Ilham Aliyev chaired a meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first quarter of 2014 and objectives for the future
13 April 2014, 13:15
President of the Republic of Azerbaijan Ilham Aliyev chaired a meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first quarter of 2014 and objectives for the future.
The head of state made opening speech at the meeting.
Opening speech by President Ilham Aliyev
- Today’s Cabinet meeting will discuss the results of the economic and social development in the first quarter of 2014. I remember expressing confidence during the discussion of the results of 2013 that 2014 would also be successful for our country in terms of economic development, and the results of first three months of this year confirm this. Azerbaijan has managed to preserve the dynamic pace of development. Our country is moving forward successfully in all areas. The economy grew by 2.5 per cent. I believe that this is a good indicator. The structure of our gross domestic product is also improving. Of course, the main indicator reflecting our economic development in recent years has been the performance of the non-oil sector. As was the case last year, we have managed to achieve rapid development in this area this year too.
Last year, our non-oil sector grew by 10 per cent, while in the first quarter of this year by a further 8.8 per cent. Of course, this growth is a result of the reforms carried out in Azerbaijan in recent years. The policies conducted in the field of economy have brought about the present realities.
Diversification of the economy is our top priority. I think we have managed to achieve that, as our non-oil sector has been growing fast for a long time.
I think that our policies in addressing social problems are going in the right direction. These policies have been conducted for many years and have withstood the test of time. Incomes of the population have increased by 4.5 per cent. Inflation is only at 2 per cent. Thus, the incomes of the population, as always, exceed the inflation more than twice. And it is also a key condition for addressing social problems of our people. At the same time, it shows that economic and social reforms in Azerbaijan are conducted in the right direction because fundamental economic reforms should also be underpinned by very serious social programs.
Agricultural growth constitutes slightly more than 3 per cent. This, too, can be seen as a positive development. I am confident that as a result of additional measures that will be taken in the coming years we will see even more impressive figures in this sphere.
Our foreign exchange reserves are growing. They have increased significantly in the first quarter. At the moment our foreign exchange reserves constitute $53 billion. This is a very large figure. If we consider the population of our country, we can see that in terms of this indicator – exchange reserves per capita – Azerbaijan is among leading countries of the world. Most importantly, despite the implementation of major investment programs, our foreign exchange reserves are not reducing but growing by the year. This is also our policy. I have repeatedly stated that we certainly need to use our financial resources for the development of our economy, entrepreneurship and infrastructure projects, but at the same time our foreign exchange reserves should continue to grow every year.
Today, our experience and policies towards channeling funds into the real sector of the economy, attraction of investmentand implementation of infrastructure projects are already perceived globally as an example.
There used to be different opinions in relation to this policy. Some international financial were giving us other advice and putting forward different recommendations. But we pursued our policies correctly. We used our foreign exchange reserves very effectively for the development of the country, creation of a powerful potential and development of the non-oil sector.
At the same time, our strong financial status preconditions our independent policy, because an economically free and independent country can speak its word in the international arena more confidently.
In short, our main economic parameters are very positive. This allows us the opportunity to be optimistic of the future. I am sure that this growth rate will be maintained for the rest of the year and we will complete 2014 with great success.
Deposits in banks grew by more than 20 per cent. This is also a very positive indicator. First of all, it shows that people’s financial situation is improving. On the other hand, it is also a sign of people’s confidence in banks. At the same time, it allows our banks to contribute to the economic development of the country more actively. As I said in previous meetings, it also helps us to direct more credit resources into the real economy. In this case, our business will go even faster.
For two months of the first quarter of this year, we observed the implementation of a major social initiative in Azerbaijan. A program of medical examination of the population has been implemented. This is a purely social project. The implementation of this project, of course, requires primary conditions. And this means the availability of advanced equipment and modern medical centers which we have created across the country in recent years. In this case, every part of the country has the opportunity to conduct examination using the most sophisticated equipment. In a short time – in a matter of two months – four million people were examined. I believe that this initiative should be put forward every year, this should be an ongoing process.
