What business does a country on the western shore of the Caspian Sea have courting governments thousands of kilometres away in Southeast Asia?
At first glance, there seems to be little. The primary focus of Azerbaijan is in the South Caucasus region, as well as in its energy relations with Europe and the corridors through Central Asia. On the other hand, Cambodia finds itself in a market environment that is influenced by ASEAN, China, and the Pacific Ocean. But then again, that’s why their developing relationship is intriguing.
On Monday, Cambodian prime minister Hun Manet arrived in Baku for an official visit and the forthcoming summit of the Conference on Interaction and Confidence-Building Measures in Asia (CICA). His meetings with President Ilham Aliyev produced agreements on double taxation, trade and economic cooperation, and ties between diplomatic education institutions. Individually, none of them is groundbreaking. Yet collectively, they give grounds to say that Azerbaijan is experimenting with the scope of its foreign policy - possibly discovering its direction for a new era.
The idea is possibly about becoming valuable to an Asian power through providing access to its markets and transportation network, which leads to Central Asia, the Caucasus region, and ultimately Europe. It is a realistic option rather than the rhetoric of friendship, usually expressed on such occasions.
As always, Ilham Aliyev noted the discrepancies between the two countries, acknowledging the gap between political enthusiasm and commercial reality. “Our trade turnover is still very modest,” he said after the talks. The two sides established a joint working group on trade and investment, while a business forum sought to introduce companies that have had little reason to encounter one another.
In addition to geography, the president highlighted one other issue: “Another obstacle is the lack of information, and we need to close that gap.” This is an interesting revelation. Even though there has been diplomacy for well over three decades, familiarity does not mean there have been business dealings.
The agreements provide a starting point, not proof of any sort of economic breakthrough. Taxation without double taxation may simplify cross-border investments; a trade agreement may give policymakers a way to resolve such practical barriers. However, business requires customers, reasonable freight rates, dependable payments and predictable policies. The Cambodian prime minister even mentioned the idea of an agreement for air services.
The attraction of Azerbaijan for Cambodian companies may not be due to the country’s own market, but more to what it offers outside itself. According to Kith Meng, president of the Cambodian Chamber of Commerce, “there has been an interest to enter the Central Asian market through Azerbaijan.” The following are some of the topics that have been discussed during their talks.
A corridor looking for new customers
Much of Azerbaijan’s recent diplomacy has rested on the idea that geography can be converted into leverage. The Middle Corridor links China and Central Asia across the Caspian, through Azerbaijan and the South Caucasus, towards Türkiye and Europe. It is neither the only route across Eurasia nor a frictionless one. Sea crossings, border procedures and competing infrastructure priorities can all erode its commercial appeal.
Even so, the search for diversified trade routes has created an opening for countries positioned between major markets. Southeast Asian manufacturers are not about to redirect their exports wholesale through Baku. But selective cargo flows, distribution partnerships and joint ventures could make sense if the economics work. For Azerbaijan, bringing new businesses into those networks would help turn transit infrastructure into a wider commercial ecosystem. Baku, although geographically closer to Asia, has successfully established itself as a significant player in the political and economic spheres, particularly on the European side. However, many countries on the far side of the continent are still largely unaware of Azerbaijan.
In this respect, the linkage has a political nature too. For instance, Azerbaijan has tried to gain flexibility among major states without aligning its diplomacy with any particular alliance. For Azerbaijan, the engagement with Cambodia adds an Asian angle to its foreign policy, while for Cambodia, the cooperation with Azerbaijan means getting one more player who does not belong to the immediate vicinity of its bigger neighbors, as it intends to integrate its economy into the Central Asian region by developing a partnership with Azerbaijan.
Old classrooms, new forms of influence
CICA provides an institutional framework for doing so. Azerbaijan’s chairmanship, as unanimously supported by all members, according to Aliyev, and hosting of the upcoming summit will afford the opportunity to bring together governments which would otherwise have little bilateral contact. Baku and Phnom Penh already cooperate within the United Nations, the Non-Aligned Movement, and CICA.
According to Aliyev, chairmanship is a reflection of an independent policy grounded in sovereignty. This is the meaning given to it by the government, but its practical effect is access. Holding international conferences gives an opportunity to a small state to establish diplomatic contacts, put forward initiatives, and become a negotiating forum. The issue is how such contacts will lead to a durable project after the departure of delegations.
The most convincing fields for collaboration may be less spectacular than pipeline and transport projects. For instance, President Aliyev remembered how hundreds of students from Cambodia studied in Azerbaijan in Soviet times and suggested resuming educational cooperation. The cooperation between ADA University and the National Institute of Diplomacy and International Relations of Cambodia is an example.
Another form of painful experience they both share is that of land mines. They suffer the long-term consequences of contamination by explosives, and this was one of the areas where their leaders exchanged ideas about training and technology. The Azerbaijani ASAN public service model has been suggested as a potential area for collaboration. The value of such initiatives does not depend on large trade volumes. This might be the true test of Baku’s opening to Southeast Asia. One Cambodian visit alone does not make a strategic shift to the region, and there is nothing in the existing data to indicate how far along Azerbaijan is in developing a relationship with Laos or other ASEAN countries. Same initiatives, however, could be expected for Tuesday's visit of the Laos President.
But there is a serious issue behind it all. In a world where nations seek to have many friends, alternative ways, and robust connectivity, distance is not the only determinant of relevancy anymore. The idea behind the move by Azerbaijan is the expectation that a nation located between regions can actually gain importance from knowing how to connect them. It is up to the Southeast Asian business community whether they find the concept relevant enough.