Alex Kaplun: "Israel and Azerbaijan have much to offer to each other"

Interviewed by Peter Lyukimson , Israel, exclusively to VK

A few days ago in Tel Aviv a meeting of the founders of the Israeli-Azerbaijani Chamber of Commerce was held, where businessman Alex Kaplun was unanimously elected the president and the chairman of the Board of Directors of the Chamber, and Arie Mishneh became its CEO. They both are former Baku residents with a brilliant career in the Israeli hi-tech sector. After the meeting , Alex Kaplun gave an interview to VK.

- How did the idea of the Israeli-Azerbaijani Chamber of Commerce appeared, and what were the main reasons for its creation ?

- In fact, by itself, this idea is not new. Even when we started to work on the establishment of the Chamber of Commerce, it became clear that before us at least four or five attempts to create it had been taken up, but all of them, for whatever reasons, have been unsuccessful. This idea came to me as the result of my experience - having been gone almost half a year ago from the post of CEO of a large company, I engaged in private business and almost entirely focused my business activity on the ties with Azerbaijan, mainly in the field of high technologies. More precisely, this idea came to me in the course of communication with the previous Israeli Ambassador to Azerbaijan. Michael Lotem , who first started talking about the fact that it is time to create such a structure, and began to push me to take this step. This was about a year ago. I liked Lotem’s offer and began to actively engage in its implementation.

- How do you personally assess the current level of economic relations between Israel and Azerbaijan, and what role can the Chamber of Commerce play in their development?

- The relations between the two countries in recent years have been developing rapidly; the volume of our annual turnover is about $4 billion. This is a very solid figure, saying a lot to an understanding person. However, the share of the national economy and civil industry, excluding oil, is relatively small. I want to stress this - relatively, that is, in comparison with the trading turnover of Israel in these areas with countries such as, say, the US or Germany. Meanwhile, both our countries have much to offer to each other, and for the development of such "civil business" we have created our Chamber of Commerce - we are called to open doors and help businessmen of both countries in search of partners. The development potential in Israeli- Azerbaijani relations is huge.

- How was the news of the creation of your Chamber of Commerce perceived in the government and business circles of Azerbaijan and Israel ?

- On the part of government representatives of both Israel and Azerbaijan we initially felt constant support for our initiative. During a recent visit to Israel, Foreign Minister of Azerbaijan Elmar Mammadyarov in his speech said that he knows that now the creation of the Chamber of Commerce is underway, and he warmly welcomes this initiative. Also, a lot of support in the creation of our chamber was provided by the Minister of Economic Development, Mr. Shahin Mustafayev and Minister of Communications and Information Technology, Mr. Ali Abbasov. And, of course, our Chamber of Commerce would not have been created without the support of the Ministry of Finance, Ministry of Foreign Affairs and Ministry of Economy of Israel.

- And how did large companies and businessmen of both countries react to the creation of the Chamber?

- Many Israeli companies and businessmen have expressed interest in setting up a new structure already at a very early stage. Look: the official registration of the Chamber of Commerce needs 30 founders, and we have 35, and each of these founders is a very important figure in our industry; we are talking about the CEOs, presidents and vice- presidents of leading Israeli companies in energy, communications, high technology, and education.

- Personally, I have the impression that the majority of Israeli businessmen are still not familiar with Azerbaijan and the Azerbaijani market...

 - First, some of them are already familiar with it and work there. Secondly, one of our objectives is precisely to discover Azerbaijan for Israeli businessmen and the huge potential of cooperation with it. I should note that sometimes an Israeli businessman should just visit Azerbaijan, and he immediately begins to realize what opportunities are out there in front of him, and he begins to actively work in this direction. So if we talk about the interest of the business community in Israel, it is huge. Even today, those wishing to become members of our Chamber of Commerce are a lot, but we could not just accept new members as long as the founding meeting was not held to elect the members of the Board of Directors, as under the charter new members can only be received by the Board of Directors.

- And how was the information about the beginning of the work of the Chamber of Commerce in Azerbaijan perceived in Azerbaijan?

- As I have said, the ruling circles of the republic definitely support us. The reaction of the Azerbaijani media, too, was very positive. As for the reaction of the business community, at an informal level it is again most positive, and the official one has not appeared yet – the Chamber has been working, in fact, for only a few days and has not even had its official presentation either in Israel or in Baku. We have not even had time to open a website. But the interest is already there, I would say, a lot of interest.

- What will the activities of the Chamber be?