While attending opening ceremonies of new hospitals in recent years and during meetings in different regions I repeatedly stressed that everyone should undergo examination once a year. I am glad that people are responding to this initiative positively. After all, this is necessary for them, for every individual. Today, Azerbaijan has modern medical equipment and any examination can be carried out. So I think that it is a very important initiative, which is an integral part of our social policy. I am glad that we have been able to implement it.
In the first quarter, the average salary grew by nearly 7 per cent. Today the average salary in Azerbaijan is at the level of AZN 430, i.e. $550. The salaries grow every year and will continue to grow. As a result of the work to be done in the future, the economic development, the development of the non-oil sector and increase of salaries and pensions, the average salary and the average pension should and will be raised further.
In the first quarter of the year, the third state program on the socioeconomic development of districts was adopted. In February, we discussed the results of the second program. The adoption of the third program, I am sure, will give a great impetus to the solution of the outstanding social and economic issues in the next five years. As was the case in the previous program, it is also a very detailed document. The program covers all the issues.
There are specific tasks and assignments for each district. Naturally, the implementation mechanisms and financial resources also support this program. I am confident that the implementation of this program by 2018 will resolve major problems of social infrastructure and economic issues in the regions.
At the same time, we have adopted a program on the socioeconomic development of Baku and its suburban settlements. This program will be completed in 2016. All infrastructure projects will be implemented in the suburban settlements of Baku by then. Gasification will be completed, the provision of electricity will be further improved, projects on the supply of drinking water and sanitation, the construction of rural roads will be implemented. Jobs will be created, schools, hospitals and medical centers built. So this program is yielding fruit in every settlement.
Overall, important steps towards creation of the social infrastructure were also taken in the first quarter. This is already an ongoing process. There is still a lot to do in this area. Although we have built more than 2,000 schools and over 500 hospitals, there is still a need for that. We need to try to complete all renovation, restoration and construction work in this area by the end of 2018, so that the entire social infrastructure could be completely renewed.
In the first quarter, additional measures were taken aimed at the development of entrepreneurship. A very important Order was signed to improve the business environment. The implementation of this Order will enable us to raise up our position in the World Bank’s Doing Business rating. At the same time, the most important thing is to take further steps to improve the business environment in Azerbaijan. This, I can say, is one of the main directions of our policy. Today, the vast majority of the country's economy is generated in the private sector. In the future, the private sector will ensure the development of the Azerbaijani economy. The improvement of the business environment and the creation of favorable conditions for local and foreign investors are always in the spotlight. I am sure that the implementation of the provisions of this Order will enable us to achieve even better results in this area.
In general, Azerbaijan has successfully addressed issues related to entrepreneurship. The investment climate in the country is very positive. Azerbaijan maintains CIS leadership for the volume of direct foreign investment. I am glad that domestic investment has been exceeding foreign investment for several years now. We should try to facilitate an increase of investment in the national economy and ensure that these funds are fully consistent with our economic policies.
Foreign investors, of course, may have their own interests. Our country also has interests of its own. We should and do link them with each other. The present-day Azerbaijan is already known worldwide as a wonderful country for doing business. It is no coincidence that the leading financial institutions have a very positive opinion about the economic reforms in Azerbaijan. The competitiveness of our economy is enhancing. Leading rating agencies maintain our credit ratings at a high level. We can already attract any amount from foreign financial markets, as we have recently done. We have done this in a very limited quantity. But the demand or application was four to five times higher than what we offered. We have attracted additional financial resources on the most reasonable terms.
Our overall financial situation is such that we can receive any amount from the international credit market without limits and restrictions. We simply don’t do that in large quantities as it is not necessary. But I can say that for the level of external debt Azerbaijan is in one of the leading places in the world today. The external debt accounts for only 8 per cent of the Gross Domestic Product. It is possibly the lowest indicator globally, perhaps one of the lowest.
In other words, today we have our own financial capabilities. We have created them ourselves, through hard work, sound policies and the development of the energy sector. At the same time, we can attract any amount to the country's economy. But I want to say again that the share of our external debt in the GDP should be measured by a single digit. Today it is 8 per cent. So if it stays at this level, I think it is an acceptable level for the future and for the expansion of our capabilities.
