President of the Republic of Azerbaijan Ilham Aliyev has been interviewed by “Russia-24” Russian State Television and Broadcasting Company. AzerTAc presents the full text of the interview:

- Mr. President, good afternoon and thank you for hosting us on Azerbaijani soil again.

- Good afternoon and welcome!

- Mr. President, many partnerships are tested for durability today. Russian-Azerbaijani cooperation is developing dynamically and extensively. This year has been quite busy in terms of visits and bilateral contacts. How do you evaluate the political dialogue between Russia and Azerbaijan at this moment in history?

- Our political dialogue is maintained on a permanent basis, the relations develop dynamically, cover all areas and there are no outstanding issues and problems between us. The only thing we always talk about and discuss when we meet with colleagues is how we can further increase the potential for our cooperation. Today, Azerbaijan and Russia are two neighboring and friendly states that are actively developing and stand ready to face all challenges existing in the world.

- What are the areas in which you see opportunities for increasing cooperation?

- We have traditional areas of cooperation. These, of course, include the energy sector, the oil and gas sphere. Here cooperation already has a good history and a good potential. This year we have signed agreements in the oil and gas sector that will contribute further to the dynamic development of relations in this field. There is also good potential and experience of cooperation in the spheres of electricity and transport. Russia and Azerbaijan are interested in engaging the North-South transport corridor more broadly. We, for our part, are creating the necessary infrastructure – sea ports, the reconstruction of the railway and highways. The same holds true for the Russian side.

There is also good potential for cooperation, of course, in the marketing of Azerbaijani agricultural products in Russia. We are building up our export potential. In principle, it was a strategic line of our government, but given the current situation and the need for our products on the Russian market, we have deliberately begun to increase the assortment that is popular with Russian consumers.

There are good prospects in the tourism sector. We are observing an increasing number of Russian tourists coming to Azerbaijan. In summer and winter there are good conditions here, the distance is not too long and there is no language barrier.

And, of course, the sphere of culture and education. I think that it forms the basis of our cooperation. Famous Russian musicians come to Baku almost every week.

- The main thing is that there is no language barrier. And this is largely thanks to the efforts and policies Azerbaijan has consistently pursued in respect of the Russian language. Indeed, education is also one of the promising sectors successfully explored between Russia and Azerbaijan today. A total of 13,000 Azerbaijani students go to Russian universities. What can you say about the interaction and the place of the Russian language in Azerbaijan today? There is a very large Russian community in Azerbaijan and this should also be highlighted. Isn’t it in the way? Doesn’t it create some sort of difficulties? And how do you accomplish the truly comfortable existence of the Russian language?

- As you rightly pointed out, the Russian community in Azerbaijan is the biggest in the South Caucasus. It numbers more than 120,000 people. These people successfully represent Azerbaijan in the international arena, participate in various international events and make a great contribution to the development of our country. They are worthy citizens of our state and patriots of Azerbaijan. At the same time, these people are attached to their language, culture and traditions.

The traditions of multiculturalism, a relatively new concept in our vocabulary, have existed in Azerbaijan for centuries. They simply had a different name, but the essence has always remained the same. I think that the positive traditions created over the centuries, including the Soviet time, have been strengthened further in modern Azerbaijan. And this forms the basis of interethnic accord in our country, the basis of a dynamic development, a modern development of our country. In the modern world, we unfortunately see a completely different picture – standoffs, discord, discrimination. Some countries have actually stated on an official level that the policy of multiculturalism has suffered a fiasco. This is a very dangerous trend and I think that the example of Azerbaijan attests to the contrary. It shows that it is possible to be attached to one’s culture and history, but at the same time have respect for the culture of representatives of other ethnicities and religions. And it is no coincidence that Baku has become a center of international cooperation in this area. We have recently established an international center of multiculturalism in Baku, are conducting various activities and international forums. And, of course, as a multiethnic and multi-confessional country, Azerbaijanis demonstrating an example of how to skillfully address these matters when there is a social demand and a prudent policy of the state.

The Russian language is just as respected in Azerbaijan as in previous times. We have more than 300 schools with teaching conducted in Russian, and some of them are Russian only.
All public universities have Russian-language departments. A branch of Moscow State University has also been established. It has already released first graduates. There is Slavic University, which trains teachers, including those of the Russian language. I believe that this positive experience may be useful for countries that choose language as a target for attacks.

