Expanded meeting of the Cabinet of Minister chaired by President Ilham Aliyev was held

A meeting of the Cabinet of Ministers chaired by President Ilham Aliyev and dedicated to the results of socioeconomic development in nine months of 2010 has been held.

The meeting was opened by remarks of the head of state.

Opening remarks by Azerbaijani President Ilham Aliyev

- There are two months left until the end of 2010. We can say that all the programs planned for 2010 are being successfully implemented. Of course, other issues will be resolved before the end of the year and then we will discuss the outcomes of the current year. Today we will discuss the results of socioeconomic development in the first nine months of 2010.

The Azerbaijani economy developed successfully in the first nine months. If we consider that in 2009, a year that went down in history as one of a global crisis, our economy grew by more than nine per cent, today's economic development is very valuable. This year our economy grew by 4.1 per cent, the non-oil sector by 5.2 per cent and industrial production by 3.1 per cent. I believe that these figures should be seen as positive. If we consider that there was rapid economic development in Azerbaijan in recent years, it required a great effort to achieve further development on this already high basis. Our carefully thought-out economic policies have allowed us to meet these goals.

In short, the macroeconomic situation in Azerbaijan is stable, the economy is developing in different ways. We have managed to diversify our economy, and an excellent indicator of this is the development of the non-oil sector. At the same time, we are implementing a strong social policy. This, as ever, is one of the main directions of our policy. This year, the population’s incomes have increased by 11 per cent. If we compare this figure with inflation, we can see that incomes are twice as high. In the last quarter, the minimum wage and the minimum pension were raised from AZN 75 to 85. These trends were also observed in Azerbaijan in the past. In the coming years the government will take further steps to increase the population’s incomes. I would also note that we are still not satisfied with the current level of the minimum pension and wage. But if we compare ourselves with the CIS, we can see that the figure in Azerbaijan is at the highest level. We are successfully implementing a program of targeted social assistance. This program covers about 600,000 people. Every month 128,000 families receive an average of AZN 108 from the government. This shows again that social policy is a priority for us in the true sense of the word.

All issues relating to the social sphere have been resolved in nine months of this year. We have invested heavily in the social infrastructure. This year 23 health facilities were renovated, while 59 schools and additional buildings, as well as three regional Olympic Centers, were built. We have recently commissioned the Kura Olympic training center. This process is continuing and next year's budget will, of course, provide for additional measures to strengthen the social infrastructure.

We are satisfied with the work under way in districts. I often travel around the country to get acquainted with the situation. I can see that very important steps are taken every year towards improvement, industrialization, development of agriculture and processing sectors. It is no coincidence that the income generation process is well under way in Azerbaijan. 56,000 new jobs have been created this year and about 900,000 since 2003. This in itself testifies to the fact that a very complicated and difficult problem of unemployment is gradually being resolved. I am sure that even more strides will be made in the coming years to reduce the level of unemployment in Azerbaijan. Those who wish to work in Azerbaijan can be provided with jobs.

Considering the fact that major construction projects are being implemented in Azerbaijan, that the government provides great support for entrepreneurship – both through loans and other benefits – these factors will certainly play a role in the elimination of unemployment because the private sector is now at the forefront of employment processes. This is a result of the government’s attention and support for the private sector. 70 per cent of the jobs have been created in the private sector. If the government did not provide loans, did not take care of entrepreneurship, if the program of the development of districts had not been adopted in 2004, then, of course, the private sector could not develop at this level today. We support large private enterprises and must also support small businesses because international experience and the financial crisis of last year have shown that the economy of countries with advanced small business is more stable. Of course, we will support small businesses, while at the same time, the Azerbaijani government will make efforts to establish major international, multinational companies, private companies. Azerbaijani companies successfully operate in foreign markets today.

In short, things in the districts are moving in a positive direction. All our cities are improving, modernizing, becoming nicer, and this is very gratifying. Of course, Baku, our capital and beloved city, is among the most beautiful cities in the world. This is confirmed by everyone who comes to Baku. But I want all our towns and cities to be beautiful and modern, and to have all the conditions for comfortable life. It was with this purpose that we adopted a program on the development of districts. Today, work in the fields of education, health, infrastructure and all other spheres in districts is being carried out at a high level.