In the first quarter, Azerbaijan further strengthened its global standing in relation to international policies. Azerbaijan is known internationally as a very reliable partner. Our foreign policy is open and principled and is based on international law and justice. This principled approach and the demonstration of our position on every issue certainly cause even more sympathy for Azerbaijan. Most of the world community is cautious in demonstrating its position on some international affairs. We do not intend to give an assessment to that. But Azerbaijan shows a principled position on each issue. This position is primarily based on the norms and principles of international law. Norms and principles of international law should be the main condition because the present-day international world is based on these principles. If these are disrupted, then the entire mechanism of international cooperation and relations is undermined. Such a principled stance on the international arena certainly earns us great respect. Azerbaijan further reinforces its position as an independent and principled country. This proper idea of our country in international organizations will create us additional opportunities in the future.
In the first quarter I participated in the World Economic Forum in Davos. I can say that Azerbaijan has been involved in this forum for about 10 years. I believe that this is the top forum of the world both in terms of the issues discussed and from the point of view of contacts. This is not only an economic but also a political forum. I believe that participation in this forum, the demonstration and explanation of our position are very important. At the same time, I paid a visit to NATO headquarters earlier this year. I have visited NATO headquarters several times. This visit was also very positive. Our bilateral relations are positive. We have had an exchange of views on future cooperation. Azerbaijan's participation in the energy security and our contribution to peacekeeping missions are regarded with approval.
Azerbaijan successfully cooperates with international organizations. We are a member of various international organizations. We work closely with a number of organizations. I believe that this policy also brings us additional dividends. In the first quarter of the year I also participated in the Nuclear Security Summit. Azerbaijan's participation in this summit has a special meaning. Naturally, we are not a nuclear state. At the same time, we do not have nuclear power plants. However, the importance of our country, its role in the region and the world have, of course, contributed to the fact that Azerbaijan was among the countries attending the summit. This summit – both its public and closed-door sections – discussed very important issues. Issues of security in the world are, of course, top of the global agenda. Azerbaijan is making and will continue to make its contribution to this area as well. As you know, during our presidency in the UN Security Council we organized a discussion on the topic of fight against terrorism.
In the first quarter I had numerous contacts in the bilateral format. The number of delegations coming to Azerbaijan from different continents is gradually increasing. A growing number of countries want to cooperate with us. At the same time, high-level reciprocal visits have been paid. The Prime Minister of Turkey visited Azerbaijan. It was the first visit of the Prime Minister after the municipal election. The friendship, brotherhood and strategic nature of our partnership was reaffirmed during the visit.
At the same time, I have recently paid an official visit to the Islamic Republic of Iran. This visit was also very successful. The documents signed, the talks and the exchanges held during the visit will elevate our relations to an even higher level. I can say that this visit is very important. In a spirit of friendship and sincere cooperation, we clarified a number of issues. We expressed a shared view that Iranian-Azerbaijani relations should continue to be on an upward trend. A new format of the intergovernmental commission is being put in place and it will be fully formed in the near future. A lot will be done on all fronts.
In general, I can say that we actively cooperate with international organizations. At the same time, our relations with neighboring countries are traditionally very close and positive. We have five neighbors. One of them is Armenia, the invader and our enemy. The other four are our friends. Relations with friendly neighbors are a priority for us. I believe that each country’s relations with its neighbors are particularly important. We have a shared history and past with our neighbors. As an independent country, we are building our bilateral relations on the principles of friendship, cooperation and non-interference in each other’s affairs. I am sure that the development of these relations in the future will benefit all countries.
I also want to note that Azerbaijan has initiated two trilateral formats in the region. These formats have existed for several years now. There is Azerbaijan-Iran-Turkey format. Our foreign ministers meet on a regular basis. At the same time, there is Azerbaijan-Georgia-Turkey format. Both economic and political blocs have emerged in this format. This was our initiative. I think that it was a very sound and wise initiative. Azerbaijan is actively involved in both formats.
Our biggest problems related to international affairs is the settlement of the Armenian-Azerbaijani conflict over Nagorno-Karabakh. Unfortunately, there was no progress in this direction in the first quarter. The mediators expressed some optimistic views at the end of last year. But they are not coming true. Today we are witnessing again that Armenia is simply biding time, tried to maintain the status of “neither war nor peace”, while international mediators, unfortunately, are not putting serious pressure on it.
