Ilham Aliyev chairs republican conference of non-oil exporters in Yevlakh

President of the Republic of Azerbaijan Ilham Aliyev has chaired a republican conference of non-oil exporters in Yevlakh.

The head of state made an opening speech at the event.

Opening speech of President Ilham Aliyev

- The first national meeting of non-oil exporters is being held in Yevlakh District today. This meeting is of great importance. I am confident that our non-oil exports will increase after this. There are grounds to say this, because serious reforms have been carried out in Azerbaijan in recent years, state programs on socioeconomic development of the regions have been adopted, and major state support has been and is still being provided to entrepreneurs. Thus, we have managed to achieve an increase in non-oil exports. The first meeting is being held in Yevlakh District.

In recent years, many important steps have been taken to accelerate the socioeconomic development of Yevlakh District. Both economic and social projects have been implemented. As part of my current trip, we marked the opening of several important facilities. Two road projects have been commissioned. The reconstruction of the Varvara hydro power station has been decided on. It was at a standstill for years, and the capacity of this station is 18 megawatts now. In addition, we have celebrated the opening of a modern fish farm in Yevlakh. This is also a large enterprise. Major investments have been made. At the same time, the enterprise has a huge export potential.

In fact, the main focus of our activities is on meeting the domestic demand through domestic production and increasing the export potential. We are doing that. I meet with entrepreneurs several times a year. Over the past 13-14 years, meetings have been held with hundreds of entrepreneurs. I personally took part in the opening of many enterprises in the field of entrepreneurial activity. Entrepreneurs are well aware that the government provides them with great support, including political.

The attitude towards entrepreneurs is changing for the better today. Of course, the social responsibility of entrepreneurs is one of the issues on the agenda. I have repeatedly expressed my thoughts about that. This is also necessary for entrepreneurs, so that society could appreciate their work even higher. At the same time, entrepreneurs should make effort not only in the interests of business, but also to meet the challenges, including the social tasks facing the country as a whole. I am confident that as material opportunities grow, they will pay more attention to this issue and allocate more funds.

As for the state policy, I would like to say once again: the development of entrepreneurship is one of our priorities. As I have already noted, political support is provided for the development of entrepreneurship. At the same time, state bodies provide extensive methodological support. Such excellent regional development centers are being set up. This is the second such center. I personally took part in the opening of the first center in Khachmaz District. The Aran Regional Development Center in Yevlakh District has also been built and handed over to entrepreneurs. This is further evidence of the government support for the development of entrepreneurship.

In recent years, the state has provided entrepreneurs with very concessional loans in excess of 2 billion manats through the National Fund for Entrepreneurial Support. The projects being implemented at the expense of these loans, as well as the funds invested by entrepreneurs, provide grounds to say that we are increasing our non-oil exports. Without these loans, many projects could not have been implemented. There could be no talk not only of increasing the export potential today, but also of meeting domestic demand in general. Therefore, the state policy, the political, moral and financial support provided to entrepreneurs, the serious reforms aimed at the development of entrepreneurship, and the privileges granted to them are the main factors giving an impetus to the development of the non-oil sector in Azerbaijan today.

Of course, when speaking about the development of entrepreneurship, we must point to regional development programs. The first program was adopted in early February 2004. The adoption of this program was part of my pre-election program in 2003. At the time, I said that if the people trusted me, the development of the regions would become one of the top priorities on my agenda. And so it happened. The first program of regional development was adopted and implemented in 2004, the second in 2009 and the third in 2014. I should also note that the first and second programs were over-fulfilled. All the objectives of these programs were met. At present, we are implementing the third regional development program. I am sure this program will be successfully implemented too.

What have we achieved by implementing these programs? First of all, modern infrastructure was created in the regions. If we had not invested in infrastructure projects, there could be no talk of development. We started doing this when the country was not receiving major oil revenues yet. Oil revenues began to flow into Azerbaijan after the commissioning of the Baku-Tbilisi-Ceyhan oil pipeline in 2006, but we adopted the first regional development program and started to implement it in 2004. This shows that our success is underpinned not only by our financial situation. At the same time, our prudent policies, firm will and properly planned consistent activities contributed to the implementation of regional development programs. In general, by pursuing a consistent policy in all other spheres we are strengthening our country.

It is possible to say that all major infrastructure projects have been implemented in Azerbaijan from 2004 to the present. We used to import electricity, but we have already started to export it. About 30 power plants have been built and put into operation. This is the first condition for development. Without the energy capacity it is impossible to create any enterprise. On the other hand, our infrastructure projects are of social nature, because it is the duty of every state to provide its citizens with sustainable energy. We have achieved that. We remember the previous years too well – there were blackouts even in Baku. It is possible to say that we have achieved uninterrupted power supply. Work is still ongoing, energy infrastructure is being updated, substations built, power lines laid, and electricity pylons updated. However, we can say that we have done most of the work.

Gasification in Azerbaijan has reached 92 per cent. I remember that one of the issues people raised during my first trips to the regions as a President was gasification. At that time, there was no gas supply not only to the villages, but even to district centers. In fact, the city of Baku was not provided with natural gas by 100 per cent either. We can say that we have resolved this issue as well. The level of gasification of up to 92 per cent is a great achievement for any country. But we should not be content with this. We will achieve an even higher level in the coming years.