- History itself dictates Baku to remain a tolerant and an international city. It was the most international city in the Soviet Union. How difficult is it in the modern world to continue to be such a city and country at a time when the collapse of multiculturalism is recognized even by leading European politicians? Don’t you feel pressure from inside or outside?

- No, we don’t. There is no pressure from within, because society fully shares the approach of the government to this matter. There are no differences here. Public policy also supports these sentiments in society, while public opinion helps the government to implement this policy. We are seeing the advantages of such a state of society, because it was not always the case. In the early years of independence, when the so-called Popular Front was in power, the situation was completely different. Ethnic intolerance was essentially elevated to the rank of state policy. Negative attitudes and attempts to squeeze out the non-indigenous population – all this happened right before our eyes. Those were the years of national shame for our country and for our people. The Azerbaijani people showed wisdom and tolerated this government for just over a year. Then it was dumped onto the scrap heap of history.

- Is this vaccination still valid?

- Yes, because society has rejected these approaches. Very big mistakes, if not crimes, were committed in the area of ethnic policy and indeed all other areas. Therefore, society quickly got rid of this alien approaches and returned to its roots. Today it is the normal state in the development of our society. There are no prerequisites to the fact that this policy may be subject to revision.

As for what is happening outside our borders, this, of course, is a matter of concern because we don’t live on an island and are not isolated. The developments unfolding in the region are having a certain impact. But here too, the consciousness of society, as well as the effective public policy and a clear demonstration of the benefits of such an attitude and such a state of society are the main driving forces.

- Let's talk about the economy of Azerbaijan, because the global economy also significantly affects the state of society in any country. Azerbaijan's GDP this year is registering a 3-percent growth. This is fairly stable and is an indicator that can serve as a benchmark today. It is evidence of the government’s effective economic. What are your forecasts for next year and what, in your opinion, will determine your economic growth in the near future?

- This year, as you pointed out, we expect a 3-percent increase, but when we think of the GDP, we always pay attention mainly to the non-oil sector. And the situation there is better – we expect growth at a rate of 6 to 7 percent this year. Last year it was 10 percent. Next year too, we expect growth between 6 and 10 percent in the non-oil sector of the economy.

This is the result of a policy of diversification and of the fact that we invested a lot of money and effort in previous years in diversifying the economy of Azerbaijan. Today, the oil sector accounts for about 45 percent of the GDP, which is less than half. So next year, of course, we will strengthen these trends.

The fall in world oil prices, of course, will have a negative impact on our plans. But we have developed various scenarios, and with the oil price of $60 our economy will continue to grow steadily.

- And what is the price envisaged in the state budget?

- The budgeted price is $90 per barrel of oil. Last year it was $100.

- These is a fairly optimistic figure ...

- Yes, but when we envisaged $90 and adopted the budget, the price was $90. It is suddenly plummeting now. Of course, these factors will have some impact. But it is not critical, because I see the only negative aspect in the fact that what we planned to do in a year, we will do in two years. We will simply cut on budget spending for low priority areas and infrastructure projects. It is good that in previous years we largely implemented those projects.

Even before the situation that has taken shape this year, serious measures were taken to promote entrepreneurship, concessional lending and the allocation of subsidies to farmers. Our farmers are exempt from all taxes other than the land tax, and the government actively subsidizes the development of production in the countryside.

The sphere of information and communication technologies in Azerbaijan is growing steadily. Azerbaijan is a country with a space industry now. We have already launched the first satellite and the second is to be launched soon. So this area is developing fast. We have high hopes for tourism. A lot of modern hotels are being created across the country, and we are observing an increase in the number of tourists who prefer Baku as a holiday destination. These are the main directions. In addition, of course, the policy of industrialization we have pursued for several years is yielding fruit. We are trying to be fully self-sufficient for construction materials and food, and we still need to do a lot in this direction.

- Do you intend to continue the policy of economic diversification? And if so, ideally how much should oil and natural resources account for in the GDP?

- Ideally, of course, we will strive to ensure that oil revenues constitute around a third of our GDP. In this case we will consider our diversification policy to be a success. We are getting there. When we started this program, oil accounted for almost 80 percent, now it is at 45. So there is a tendency towards reduction. We need to take into account the fact that in the next few years we expect a significant increase in gas production and marketing. Therefore, the oil GDP will grow.

- It will be oil and gas.

- Correct.