In essence, international sanctions should have been applied to Armenia long ago because Armenia has been occupying Azerbaijan’s internationally recognized territory for 20 years now. An act of genocide has been perpetrated against civilian population. The Khojaly genocide has been perpetrated. A policy of ethnic cleansing has been unleashed against our people. Four UN Security Council resolutions are being flouted. There have never been so many injustices and violations of law in any other similar situation. International norms are violated. No heed is being paid to the resolutions of other international organizations – the Council of Europe, the European Parliament, the OSCE, the Organization of Islamic Cooperation. They are ignored. Thousands of Azerbaijani citizens have been killed. But at the end of the day Armenia is not faced with sanctions.
One may ask: why? How much longer are we going to be faced with double standards? What is the reason for that? Why aren’t the leaders of the fictitious “Nagorno-Karabakh republic” subjected to sanctions? Why aren’t sanctions applied to them? This is an injustice, these are double standards! This is why we are speaking up in protest against double standards in international relations. We urge the western countries cooperating with us not to allow the leaders of the self-styled “Nagorno-Karabakh republic” into their territories. They should be subjected to sanctions. They go there and conduct illegal TV marathons and raise money. And then this money is used against Azerbaijan. Their so-called leaders are received in leading countries of the West. They get visas, establish so-called representative offices, travel back and forth, etc. Why?
I think that the time has come for us to express our opinion on this issue openly. We are tired of double standards. It is impossible to tolerate so many injustices.
Why hasn’t the aggressor been condemned to this day?! Why doesn’t the Parliamentary Assembly of the Council of Europe discuss the issue of suspending the credentials of the Armenian delegation?! We have raised this issue a number of times. As the head of the Milli Majlis delegation to PACE, I remember repeatedly raising this issue in 2001. But no-one seems to react to this in any way. They tell us to come to an agreement, to negotiate and to resolve it in peace. We have been a victim of ethnic cleansing and an act of genocide. After the Azerbaijanis were driven out of Nagorno-Karabakh, a so-called referendum was held there. It is considered acceptable. This is intolerable.
We need to expose these injustices through facts and arguments. I believe that this principled position will restore justice and expose hypocritical policies.
A hypocritical policy and a policy of double standards with respect to us is continuing. But we will never put up with it. As to the settlement of the conflict, it is no secret that the main factor in today's world is strength. This is a reality. So we need to be even stronger and first of all step up our military might. While discussing this issue again, we see how right we were in deciding to keep the process of army building in the spotlight. The weaponry, machinery and ammunition purchased over the years have significantly increased our strength.
The machinery available to the Azerbaijani army today is not far behind the machinery of the most powerful armies. At the same time, I recently visited Nakhchivan, and the demonstration of new machinery there suggests that the army in Nakhchivan also possesses the most sophisticated machinery available to the armies of the world today. There already are modern artillery units, combat and transport helicopters, anti-tank and antiaircraft installations, the most modern tanks T-72 and T-90, other weaponry and ammunition, and their number will grow. We must and we will be even stronger.
Closing speech by President Ilham Aliyev
- In the second quarter and for the rest of the year we have a lot to do. We have to do all this work to a high standard. In the first place, we must fully execute the state investment program. This year's investment program is quite large. Investment serves comprehensive development of our country and is aimed at improving our powerful economic potential.
Infrastructure projects are and should be implemented according to the program. We have not yet completed infrastructure projects but there is progress in this direction. This year we will traditionally implement projects on gasification, construction of rural roads, water and sewage lines. In some districts these projects have been completed, in others work is still under way. Projects of drinking water and sanitation are now our top priority because a significant share of the work in the fields of power supply and gasification has already been completed. Currently, the biggest investment is required by projects associated with rural roads, drinking water and sanitation. At the same time, we have recently allocated additional funds from the Contingency Fund of the President for the drilling of water wells. This will also be a very important step towards providing people with drinking water.
In other words, these issues are reflected in the state investment program, they must be implemented because there are no financial problems. At the same time, we are implementing social infrastructure projects. Here too we need to give priority to quality. The construction of schools and hospitals should be carried out at the highest level. I am confident that the implementation of the state investment program will be provided in its entirety this year.