After the adoption of the first program, roads more than 11,000 kilometers in length were laid. Roads linking us with all neighboring countries have either been put into operation or are close to this. The construction of rural roads has assumed large proportions. We put into operation two road projects in Yevlakh District yesterday. We can say that the main rural roads in Yevlakh District are already in a normal state. New road projects connecting hundreds of villages will be implemented this year. This is both social and economic issue. It brings people comfort. At the same time, roads are of great importance for the timely delivery of crops to markets. In addition, where there are no roads, there is no investment and no development. These were the main directions of the program.

Let’s move on to the creation of social infrastructure. More than 3,000 schools and over 600 hospitals have been built or renovated. Major land reclamation projects have been implemented. I can say that two of them, the Takhtakorpu and Shamkirchay water reservoir projects, are of historic importance. Major state funds have been invested in these projects. The operation of these reservoirs will continue to provide great support for agriculture in the future. Other land reclamation projects have been implemented as well. This process continues. I think that the most serious steps will be taken in this direction this year. I have already mentioned that new irrigated land of about 150,000 hectares will be made available to farmers this year. The fact that we have received so much irrigated land in just one year is a historic achievement.

In other words, the implementation of regional development programs has produced excellent results. Thousands of new enterprises have been created. A total of 1,700,000 jobs have been created, including 1,300,000 permanent ones.

Our regions have improved and the cities have become prettier. When you come to any district today, you see beauty and comfort. We have done all this. This has been possible thanks to our policies. This shows once again that we have chosen the right path, and the implementation of these initiatives has created an entirely different situation.

We can say with confidence today that Azerbaijan has managed to diversify its economic potential. Currently, the non-oil sector provides about 65 per cent of our economy. We can’t say this about exports yet. A significant part of our exports is still connected with oil and gas. This is probably natural for the current stage because we are building up our oil and gas potential. But one of the tasks we are facing to achieve diversification in exports as well. We must achieve this in exports, just as we have done with the gross domestic product.

The indicators of this year are also very reassuring. I have already talked about this and I want to say again: the indicators for three months of this year are very encouraging. This shows once again that the decisions we made in 2016 and the reforms launched have given excellent results in a short period of time. Over the three months of this year, the non-oil sector of our economy increased by 2.4 per cent. This is a very good indicator. Our non-oil industry grew by 2 and agriculture by 3.5 per cent%. Over three months, more than 80,000 jobs were created. The turnover has increased by 15 per cent and exports by almost 50 per cent, while imports have decreased by 17 per cent. Exports of agricultural products have increased by 44 per cent. Our surplus exceeds $1 billion. In three months, we have earned $1 billion. Our foreign exchange reserves are growing. This positive dynamics suggests that we will achieve even better results over the year because the pace and reforms that have assumed major proportions, including the support of our policy by entrepreneurs, which is manifested by their deeds and investments, suggest that 2017 will be very successful. At the same time, by moving to a new economic model, we will now develop our economy only through reforms, innovations, technologies and the non-oil sector.

The decisions made last year, the laws, decrees and orders signed have created good opportunities for further diversification of the economy. In particular, the steps we have taken in connection with non-oil exports are already yielding excellent results. We have started applying the incentive system. I said this in previous years, because the incentive system justified has itself in several countries and led to a rapid growth in exports. We have studied the most advanced practices and begun to apply investment and export promotion systems in Azerbaijan. Both mechanisms are involved and have already been successfully implemented. Perhaps entrepreneurs did not immediately believe that the government would provide them with such benefits. Some of them were surprised by this. But now they see that if an entrepreneur produces exportable goods and delivers them to world markets, the state returns a certain percentage of its value to him. So this initiative gives a huge incentive. In economic terms, the entrepreneur receives an extra income. Also, I think that this is of moral value because the entrepreneur has more confidence, does his job with even greater faith and attracts investments to the country.

There is a mechanism for encouraging investments. In a short time, 130 documents on investment promotion have already been issued. Within the framework of this program, people will invest 1 billion 250 million manats in the economy of the country. Look how much money we have attracted for investment using the mechanism of their promotion. Entrepreneurs organize it themselves. The state, of course, provides support.

As I have already mentioned, preferential loans, methodological recommendations and infrastructure projects are bearing fruit. This year, we will begin the irrigation of 150,000 hectares for the first time. All this enhances our economic potential and enables entrepreneurs to invest funds, grow produce, and deliver it to foreign and domestic markets. So these two incentive initiatives deserve very high praise. Along with this, we created the Azexport portal last year. This is also a step taken by the state to facilitate the work of entrepreneurs. Today, Azexport has already proved itself on a global scale. Interest in this portal will gradually grow. At present, our main task is to ensure production of goods ordered from abroad. Today, we sometimes do not have enough products for exports. The creation of Azexport is a very positive event, and interest in it in the world will gradually increase.

Tangible steps are being taken to popularize the Made in Azerbaijan brand in the world. Today, this brand is already gaining recognition in the world. The exhibitions organized by the state and the participation of entrepreneurs in them are producing excellent results. I am told that contracts have already signed in several exhibitions. If we had not participated in these exhibitions, contracts would not have been signed. We realize that entrepreneurs should be provided with additional support.

I have already noted that loans are provided and farmers are exempt from all taxes except for the land tax. Equipment is purchased, fertilizer, fuel and subsidies are provided on preferential terms. All this has revived our non-oil sector. However, entrepreneurs should be provided with additional support so that they could supply their produce to foreign markets. This is necessary for them and for the state. This brings currency to our country. This is why we have begun to expand our participation in these exhibitions. Several export missions were sent to foreign countries. These missions also bring tremendous benefit. We have decided to create trading houses of Azerbaijan in several countries and are already close to achieving that. Of course, all the steps taken by the state create new opportunities for entrepreneurs.

