As shifting trade routes, geopolitical tensions and economic uncertainty reshape investment decisions, attention is increasingly turning towards a region long overlooked by international markets: the Caucasus and Central Asia.
The search for new investment opportunities and trade corridors was at the heart of the Investment Outlook Forum, which formed part of the Islamic Development Bank (IsDB) Group Annual Meetings, bringing together policymakers, investors, development finance institutions and business leaders for deal-making and panel discussions.
All 57 member countries came together, displaying a determination to strengthen regional cohesion. They also examined how Azerbaijan and the wider region can attract long-term investment and unlock new sources of growth.
The demand to shift trade routes away from Russia and the need to tackle economic uncertainty are reshaping investment decisions around the world.
For many investors, traditional markets remain important.
But growing attention is being paid to emerging regions that offer strategic geographic positions, expanding consumer markets and significant infrastructure potential.
Regional cooperation takes centre stage
Dr. Khalid Khalafalla, CEO of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), said the “exchange of ideas” would hopefully translate into “practical solutions” and explained why he thinks Islamic countries need to work together.
“Now, with the global uncertainty. Definitely, this is timely for our member countries to come together”, he underlined.
He added, “In terms of financial integration among our member countries with different tools we have and mobilize the liquidity for the service of development.”
Ismail Ersahin, CEO of the World Association of Investment Promotion Agencies (WAIPA), said the willingness to collaborate demonstrated a spirit of solidarity.
“In all the regions that are ongoing conflicts, it is not the best time for the investments to flow from one point to the other”, he said.
“But here people are together and showing the solidarity, and they are collaborating.”
However, supporting countries in need is also part of the discussion, as Muhammad Humair Karim, Secretary at the Ministry of Economic Affairs, Pakistan, explained.
_"_Regional connectivity can contribute to development in the region, because development cannot be undertaken by just one stakeholder or one country”, he says.
“I think it has to be a collective responsibility in order to ensure more effective development.”
The forum focused on capital deployment, investment trends and the opportunities emerging across Azerbaijan, the South Caucasus, Central Asia and the Middle East.
Cross-border investment, industrial development, infrastructure, renewable energy and the growing role of development finance in mobilising private capital were all topics on the agenda, with Azerbaijan seeking to position itself at the centre of these conversations.
Ulvi Mansurov, Chairman of the Management Board of the Azerbaijan Business Development Fund (ABDF), argues that attracting investment requires more than capital alone, highlighting the importance of business support mechanisms, industrial development and creating an environment where enterprises can scale and grow.
“This is not only about discussions of the economic integration or growth, but this is also exchange of experience, exchange of knowledge”, he said.
He added that he believed having so many countries “ with so many practices, so many attitudes and approaches towards the business and the governance,” was important.
Azerbaijan's investment ambitions
Located at the crossroads of Europe and Asia, the country has invested heavily in transport infrastructure, logistics corridors and energy connectivity projects.
Policymakers argue that Azerbaijan's position along the Middle Corridor – linking China and Central Asia with Europe through the South Caucasus – provides a strategic advantage as businesses seek alternative trade routes and more resilient supply chains.
Despite abundant natural resources, a growing population and expanding markets, many countries in the region continue to compete for international capital.
Reforms, regulatory frameworks and financing mechanisms have been identified as areas requiring improvement to alleviate investor concerns, boost confidence and attract much-needed long-term investment.
Development finance institutions have played a crucial role, with representatives examining how blended finance, sovereign partnerships and public-private cooperation can help unlock investment in sectors ranging from infrastructure and manufacturing to technology and clean energy.
Regional integration was another recurring theme, as were renewable energy and diversification.
Following COP29 and Azerbaijan's ambitions to increase renewable energy generation, delegates were keen to explore investment opportunities linked to solar and wind power, energy exports and green financing mechanisms.
For critics, the challenge remains whether regional economies can move quickly enough to address regulatory barriers, improve market access and create the conditions needed to attract large-scale international investment.
The question is therefore not whether opportunities exist, but whether or not the Caucasus and Central Asia can successfully convert strategic potential into sustainable economic growth and become one of the next major destinations for global investment.
