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Iran to become partner in Azeri steel plant project?

Azerbaijan could soon see a boost to its construction industry, as Iran has announced that it may be willing to partner with the nation on a major steel plant project. This would be excellent news for both countries, and highlights how attractive the Azeri building industry has become. However, it very much depends on the relations between the two nations.

While there are many good reasons why Iran and Azerbaijan should - in theory - be close allies, this has not always panned out in real life. However, the potential for Iran to become involved in Azeri building work shows that the nations are becoming closer and more willing to work together for their mutual benefit.

This could be an extremely positive step for business in the region, however economic expansion will depend heavily on the political relationship between the two countries. If this can be managed, then both Iran and Azerbaijan could potentially benefit from new investment agreements in the construction industry.


The agreement

This potential investment agreement between the two countries has occurred due to a meeting between two important representatives of the nations. Artur Rasizade, Azerbaijan's prime minister, met with Iranian foreign minister Mohammad Javad Zarif on February 24th to discuss international co-operation between the countries.

Mr Zarif was enthusiastic about the prospect of partnering with Azeri firms on construction project, specifically a steel production plant. The precise details of this project have not been specified, but it will be located in Azerbaijan. Iran will potentially be involved in funding the project as well as assisting with the building work.

"Iran is ready to partner in the construction of a steel plant in Azerbaijan," Mr Zarif said. This could also lead to co-operation on similar projects, with the Iranian foreign minister talking about removing "certain, mostly bureaucratic, problems" that stand in the way of the two nations working together on other construction schemes.


The problem of foreign relations

Of course, all of this will depend on whether or not Iran and Azerbaijan can maintain a positive, friendly relationship. On paper, the two should be close allies. They are the only two countries in the world with populations that are mostly Shiite Muslim, after all, and they share a border, which should facilitate international co-operation.

However, the truth is more complex. Azerbaijan sees itself as part of Europe and has petitioned heavily to join the EU. This in many ways would be detrimental to Iran, as there has been a lot of tension between it and western Europe in the last few years. As such, this has strained relations between the two somewhat.

The nations have disagreed on a number of other issues as well. Political issues regarding the large ethnic Azeri population in Iran has caused tension, as well as Azerbaijan's relationships with Israel and Iran's with Armenia.


Azerbaijan's construction industry

However, both countries recognise that investing in Azerbaijan's building industry is a good move at the moment. The nation has seen a lot of expansion in this sector recently, making it a good market for international investment.

For example, the country has invested a lot recently in 'High Technologies Parks' - large facilities designed to accommodate cutting-edge research in the science and technology sectors - and is planning to construct a new one in the near future. The 1.3 hectare facility will be located near the city of Mingachevir.

The nation has also seen significant international investment from other countries, most notably South Korea. The south-east Asian country has been heavily involved in the construction of Azerbaijan's first island town, Khazar Islands. This project will see a number of high-rise residential buildings constructed in the country by 2025.

This growing construction industry has made Azerbaijan an attractive place for international investment, and Iran has clearly taken notice. The upcoming steel plant project is a sure sign of this.

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