- Nevertheless, the dependence on the external environment will also increase. You are saying that with a price of $60 per barrel of oil, Azerbaijan's economy will grow steadily. How realistic do your analysts believe such a forecast is, and what is the overall outlook for oil prices?

- You know, it is difficult to expect our analysts to provide a more detailed analysis than that of global analysts. Therefore, they are probably guided by the common global trends. No-one can predict for sure – and apparently there are objective reasons for that - what would happen, and so far no-one can clearly explain why it happened.

- I want to ask you what theory you are more inclined towards. There are several conspiracy theories, and objective and more realistic ones...

- I would probably integrate all these theories little by little in my analysis. There are certainly objective reasons for what is happening. But, of course, there can be other reasons as well. History has seen periods when a sharp decline in oil prices led to certain problems in some countries. So we can’t rule that out, especially since this is often spoken about in the media and by analysts. Therefore, it is very difficult to expect any forecasts here.

- An important criterion of the effectiveness of economic policy is the social status of citizens. You mentioned that if it is necessary to reduce costs, you will do that at the expense of infrastructure projects. Does this mean that your social programs will remain intact? And do you follow the vector of a social state?

- Yes, social programs will remain unchanged, of course. On the contrary, we will strive to create even more opportunities. In this case, of course, we are talking about an increase in wages, as well as the creation of the social infrastructure. For us, the social sphere has always been a priority. We have never separated it from the economic component, and the reforms we carried out have always been associated with the social factor. Therefore, despite drastic reforms, social issues have been dealt with very well in Azerbaijan in recent years.

Over the past 10 years, we have built more than 500 medical institutions and over 3,000 schools. Infrastructure projects aimed at providing water supply to all regions are being implemented. So investments in the social infrastructure are our priority. These will not be reduced. But at the same time, of course, this area cannot develop in isolation from the economy. After all, it is thanks to the economic development of recent years that we have managed to reduce poverty from 49 to 5 percent over the course of 10 years, and mainly through the creation of jobs and new working conditions. Also, unemployment has almost ceased to exist in Azerbaijan as a social phenomenon.

- What is the percentage of unemployment in Azerbaijan?

- Five percent. Of course, it was all a result of the economic policy of the state, as well as the creation of a good business environment. These jobs were not created in the oil sector. Jobs are not created so quickly in the oil sector. These were all created in the manufacturing and service sectors, in the regions. Therefore, without the economic growth it would be difficult to address social issues simply by budget spending. It is important to find the right balance between reducing costs in the areas that are not of high priority and the areas that do not affect the social status of society.

- At the time of crisis in the economy, there is usually a dilemma: whether to spend money on development or to save it and create the so-called stabilization funds. What path have you chosen?

- We have chosen both ways. And over the years of active reforms, our foreign exchange costs increased from year to year, and so did our investments. Last year, $28 billion was invested in the Azerbaijani economy. For a country with a population of 10 million people this is a considerable amount, of which 70 percent is domestic investment. The structure of domestic investment, of course, is so far dominated by public infrastructure investments. Therefore, we sought to ensure that our foreign exchange reserves are increased every year. And they are increasing every year. At the same time, we are spending as much as necessary to create a diversified economy. And this is impossible to do without normal living conditions in the regions.

In the early years of independence, many Azerbaijani citizens went abroad, including Russia, for work. This process has almost stopped now or slowed down. But a different process has begun – people from the regions are coming to Baku. This is why our main task has been to address issues of regional development, to have good hospitals, good schools, water, electricity and gas supply, and working conditions in the countryside. Therefore, economic diversification is not only about the structure, it is also about geography. In this respect, I think we have succeeded in ensuring the sustainable development of our country in recent years.

- If we expand on the theme of geography a little and talk about foreign investments, what markets are more promising for investments today, for the saving and development of public funds. Where are you looking now? How promising and interesting do the markets of the East, China, for example, seem to you? I know that Azerbaijan has invested in sovereign wealth funds, a lot has been invested in the yuan.

- Yes, we began to diversify our investment portfolio a few years ago. There were several reasons for that. First, we could not overheat the domestic economy. We also wanted to diversify our investment portfolio, of course. So we began to invest. This is Asia, Europe and Russia ...

- I was hoping to hear that.