The state budget also provides for the implementation of social programs. As I have said, this is an ongoing process. We must try to make sure that our citizens do not experience difficulties in terms of social welfare. In particular, social support for low-income families should be more effective.
Our investment program is extensive, therefore we need to pay constant attention to the macroeconomic situation. Currently, macroeconomic stability is fully ensured and inflation is only at 2 per cent. I do hope that we will be able to preserve inflation at this level until the end of this year. I can say that Azerbaijan, as I noted in my opening remarks, is one of a handful of countries where incomes of the population consistently exceed inflation two or three times. But they should consistently exceed it. This figure is not simply an excellent economic parameter, it is, in fact, a factor that plays a huge role in people's daily lives.
We need to try to attract foreign investment to the sectors that are necessary and represent priority to the development of our country. Our foreign investment is primarily channeled into the oil and gas sector. And this is quite natural. This has been the case for 20 years. And it will probably be the case in the future too, considering the fact that we are currently implementing major energy projects. But we need to try to attract major foreign and private investment to other sectors because the implementation of infrastructure projects is currently financed by the state. Using state loans, we are also revitalizing the real economy. But we need to try to attract foreign investment to accelerate the development of industry, agriculture, tourism, services and ICT sectors. This, of course, is a difficult task, as the world is still suffering the consequences of the economic and financial recession. The economic development of the world's leading countries is not provided at the appropriate level for them. Therefore, it is not so easy to attract foreign investment. We should note that most countries of the world are engaged in doing that. But in general, a very positive picture associated with reforms, improvement of the business environment and overall development is observed in Azerbaijan. This is why I think that if we create such conditions and properly organize these issues, we will be able to direct foreign investment into the necessary sectors. We need to work out these issues.
Work has already been started in relation to entrepreneurship development. Financial resources are allocated, measures of consultative and advisory nature are taken, so that entrepreneurs could benefit from the received soft loans more effectively. This, of course, will have a positive impact on the future development of the processing industry and agriculture.
Food security issues are a priority in this area. At the same time, I believe that we need to seriously tackle the production of other products consumed in Azerbaijan. Among them, I think we should pay special attention to the production of building materials. All the goods that can be produced should be produced in Azerbaijan, and we need to reduce our dependence on imports - first of all, in the interests of economic development and creation of jobs. At the same time, we need to increase our export capacity. I am sure that as a result of the ongoing reforms related to agriculture, the increasing productivity, the provision of transparency in the allocation of subsidies, the acquisition of agricultural machinery in an even larger volume and other measures, we will generate a large export potential, and our growing domestic needs will not be able to digest all the agricultural produce to be manufactured in Azerbaijan. Therefore, we have to increase our export opportunities. Exported products must meet the highest international standards. We must seek new export markets and be able to access them.
In this case, we will go down the path of a very dynamic development in terms of progress of private enterprise and agriculture in the future. This will secure our development. Our advantage lies in the fact that the demographic situation in Azerbaijan is very positive and our population is increasing every year. According to the latest information, it has already reached 9.5 million people. If we look at Armenia, about 80,000-100,000 people leave it every year. According to the statistics for the first quarter of this year, more than 20,000 people have left the country. This, of course, means depopulation. After some time, Armenia will have a population of less than 1 million people. But, as they say, to secure non-existent economic development this plays into their hands because if we assume that the population of Armenia increases like it does in Azerbaijan, in this case there will be complete impoverishment and the level of poverty will be measured by larger numbers. But even today the number of people living in poverty in Armenia is 35 per cent. In other words, I want to say again that the development of agriculture should also take into account the positive demographic dynamics in Azerbaijan.
During the discussion of the second state program on the socioeconomic development of districts I spoke at some length about these issues and gave relevant instructions. There is no need for any additions. I just want to say that a new executive order will be signed in the coming days to deepen reforms in agriculture, and I am sure that it will have a very positive impact.
