Opening speech by Ilham Aliyev at the Meeting of the Cabinet of Ministers on the results of socioeconomic development in the first quarter of 2011

Today’s meeting of the Cabinet of Ministers is dedicated to the results of the first quarter of 2011. Our economy successfully developed in the first quarter. Of course, in order to analyze the results achieved at the beginning of this year correctly, we must take into consideration Azerbaijan’s economic development in previous years. In recent years our economy has been growing steadily. In the last seven years, our gross domestic product has increased almost three times. Even in the years of crisis, 2009 and 2010, our economy developed by 14 per cent. Therefore, the growth in the first quarter based on this solid foundation is certainly very gratifying indeed.

In general, our economy grew by 1.6 per cent in the first quarter. It is gratifying that our non-oil sector has grown by 5.6 per cent. As you know, our main goal is to develop the non-oil sector, reduce dependence on the oil and gas factor, thus achieving economic diversification. Therefore, special attention is being paid to the development of the non-oil economy, and the social and economic reforms under way are primarily intended to achieve this objective.

Although industrial production has increased by 0.3 per cent, the most important and gratifying aspect of industrial development is that our non-oil sector has grown by 9.8 per cent. This shows that the funds invested in the non-oil sector, the investment and the conditions created for entrepreneurs are yielding great results. Overall, the relatively minor increase in industrial production is explained by a certain decline in oil and gas production. However, this decrease is of temporary nature. At present, we can say that oil production in Azerbaijan has reached a high level and will remain as such. As for gas production, it should also be increased in the coming years due to the investments being made.

One of the worrying issues is the fact that inflation has risen by 9.1 per cent in the first quarter. This worries us. But at present inflation is in single digits, and we must maintain this level. Besides, population incomes have increased by over 16 per cent. So if we compare inflation to population incomes, we can see real growth of the latter. I am sure that these trends will further manifest themselves during the year.

Our accumulated exchange reserves constitute $34.2 billion. All instructions in this direction are also being fulfilled and our exchange reserves are growing. Major investment projects requiring significant resources are being implemented. Despite this, we are securing our investment projects and increasing exchange reserves. This is a great indicator in itself. It is also evidence of the country’s economic and financial capacities.

I have no doubt that our exchange reserves will increase by the year’s end. And this increase will be very impressive.

Overall, all the instructions in the economic sphere are being fulfilled. First quarter results afford grounds for manifestation of these positive trends for the rest of the year. All social programs are being fulfilled. All social issues are being addressed. Work on creating a social infrastructure is based on a program. The construction of schools, hospitals, social, culture and sports facilities is progressing in concordance with the investment program. As of the first quarter, the average monthly wage in the country is 340 manats, or $430. This is a good indicator. The growing average wage is an indicator of the policies being conducted in both economic and social spheres. Our country adheres to a market economy. At the same time, social issues are successfully addressed in Azerbaijan. Of course, the best indicator of that is the fact that the level of poverty in Azerbaijan has been reducing by the year.

According to the results of 2010, the level of poverty in Azerbaijan was 9.1 per cent. I do hope that thanks to the work to be carried out this year in both the economic and social spheres, as well as the expected increase of wages and pensions this year, the number of people living in poverty will be further reduced. As a result, we will meet the objective set several years ago.

There are poor people in every country. But we have set this task, this is our goal. The creative work under way in the country, the economic reforms, social programs will enable us to resolve this difficult problem.

Along with this, the state program on the socioeconomic development of districts is being successfully implemented in all our districts. All of the scheduled investment projects were implemented in a tamely manner in the first quarter of this year. Almost 17,000 jobs were created in districts in the first three months. This process is ongoing. In general, 930,000 jobs were created in the country as part of the first program. In order to help businessmen, we allocate loans which have been yielding great results. In other words, the program on the development of districts is being fulfilled. While traveling to districts, I can see the work being done with my own eyes, and I can confirm that there is development in every district. Most importantly, this development is permanent. We shouldn’t be complacent with these successes although a lot has been done in Azerbaijan in recent years. We must keep on developing and actively resolve existing problems. Along with the program on the socioeconomic development of districts, a program on the socioeconomic development of Baku settlements is being prepared. An expanded meeting was held in this regard last month and all instructions were issued.

Problems are being analyzed now. In fact, these problems are known. After a special program is adopted to tackle them, we will implement some of the issues this year. But in order not to waste any time, 10 million manats has been allocated from the Reserve Fund of the President to the Mayor’s Office of Baku, so that these issues could be resolved without delay.