Thus, from now on, on the basis of these excellent results, we must further improve our work and expand our activities. Of course, in order to increase non-oil exports, we must, first of all, meet the domestic demand with local products. We are approaching this. Every year we sum up our regional development programs. The following topic is always on our agenda: what products we provide ourselves with and to what extent. And every year we see positive dynamics. So far we have not been able to fully achieve that. Therefore, I believe that in the next three to four years we must try to fully provide ourselves with basic consumer goods. Thus, we will have additional opportunities for export.

I want to mention issue question: we must always develop because the country is developing dynamically and the population is growing. In developed countries, the population either remains stable or decreases. In our country, the population is increasing. We had a small population when the first regional program was adopted in 2004. Today, the population is approaching 10 million people. This, of course, is our great advantage. At the same time, it testifies to our rapid economic development. People have started to live even better, their well-being has improved and, naturally, the population is growing. At the same time, this positive trend involves new challenges. We must always increase production to fully meet the domestic demand and export competitive goods. Therefore, issues of meeting the domestic demand for local products are our primary goal in the coming years.

At the same time, we must gain access to new markets with the support of the state. We are doing and will continue to do this. We need to increase the volume of exportable goods. Food security is also a matter directly related to these two factors. We are close to fully ensuring our food security.

We will talk about the work that needs to be done in the coming years. The main objective of the current meeting is to ensure that we consistently carry out further activities. The instructions issued today should be and will be fulfilled, of course. As a result of their implementation, we will achieve even greater export potential. Of course, we can achieve this only with the help of entrepreneurs and with their hard work. The state, as always, will stand by entrepreneurs.

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Speakers at the event included Azerbaijani Economy Minister Shahin Mustafayev, chairman of Wine Exporters' and Producers' Association Elchin Madatov, chairman of Hazelnut Producers and Exporters Association Ismayil Orujov, CEO of Azersun Holding Savaş Uzan, Executive Director of Az-Granata LTD Rovshan Farhadov, CEO of Gok-NUR Baku LLC Farid Farhadzade, founder of D-Fruits Farming Isamaddin Damirov and Business Incubator participant Ariz Mikayilov.

President Ilham Aliyev made a closing speech at the conference.

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Closing speech of President of Ilham Aliyev

- I am sure that our export potential will further increase after this meeting and we will meet the domestic demand more with local products. I am convinced that, summing up the results of 2017, we will see good dynamics. Of course, as I have already mentioned, in order to increase exports, it is first of all necessary to fully meet the domestic demand both for food and construction materials. Specific steps are and will be taken in this direction.

In the coming years, we should pay more attention to the creation of export-oriented enterprises. In fact, the enterprises to be established in Azerbaijan in the future that should pursue both goals – it is necessary to meet the domestic demand and have export opportunities. To achieve this, state bodies carry out consistent activities. The loans to be provided through the National Fund for Entrepreneurial Support in the future should also give an impetus to the establishment of export-oriented enterprises. Export-oriented products will easily find a place in the domestic market as well. Local executive bodies should also take an active part in addressing these issues. The main burden falls on state bodies, of course.

There is a wonderful investment environment in Azerbaijan. In recent years, we have attracted investments exceeding $200 billion. Some of them are investments in oil and some in non-oil sectors. In general, the investment climate in Azerbaijan is very positive. Influential international structures are giving a positive assessment to our activities. The Davos World Economic Forum ranks the Azerbaijani economy in 37th place globally for competitiveness. In one year we climbed three steps. So in general, the economic liberalization, the profound reforms, the excellent investment climate and the fact that we occupy leading places in terms of direct foreign investment per capita in the CIS create additional conditions for attracting foreign and local investors, of course. Local executive bodies should also pay constant attention to this issue. The assessment to be given to the activities of local executive bodies in the future will be based on this factor as well – how much investment has been attracted to a region. Local executive bodies should organize this work together with central executive bodies.

Naturally, the exported products should meet international standards. Otherwise, they will not have export prospects. The laboratories operating in our country should undergo international accreditation, and this issue should be resolved as soon as possible. The certificates issued for the products manufactured in Azerbaijan must be recognized by foreign countries.

Special attention should be paid to personnel training. We need to train export specialists. In general, the training of personnel is one of the most important issues we are facing now. The country is developing, new enterprises are being created, and the people working at these enterprises should be well trained. Particularly important is the training of personnel at export-oriented enterprises, and state bodies should be active in these matters.

It is necessary to simplify export procedures. Steps are also being taken in this direction. There are no artificial obstacles to export now, as was the case in previous years. At the same time, it is necessary to take institutional measures. In addition, all relevant state bodies should make additional efforts to stimulate and facilitate exports in real life.

As I already mentioned in my opening remarks, Azerbaijan will set up trading houses in many countries. The first trading house will be created in Belarus in the coming weeks. Also on our agenda is the creation of such houses in other post-Soviet countries – Russia, Ukraine and Kazakhstan. This will promote our country and, at the same time, create new opportunities for exporters. Along with this, our trading houses must definitely be set up in large countries of the Asian continent. Gulf countries are showing great interest in our products. In essence, the source of such interest is our activity, as we have recently managed to establish business cooperation with Gulf countries, including this direction, and succeeded supplying Azerbaijani products there. These countries are showing great interest in our agricultural produce in particular, and the consumer market of Gulf countries is quite large. Most of the goods we produce and export to them are imported from other countries. Therefore, we must actively access these markets. In order to do that, trading houses must be established in Gulf countries.