A significant portion of our gross domestic product today is provided by the non-oil sector. This is a positive phenomenon, the result of our policy towards economic diversification. But if we have a look at the structure of our exports, we will see that the absolute majority is accounted for by the oil and gas sector. This is perhaps natural because these figures and production are so high that the non-oil sector, of course, cannot keep up with this pace. Nevertheless, we need to try to increase and strengthen our non-oil export potential. To achieve this, we need to ensure additional high quality production. We must and we will access new markets.
As you know, 2014 has been declared the "Year of Industry". We are conducting judicious policies associated with industrialization. I have already talked about that. I want to say again that each district should have industrial zones. This instruction was given in February and it must be fulfilled. Our main industrial centers, of course, have already been defined. These are traditional centers. Our main industrial centers are Baku, Sumgayit – which is the second largest industrial city not only in Azerbaijan but also in the South Caucasus – Ganja, Mingachevir. But as I have already mentioned, we need to create industrial zones in all our districts. The development of industry should go even faster.
Regarding the development of the transport sector, I want to say that a new terminal of the Heydar Aliyev International Airport will be put into operation in the coming days. It will be one of the most beautiful airport terminals globally. It has a beautiful appearance, is comfortable on the inside and meets the highest standards. If we consider that numerous international events have become commonplace in Azerbaijan, of course, this airport will play a huge role in the overall development of the country. It is some sort of a gate to our country. Of course, the construction of the new terminal building is a historic event, I think.
The construction of highways is progressing in accordance with schedule. Here too, we need to place the focus on quality. Most of our highways have already been built and work is currently under way. But quality should be at the forefront.
A project on the restoration of our railway is under way. New rail cars and electric locomotives are to be purchased. Relevant instructions have already been issued. Of course, the state program on the development of our railway is being implemented.
In the summer of this year, the first phase in the construction of a new international seaport should be completed. This is a major project. The port in Alat will be the largest international seaport on the Caspian Sea. The task has been given of putting into operation the first part of the port this summer. After that, work will be continued on the second stage.
I believe that this can be achieved. In this case, the current sea port will be moved out of the city center and public places will be set up there instead. A new boulevard, the White City Boulevard, is already being built from the port in the direction of Zikh. Its current length is a little over 2 kilometers. New public places are being established there. Of course, the soonest possible relocation of the port from there will allow us the opportunity to make this area available to people. Railway tracks will also be removed from there. An eight-lane coastal road and a beautiful boulevard are currently under construction. In other words, the new international seaport will be fully operational in the near future anyway. But we need to commission at least its first phase in the summer months.
Additional measures will be taken in relation to municipal transport. The construction of the underground is powering ahead. As you know, we intend to increase the number of underground stations to 70. We will achieve that. The entire work is progressing on schedule. We will import new passenger buses meeting the highest standards for the city. Underground car parks have been built in Baku. This is also of help in addressing the problem of traffic congestion. Above-ground parking lots should be established as well. As in developed cities, we will have parking meters installed in the streets in the coming months, so that our people could park their cars easily. Transparency should also be provided in this area.
Baku is a beautiful, modern and growing city. Of course, you will never see controllers with a batons in their hands helping people park in developed cities of the world. This doesn’t and can’t suit us at all. In fact, no-one knows where they work and to whom they pass on the collected money. I understand that due to a lack of above-ground parking lots they help drivers. I appreciate that. Therefore, I believe that we have to be patient. But after the installation of normal and transparent parking meters, we will certainly have to provide the people with batons with another job.
This year we have great programs related to army building. There is a program related to construction as well. We are not only acquiring weapons and ammunition but are also engaged in construction activity. Among them, I want to emphasize the base of the Navy. This large base has been under construction for many years now. I do hope that we will open it this year. Construction and installation work is under way in other military units. New military bases are being built as well. All of the military units and bases apply the highest standards because our officers and soldiers must serve in good conditions.
I do hope that there will be no old or dilapidated military units or structures in disrepair in the coming years.
Unfortunately, this area did not receive the necessary attention in previous years. We have to openly say that. Our soldiers and officers should live and serve in the best conditions. Therefore, the task has been set and funds allocated so that there is not a single unsafe or old building in the army in a short time, perhaps in the next two years.