In nine months of this year our currency reserves increased. I should note that our currency reserves increased even last year, the year of crisis. Although the main source of our currency reserves is the sale of oil and gas, the price of oil fell 3-4 times last year. But thanks to our sound policies and rational use of these opportunities, we have resolved these problems, allocated significant resources for infrastructure projects and, as was the case in the past, managed to prevent a reduction in currency reserves. According to the information provided to me today, our overall currency reserves now exceed $ 28 billion. This, of course, makes us even stronger, inspires us with full confidence that Azerbaijan will be developing for many years, for decades afterwards, will become an even more prosperous and wealthy state, and that the economic and social problems the country faces will be resolved even more quickly. In general, this shows again that the Azerbaijani economy is independent, relies on domestic resources, that Azerbaijan has a thought-out program, a strategy, a package of projects for each year to resolve socioeconomic issues. We regularly discuss these issues both in Baku and in districts so that to move all this work forward at the proper level and successfully resolve issues of coordination.

The issues set forth in the oil and gas sector for this year are being resolved, oil and gas production is growing. According to the latest figures provided to me, Azerbaijan will produce more than 50 million tons of oil and more than 28 billion cubic meters of gas by the end of the year. Much of this is exported, expanding our export opportunities and geography. Azerbaijani gas is transported to neighboring countries now.

Azerbaijani oil is exported to many countries around the world. We can say that our oil has already reached all continents. Of course, this creates favorable conditions for the development of both economic and bilateral relations with countries. Next year we must make even better use of our natural resources. In particular, we must strive to reduce losses in the gas sector and resolve issues of gasification in Azerbaijan more successfully.

The work we are carrying out in the energy, oil and gas sectors is not limited to domestic affairs. The work being done in the oil and gas industry has started to play an important role for the region, and more recently for the European continent. Neither we nor our partners consider Azerbaijan’s oil and gas policy only as an internal affair of Azerbaijan, as it already plays an important role in international relations, in the redrawing of the world’s energy map. Azerbaijan has turned into an independent and very reliable player in the energy sector. The work undertaken in our country, the specific strategies, tactics and development prospects affect regional countries, the world’s energy market, diversified supplies of oil to different markets. I must say that this is a very positive impact because Azerbaijan is using its natural resources and energy policies so that we have more friends and partners. Our energy policy serves only to deepen our cooperation.

Particularly important steps have been taken this year. Azerbaijan’s gas potential is now being realized more efficiently. Our natural gas exports are growing, we are looking for and finding new ways. We are working on new projects, investing and developing feasibility studies so that all our projects are effective. We are ready to work even more seriously on any project.

In short, the work done so far and especially the work to be done in the future will further strengthen Azerbaijan. Our country will benefit a lot from this policy from economic, political and all other standpoints. We will talk about that today.

Positive results of 2010 are obvious. The state budget for next year is a good indicator of that.

The state budget for next year has been developed on the basis of the achievements of this and previous years. Budget parameters have already been made public. In the coming year, public spending will amount to AZN 12.7 billion, or $ 15 billion. This is a very big amount. If we calculate the budget per capita, we can see that Azerbaijan is among leading countries in this field. Budget deficit is also at the required level, i.e. it is in line with the criteria once adopted by the European Union. This is also a great indicator. In other words, this work in Azerbaijan is conducted in full compliance with European standards. Our budget is investment-oriented. At the same time, social issues will certainly be resolved. As I said, social issues are a priority for us.

In short, the state budget for next year will allow us to implement all the projects planned. There are many such projects – both in the construction sector and social. We seek to facilitate the establishment of major industrial enterprises in Azerbaijan. The Azerbaijani State Investment Company is taking an active part in these matters.