Special attention should be paid to personnel training. We need to train export specialists. In general, the training of personnel is one of the most important issues we are facing now. The country is developing, new enterprises are being created, and the people working at these enterprises should be well trained. Particularly important is the training of personnel at export-oriented enterprises, and state bodies should be active in these matters.

It is necessary to simplify export procedures. Steps are also being taken in this direction. There are no artificial obstacles to export now, as was the case in previous years. At the same time, it is necessary to take institutional measures. In addition, all relevant state bodies should make additional efforts to stimulate and facilitate exports in real life.

As I already mentioned in my opening remarks, Azerbaijan will set up trading houses in many countries. The first trading house will be created in Belarus in the coming weeks. Also on our agenda is the creation of such houses in other post-Soviet countries – Russia, Ukraine and Kazakhstan. This will promote our country and, at the same time, create new opportunities for exporters. Along with this, our trading houses must definitely be set up in large countries of the Asian continent. Gulf countries are showing great interest in our products. In essence, the source of such interest is our activity, as we have recently managed to establish business cooperation with Gulf countries, including this direction, and succeeded supplying Azerbaijani products there. These countries are showing great interest in our agricultural produce in particular, and the consumer market of Gulf countries is quite large. Most of the goods we produce and export to them are imported from other countries. Therefore, we must actively access these markets. In order to do that, trading houses must be established in Gulf countries.

Of course, we must establish business cooperation with major distribution networks in priority export markets. They are well known. It is necessary to invite them to Azerbaijan, show our possibilities, and organize trips to our main and advanced enterprises. Let them come and see with their own eyes that there is great potential here and our products are competitive. Of course, during meetings with my colleagues, heads of state and government of other countries, I always raise this issue, as our turnover should grow and our products should be delivered to the markets of these countries. Of course, political support is provided, but we must work at various levels, and the best way, as I said, is to establish relations with large sales networks and invite them to Azerbaijan.

Our export missions are already proving effective. These missions are of great benefit. They need to be organized throughout the year. This should happen automatically, i.e. not necessarily on my orders. Every year, different state bodies should envisage how many export missions they will conduct in what countries this year. Every year we should send missions to countries that are the best potential markets for us. It is necessary to organize special missions to various regions of large countries. Our groups should regularly travel not only to capitals but also to the regions of these countries.

Last year, we arranged for the participation of our entrepreneurs in leading international exhibitions. In previous years this was not particularly widespread, while in some cases our participation in international exhibitions was a pure formality. A group of people was delegated, spent several days there, and their participation was not of particular importance. The main objective of participation in international exhibitions is the promotion of our products there. An excellent result can be achieved if a contract is signed during an exhibition. The first experience is already there, as has been mentioned here. A contract related to the export of a large batch of our wine has already signed in China. Therefore, our participation in exhibitions should be of practical importance. We should participate in all the leading exhibitions of the world. State bodies and entrepreneurs need to include this in their schedule. Of course, state bodies, in particular the Ministry of Economy, will organize this work, but entrepreneurs should also be active. In previous years one of our problems was that entrepreneurs did not pay due attention to export issues. This has different reasons. It should also be noted that state bodies did not attach much importance to this. This is why work was mostly done spontaneously. From now on we should address export issues in an organized and comprehensive manner. This is precisely the goal of today's meeting.

The Azexport portal has been created. I mentioned this in my opening remarks. Now we need to provide Azexport with detailed information. Entrepreneurs should post information about their activities on this site and regularly enquire about it, find out what is available and what orders are being placed. We are already seeing the early results of this. Thanks to the operation of this portal, many contracts have already been signed. What else do we see? Sometimes we receive an order but do not have exportable products. Therefore, this portal is not only about our exports, though this is the main goal. At the same time, this portal will inform us about the demand, the regions and countries in which certain products are in demand. This will be clear to state bodies and business people. They will see, for example, that there is demand for certain products, but their production is not at the proper level in Azerbaijan. This means that the state will provide loans to the industry through the National Fund for Entrepreneurial Support. Entrepreneurs will see that if they produce and grow a product, there will be a market for it. Therefore, in order to achieve this, all Azerbaijani companies should first place information about their exportable products on Azexport and then follow it. Of course, state bodies also need to monitor the situation. In essence, the demand will trigger supply.

As I have already noted, the Made in Azerbaijan brand is already proving effective in the world. The government is doing work to promote this brand. At the same time, we should engage major public and private companies in this work, so that they could also promote this brand in the countries they work in. In particular, this applies to state bodies. The companies with a wide range of activities abroad, first of all, the State Oil Company of Azerbaijan (SOCAR), the Azerbaijan Airlines (AZAL), the Azerbaijan Railways and other major state companies are in contact with foreign partners. They work in foreign countries. They should actively participate in the promotion of the Made in Azerbaijan brand and regularly inform state bodies about what they have done to promote this brand. Perhaps the Ministry of Economy should prepare special recommendations for them, method guidelines perhaps, so that they could do this work systematically. It is well known that advertising, of course, is an integral part of trade.