At the same time, I believe that we have to use the newly built shipyard for this purpose. As you know, this plant can build any vessel. The plant has already started receiving first orders. I believe that the Ministry of Defense should also order the construction of military vessels by this plant. Of course, the Ministry of Defense should take care of the financial side of this issue. I think that we should begin this work in the current year, because the construction of a ship will take a long time to complete. We have no time to waste and should do everything possible to ensure that the plant operates at full capacity so that we could upgrade our navy.
This year we will continue the program on the provision of IDPs with houses. Last year, more than 20,000 displaced people moved into new homes and apartments. This year at least another 20,000 people will follow suit. This program is going on. Places have been identified. There should be no delays here. There should be no financial problems either. So everything is progressing on schedule.
We are also addressing the problems of veterans and people disabled in the Karabakh war. Following an executive order I have recently signed, the social welfare of 80,000 people belonging to this category has been improved. This process will be continued. Even better conditions will be created for war veterans, those disabled in the war and martyr families. As you know, houses have been built, apartments are distributed and cars are presented to the disabled people. I do hope that the disabled veterans of the war and martyr families standing in line for cars will receive them this year. Over the next three to four years, all martyr families and disabled veterans of the war will be provided with new apartments and houses. Such an instruction has been issued. The Ministry of Labor and Social Protection of the Population is engaged in this work. This issue should also be reflected in public investment expenses.
Things are also going well in the oil and gas sector. Both domestic and foreign investments are growing. The new platforms built and wells drilled will further enhance our energy potential. The gasification process is well under way, and I am sure that we will reach the desired level in the near future.
Of course, the implementation of the TANAP project has already started. TANAP is a project of the 21st century. Shah Deniz-2, TANAP and TAP are the largest infrastructure projects in Europe. Tenders have already been announced. I hope that we will begin the process of construction soon. This project was started at the end of last year. Preparatory work has begun. Azerbaijan demonstrates leadership in this project. I think, I am absolutely convinced and I know that if it hadn’t been for our policies, our energy policies, our courageous policies, this project would never have been realized. Azerbaijan is the initiator of these projects. Azerbaijan also plays the key role in them. Azerbaijan has assumed all the risks. Azerbaijan has assumed all the financial and technical risks. I am confident that we will successfully implement this project, because we have achieved success in all the energy projects we have initiated in the past. Oil and gas projects Baku-Supsa, Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum are already a reality. They have been in operation for many years. So I am quite sure that we will implement these major projects with dignity.
I would like to say a few words with regard to environmental protection. Several years ago, the "Year of the Environment" was declared in Azerbaijan. I remember saying during the discussion of the work done in the "Year of the Environment" that every year should be the "Year of the Environment" because the environment is one of the key issues, especially for Baku and the Absheron peninsula. For years and centuries, there were oil ponds and contaminated places here. The situation was unacceptable from an environmental point of view. In recent years we have come a long way in this regard. Since oil has been produced in Azerbaijan for about 200 years, unfortunately the attention paid to the environmental situation was not up to par. Just remember the condition of the Bibi-Heybat bay – it was a picture of a complete disaster. Today the place has been completely cleaned. Derricks remain in place, but the area around them has been cleaned. I have issued an instruction to launch a campaign of planting trees there, between those derricks. We have to turn this place into a green zone.
There used to be an iodine factory in the city center. Subsequently its activities were stopped. But the iodine deposits remaining there were causing an enormous damage to the environment. We have cleaned this place as well, and this issue was also resolved at the highest level. The Balakhani landfill was burning and fuming for years. This smoke was enveloping the whole city and it was impossible to breathe. The smoke was causing problems not only to Balakhani residents, but also to the entire city. We have cleaned this place too. Currently, there is no waste and garbage on the landfill. Trees have been planted and there is no smoke there. Large funds have been invested in the construction and operation of a plant for the incineration of garbage. There are many examples like this. As part of the campaign of planting trees, more than 10 million trees were planted, and this process continues.
Therefore, issues related to the environmental situation are always the focus of our attention. But the public, including myself, is concerned about the felling of trees. This cannot be allowed to happen. I think that we must apply greater liability in this issue. The felling of trees must be completely stopped. Only in exceptional cases and only on the basis of a conclusion of the Ministry of Ecology and Natural Resources can a tree be relocated or felled somewhere. I have repeatedly expressed my opinion on these issues. I can say that in comparison with previous years, the situation is more positive now. But we have failed to fully achieve our goal. People come at night, illegally cut down trees and level a place in order to build a house. This is dishonesty, this is a disgrace, this is a crime.
