Prime Minister of Japan Junichiro Koizumi and President of the Republic of Azerbaijan Ilham Aliyev,

Expressing their satisfaction at the continuous development of amicable relations between Japan and the Republic of Azerbaijan ever since the two countries established diplomatic ties in 1992,

Noting the positive role played by the "Joint Statement on Friendship and Partnership between Japan and the Republic of Azerbaijan" signed in 1998 on the occasion of the visit to Japan by the late former President Heydar Aliyev in the development of bilateral relations between the two countries in recent years, and,

Expressing their conviction that the present visit to Japan by President Ilham Aliyev would provide an important impetus to the further development of friendship and partnership between the two countries in the future,

Issued the following statement.

1. Bilateral relations

(1) Both sides noted the importance of enhancing dialogue between the governments of the two countries at various levels as well as promoting political dialogue including the expansion of exchange between the members of the parliaments of the two countries, who represent the peoples of their countries, with a view to further developing bilateral relations.
Both sides also highly valued that the foundations for strengthening bilateral relations had been laid through the opening of the Japanese Embassy in the Republic of Azerbaijan in January 2000 and the Embassy of the Republic of Azerbaijan in Japan in September 2005.

(2) The Japanese side valued the democratization efforts made by Azerbaijan through a series of measures aimed at realizing democratic elections but noted that there is still a need to further democratization. The Japanese side stated its intention of continuing to provide appropriate support for fostering the market-oriented economy and democratization in the Republic of Azerbaijan.

(3) Both sides welcomed that a final agreement was reached with regard to succession to treaties which was a matter of concern for many years and that legal foundations between the two countries were established through the exchange of notes verbal on May 30, 2005.

2. Economic cooperation

(1) The Azerbaijani side expressed its gratitude to the Official Development Assistance(ODA) consistently provided by Japan for the economic development of Azerbaijan and the alleviation of social difficulties during a period of transition, including the "Shimal Gas Combined Cycle Power Plant Project (Second Unit)" aimed to improve electric power conditions in Baku (the capital) and the Absheron Peninsula, and expressed its expectation for the continuation of the Japanese cooperation.

(2) The Japanese side expressed its intention of continuing to extend its cooperation to the economic and social reforms of the Republic of Azerbaijan, considering that the stability of the Republic of Azerbaijan, which is of importance with regard to geopolitics and energy policies, would contribute to the stability and peace of the whole Caucasus region.

(3) Both sides welcomed the technical cooperation agreement agreed upon on this occasion between the governments of Japan and the Republic of Azerbaijan in the belief that it would have a significant impact to further enhance bilateral cooperation in the future.

3. Bilateral economic relations

(1) Both sides welcomed the holding of a joint economic conference comprised of the Japan-Azerbaijan Economic Committee and the Azerbaijan-Japan Economic Committee in 2006 in Baku, taking into consideration the roles played by the economic committees of the two countries to further expand trade and investment between the two countries.

(2) Both sides expressed their intention of supporting the expansion of trade and investment between the two countries. In this regard, the Azerbaijani side stated its intention of continuing to make efforts to improve the environment surrounding trade and investment through such measures as the deregulations in every field and reforms of tax and legal systems. In this connection, both sides shared the opinion that they will continue to actively negotiate with each other for the early accession of the Republic of Azerbaijan to the WTO.

(3) Both sides expressed their intention of further developing their cooperation in the field of energy. In this regard, they highly valued the smooth progress and contribution to the Azerbaijani economy being made by (a) the Azeri-Chirag-Guneshli (ACG) oil field development project, in which Japanese private companies, banks, the Japan Oil, Gas and Metals National Corporation (JOGMEC) and the Japan Bank for International Cooperation (JBIC) are participating, and by (b) the construction of the Baku-Tbilisi-Ceyhan (BTC) petroleum pipeline, in which above-mentioned enterprises and Nippon Export and Investment Insurance (NEXI) are participating, also contributing to the diversification of crude oil transportation routes. The Azerbaijani side expressed its gratitude to the cooperation in the field of oil such as transfer of manufacturing technology of oil exploration equipment from Japan.

(4) The Azerbaijani side stressed that the Kars-Akhalkalaki-Tbilisi-Baku railway project will contribute to the economic development of countries of the region. The Japanese side took note of the importance of the improvement of regional transportation networks connecting Azerbaijan and neighboring countries.

4. Enhancement of mutual understanding between the peoples of the two countries

Both sides shared the view that the strengthening of people-to-people and cultural exchange between the two countries is of importance to fostering mutual understanding and reinforcing mutual confidence. In this connection, both sides highly valued the significant contribution made by the participation of the Republic of Azerbaijan in EXPO 2005 AICHI to deepen the understanding and expand the knowledge of Azerbaijan among the people of Japan.

5. Cooperation in the international sphere

(1) Both sides share the recognition that, on the basis of the 2005 World Summit Outcome in September 2005, there is a need for the comprehensive reform of the United Nations, including the Security Council, in order to strengthen its effectiveness, credibility and efficiency to address challenges in the 21st century. Both sides expressed their determination to work together towards realization of the early reform of the Security Council in this session of the General Assembly. In this context, the Azerbaijani side reconfirmed its support for Japan's becoming a permanent member of the Security Council.

(2) Both sides viewed that the establishment of peace and security in the Southern Caucasus region is indispensable for the further development of the Republic of Azerbaijan and the other countries in the region, and, paying serious attention to the three principles of the OSCE Lisbon summit, expressed their expectation that the peace talks between the Republic of Azerbaijan and the Republic of Armenia regarding the Nagorno-Karabakh conflict would develop through various channels including the OSCE Minsk group to peacefully settle the conflict on the basis of the relevant UN Security Council resolutions. The Japanese side confirmed that, from viewpoint of humanitarianism and human security, it would continue to extend its assistance as necessity required to refugees and domestic displaced persons through international agencies in the future.

Tokyo, 10 March 2006

KOIZUMI Junichiro
Prime Minister of Japan
President of the Republic of Azerbaijan

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