- Yes, indeed. Therefore, we are investing in shares, in property, in banking and in manufacturing. As for Russia, we have invested in the banking sector, acquired the shares of VTB, have invested in real estate, production, etc. The Russian market is quite promising for us. We will continue to invest actively in the Russian market despite any situations and the so-called sanctions. Firstly because this is a temporary situation and secondly, we have to work hard to strengthen our relationship. After all, investment is not only about diversifying the funds. It is also a demonstration of the relationship and of the level of cooperation. No country will invest public funds where there is no stability and good relations. Russia is our friend and partner. And investments in Russia will be continued. Also, of course, we would like to see more Russian investments in Azerbaijan.

- You have repeatedly said that one of the biggest problems and painful issues for Azerbaijan is the Armenian-Azerbaijani conflict over Nagorno-Karabakh. In your opinion, how close have you managed to approach a settlement of this issue lately?

- Unfortunately, we can’t talk of a success in the negotiating process. And the reason is quite simple and banal. It seems to us, and this opinion has substantially settled in our society, that Armenia does not want peace, does not want to resolve this issue and wants to leave everything as it is. In other words, it wants to maintain the status quo. However, the presidents of the OSCE Minsk Group co-chair countries – Russia, the United States and France – have repeatedly stated that the status quo is unacceptable and must be changed. Changing the status quo means de-occupation of Azerbaijani territory, which is the main precondition for resolving the conflict. The Armenian-Azerbaijani Nagorno-Karabakh conflict differs from all other conflicts in the FSU by the fact that there are UN Security Council resolutions for resolving it. And not just one, but four resolutions requiring, as they read, an immediate and unconditional withdrawal of Armenian forces from the occupied territories. They have not been executed for more than 20 years.

Unfortunately, there is no mechanism for their implementation, because Armenia simply ignores them. These resolutions should underpin a settlement of the conflict because there cannot be a different option. Nagorno-Karabakh is historically Azerbaijani territory. It is called "upland" because there are is also “lowland” Karabakh. Karabakh is ancient Azerbaijani land. Today, a part of Karabakh is under occupation, and not only within the bounds of the Nagorno-Karabakh autonomous region. They have also occupied a territory outside the former Nagorno-Karabakh autonomous region, where there was no Armenian population at all. We have been subjected to a policy of ethnic cleansing, and today a large part of our territory is under occupation.

So there is legal framework for addressing this issue. It consists of UN Security Council resolutions. There is a historical basis. The word Karabakh is of Azerbaijani origin, and the history of this region is well known to historians and the people dealing with this topic. Armenia is doing everything it can to torpedo the negotiating process through its actions.

I must say that this year was different from previous ones by active negotiations. And not only by the fact that Minsk Group co-chair countries represented by their leaders have actively participated in the negotiations, which had probably never happened before. In August, President Putin met with the presidents of Azerbaijan and Armenia in Sochi, Secretary of State Kerry similarly met with us in September and French President Hollande also invited the presidents of Armenia and Azerbaijan to meet in Paris at the end of October, and we held bilateral and trilateral discussions. One of the issues, besides the settlement of the conflict and negotiating process per se, concerned confidence-building measures, so that there are fewer incidents on the contact line and the parties trust each other more. Both sides – the Armenian and Azerbaijani – positively evaluated the meeting in Paris and confirmed this in their public comments. But just two weeks later Armenia initiated the so-called military exercise on the occupied part of our territory. Moreover, these exercises were not conducted in Armenia, not even within the bounds of the Nagorno-Karabakh autonomous region, but on the territory of Agdam District of Azerbaijan, right along the line of contact. According to their own data, 47,000 soldiers and thousands types of military hardware were deployed. The question is whether it was necessary to stage such a provocation after the positive meeting in Paris?! Moreover, for a few days while these exercises were in progress, Azerbaijan remained calm and showed patience, not reacting to this in any way. But apparently the Armenian side was not contented with that and attempted a military attack on our positions using combat helicopters Mi-24. When these helicopters almost attacked the positions of our troops, our army was forced to bring down one of the helicopters. So it was a deliberate provocation aimed at provoking us to a response and then using it as a pretext for undermining the negotiating process again.

I think that the OSCE Minsk Group should have responded to this Armenian provocation more resolutely and condemned them for such actions. But since this is not happening, they get away with it. Therefore, the prospects for a settlement in 2015 will depend on several factors, one of them is the ability of mediators to convince the Armenian side that a settlement of the conflict would be beneficial to them as well.

- What do you generally think about the effectiveness of international institutions in addressing today's conflicts?

