By Samir Muradov
In 2024, Azerbaijan and the United Arab Emirates took a major step forward in cementing their investment partnership-one that reflects broader shifts in the global economic landscape. As economic uncertainty continues to unsettle much of the world, particularly the Global South, Baku and Abu Dhabi are emerging as active architects of a new transnational investment order-where developing economies are no longer just recipients, but strategic investors in their own right.
According to the Central Bank of Azerbaijan, the country’s foreign direct investment (FDI) into the UAE surged to an impressive USD 457.5 million in 2024-an increase of over 4.8 times compared to the USD 94.8 million recorded in 2023. This USD 362.7 million jump marks the sharpest rise in bilateral investment flows in the modern history of Azerbaijan-UAE economic relations.
The UAE’s share in Azerbaijan’s total outward FDI has also seen a dramatic rise, reaching 26% in 2024. While Azerbaijan’s global FDI portfolio shrank from USD 3.1 billion in 2023 to USD 1.76 billion in 2024-a 43.5% decrease-this trend is less about contraction and more about strategic consolidation. The UAE is clearly emerging as a priority destination in Azerbaijan’s refined investment strategy.
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Meanwhile, Emirati capital continues to flow steadily into Azerbaijan. In 2024, UAE investments in the Azerbaijani economy reached USD 490.2 million-up 56.7% from the previous year. However, it’s worth noting that in 2023, total FDI from the UAE stood at USD 1.86 billion. The drop may suggest a change in accounting methodology or a shift in the composition of investments, possibly moving from direct to portfolio assets.
Still, the UAE accounts for 7% of Azerbaijan’s total FDI inflow, which stood at USD 7.05 billion in 2024-up 5.8% from USD 6.66 billion in 2023. Against the backdrop of global investment slowdowns, this level of growth speaks volumes about sustained investor confidence in Azerbaijan, particularly from the Gulf region.
Several strategic drivers are behind this deepening relationship. For Azerbaijan, it’s part of a broader effort to diversify its economic partnerships beyond traditional Western allies, focusing instead on building robust, long-term investment ties with high-growth, strategically aligned nations.
For the UAE, Azerbaijan offers more than just a promising investment destination-it’s a gateway. Baku is seen as a vital logistics and energy hub linking the Caspian region to Türkiye, Southern Europe, and even China. The expansion of the Trans-Caspian International Transport Route (TITR), the development of the East-West trade corridor and increasing investments in green technology all make Azerbaijan an attractive focal point for Emirati geoeconomic ambitions.
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Another critical element is institutional trust. In recent years, both countries have established solid intergovernmental coordination, active business councils, and investment-friendly legal frameworks. In today’s volatile global climate-marked by sanctions regimes and regional instability-such reliability and predictability matter more than ever.
Looking ahead, the Azerbaijan-UAE investment axis holds strong potential across a range of sectors: energy, digital infrastructure, agriculture, tourism, and beyond. Of course, no cross-border investment strategy is immune to risks-from regional geopolitical flare-ups to shifts in oil prices and global macroeconomic trends.
Yet 2024 has unmistakably marked a turning point. Azerbaijan and the UAE are no longer just deepening bilateral ties-they are shaping the contours of a new Eurasian investment map, where regional powers take the lead in writing the rules of the game.
