Caspian Energy Journal Caspian European Club
Tuesday, 17 May 2016 12:00

I see a lot of untapped potential and considerable interest on both sides to increase the current levels of trade, Ambassador of the Swiss Confederation to Azerbaijan Featured

There is an interest from Swiss investors in the real sector of the economy in this country

Caspian Energy (CE): Your Excellency, you have been appointed to Azerbaijan relatively recently. What is the purpose and major tasks of your mission in Azerbaijan?

Philipp Stalder, Ambassador Extraordinary and Plenipotentiary of the Swiss Confederation to the Republic of Azerbaijan and Turkemenistan: Generally speaking, my goal as the 4th Swiss Ambassador to the Republic of Azerbaijan is to broaden relations between our two countries in as many fields as possible - be it on the political, economic, cultural or scientific level - and to make Switzerland's presence in Azerbaijan even stronger. Switzerland and Azerbaijan over the last couple of years have established a close partnership. There is a productive political framework for boosting bilateral relations. President Ilham Aliyev regularly visits the Swiss mountain resort Davos for participation at the World Economic Forum and meeting there officials from Switzerland. Three presidents of the Swiss Confederation (yearly rotating presidency) have visited Azerbaijan over the last years and regular visits take place on a ministerial level. Since my arrival in October 2015, I continuously meet with ministers, high officials and members of parliament and from this perspective I can note a clear political will to strengthen bilateral relations which is of course highly motivating for me and my team.


CE : Are the Swiss investors interested in the real sector of the economy of Azerbaijan?

Philipp Stalder: Since many years, a considerable number of major Swiss companies in various sectors which go far beyond the oil and gas business have established a physical presence in Azerbaijan. The Swiss company Holcim producing cement in its factory south of Baku is even the biggest non-oil and gas FDI in the country. And to give you just a recent example: Sika, a Swiss manufacturing company of speciality chemicals for construction and industry has announced this spring its willingness to operate a new factory at Sumgait Chemical Industrial Park. So, there is an interest from Swiss investors in the real sector of the economy in this country. In this regard, I would also highlight the visit of Switzerland Global Entreprise (S-GE) to Baku in April. S-GE is Switzerland’s center of excellence for fostering exports, imports and investments and for helping Swiss clients to develop new potential for the international businesses. During two days, the Embassy organized a range of meetings for S-GE with the goal to boost Swiss investments to Azerbaijan


CE : Can you inform us about trade relations and how would you assess the level of investment attractiveness of the economy of Azerbaijan?

Philipp Stalder: Compared to recent years when our bilateral trade exchange reached almost 1 billion CHF (1 billion US$), I see a lot of untapped potential and considerable interest on both sides to increase the current levels of trade again. The ambition of Azerbaijan to diversify its economy and to attract FDI through various structural reforms and tax incentives should further increase the prospects for attracting more companies from Switzerland. At least, this was my impression from the 7th session of our Bilateral Economic Commission held in Baku on the 10th March 2016. And for this reason, with the active involvement of the Swiss Embassy private circles in Switzerland (Joint Chamber of Commerce Switzerland-CIS) will organize a Switzerland-Azerbaijan Business Forum at the end of May in Winterthur near Zurich. So, we as an Embassy do our best to assist Azerbaijan in attracting further investments from Swiss companies. But at the end of the day, it is up to the private sector – in Switzerland most of them are SME's operating on a global level and being high-tech niche players – to take such investment decisions by comparing business conditions in Azerbaijan with other competing markets.


I see the potential for establishing a presence of a Swiss bank in Azerbaijan as rather limited


CE : The banking sector is a leading sphere of economy of Switzerland. Is it planned to attract the Swiss banking sector into Azerbaijan?

Philipp Stalder: Although Switzerland is a relatively small country, it is one of the heavyweights when it comes to financial services. More of 6 percent of the working population in Switzerland are employed by a bank or a financial institute. We have 240 banks in Switzerland with the two big globally operating banks UBS and Credit Suisse. International investors count worldwide on the professionalism, discretion and confidentiality of Swiss banks who mainly operate their business from Switzerland itself with a relatively small presence of bank branches abroad. Therefore, I see the potential for establishing a presence of a Swiss bank in Azerbaijan as rather limited.


Switzerland very much welcomed and actively supported the selection of TAP


CE : In 2015, Switzerland became one of the two countries which got an AAA trilemma in accordance with the ranking of the energy and climate strategy of the Global Energy Council. What are the features of the energy sector of Switzerland?  Are the Swiss companies interested in the energy sector of AZ?

Philipp Stalder: Indeed in 2015, Switzerland along with Sweden was top ranked in the World Energy Trilemma as regards the likely ability to provide sustainable energy policies through the 3 dimensions of the energy security, energy equity and environmental sustainability.

As regards your question linked to Azerbaijan, I can say that Switzerland very much welcomed and actively supported the selection of TAP (Trans Adriatic Pipeline) as the pipeline infrastructure of the Southern Gas Corridor. So, TAP which is a Swiss based consortium is a striking example of this fruitful cooperation in the energy sector. The Swiss energy company Axpo is also as one of TAP’s shareholders. Then, let me of course also proudly mention that SOCAR is an active foreign investor and employer in Switzerland with its 160 pumping stations and its trade entity in Geneva.


CE : How do you see the role of the Southern Gas Corridor in the context of energy security of Switzerland?

Philipp Stalder: According to 2015 report of Swissgas, gas consumption of Switzerland in 2014 was more than 3 billion cubic meters. Switzerland’s energy supply and respectively energy security highly depends on imports. 43% of gas is imported from EU, 31% from Russia, 18% from Norway and 8% from other countries. Taking into account that about 40% of EU’s gas import comes from Russia, we can say there is a strong Russian presence in the energy market of Europe. Switzerland imports natural gas from abroad since 1974 and it has always been supplied without any interruption. However, it is well known that the diversification of import sources is the core element of the energy security. Therefore, high dependence on imports and the need to guarantee supply security, mean close cooperation with foreign energy partners, particularly within energy projects. From this point of view, the Swiss government attaches great importance to the Trans Adriatic Pipeline.


Thank you for the interview

Interview made by Sabina Mammadova and Emil Mammadov



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