The provision of loans through the National Fund on Support for Entrepreneurship, agricultural leasing, subsidies – we are faced with many questions. There are problems in the country awaiting solution. We are aware of these problems, and will talk about them today. We are working on the basis of specific programs for each year so that the country's economy and the country as whole develop intensively.

Military expenditures have a special place in the state budget for this year. This is not the first year when our military expenses are in first place. It is only natural because we live in a time of war, and the Azerbaijani state does everything possible to expedite and strengthen the process of building the army. The expenses allocated to the army today are increasing the power of our armed forces. At present, the Azerbaijani army is the strongest, most professional and most efficient army in the South Caucasus, and we will certainly continue to work in this direction.

Next year, our total military spending will be at AZN 2.5 billion, or more than $3 billion. If we consider that the entire state budget of Armenia, which continues to keep our lands under occupation, is slightly above $2 billion, we can see that the task we have set earlier that Azerbaijan’s military expenses should exceed Armenia’s total budget has already been fulfilled. It is a reality today. Over time, we, of course, will further increase our costs, including those on defense. In contrast to Armenia, we are doing it at our own expense, do not depend on any country, do not owe anything to anyone and do not ask anyone for help.

Unlike Armenia, we are building our economy and army thanks to the will and hard work of the Azerbaijani people. The revenues earned by our people are being channeled into a critical area for Azerbaijan – army construction. We will continue this work in the future. Our lands are under occupation. We are striving to put an end to this occupation soon.

As you know, an OSCE fact-finding mission has recently visited occupied territories. I think that this is a very positive fact. Five years ago, in 2005, a first OSCE fact-finding mission was sent to the occupied lands. The report prepared by that mission clearly showed what crimes have been committed by Armenian occupiers, Armenian vandals.

The recent mission must certainly make comparisons and reflect in its report the destruction and crimes that have taken place there. I do hope that the mission’s report will be fair and objective, is not balanced because mediators often apply a balanced approach to negotiations. There can be no talk of a balance in this issue because this is our land, all buildings are destroyed by the Armenians, not a stone was left standing, all our historical monuments, mosques and homes are destroyed and looted. All of this has been committed by Armenian vandals. All material assets have been destroyed and looted by Armenian marauders.

The crimes committed in the occupied territories exhibit the bestial face of the Armenian fascism. We know this, and it is very good that the international community will also receive information about that. I do hope, let me repeat, that this report will be objective and reflect the reality. This mission is special because it includes representatives of the UN High Commissioner for Refugees. This is a very important fact from both political and practical standpoints. I hope that we will soon see this report.

As for the settlement of the conflict, I want to say once again that Azerbaijan has a principled position on this issue and will not retreat a single step from it. Nagorno-Karabakh is Azerbaijani land, and this issue must be resolved within the framework of Azerbaijan’s territorial integrity. No issue can be resolved outside of this principle. We cannot tolerate a second Armenian state on historically Azerbaijani lands. The first Armenian state was founded in 1918 on Azerbaijani lands - on the territory of the Erevan Khanate, the Zangezur mahal.

A second Armenian state cannot be created in Nagorno-Karabakh, which is ancient Azerbaijani land. We will safeguard this principled position in all international organizations. With our work and steps being taken and by strengthening the country we are nearing the day when our lands will be liberated from invaders.

With regard to international organizations, I can say that all leading international organizations have expressed their positions on this issue. A significant role, of course, is played by four UN Security Council resolutions. Furthermore, decisions and resolutions of the Council of Europe, the Organization of the Islamic Conference and more recently of the European Parliament unequivocally support the territorial integrity of Azerbaijan and demand an end to the occupation.

This is a political and legal aspect of the issue. The practical side also strengthens our position because it is impossible to compare Armenia and Azerbaijan today. Azerbaijan is a prosperous, progressive, modern, dynamically developing country which relies on its own resources, while Armenia is a country sidelined from communications, is in a dependent position, barely able to make ends meet thanks to the offerings of other countries and circles. It is therefore impossible to compare these two countries. This is confirmed by the figures I have cited today and our future plans. I have absolutely no doubt that this gap will increase further over the years and by further building up our military capabilities, we will succeed in resolving the issue.