We must extensively analyze and study external markets. A struggle for markets is under way. We should not think that if we increase production here and produce exportable goods, then all the issues will be resolved. No, we should compete for markets, and we are doing that. To do this, first of all, it is necessary to accurately analyze foreign markets, their current state and prospects. We are also well aware that many countries want to meet the domestic demand by local production. This applies not only to us. Therefore, it is important for us to know, for example, what trends are emerging in traditional markets, what state programs are being implemented, and what products are to be produced as a result of these programs. And we should plan our work accordingly. At present, we have traditional markets to which we export our traditional products. But one day these markets and countries will meet the domestic demand and there may be no need for our products. What will we do then? Therefore, it is necessary to conduct a very serious analysis in order to know the current and future situation.

In parallel, we should access new markets. We should not think that we have traditional markets in the neighborhood to which we are sending everything we produce. We should pursue very precise policies in this sphere. Export diversification is not only about assortment. We should diversify the geography, access new markets in general and further strengthen our positions in traditional markets. Of course, there are various ways of doing that. First and foremost, I believe that the main issue is the existence of good political ties. Azerbaijan has very good business and friendly relations with almost all countries, including, first of all, its neighbors. Such a pattern is not common in the world today. Quite often there are disputes and problems between neighbors. We have no problems with any of our neighbors except for Armenia. On the contrary, as a result of the policy we have conducted in recent years, our relations with four neighboring countries have developed rapidly and are at the highest level today. Therefore, entrepreneurs should also use these opportunities. They have no political obstacles in the way to neighboring and any other markets. However, we see that where there are political problems, this immediately affects entrepreneurs. Restrictive measures are taken under various pretexts, which causes exports to experience problems. Thanks to our policies, nothing of this nature threatens our business people.

However, I want to say again that we should accurately analyze the markets, the current situation and prospects, and access new markets. We must strengthen our positions in foreign markets. So the establishment of logistical centers is of special importance for this. The first such experience is already available. This was mentioned in the speeches. Azerbaijan’s first logistical center abroad has been established in Aktau, Kazakhstan. This center is of great importance. It will allow us the opportunity to export our products to the markets of Central Asia and, Kazakhstan. Such centers should be set up in other countries. The Azerbaijanis living abroad also have a role to play in this.

As you know, we are doing a lot to resolve the problems of the Azerbaijanis living abroad. Azerbaijan is one of a handful of countries to conduct traditional congresses of the Azerbaijanis living abroad. We provide them with political support and create business opportunities. They, too, should participate in these matters. As far as I know, they are actively involved in our new initiatives. The Azerbaijanis living abroad, in particular, our compatriots living in the CIS, are engaged in business and have great opportunities. They also need to work hard to expand their business opportunities and, at the same time, help the home country. This work has begun, and our state bodies are engaged in that. I urge them to do this work. They also have large retail chains. They import products from different parts of the world. If we take into account our expanding opportunities, they should import from Azerbaijan more.

We should pay attention to the packaging of products. I am glad that this has been in the spotlight in recent years. There is a small exhibition in the lobby of this Regional Development Center. I saw new prepackaged products and goods at this exhibition. We need to pay more attention to this. I have already spoken about this and want to say it once again: we should strive to develop the packaging sector in Azerbaijan. So far we import packaging and auxiliary materials from abroad. There are no problems for their production in Azerbaijan. We have a glass plan now. It is necessary to upgrade it to be able produce all kinds of glassware and cans. We have a cardboard factory. In general, packaging will reduce our dependence on imports. When we look for an external component in the cost of production, we see that packaging plays a special role here. Therefore, it is necessary to fully arrange packaging in Azerbaijan and pay great attention to this. Of course, the goods we offer should be pleasing to the eye.

Last year we started advertising campaigns in foreign media. This can be attributed to tourism and the goods produced in Azerbaijan. This work should also be done on a regular basis. To do this, it is necessary to allocate the appropriate budget. I think that the state should also help entrepreneurs here, because before spending these additional funds, entrepreneurs will think a hundred times whether to advertise or not – probably because the volume of exportable products is small. Therefore, we do not have a proper idea of advertising yet. We must acknowledge that. Therefore, the government should organize advertising campaigns in foreign media, on television and in newspapers at its own expense in order to promote our exportable goods.

Let business people submit to the Ministry of Economy proposals on the products and countries to which they are exported. We should start that. Of course, at the initial stage we must start with neighboring countries, the CIS. This will be further excellent support for entrepreneurs.

Let’s move on to industrial production. Several major industrial enterprises are being set up in Azerbaijan. I have already spoken about this and given recommendations to entrepreneurs. I want to say again: they should rationally use the raw materials produced by these large enterprises, create new factories and plants, produce finished products in Azerbaijan in order to reduce our dependence on imports and export finished products. I would like to emphasize the factories of the Sumgayit chemical industry park. There is huge potential for business, small and medium-sized businesses and exports there. There are also Sumgayit Polymer and Fertilizer Plants, and the Mingachevir Industrial Park. First plants will be commissioned this year. There are Neftchala, Balakhani and Pirallahi industrial zones. This experience is already expanding, and we should try to ensure that each district has a modern industrial zone. We support and will continue to support this.