- I am not very optimistic about it, and I think that I am not alone in this approach. What is happening in the world demonstrates that international institutions are not coping with their responsibilities and not living up to the hopes pinned on them. This also applies to our case where the OSCE has been a mediator for over 20 years. This also applies to matters that are within the remit of the UN. Therefore, in principle, the world is experiencing a deformation of international institutions, which is a very worrying and dangerous trend. I think that leading countries of the world should say their resolute word not only through statements, but also through respect for the decisions that are made. Or decisions are not made but actions are taken nonetheless – we have seen this many times in the modern world not so long ago. Therefore, scrapping the existing mechanism of international cooperation will lead to a total chaos. It is difficult to come up with something new. It is even more difficult to reform the existing international institutions because there are restrictions in this regard. I think that at this historical period responsibility falls on leading countries of the world. They should not violate international law in the first place. They should support international law. But, unfortunately, this often does not happen.

- This year we saw a new structure which calls itself "the ISIL state" appear on the world map. The radical Islamist group captures new territory and threatens its neighbors. This is not happening too far from Azerbaijan, I must say. What do you think about this phenomenon? This is quite an aggressive and determined phenomenon.

- First, in order to assess the situation properly, we need to have a clear understanding of how this so-called structure arose and where it came from. It did not come from another planet after all. It is the result of what has been happening in the Middle East over the last 10 years at least. This is the fruit of a policy that was carried out in the Middle East, a result of that policy. This proves once again that matters of support for radical and fanatical groups require great caution and foresight. We can’t divide terrorists into good and bad – a good terrorist fights your enemy and a bad one fights you. This, I think, is the main issue that should be resolved. And as long as this is not resolved by leading countries of the world, as long as there is no common understanding of the fight against radicalism and terrorism, such situations will always occur.

I wouldn’t say that this is such a big threat for us, of course, but it is a topic that we must keep track of. It is not too far from our borders, as you pointed out. There are no domestic sources of radicalism in Azerbaijan. We, of course, are a Muslim country, our society is committed to its traditions and religion. Islam is a religion of peace. Our national and religious values dictate such a peaceful approach to all issues. At the same time, Azerbaijan is a secular country with a secular society, a modern state with a high level of education. Education is the main safeguard against radicalism. A country with a literacy rate of 100 percent and an educated society, there can be no potential threats inside. But from the outside, of course, we are part of the region, so we are concerned about the processes taking place in the Middle East and around our borders. This may adversely affect public consciousness and also pose a physical threat. But our borders are securely protected.

- Finally I suggest talking about something that brings people together – about sport. Russia hosted the Winter Olympics this year and Azerbaijan will play host to the European Games in 2015. How do you prepare for this holiday?

- First, I would like to take this opportunity to congratulate the Russian people on the success of the Olympic Games in Sochi. I was there at the opening of the Olympic Games. It was a great show demonstrating the power of Russia, modernity and development. And we are very happy for the success of Russia and for the victory of the Russian team. So congratulations again.

We are also preparing for the European Games. These will be held for the first time. We are very pleased that the European Olympic Committee has entrusted this right to Azerbaijan. European Games have never been conducted before. From the very beginning, as soon as the decision to hold the Games in Baku was made, we decided to hold them at the highest level, at the level of Summer Olympic Games.

The 2015 European Games to be held in Baku will be quite large-scale. We expect more than 6,000 sportsmen who will compete in 20 sports. This, in general, is quite comparable with Summer Olympic Games. We could take more athletes and sports, but it was decided that this number was sufficient. Our main difficulty had to do with the fact that there was very little time for preparation – only two and a half years, but we wasted no time. New sports facilities and, of course, transport infrastructure are built. The city lives with the expectation of these games. They will take place in six months. It will be a great European holiday. I think that the decision to conduct European Games in a Muslim country is one of the wisest decisions. It is one of the wisest decisions in terms of multiculturalism and exchange of civilizations and cultures. In 2017, Baku will host Islamic Solidarity Games. So over the course of two years Azerbaijan will host both European and the Islamic world Games, and in between these events we will also play host to "Formula 1", which has also been successfully held in Sochi by the way. So my congratulations again! Sochi is a new city for "Formula-1" and then comes Baku. The same with the Olympics. Therefore, I would like to take this opportunity to invite the people of Russia to come back to Baku, not only for the European Games.

- I wish Azerbaijan and Azerbaijani athletes more victories in all upcoming games. Thank you.

- Thank you.