Armenia should not forget about a demographic issue either. Today Azerbaijan has a population of more than 9 million people, while Armenia is experiencing a large-scale exodus because people are tired of the intolerable conditions existing there. The police regime established there does not allow people to live freely. Armenian invaders have shed the blood not only of the Azerbaijani people. War crimes have been committed not only in Khojali and other places. In 2008, they committed atrocities and crimes against their own people. The army has killed more than 10 citizens. In other words, Azerbaijan is very different from Armenia from political, economic and demographic perspectives. I am confident that the development of all these issues will lead us to our goal.

Closing remarks by Azerbaijani President Ilham Aliyev

- Once again I want to say that there are two months remaining until the end of the year. All the outstanding issues must be resolved during these months. All investment and infrastructure projects must be completed. I am confident that the outcomes of 2010 will be successful for Azerbaijan. The macroeconomic situation is stable – I cited figures showing that earlier. I want to repeat that the rate of inflation of 5.2 per cent is acceptable. At the same time, we must exercise strict control to avoid artificial price increases, thus keeping inflation low. Work in this area is under way. Control over the consumer market is improving, and this question must always be in the spotlight.

The rate of the Manat in Azerbaijan is stable. This also strengthens our economy and plays a very important role in addressing social issues. National currencies in most CIS republics depreciated last year. In some countries this was inevitable because their economy could not withstand the crisis and the depreciation of national currencies occurred in some way at people’s expense. Despite the crisis, we have kept the rate of the Manat stable. We did encounter certain economic difficulties, but tried to address social issues first. We could not allow the crisis to affect people’s daily lives. In general, the crisis of 2009 had very little impact on Azerbaijan. As for citizens, we can say that overall the citizens of Azerbaijan did not feel the crisis - first of all because we maintained the stability of the Manat. To do this, of course, we must have material resources and a strong political will. Currently, we are satisfied with the rate of the Manat, and I am sure that the Manat, as a strong currency, will play a role in developing Azerbaijani economy and addressing social issues in the coming years too.

The Azerbaijani economy can be considered as being developed in terms of its competitiveness. According to a report of the World Economic Forum, our economy is in first place in the CIS for the level of competitiveness. This shows that oil revenues were invested in other economic sectors. At the same time, it has been acknowledged that there is absolute transparency in this area. We have achieved this as well. We must make sure that all matters in the financial and economic sectors are organized at the same level as the management of oil revenues. In this case, a 100-per-cent transparency will be ensured in Azerbaijan in general – in economic and financial sectors. At the same time, conditions will be created for an even more effective management of our affairs.

There are opportunities in Azerbaijan to remain highly competitive. We are pursuing liberal policies in the economic sphere. Azerbaijan is a very attractive country in terms of investment. The new contracts signed recently between the State Oil Company of Azerbaijan and foreign companies are evidence of the growing interest in Azerbaijan. At the same time, major investment is made in our non-oil sector, and we can see it every day. This is confirmed by the improving appearance of Baku. Private companies are investing heavily in infrastructure and service sectors. If the government wasn’t implementing infrastructure projects, no-one would invest in the service sector in the capital and districts. Five-star hotels and beautiful recreation centers are under construction in our districts. There are broad tourism opportunities in our districts. Modern hotels and recreation centers corresponding to the level of our beautiful natural environment are being built. This will significantly expand Azerbaijan’s tourism opportunities.

The political and financial support the government provides to the private sector, the low-interest loans being allocated are increasing the competitiveness of our economy and creating a solid foundation for its further diversification. I remember discussions being held at certain research centers abroad 5-10 years ago regarding Azerbaijan’s oil strategy. It was believed that Azerbaijan would soon be affected by the Dutch Disease, that our economy would become lop-sided and that we would not be able to efficiently use our natural resources. I remember those discussions too well and am very happy today that we hear them no longer. We knew back then that Azerbaijan would not be exposed to the Dutch Disease and that our economy would not be lop-sided. We knew that Azerbaijan’s oil revenues would be managed at the highest level. With this purpose Azerbaijan joined the Extractive Industries Transparency Initiative (EITI). Today, the Executive Director of the Oil Fund has said that Azerbaijan has become the first country to secure fully-fledged membership in the program. We are doing this not only to receive good feedback from foreign centers. We are doing this because it strengthens our country.