Our country develops high technology. At present, we are developing the space industry. Azerbaijan is one of a handful of spacefaring nations. We have two satellites. A third satellite is being designed and we are already selling these services abroad. This is another type of exports. When putting the first and second satellites into orbit, we pursued several goals, of course. These include innovation and technology, which are of great importance in terms of training. The image of Azerbaijan will be enhanced. At the same time, we treat this as a business project. Satellites are already beginning to pay off. As far as I know, contracts have already been signed for the services of our third satellite. So this is also a sphere that brings currency income to our country. We have done this through official channels. However, businesses in developing countries order satellites, put them into orbit themselves and earn money on them. There are small countries that have perhaps dozens of satellites. Why? Because it is profitable for business! We already need to expand the business opportunities of the space industry. As I noted, this is a source of the currency for us.

At the same time, a new direction of exports has been created. It is the export of military equipment. This is also an innovation. Ten years ago it was impossible to imagine that Azerbaijan would not only meet its own demand for weaponry and military hardware, but would also export them. This is a reality today. We have achieved this. When the Ministry of Defense Industry was established more than 10 years ago, we already knew that this day would come. And it has come. Today, not only do we meet the needs of our army, we also export. We participate in international exhibitions. This shows again how important it is to participate in exhibitions. An international exhibition of weaponry has been organized in Baku twice. Our arms trade is growing. This brings a lot of currency to the country. At present, military products of more than 1,000 denominations are produced in Azerbaijan, including those based on the latest technologies. Therefore, this industry should also be in the spotlight because its export potential is growing.

Of course, we should rationally use our resources. Consistent work is also carried out in this direction. Azerbaijan is rich in natural resources. Our natural resources are not limited to oil and gas. We have gold deposits. A state agency, the “AzerGold” Joint Stock Company was set up some time ago. It is already engaged in the development of gold deposits and exports. We have deposits of not only gold, but also silver and other precious metals. This sector will bring a huge income to the state. There is export potential estimated at millions, tens of millions of dollars, and this work is already being built on a modern basis. This is also great export potential. Of course, the government provides and will continue to provide its support so that “AzerGold” becomes a world-class extractive company.

We have other great resources which we can’t use rationally. I am talking about iron ore. Back in the times of tsarist Russia, as well as in Soviet times, there was great interest in our iron ore. People coming here from Europe in the times of tsarist Russia, the business people of those days, were very interested in this and tried to organize this business. However, there was not enough attention to this sector in the period of independence. Unfortunately, we have yet to create a unified production industry. The Dashkasan iron ore deposit is one of the biggest in the world. We can’t be content with its current state, of course. Different proposals have been put forward at different times. A state body was even set up, but could not operate afterwards. The private sector has also occasionally shown interest in this. It is now time to take serious steps on this issue. The whole production chain should be created – from ore to final exports. Our exports will increase, and the dependence on imports will drop drastically. Huge funds are spent on importing finished products from abroad, and they are expected to gradually grow because the dynamics of our development will continue to be so rapid that domestic demand will also increase. Therefore, the development of the Dashkasan iron ore deposit and the creation of an industrial chain are important issues on the agenda.

Tourism is developing fast in Azerbaijan. The number of tourists increased by 11 per cent last year and by 25 per cent in three months of this year. It can be seen with the naked eye today. The number of tourists is growing fast both in Baku and in various regions. Of course, there are reasons for that. This did not happen spontaneously. The work done in recent years has led to this situation. First of all, the stability, calm, and public and political order turned Azerbaijan into a very attractive country for tourists, especially in the current conditions, when tensions run high in different parts of the world, there are growing threats, confrontations, public discontent, and mass protests. There is nothing of this kind in Azerbaijan. There is unity between the people and the government in Azerbaijan. Our policy is supported and approved by the people. This is the key factor of stability in Azerbaijan.

Of course, there could be no talk of the development of tourism in the early years of independence. Azerbaijan was a very risky place, a poor country with almost no tourism infrastructure. However, we have created the infrastructure that led to the development of tourism. For example, in recent years we have built six international airports in the country. They have been practically rebuilt. When creating them, we certainly thought about people’s comfort. Today these international airports operate flights to different countries. We see how much this benefits tourism. Direct flights are being opened. Direct flights are opened from Ganja, Nakhchivan, Gabala and Lankaran, and their number is growing. In previous years, these flights were used only by the Azerbaijanis living abroad or guests. Today these flights are used by tourists. If these airports and the Heydar Aliyev International Airport in Baku were not at this level now, there could be no talk of the development of tourism. Beautiful and modern roads have been built. The Baku-Yevlakh road meets the highest international standards. The main roads linking us with neighboring countries are either fully commissioned or will be commissioned in the near future. In all the regions, we have implemented infrastructure projects – electricity, gas and drinking water. Modern hotels have been opened both in Baku and in the regions. Of course, our natural conditions, wonderful climate, the hospitality of our people, rich cuisine, and historical monuments – all this also plays a role. I believe that our policy on visas is playing a key role in the development of tourism. The launch of “ASAN Viza” and the receipt of a visa by simplified electronic ways have, of course, contributed to that. We are still at the initial stage of tourism development, as long as the process of popularization of Azerbaijan is in progress. Of course, the international events organized in our country, such as the European Games, the upcoming Islamic Solidarity Games, especially Formula-1, have played a major role in this process. The audience of Formula-1 is 500 million people. Each of them sees the beauty of our city, and many want to come to Baku.