Therefore, relevant agencies should make proposals, so that we could take more serious action against those who cut down trees. They must be brought to justice. I want to reiterate that not a single tree can be cut down in the city without the permission and conclusion of the Ministry of Ecology and Natural Resources. This is my last warning.
Starting from this month, we switched to the "Euro-4" standard. I am sure that the move will significantly improve the composition of air. According to the available data, the main source of air pollution is vehicles, not industrial plants. I believe that the application of "Euro-4" will prevent this. At the same time, we certainly have to say that the quality of fuel produced in Azerbaijan should be improved. A new refinery is to be built in Baku. It will be built, but it will take time, perhaps three to four years. We need to try, and the government should also make suggestions on how we can improve the quality of fuel produced in Azerbaijan while the plant is built. I believe that we can allocate financial resources for that too.
A program on cleaning the lakes existing in Baku is about to begin. I have received a list of these lakes. There are nine lakes on it. But they can hardly be called lakes, because a lake is a natural basin with clean water, while these lakes are an environmental disaster. Sewage, effluents contaminated with oil and produced water were discharged to these lakes for years. These lakes represent an environmental disaster in the city, right in the city center. Therefore, all instructions on the subject have already been issued. We can no longer tolerate this situation. As much money as necessary will be allocated for this purpose. We will transform these sewage ponds into clear lakes. Baku today is a city of parks. And Baku will soon be a city of lakes. Today I set this objective and believe that we should start this work soon. In truth, we have already started it. We have already signed contracts with foreign companies experienced in this field. We have started with the most environmentally and technically challenging project. It is a project on cleaning Lake Boyukshor. Lake Boyukshor covers an area of 11,000 square kilometers. So it is more than a thousand hectares. Now we are dividing Lake Boyukshor into two parts. A dam will be built on it. This dam will also serve as a highway. We are doing this both in the interests of transport and to divide cleaning work into stages.
At the first stage, the part of the lake located near the Olympic Stadium under construction will be cleared. This area covers 300 hectares. There will be clean and clear water there. A beautiful boulevard will be built around the lake. We have the seaside boulevard and we will soon have the Boyukshor boulevard. Some wonderful landscaping will be carried out, trees and shrubs planted, there will be recreation areas and a clean lake.
The second stage will see the cleaning of the rest of the lake. Thus, we will create a beautiful recreation and health area in our city. As I have noted, in a few years Baku will become a city of clean and beautiful lakes. However, there is a lot to do, as we are talking about nine lakes. But we should try to complete the job in the next five to six years. All of this work, of course, should be reflected in the state budget. Financial resources, of course, will be provided because the entire work should be carried out at the highest level.
Finally, this year we are entering a crucial stage in preparations for the first European Games. All the work is progressing on schedule. The President of the European Olympic Committee and the Coordinating Committee visited Baku recently. They gave a very positive assessment to the preparatory work under way in Baku. Construction is under way on all sports facilities. The Olympic Stadium, the Aquatic Palace, the Gymnastics Arena and the Shooting Center are under construction, other facilities are being repaired, roads are built. The Olympic village for athletes is practically ready. So we are doing the necessary preparatory work.
I want to say again that we intend to conduct these Games at the level of Olympic Games. Some people don’t know that these games are very similar to Olympic Games both for the number of sports and the number of athletes involved. And in terms of preparations and scope of construction activity they are even more ambitious than Winter Olympics. The number of athletes to compete here next year is twice as high as the number of athletes involved in Winter Olympics. So it is a great challenge, especially when we consider that the period of preparations for Summer Olympics is seven years, while we have only two and a half years to prepare. But we are a strong state where all the work is organized and done correctly. We have a strong political will, technical and mobilization capacity. We will hold these games in an exemplary manner for future Olympic Games. Azerbaijan will reassert itself to the world as a modern, dynamic and strong state. A lot remains to be done until the end of this year. I wish you all success in this work.