Work in the settlements has already begun. I often travel to settlements now, as I did in the past. I examine the situation and ask people directly what their concerns are. I can say that a lot has been achieved in settlements lately. The schools built in the settlements have had a positive impact on the development of education. There is a shortage of water in some settlements. The sewage problem is common for practically every settlement. This problem is acute not only for settlements, but also for Baku proper. At the same time, as a result of the work done in recent years, electricity supply is good. There have been no complaints and appeals. Gasification of settlements is under way. This issue has been practically resolved in full. In the coming years we need to build new lines in order to provide a higher gas pressure.

Public health issues have been resolved to a certain extent, but there is a need for new hospitals and clinics. The problem of roads, which is characteristic of all settlements, is a top priority issue. Most of the roads in settlements are earth roads. The process of road construction has commenced.

I think that after the adoption of a broad, very precise and specific program, we must resolve most of the problems existing in settlements by 2013. Even though this is a very large program. At present, settlements are home to over 800,000 people. This is a city in itself. But this issue must be resolved. I do hope that we can succeed in that in a short period of time.

Major infrastructure projects were implemented in the country in the first quarter. Their implementation is progressing on schedule. The process of gasification is under way. Issues of water supply and sewage are being dealt with, both trunk and local roads are being built. Among major infrastructure projects, I would like to point to the construction of a new building of the Heydar Aliyev Airport. The airport is the gateways of any country. At present, our international airport is not fully in line with the present level of Azerbaijan’s development, and our future development in particular. Therefore, a new airport building must be built. Work has already begun. It is also necessary to build new runways and rebuild the whole service infrastructure. The Heydar Aliyev international airport must become one of the most beautiful and top level modern airports on global scale. I am sure that the construction will be completed in two years, and the country’s highly important infrastructure facility will be commissioned.

As you know, other major infrastructure projects are being implemented now. The International Trade Seaport is one of them. Work is progressing well there. A shipyard is being set up. So if we add these two major projects and the airport, this will significantly raise Azerbaijan’s transport capacities. New vessels and ferry-boats are to be purchased in the coming months, because the volume of cargo traffic via Azerbaijan is increasing. Although we have bought around 10 new and modern tankers and bulk carriers in recent years, we need more. We should bear in mind that the Baku-Tbilisi-Kars railway is to be commissioned in 2012. We need to do the preparatory work in a way that would rule out any delays after the Baku-Tbilisi-Kars railway has been commissioned. Therefore, we have set the task of buying new ferry-boats, and this will be accomplished this year.

The information and communication technologies sector has registered major growth in the first quarter of 2011. This sector is developing dynamically. I have repeatedly spoken about that. Azerbaijan is already turning into a regional ICT center. Bakutel exhibitions have become traditional. The world is increasingly interested in Azerbaijan and the work being done here. The development of this sector is contributing to the development of Azerbaijan’s overall intellectual potential and our intellectual capacity. At the same time, this sector is of great commercial importance. It is already turning into another source of revenue for us. In the future, this revenue will have a strong impact on the economic development of the country.

A program on developing an artificial satellite is being implemented. I do hope that Azerbaijan will have its own satellite soon. This is very important for both the image and authority of the country. But above all, this is highly important from a practical standpoint. The income to be made from the commercial operation of the satellite will also create good opportunities for us.

Our country’s military-industrial potential is rapidly developing. I want to emphasize this sphere because it is an industrial sector and, at the same time, a very special sphere. Both of the goals are being pursued. First of all, we must strengthen Azerbaijan’s military potential using domestic opportunities. It is with this aim that the Ministry of Defense Industry has been established. On the other hand, this is a new industrial sector. Thousands of new jobs have been created, good salaries are being paid and modern military-industrial products are manufactured in Azerbaijan. At present, products of 430 denominations are made in Azerbaijan. Our goal is to arrange work in this sphere on the basis of cutting-edge technologies.

Among them I want to highlight the production of unmanned airplanes. These industrial spheres are typical of the more developed countries. Azerbaijan, using its own capabilities, has already started producing unmanned airplanes at the highest level, and this will significantly bolster our military power.

In general, Azerbaijan is playing a very positive role in strengthening the measures of security in the region. Azerbaijan is a stabilizing factor in the region. Our country is conducting successful policies in all the spheres. Our stance on the Armenian-Azerbaijani conflict over Nagorno-Karabakh is unequivocal. The norms of international law must be fully secured. Four resolutions of the UN Security Council must be unconditionally fulfilled. In the same manner as resolutions of the UN Security Council on Libya which started being executed in a matter of hours. I have already expressed my opinion about that. I want to say again that this is unfair, this is double standards, and this discrimination cannot be explained otherwise. Because the Armenians have perpetrated a genocide against Azerbaijanis. The Khojali genocide was committed. The Armenians have massacred innocent people. For some reason, the world community remained indifferent to our grief at the time. Azerbaijan’s internationally recognized territories have been under occupation for many years. Four resolutions of the Security Council, decisions of the OSCE, decisions of the European Parliament, the Council of Europe, the Organization of Islamic Conference, NATO have been adopted – all these decisions demand that Armenian troops should withdraw from our occupied lands. But the issue still remains unresolved. Under such circumstances, Azerbaijani citizens are asking a legitimate question: why are we treated differently? What is the reason for that? I am putting this question to the international community, to the countries that have a say on the international arena. Azerbaijan’s territorial integrity must be restored, an end must be put to occupation, and this issue must be resolved soon because the patience of the Azerbaijani people is not unlimited.

