President of the Republic of Azerbaijan Ilham Aliyev has chaired a meeting of the Cabinet of Ministers dedicated to results of socio-economic development in the nine months of 2018 and objectives for the future.
The head of state made an opening speech.
Opening speech of President Ilham Aliyev
- Today we will discuss the results of nine months of the year and talk about the work to be done until the end of the year. I must say that 2018 was a successful year for our country. All the tasks we have set ourselves since the beginning of the year have been fulfilled successfully and on time. Azerbaijan has registered dynamic development in 2018, and our country has lived in the conditions of peace, stability and security.
Given the current situation in the world, we must note that stability and security are among the key factors for any country today. Security, calm and stability are protected and strengthened in Azerbaijan. Our stability and successful development is underpinned by a -thought-out policy, as well as the popular support for our policy. The situation in the world and in our region in particular remains tense, as new centers of confrontation and conflict are emerging. Unfortunately, the tensions which emerged in previous years is still there. Under such circumstances, of course, we must protect ourselves even more seriously against possible external risks, and we are doing that. I want to note again: there are no sources of internal risks in Azerbaijan, and we are protecting and will continue to protect ourselves from possible threats by our policies and hard work. We are providing and will continue to provide for the security of the Azerbaijani people.
Many steps are being taken in this direction, including those related to foreign policy. I can say that the international positions of Azerbaijan were further reinforced in 2018. I have had numerous meetings with colleagues in both bilateral and multilateral formats. Over the course of nine months, I have paid 12 foreign visits and 15 heads of state and government have visited Azerbaijan. This indicates that Azerbaijan pursues a very flexible and multi-vector foreign policy. The agreements reached in a bilateral format are being implemented. Azerbaijan is known in the world as a reliable partner, we enjoy trust because our words do not contradict our deeds.
I believe that this year our relations with neighboring countries have risen to a new level this year. I have had numerous meetings with heads of state and government of neighboring countries. The agreements reached have strengthened our bilateral relations and also serve the development of stability, security and cooperation in the region. As always, our relations with Muslim countries are in the spotlight. This is one of the priority issues of our foreign policy. Azerbaijan is an active and authoritative member of the Organization of Islamic Cooperation. We demonstrate and promote Islamic solidarity in all international organizations and at international events. It is no coincidence that last year was declared a “Year of Islamic Solidarity” in Azerbaijan. Our work towards strengthening unity and solidarity in Azerbaijan and in the Islamic world is highly valued in the Muslim world. The Organization of Islamic Cooperation is giving a high assessment to our work. We will continue our efforts in this direction. It is no coincidence that Nakhchivan has been the second Azerbaijani city after Baku to have been awarded the title of the Capital of Islamic Culture this year. We perceive and view this as a manifestation of the entire Muslim world’s respect for us. At the same time, this decision, of course, is associated with the positive role we are playing in the Islamic world, and we will continue our efforts in this direction. We will also continue our efforts to strengthen solidarity and unity in the Islamic world. At the same time, we will continue to take steps to communicate Islamic values to the world. As you know, numerous events related to multiculturalism have been held in Azerbaijan. Our efforts are highly appreciated both in the Islamic world and in Europe. They are producing excellent results.
In addition, we have participated in a number of important international events this year. Among them I would like to specifically note the adoption of the Convention on the Legal Status of the Caspian Sea. I think this is a historic document which fully reflects the national interests of Azerbaijan. Five Caspian littoral countries have come to an agreement after lengthy negotiations. This shows that this Convention ensures the interests of all countries. I believe that this is a very important and serious legal document for the development of the region and for the expansion of economic opportunities.
This year Azerbaijan has hosted a major conference of the Foreign Ministers of the Non-Aligned Movement. Azerbaijan carries out successful activities in this organization and will chair the Non-Aligned Movement, one of the largest organizations in the world, from next year. A Summit of the Non-Aligned Movement will be held in Baku.
We have taken another serious step this year to develop ties with the European Union. The Partnership Priorities document was signed between the European Union and Azerbaijan this summer, and I believe that this is a very important step and an important document. It reflects many significant issues. This includes provisions related to the settlement of the Armenia-Azerbaijan Nagorno-Karabakh conflict – they are fair and fully express our position and interests. This document states that the European Union supports the sovereignty, inviolability of borders and the territorial integrity of Azerbaijan. At the same time, a declaration adopted at the end of the NATO Summit once again expressed support for the territorial integrity of Azerbaijan. All these documents further strengthen our position on the settlement of the Armenia-Azerbaijan Nagorno-Karabakh conflict. There is already a sufficiently broad legal framework for resolving the conflict, but the new steps, in particular, the decisions and resolutions of influential international organizations related to the sovereignty, inviolability of borders, the territorial integrity of our country further strengthen our position.