These are the main factors contributing to the development of tourism. I also want to say that we need to treat tourism as an export product as well. What does tourism bring us? Currency! What do exports bring? Currency! By developing tourism, we will earn billions in hard currency. According to the Davos World Economic Forum, Azerbaijan is a place where tourism develops at the fastest pace in the world. These are the results of our policy. In the regions, it is necessary to develop a modern tourism infrastructure. I also call on the business people. Entrepreneurs should know that there will be a great need for new hotels, because Baku hotels are already occupied by 85-90 per cent, in the winter season. What will happen in the summer? There will be no vacant rooms. Therefore, the creation of hotels in Baku and our main tourist centers is of great importance. It will be of great benefit to the business sector.

And now I want to talk about the tasks related to the exports of agricultural produce. At present, 33 agro-parks are being set up in 24 districts. Investments of 1.1 billion manats are being made in these agro-parks. The area of these agro-parks, the land allocated for them covers 142,000 hectares. I am sure that the launch of these agro-parks we will help us meet the domestic demand by 100 per cent and there will be huge export potential. Going back to what has been said, I want to note that we already have to plan on what we will export and where. Entrepreneurs will experience difficulties on their own. State bodies, the Ministry of Economy, the Ministry of Agriculture and, of course, the Presidential Administration should determine our export strategy for the coming years. We already need to know how we will realize our growing export potential. Of course, there are export products that do not require a search for markets. One of them is cotton. It is sold on stock exchanges. But to export horticultural and other products, we already have to work hard and make plans.

Other projects that will give a major impetus to our export potential are related to irrigation. This year alone, 150,000 hectares of additional acreage will be included in the turnover. Various products will be grown there, which means additional export potential. It will be a project that will give an impetus to great development. If we add to this the greenhouses under construction, we will see that the volume of output will be even higher. Among 130 investment promotion documents, there are 26 greenhouses. These 26 greenhouses create thousands of jobs, and the investment in them totals 342 million manats. All these are exportable products.

I have pointed out to the work related to irrigation. Currently, new canals are being laid and existing ones are being cleaned. In the coming years, we will give farmers tens of thousands of hectares of newly irrigated land. We are ready for that. Thus, we will include unused and infertile land in the turnover.

The production of fruits and vegetables is increasing. The biggest income in currency is fetched by tomatoes and persimmons. This is of the greatest interest. Therefore, entrepreneurs should take this into account. It is necessary to create logistical centers. At one time, we built numerous cold stores. However, they are designed for the previous volume of production. In the coming years, we will need additional cold stores. The Ministry of Economy, the National Fund for Entrepreneurial Support and entrepreneurs proper should take this into account. The capacity of cold stores should be consistent with our production. Otherwise, we can’t keep the products we produced.

Cotton-growing develops fast. These figures have been expressed a number of time, but I want to repeat them. We harvested 35,000 tons of cotton in 2015 and 90,000 in 2016. I think that this year we expect to harvest at least 250,000 tons of cotton. If we move on at this rate, we will produce about 400,000-500,000 tons of cotton in three to four years.

We have excellent natural conditions for viticulture. It has been noted here how viticulture was developed on the initiative of great leader Heydar Aliyev in the 1970s and early 1980s. We should restore and are restoring viticulture now. We need to set up new vineyards and our wineries should work at full capacity. According to the information provided to me, the production potential of wineries is 100 million bottles a year. We are using about 20-30 percent of that. Therefore, it is necessary to increase the production of grapes, including technical grapes. Wineries should operate at full capacity. Exports should also increase sharply. According to my information, exports increased last year. But if we look at the figures, we can see that the exports of cognac and wines brought our country only $17.5 million. Therefore, we can increase the production and exports of wine and cognac at least five times in a short time. We must achieve this. Additional proposals will be prepared on the development of viticulture and winemaking.

Tobacco farming has great potential. We must restore this industry. In Soviet times, we harvested 10 times, perhaps even more tobacco than now. This year, tobacco is sown on an area of 3,000 hectares and about 3,000-4,000 tons of dry tobacco will be harvested. We should increase this indicator to the level of 10,000 tons in a short period of time. You can achieve this. As in cotton-growing, subsidies are available. Of course, the construction of modern cigarette factories should also be envisaged – not for people to smoke more. No, smoking is a very harmful habit. I do not smoke myself and do not advise anyone to do that. I hope that there are fewer smokers in Azerbaijan. However, the export of cigarettes is a very profitable activity, and it is hard to understand why tobacco-growing should not develop in a country with appropriate natural conditions. Therefore, we must achieve serious growth in this sector as soon as possible. Let me voice a real figure. I want to say again that harvesting of 10,000 tons of dry tobacco is a realistic indicator.

We are widely promoting carpet-weaving. It is our ancient craft. Company "Azerkhalcha" has been set up. New carpet factories are being created in 13 cities. I have personally attended the opening of one of them – in Fizuli District. The other carpet factories will be commissioned this year. This means thousands of jobs and our wonderful export potential.

The procurement of wool in previous years was largely out of focus. According to the information available to me, we have only one normal procuring station. The procurement of wool should be organized in all our regions. It is time to set up a major wool spinning factory in Azerbaijan. This sector also deserves serious attention. It will become an additional source of income for farmers and bring currency to the country.

We have now started to export meat and poultry meat, albeit in small quantities. We can’t provide ourselves with poultry meat yet. However, exports have already begun, which is good. I do hope that we will fully provide ourselves in the near future and the export potential will further increase.