I want to reiterate that Azerbaijan’s position in the negotiations in explicit. This position is based not only on our wishes, but also on international law, which is still the main criterion worldwide. We can see the norms of international law being flagrantly violated now. Therefore, Azerbaijan’s territorial integrity must be restored and there should be no preconditions for that.

The proposals being negotiated now will ensure the restoration of Azerbaijan territorial integrity. At the same time, the issue may be resolved on the basis of principles that can ensure the co-existence of those living in Nagorno-Karabakh and the citizens of Azerbaijan who will definitely return there, in the status of an autonomy and self-governance. I want to repeat: provision of Nagorno-Karabakh with independence now or at any time in the future is impossible. This is not and will never be a subject of negotiation.

In the first quarter, an OSCE evaluation mission visited the occupied territories in this regard. The visit took place on our suggestion. The Armenian side attempted to object to that. As you know, a similar mission visited the occupied territories in 2005. That was a fact-finding mission. This is what it was called. Its main goal was to study the situation on the occupied territories and prepare a report. I know that there are different opinions in Azerbaijani society as to the latest report by the mission. Our society has been voicing its legitimate concerns at the fact that expressions used in the report are not very harsh. But I want to indicate that the goal and the mandate of the mission were to study the situation and describe its observations in a report. From this standpoint, I think that the issues covered in the report do reflect reality. I want to point to several important aspects of the report. First, it says openly that the Armenians have destroyed the entire infrastructure on the occupied territories. We knew that before, this was stated in the 2005 report and it is stated this year again. So the mission saw with its own eyes the consequences of Armenian vandalism. Our mosques, graves, the entire infrastructure have been destroyed and plundered. The second important issue is that the report stresses the unacceptability of artificially changing the administrative boundaries of occupied districts. This demand concerns Armenia directly. We know too well that the so-called local authorities want to artificially change the boundaries of our districts at the direction of Armenia. Also, the report describes as unacceptable the renaming of historical and native places of Azerbaijani districts. This claim is also addressed to Armenia because they are trying to rename our cities, and no-one will ever recognize these new names apart from themselves.

The report covers quite a few similar issues. To a certain extent, all these issues were reflected in the previous report too. This time they are confirmed again. One of the most important issues is that the report points to the policy of illegal resettlement on occupied territories. At present, there are 14,000 facts of illegal resettlement, mostly in Lachin and Kalbajar Districts, i.e. there are 14,000 people who are not supposed to live there. They were moved there subsequently, which is described in the report as an unacceptable fact.

Finally, the report indicates that the status-quo, i.e. the present situation, cannot be continued. I think this is one of the crucial aspects of the report because the Azerbaijani state has been declaring from all rostrums, in all international organizations and in direct meetings with officials from co-chairing countries for many years that the status-quo must be changed.

The Armenian side is using every opportunity to drag out the talks. To some extent, I have informed Azerbaijani citizens of that too. Issues agreed at a certain stage are then tabled again, they back down from the agreements reached earlier. In other words, they want this process to be endless, permanent, eternal, they want the talks to last permanently and create the impression that Armenia acts constructively. However, we have repeatedly indicated that Armenia is not sincere in the talks. Their goal isn’t to resolve the issue. Their goal is to keep the occupied territories under control as long as possible and eventually turn a de facto situation into de jure. Their intentions are as follows: the more time passes, the better, i.e. the world community will put up with the situation, and this status and the process of talks will be endless.

We have repeatedly stressed that this is impossible. Azerbaijan will not join the talks only to imitate them. This is our categorical opinion, and the status-quo must be changed. We all understand what it means to change the status-quo. It means that occupying forces must withdraw from Azerbaijani lands. I think it is very important to include this thesis into the report. Azerbaijan’s position is supported by co-chairing countries, the OSCE. The unacceptability of the status-quo has been stated a number of times. It has been confirmed in the statements of senior officials from co-chairing countries. If the status-quo is changed, and it must be, then the occupying forces will withdraw from the currently occupied Azerbaijani lands, and this must happen soon. Armenia should not be allowed to drag out the talks artificially and under various pretexts. Armenia must provide specific answers to specific proposals, so that the process of liberation of our lands from occupiers could begin.

Therefore, I would like citizens of Azerbaijan to know my position on the issue, the position of the Azerbaijani state both as regards the report and the essence and content of the talks. I think there is a need for that.