- The overall objective is the same as the objectives of any bilateral Chamber of Commerce - promoting the interests of Israeli businessmen in Azerbaijan and Azerbaijani businessmen in Israel. Both Israel and Azerbaijan have Institutes of Exports, both of which work well. But their task, as the name implies, is to develop and increase export volumes. A Chamber of Commerce does not attach much importance to the direction the business is going in - it is clear that there is no business that is profitable for only one side. So we look at things a bit wider: we are interested in both export and import flows into both countries, and, therefore, the provision of services to entrepreneurs and the creation of structures that would facilitate the process of making deals and intensify these flows .

- What can Israel today, in addition to the production of its defense industry, offer Azerbaijan?

- Lots of things. Already at this stage in the Chamber several departments will act. Of course, there will be a high-tech department. But high-tech is a very broad term , so in this department there will be several sub-sections. In addition, we are definitely going to be engaged in areas of energy, based on both traditional and alternative sources of energy. I already have several joint projects in the area that are carried out in Azerbaijan, and the Azerbaijani oil company is looking for oil in the area of Ashdod. Negotiations are underway on a number of very large and extremely interesting joint projects from a technological point of view. Unfortunately, not everything can be discussed in the press, especially when it comes to the negotiating stage. Certainly, Azerbaijan, by its very location, military and political realities is very interested in acquiring technology from Israel to ensure security of information (so-called "cyber defense"), and many other products of the Israeli high-tech industry. So, from 2 to 5 December Baku will host the exhibition "BakuTel", where Israel will be hosted in a large pavilion in special conditions. In parallel, the capital of Azerbaijan will host a joint Israeli-Azerbaijani seminar on cyber defense and a number of other aspects. I think the Israeli pavilion at the exhibition will be one of the most interesting and representative ones – both by the list of participants and the number and weight of the technological innovations in it.

Another direction of our business is medicine. And it is about both the sale of new medical technologies and the development of projects based on the human factor - the establishment of cooperation between hospitals in both countries, exchange of personnel, expertise, scientific achievements. We will be engaged in a range of issues related to infrastructure - water, transport , road safety , etc. We will also get involved in education issues . Today, Israel has a number of technologies for education, which are leading in the global market, for example, techniques such as school labs or distance learning. And the number of former leading teachers of Baku is quite large here.

- You are always talking about some global destinations. And what about consumer goods, consumer products and the food industry?

- The food industry is not my area, I find it hard to say anything specific on the subject. Specialists in this field will be engaged in it. But, for example, this week on the shelves of the stores of Azerbaijan there will be new Israeli-made smartphones. On the one hand, these are conventional smartphones having all known functions of such apparatuses; and on the other hand, they contain medical sensors making ECG, measuring blood sugar, temperature and blood oxygen saturation without any other devices. Azerbaijan is the first country in the world where such devices will be sold, and by and large this is now a commodity. Azerbaijan, in turn, may give much to Israel . When I go at least once a month to Baku, roaming the streets of my native city, I see that there are many products that can generate interest in Israel.

- Is the legislation of Azerbaijan and Israel ready for such an intensification of cooperation? Are there already any agreements on tax incentives or risk insurance ?

- Economic cooperation between Israel and Azerbaijan has been carried out for a long time, and there is such readiness. Of course, there are certain issues related to small and medium-sized businesses, but with the mutual desire to cooperate - and it is obvious - all of these issues can be solved. Just now there is a lot of work on this topic in our embassy in Baku and in the relevant government agencies in both countries, so in the near future in this area significant changes are expected.

- Recently the Israeli National Security Headquarters included Azerbaijan on the list of "countries undesirable to visit". Could this scare off a part of Israeli businessmen doing business in Azerbaijan?

- I'm sure it won't. Let's be honest: it is difficult to scare Israelis, over the years we have gone through a lot of things. So I do not think that the recommendations of the Headquarters would play a role. The more so because it is not a prohibition but a recommendation - they say, there is some probability that some unpleasant incident could happen to Israelis. But first of all, again, we all know that such incidents can occur in almost any country, and secondly, in Azerbaijan they just have not occurred. I would have attributed these recommendations to tourists and individuals traveling to Azerbaijan on personal matters. But I am sure that this cannot affect the business of the two countries. In any case, from my point of view, Azerbaijan today is safe. This is definitely one of the most friendly countries for Israel, and, again, with huge opportunities for business.

- When can we conclude that the creation of the Chamber of Commerce was really a successful idea?

- When our chamber will be rich. We are not a commercial entity, and we do not distribute dividends. But that does not mean that the Chamber should be poor. The more financial resources the Chamber of Commerce has, the more work it is able to perform. And we will become rich only in the case where we have a large number of members - in fact the Chamber of Commerce exists due to membership dues. No Israeli company will spend a single dollar if it is not profitable. That is, if a large number of Israeli companies will pay therefore their presence in the Chamber is profitable and, therefore, the idea is good. We also urge the Azerbaijani public and private entities to join our Chamber, and in the near future we plan to open an office in Baku.