Today, there is no disagreement on these issues in Azerbaijani society. There is complete transparency in this field. Every citizen knows or can easily find out how much revenue Azerbaijan has earned from oil, what percentage of it is being saved, how much has been spent and how. It is possible to use the funds of the State Oil Fund only after parliament’s approval. And this means that every citizen, through his/her representative in parliament, is involved in the distribution of these revenues.

We have achieved the current level by ensuring transparency. Our revenues are growing. If there were no transparency, I can say that we probably would not have foreign exchange reserves of $28 billion today. Only transparency and effective use of the funds have allowed us to build up these reserves. In the coming years, these reserves will further increase. We are already receiving large profits by managing these funds. Naturally, as the volume of revenues increases, our income from management will also rise. There will come a time when Azerbaijan’s state budget will in part be made up of the revenue from the management of these funds.

Therefore, we will continue to pay attention to issues of competitiveness. The government supports the development of entrepreneurship and private sector in Azerbaijan. I think that the social factor of the issue must also be taken into account at the next stage because the loans being provided serve the creation of new jobs and raise living standards. This factor should always be in the spotlight. At the same time, we must strive to allocate more loans to the areas and companies that could produce competitive products so that they could satisfy domestic demand for quality goods. This would also expand Azerbaijan’s export potential.

Along with this, additional measures are envisaged to develop the related industrial potential. A policy of industrialization is being conducted in Azerbaijan. Both the government and the government-supported private sector are actively involved in this work. Our major plants are being restored. These enterprises were built in the Soviet time and are now in a dilapidated condition. They are being knocked down and new enterprises are emerging instead. This process is progressing fast, especially in the city of Sumgayit. At one time, Sumgayit made great strides in the development of the chemical industry. The activities of the petrochemical complex and the realization of additional plans will now turn Sumgayit into an industrial city. One of the major steps taken in this direction is the industrial park under construction in Sumgayit. A number of competitive enterprises are already emerging there. We must develop Sumgayit in this direction to turn it into Azerbaijan’s industrial hub. A wonderful new road has been laid from Baku to Sumgayit, and the distance has actually reduced. Sumgayit holds a special place in the development of our industry. At the same time, the process of industrialization should go rapidly in other regions of Azerbaijan too.

This year has been declared the Year of the Environment in Azerbaijan, and a great job has been done in this area. I am very pleased that my initiative to plant trees was supported by the public. I am proud that according to the information provided to me, six million trees have been planted in Azerbaijan in nine months, of which 800,000 in Baku and the Absheron Peninsula. This process is still under way, and I am confident that all environmental issues will be successfully resolved in 2011.

Of course, by declaring the Year of the Environment, we had one aim: to further enhance attention to this area from both the public and government agencies. And we have achieved that. We must continue these excellent initiatives in the coming years. The treatment plants built along the Kura and Aras rivers are now providing hundreds of thousands of people with clean water. The cleanup of contaminated lakes, of the Caspian Sea, the establishment of a sewage system - all this work is envisaged for the next year too. We must resolve all environmental problems of Baku and the Absheron Peninsula, drain the oil-polluted ponds. Cleaning work should be carried out in other lakes – I spoke at length about this at the previous meeting. A sewage system must be established. In short, this sphere must always be in the spotlight.

I think that further measures should be taken to clean up the Baku bay. Now we are expanding the Baku Boulevard by bringing it even closer to the sea. Today Baku residents and visitors of our city can walk in places quite close to the sea. Therefore, the water in the bay must be clean. Unfortunately, the wastewater still flowing there from different places prevents cleaning of the bay. Therefore, I am issuing an instruction to elaborate sewage matters in the Baku bay in the near future. I gave this instruction some time ago too and some preparatory work was done. Starting next year, as a special project, we must ensure that the sewerage system in the Baku bay functions at the highest level. The work must begin early next year and the problem must be solved as soon as possible. Thus, I am sure that within a few years the water in the Baku bay - along the boulevard and around it - will be absolutely clear.