Livestock breeding is developing. Thoroughbred cattle is brought in. A center of artificial insemination has been set up. We need to generate great potential within several years to fully provide ourselves both with dairy and meat products. The import of thoroughbred cattle and the breed improving process should assume even greater proportions. We should set up new farms. Entrepreneurs should pay more attention to this. We provide ourselves with milk and dairy products by about 80 per cent. We can provide ourselves completely within a few years.

I attended the opening of the Varvara fish farm yesterday. Fish farming also has great prospects. Unfortunately, in previous years this sphere was also overlooked. Both rivers and the Caspian Sea have an abundance of fish. We breed and grow fish. A fish breeding industry can be established in Azerbaijan. This will fully provide the local market and generate large export potential.

The sphere of mineral waters is also developing. We have already started exports, but in small quantities. We have natural springs. We have excellent opportunities for the production and export of quality mineral waters under our brand names. This area should also be given attention.

Processing enterprises should be established. There was talk about plans here. We have identified thousands, tens of thousands of hectares of land that will be brought into circulation. It is clear that new produce will be grown there. There is a need for canneries. At present, we have canneries, but they are not enough. We need to envisage new processing enterprises. Of course, the income derived from the sale of exported goods should fully flow into our country. To do this, control mechanisms are currently put in place, because in previous years, according to the information available to me, about 30 per cent of the value of such goods never returned to the country. |They were hidden here and there, in various bank accounts abroad. This should not be allowed. The currency should come here in full. Of course, a new mechanism is now being applied. If a company wants to receive investment and export promotion, then it should comply with these rules.

I want to draw your attention to another issue, as it also very significant. This is to do with the transport sector. We will significantly increase exports now. We deliver exported products to foreign markets using transport. Therefore, it is necessary to pay attention to our wagon fleet. At present, we acquire new electric locomotives and wagons. The number and volume of wagons should be aligned with exported products. The rehabilitation of the railway and increase of the speed – all these are issues calculated for exports and transit.

I want to voice a few figures. I think that this will be of interest both to the public and entrepreneurs. In the first quarter of 2017, the highest growth was observed in the export of cotton fiber – more than 700 per cent. Exports of dairy products increased by 260 per cent. Among fruits, the greatest growth in exports was on apples - 144 per cent. Pomegranates registered growth of 125 per cent. These are very good indicators. I have other figures. The Minister of Economy has cited them. I do not want to repeat that. However, I want to specifically highlight this.

I also want to talk about products that brought us the largest amount of currency in 2016. Hazelnuts are in first place – they brought our country currency worth $105 million. Hazelnut farming is growing very fast. It was mentioned here that we established 15,000 hectares of new hazelnut gardens, and this work is progressing fast. This includes sericulture. Whereas in 2015 we procured 200 kilograms of silkworm, last year this figure was 70 tons. This year we will have 100 tons. Our 19 regions grow more hazelnuts, but 46 districts have the capacity. I believe we can double both the production and exports of hazelnuts. We can easily increase these 105 million to 200 million. At the same time, we have started the creation of almond orchards this year. Their area is very small – only a thousand hectares. Of these, 900 hectares are in the Nakhchivan Autonomous Republic, but Baku and the Absheron Peninsula are very suitable for almonds. Therefore, new gardens are being set up at the present time. We need to create thousands of hectares of almond orchards. I advise this to entrepreneurs. The same applies to olive and sugar-beet growing. We should fully provide ourselves with olive oil. We have yet to achieve that. We export, but the domestic demand is not met yet. Sugar beet has become widespread this year. We should produce sugar from the beet. There is great potential here too.

So hazelnuts are in the first place and tomatoes in the second. Last year, tomatoes worth $94 million were exported. Persimmons are in the third place with $68 million and sugar in the fourth with $62 million. But we should know that much of this sugar is made from cane sugar and raw materials. In other words, raw materials for the production of sugar were imported from abroad. When we switch to beet, all $62 million will remain in our country, so the money will not be allocated for imports. I think that we can comfortably double sugar production either at the plant in Imishli District or, if the business catches on, a new plant can be built.

Cotton is in the fifth place. Last year, cotton brought us currency of $24 million. But it was only the first year. I am sure that this figure will double this year. So according to the above five positions, our country received $350 million in currency last year. Look how much currency we can safely get by increasing this only twice.

I have a long list. It includes industrial, food and agricultural goods. Today, in the second part of the meeting, representatives of state bodies will answer questions of entrepreneurs and cover these problems.

Among industrial products, plastic products are in the first place – about $100 million. Aluminum and products from it are in the second place - also about $100 million. We should develop the aluminum industry at a fast pace. In the third place are ferrous metals and products made of them - $96 million. Products made of precious metals are in the fourth place – $77 million. The fifth place is held by products of the chemical industry – $55 million. Why am I voicing these figures? For business people and the public to know and see both the positive dynamics and our potential! Therefore, development and increasing exports are among key issues. I want to say again: the government is doing everything possible for the entrepreneurs. The government has created the infrastructure, provides loans, subsidies, has freed farmers from taxes, created leasing enterprises, acquires, delivers and distributes machinery, provides fertilizer with a 70 per cent discount. The same applies to fuel. We create trade houses, organize export missions, exhibitions, launch the Azexport portal and the Made in Azerbaijan brand, encourage investments and exports. In the future, entrepreneurs only need to take advantage of this and expand their opportunities in order to bring even more benefit to our country.

Thank you.