The public is informed about the current stage of the negotiations related to the conflict. The Armenian side’s attempts have not produced any result and the format of negotiations related to the Armenia-Azerbaijan conflict remains unchanged. These negotiations were, are and should be conducted between Armenia and Azerbaijan. This is proved by the two meetings of foreign ministers of the two countries. Recent events show that the format of negotiations remains unchanged and this conflict must soon be resolved on the basis of the norms and principles of international law, within the framework of the territorial integrity of our country. The territorial integrity of Azerbaijan has never been, is not and never will be the subject of negotiations. Therefore, we will continue to adhere to our position of principle. I hope that the new leadership of Armenia demonstrates a constructive approach and our lands are soon freed from occupiers.
Along with this, of course, we are building up and will continue to build up our military power. The Azerbaijani army is among 50 strongest armies on a global scale. This is confirmed by international ratings, by real life and by our military successes. At the same time, two grand military parades have been held in Baku this year, and our military might was demonstrated to the people of Azerbaijan and the whole world. The Azerbaijani army today is fully equipped with the most modern weapons and hardware. This process continues. We will continue to acquire the most sophisticated military equipment. New contracts are being signed. On the basis of the contracts signed in previous years, the most modern weaponry is delivered to our country. Some of it was shown in the military parades and some wasn’t. It is possible to say that we have fully secured our military potential in terms of material and technical capacity. From now onwards, we intend to acquire only the most modern hardware and weaponry, and the number of countries interested in selling this equipment us is growing. There are no difficulties with that already. Compared to previous years, we can now make a choice and are not bound by any one supplier. This is why we are purchasing military products from many countries today. The third defense industry exhibition was successfully held in Baku this year. Many leading companies have demonstrated their products. Azerbaijan showed its military and technical capacity. We are successfully developing in the production of military equipment. Azerbaijan produces military products for more than a thousand items. We have new plans related to the production of military equipment and ammunition, and we will implement them. In short, the military potential of our country is at the highest level today. The combat capability of our army is also at a high level. Our army has demonstrated that on the battlefield.
Of course, for all our plans to be implemented, the economy must develop successfully, and consistent steps are being taken in this direction. If we did not have strong economic opportunities, none of our plans could be realized. Our economy secures our political interests. Economic independence allows us the opportunity to pursue an independent policy on the international plane. If we depended on anyone economically, then these opportunities could be limited but we are not dependent on anyone economically. I think this is our historic achievement.
At the same time, very important steps were taken in 2018 to deepen economic reforms. I believe that the figures for nine months of this year suggest that we are achieving what we want. As for our economic indicators, I can say that in the first nine months of this year our economy, i.e. the gross domestic product, has increased by 0.8 per cent. Growth in the non-oil sector is 1 per cent. Industrial production has increased by 2 per cent and non-oil industry by 10.8 per cent. This indicator is the result of the industrialization policy we have pursued.
As you know, a lot of attention has been paid to the development of agriculture in recent years, in particular to increasing employment in the regions. Extensive support has been provided. We see consistent growth in agriculture. I do hope that this growth becomes even greater in the coming years. Growth in agriculture was 4.3 per cent in the first nine months of the year. I think this is also a pretty good indicator.
Inflation is only at 2.6 per cent and growth in population incomes constitutes 9.5 per cent. In other words, revenues exceed inflation. The low level of inflation and its further decline during the year show that our financial situation is very stable and macroeconomic situation is strong.
A total of 9 billion dollars was invested in the country's economy in the first nine months of this year. It is gratifying that 5.6 billion dollars of these funds were invested in the non-oil sector. This will serve to further diversify our economy.
Our foreign exchange reserves are growing. They have reached 45 billion dollars. Since the beginning of the year, we have additionally saved up 3 billion dollars. This shows again that we treat our funds very economically. We are addressing the important issues facing the country, implementing investment and infrastructure projects, resolving social issues and, at the same time, increasing our reserves. I am sure that they will grow even more before the end of the year. This is a very important factor for our further successful development.