This year we experienced major calamities, unprecedented mudflows and floods. They brought great suffering to people and inflicted major damage. At the same time, great damage was caused to agriculture. Thousands of hectares of land remained under water, thousands of homes have become unusable. However, all our bodies worked very hard and effectively. Both state agencies and private companies joined the work. This was seen as a nationwide issue, and all the unpleasant phenomena were eliminated in a short time. Most importantly, all people were saved. Now we can see fires, floods, mudslides leading to human deaths in different parts of the world. But we have saved everyone. All measures were taken in good time, rescue workers and all organizations dealing with the issue worked very effectively.

I mentioned last time that the process of rebuilding the houses should be completed before winter. Work in this area is ongoing. First homes have already been commissioned in Hajigabul District. I know that construction is underway in other districts too. This work should proceed faster so that we can provide people with good housing prior to the onset of winter. It should also be noted that in comparison with the destroyed houses those being built are much better, more spacious and comfortable. Most of the destroyed houses were built of air-dried brick. They were small and run-down. They did not look too good and had no amenities. Now we are building beautiful stone houses with all the amenities, which are more comfortable and spacious.

I should also note that the Azerbaijani government has done all this work at its own expense. All rescue work was also conducted by Azerbaijani rescuers. Today, all construction and restoration activities are also carried out by the government. This work is being funded from the state budget without any outside help. We are not just building houses. Also destroyed were schools, roads, electricity and gas lines, water pipes. Therefore, we are also renewing the infrastructure and have been doing this for several months. This work requires great technical skill and huge financial resources. The state budget was amended and AZN 300 million was allocated. This shows that the government of Azerbaijan will never leave its citizens in distress.

This also suggests that the main issue for us is to improve the welfare and interests of the Azerbaijani people. Now we have built our economy on the basis market economy principles, and this makes us stronger. But at the same time, we cannot build our work solely on this basis. If we did, i.e. if we built our work solely on the basis of a market economy, the government of Azerbaijan could not have done anything. In foreign countries, if someone’s house collapses or is destroyed in a calamity, the affected person applies to an insurance company. All the houses are insured there. The person receives compensation, while the government does not spend anything and remains uninvolved. Are our homes insured?! Which of the houses built of air-dried brick were insured? Therefore, the government assumed this burden on its own. I also want to say that the government looks after the people, pays them compensation. I think that the amount of compensation covers a portion of the damage. So it is a manifestation and a sign of good intentions of the government, and this must be appreciated.

I know that the vast majority of those affected are very grateful. And this is natural. I believe that everyone should know that the government is and will be doing this as a sign of its developing social policy. I should highlight that we need to complete the job before the cold weather to allow the people living in temporary shelters to move into comfortable homes soon. At the same time, measures are and must be taken to prevent such phenomena in the future - bank protection, management of water resources. Now we are attracting foreign experts to the work. Local specialists are also experienced in this field. We must do everything to insure ourselves against such disasters in the future. I am confident that we will achieve this.

I want to repeat that all the infrastructure projects must be continued in the coming months. Road construction – there is great and successful work being done in this area too. We have recently celebrated the opening of the Mingachevir-Khaldan road. The Silk Way is almost ready, work is now being done in certain parts of it. A beautiful road is now being laid from Baku to the western border. At the same time, highways and local roads are being built in the northern and southern directions. Major investment is and must be made in this area. We can see the results of this investment through the developments of districts. After a few years, all the highways in Azerbaijan will meet international standards. We must pay attention to highways and, especially under current conditions, local roads because there is still much to do in this area.

