMIC TIES DURING
VISIT TO AZERBAIJAN


Classified By: Pol/Econ Chief Joan Polaschik per 1.4 (b,d)


1. (C) Summary: During an April 23-24 visit, Moldovan
President Voronin focused on economic issues, including a new
agreement to have Azerbaijani specialists examine Moldovan
oil and gas reserves. They also discussed possible
Azerbaijani investment in the privatization of Moldovan
industries, the possibility of Moldovan grain shipments to
Azerbaijan, and the establishment of a regular flight from
Chisinau to Tbilisi to Baku. Given their close cooperation
in GUAM, Azerbaijan clearly values its relationship with
Moldova; the two countries are addressing transportation
issues - an impediment to further economic cooperation -
through GUAM. (septel).


2. (C) In a May 1 conversation, Moldovan Embassy First
Secretary Igor Bodiu provided details on Moldovan President

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Voronin's April 23-24 visit to Baku. President Voronin met
with the head of the State Oil Company of Azerbaijan Rovnag
Abdullyaev, the Speaker of Azerbaijan's National Parliament
Oktai Asadov, and Prime Minister Artur Rasizade. The
highlight of the visit, however, was the meeting with
President Aliyev. At the conclusion of this meeting, which
lasted an hour longer than expected, President Voronin and
President Aliyev signed three agreements for bilateral
cooperation. Bodiu stressed that the two presidents have an
excellent relationship that is both friendly and professional
and said that there were no serious problems in the
Azerbaijan/Moldova relationship.


3. (C) Bodiu stressed that economic issues dominated the
agenda of the meetings. President Voronin said that the
legal basis for substantial cooperation between Moldova and
Azerbaijan is already firmly established in over 50 bilateral
agreements between the two states, and he urged both
countries to elaborate on specific and concrete projects that
will be beneficial to both sides. According to Bodiu, the
most important concrete project developed during the visit
was the agreement on energy cooperation signed by both
presidents and developed further during President Voronin's
meeting with Rovnag Abdullayev, head of the State Oil Company
of the Republic of Azerbaijan (SOCAR). According to the
agreement, Azerbaijani specialists will travel to southern
Moldova in order to examine the size and feasibility of
developing oil and gas deposits in that region. Bodiu
stressed that given Moldova's need for energy
diversification, this agreement was the most important
tangible outcome from the president's visit.


4. (C) Bodiu described bilateral trade between Moldova and
Azerbaijan as "growing but not yet adequate," and he said
that President Voronin and his Azerbaijani interlocutors
discussed a number of specific trade and investment projects
designed to boost bilateral trade. According to Bodiu, both
presidents reaffirmed their commitment to the newly developed
bilateral task force on trade and investment, which will meet
at the beginning of June in Chisinau. In his meeting with
Azerbaijan's Prime Minister Rasizade, President Voronin
suggested that Moldova could supply grain and other food
products to Azerbaijan, which is facing increased prices on
the global market. President Voronin also expressed his
interest in Moldovan investment in Azerbaijani construction
projects.


5. (C) In terms of Azerbaijani investment in Moldova,
President Voronin pointed to a number of industries that are
yet to be privatized and stressed that Azerbaijani
entrepreneurs are welcome to take part in the privatization
process. President Voronin believes that refineries and food
processing factories will be of the most interest to
Azerbaijani investors, and he stressed that the autonomous
trade preferences recently granted to Moldovan food products
entering the EU will make this sector particularly lucrative.
The GOAJ expressed its desire to build gas stations in
Moldova and possibly a pier on the Dniester River, which
could later be expanded to be a cargo terminal linked to the
Black Sea. Finally, the two sides discussed establishing a
flight from Chisinau to Tbilisi to Baku. Bodiu said that
border crossings make it difficult to travel overland between
Moldova and Baku and that flights between Moldova and
Azerbaijan currently have to connect through Turkey or
Russia. Bodiu stressed that this is an impediment to
Azerbaijani entrepreneurs looking to invest in Moldova.


6. (C) Comment: The GOAJ clearly values strong bilateral
relations with Moldova given the two states' cooperation in
GUAM. However, despite the rhetoric of friendship, the
bilateral relationship has not produced much in the way of
substance, especially in the economic sphere. On several
occasions during the course of the conversation, Bodiu
stressed that the level of trade between Moldova and
Azerbaijan was not yet at sufficient levels, and President
Voronin clearly focused on this issue while in Baku. SOCAR
has been increasing its investment in the region and is
likely to take a serious look at opportunities in Moldova.
Transportation links between the two countries remain an
impediment to further investment and are also being addressed
through GUAM.
DERSE