In general, all the programs of the transport sector are being implemented. Construction of the Baku underground in ongoing. Perhaps we will hold a separate meeting on this issue after some time. Work is under way and a long-term program is being prepared. We need to discuss this extensively. The investment program for the coming years should also consider the expenditure on the underground construction, so that we could do this work at the highest level. The population of Baku is growing. At the same time, of course, roads are being built and expanded. However, the rapid development of Baku requires additional measures on the development of the underground. We must do it and I am sure we will.

In the near future, we must begin the construction of a new seaport in Alat. This project is also very important. Of course, the goods passing through the territory of Azerbaijan are transported through respective ports today. But we must look into the future. We know that even greater volumes of cargo will be transported through the territory of Azerbaijan. According to preliminary calculations, more than 10 million tons of cargo is to be transported following the commissioning of the Baku-Tbilisi-Kars railway. These figures will only increase in the future. A new seaport of international standards must be built in Baku.

Preparatory work is well under way. I do hope that we will begin the construction of the port soon. Of course, the seaport in the center of Baku will be relocated and its territory turned into a recreation area. There is a project on extending the Baku boulevard in both directions. The territory occupied by the present Baku seaport will be reconstructed for the leisure of people and our city will become even more beautiful.

At the same time, the Baku Boulevard should be extended in another direction - towards the Flag Square. Work is already under way there. New embankments and parks are being set up around the Flag Square. After completion of the work we will open this area to the population. At the same time, to connect the present Baku Boulevard with the Flag Square certain things need to be relocated. We need to accelerate that. There are some enterprises and facilities which we will move elsewhere. Thus, we must join the Baku Boulevard with the Flag Square. And a separate project will be developed in subsequent years for the area behind the Flag Square. Therefore, the present boulevard will probably become twice longer and more beautiful.

Steps are being taken to develop the road infrastructure in Baku. Road junctions, tunnels and bridges are under construction. This contributes a lot to the solution of the transport problem in Baku. A road is being built from the Heydar Aliyev Airport to the Mardakan roundabout. In fact, there is no such roundabout now, there are only names such as the Mardakan roundabout, the Sabunchu roundabout, the Azizbayov roundabout. None of them is there any more. We have got rid of them. Instead, we are building modern tunnels, bridges, road junctions. But many people, including myself, are used to saying the Mardakan roundabout. At present, a road is under construction from the airport towards Mardakan. From there we will have a new road to Bilgah, Kurdakhani, Pirshagi and Sumgayit. In essence, this will be a new artery, a new blood vessel. This six- and eight-lane road will meet the latest standards and link the villages located in those parts of Baku and Absheron with each other, with the city and with the northern direction. At the same time, as you know, we are building a circular road which will connect the southern and western directions bypassing the city. This is an immense project. I have recently examined progress of work there. This work should progress on schedule.

The remaining loans associated with the development of entrepreneurship must be granted before the end of the year. Work in this area is going well. These loans work and create new jobs. Today, the private sector accounts for 82 per cent of the national economy. The provision of loans, machinery, fertilizers, agricultural leasing and seeds should be in the spotlight. I want to emphasize seed growing because work on other issues I have mentioned has been under way for a long time. While visiting Yevlakh recently, I attended the opening of a new seed growing enterprise, Azertokhum. This is very important because it is the first such enterprise in Azerbaijan.

According to the information I have received, this enterprise alone will meet Azerbaijan’s demand for seeds by 15-20 per cent. While in Yevlakh I issued an instruction on further expansion of this plant and construction of such modern facilities in other parts of Azerbaijan so that we could fully provide ourselves with seeds. If we achieve that, there will be no problems left in agriculture and crop production. To do this, instructions have been issued. The Azerbaijan State Investment Company will participate in this work and invest funds. We must ensure that specific measures are taken next year both to expand existing enterprises and build new ones.

Cold storage chambers are being established. Every farmer can see the benefits of that. Granaries are under construction. The programs planned in this area will be completed in about 1-2 years. This will help regulate prices and prevent products from spoiling.

Specific assignments relating to livestock and poultry breeding have been issued as well. They are being executed. In poultry, we cannot fully meet our needs yet. We can meet our domestic demand by around 70 per cent, but we should, as is the case with meat production, be fully self-sufficient. Specific projects are being developed now. I do hope that we can fully meet our needs in 1-2 years. Purebred cattle is imported to the country. This also gives a big boost to agriculture.

I also want to point to several issues relating to the energy sector. First, we are taking positive steps in the field of gasification. We must make sure that 90 per cent of Azerbaijan is gasified – both the population and industrial enterprises. This is our goal. Work is underway in this area, new pipelines, trunk lines, compressor stations are being built. It is very important because our gas potential is growing. Our current gas reserves exceed domestic needs and export capacities. We have pumped 2.5 billion cubic meters of gas into underground reservoirs. This has never happened before. We must increase gas storage capacity to 3 billion, perhaps even to 5 billion cubic meters. But we cannot always inject gas into storages. After reaching a certain point, we will have to either export the gas in even larger volumes or use it at home. At the same time, gasification plays a very important role in solving social problems of the population. Therefore, gasification should proceed faster so that this work is done with high quality and in a short time.

Along with this, we must further expand our export capacity. In 2010, very important steps were taken in this area. We have expanded our export opportunities and geography. As I mentioned earlier, Azerbaijan exports gas to neighboring countries. In the future, we must increase these volumes. At the same time, I look forward to hearing good news from the blocks where exploration is now under way, especially the Umid field. This is necessitated by the very name of the field (translates as Hope). The development of this field is quite special because the State Oil Company of Azerbaijan is conducting exploration and drilling in deep horizons on its own and at its own expense for the first time after a long break. Preliminary information is quite encouraging. We look forward to seeing major exploration at Umid. Therefore, Azerbaijan’s gas potential will become even more significant. The exploration of Umid will become a landmark event both in terms of addressing domestic needs and increasing exports.

The president of Azerenergy has provided information about the work being done on the renewable energy project. We attach great importance to this area. We must use all our water resources. Work is under way this year, we have laid the foundations of new stations. The opening of the Bilav hydro power plant in Nakhchivan is a major event. It will step up Nakhchivan’s energy potential. Small hydro power plants should be built in all other districts next year. There are enough resources in the budget and we must use them rationally. Sometimes the red tape creates problems and leads to delays. If we could pass through the bureaucratic procedures more quickly, if were no bureaucracy, red tape and unnecessary approvals, we could do more, particularly in the field of the environment. Everything is quite clear – we must do it. To plant a tree or clean up a polluted lake we do not have to wait for permits and approvals for months. It is clear. The President has set a task and it must be accomplished soon. In addition, we have everything – technical capabilities, qualified professionals. We must not waste time on these issues. Funds are available, including those on the development of renewable energy. Now we need to see how these funds were spent. In my opinion, we could not use even half of the money. This is so. Therefore, it is unacceptable. The year is ending. Earlier this year, we set a task. So far we have laid the foundations of only three hydro power plants although their number could be bigger.

Earlier this year, I raised the issue of developing renewable energy, including solar. An agency was established. I understand that this required the solution of certain organizational matters and the development of a feasibility study. But the year is already ending. Do we have at least one solar battery? We don’t. I was shown one or two outside the Central Election Commission, and that was all. I am aware that a plant which will produce solar batteries is to be built in Azerbaijan. The plant must be built, it is very good, there will be new jobs and domestic production. But are we supposed to wait in the meantime? I think we could install solar batteries in certain places this year.

So I think that all our agencies should be more efficient in these matters. There must be an end to a certain misunderstanding between government bodies. This is our common cause. Sometimes the red tape and bureaucracy rob us of a very long time. I want everything resolved quickly so that we do not waste time. Especially when we know that we should do it. If there is hesitation or doubt, then, of course, the question must be seriously studied. However, how much time do we have to lose planting trees or cleaning a lake, and why?! Therefore, I ask all relevant bodies to make the right conclusions and eliminate the red tape.

Once again I want to say that we will discuss the results of 2010 next year. But we can already say that these results will be good and ensure the successful development of Azerbaijan. Thank you.