Foreign trade turnover has grown by 37 per cent in the first nine months. Exports have increased by about as much. This is also a very positive fact. Non-oil exports have increased by about 14 per cent. I think this is also an excellent indicator. In the first nine months of this year, 85,000 permanent jobs have been created in our country.
Such are the key indicators of our socioeconomic development. Any influential international financial structure seeing such results can come only to one conclusion: the economy of Azerbaijan is developing successfully. Azerbaijan is pursuing a thought-out economic policy. There are no serious problems in store for the economy of Azerbaijan in the future. We simply need to continue reforms in this area. We will talk about that today so that we can make the most of our economic potential.
Of course, as I have already noted, the increase of local production is one of the most important factors for the successful development of our country. Numerous projects are being implemented in this direction with the support of the state. This includes the creation of gigantic enterprises with direct financial support of the state. For example, I believe that the opening of a propylene plant this year is a very significant event. The President of Italy attended the opening ceremony of this plant together with me. The second SOCAR Polymer project, a high-density polyethylene plant, will also be commissioned by the end of the year. The volume of investment in these plants exceeds 800 million dollars. Of course, these plants will be of great importance for the development of our non-oil industry. Our country will begin to receive a large amount of currency. A nitrogen fertilizer plant should be commissioned by the end of the year. The amount of investment there also amounts to hundreds of millions of dollars.
The Star Refinery will be commissioned in Turkey in the near future. We have invested heavily in this plant – more than 6 billion dollars. We will receive hundreds of millions of dollars in revenue from there every year. So investments made both domestically and abroad will bring us greater benefits in the future and contribute to the sustainable development of our country. Many industrial enterprises have been opened this year, and this process will be continued.
2018 was an important year for the development of our energy policy. In May of this year, we celebrated the official opening of the Southern Gas Corridor in Baku. This is a historic event. A month later, we celebrated the opening of the TANAP project in Turkey, and the Southern Gas Corridor project is being successfully implemented. All these four projects have produced excellent results. This year we will increase gas production. Gas is already coming from Shah Deniz-2. Its volume will increase even more next year and beyond. So we are doing everything possible to fully achieve the goal and, according to the latest data provided to me, there are also no problems with the implementation of the TAP project, which is the final part of the Southern Gas Corridor.
The successful completion of the Southern Gas Corridor will open up new opportunities, new horizons for us. We will access the markets of many countries with our resources. Then, taking this into account, we can implement new infrastructure projects in these countries. Negotiations are still under way, so I don’t want to say anything in advance. However, I think that we would want to remain not just a country that supplies gas to other countries, but also to manage the gas industry after that. This will further increase the efficiency and revenues, will lead to the creation of a new infrastructure in the countries we will work in.
Of course, while speaking about the results of the nine months of the year, it is necessary to note the Alat international trade seaport. It is also a historic project, the largest port on the Caspian Sea. The port was commissioned in May. Thus, an infrastructure project very important for the successful operation of the East-West transport corridor has been implemented. After that, of course, we will expand our transit capabilities. We are now heavily involved not only in the East-West, but also in the North-South transport corridors. The volume of cargo carried along this corridor is on the increase. I have already mentioned this figure but I want to say it again that the volume of cargo transported through the territory of Azerbaijan along the North-South transport corridor has increased more than a hundred times since the beginning of the year. And this is only a beginning. We are currently conducting very serious negotiations with partner countries for the full implementation of this project. Azerbaijan has the technical expertise, specialists and financial resources. We have done all the work on the territory of Azerbaijan ourselves. We can also deploy our financial capabilities in other places so that this corridor works at full capacity and brings additional currency to our country. That is our main goal. Of course, both political weight and political opportunities of transit countries are growing. The role of these countries in the development of cooperation in the region is increasing. We want our role to grow. We want Azerbaijan to be reckoned with. We want more to depend on Azerbaijan, and we are achieving this.
The events taking place in the region, the huge energy and transport projects being implemented on our initiative, the work we are carrying out in other areas have significantly increased our political weight. Azerbaijan today is a country enjoying great international respect and authority – not only because of the opportunities we have created, but also, perhaps even most importantly, because our words do not contradict our deeds. We are pursuing a policy of principle. We demonstrate our position on all issues of principle, adequately ensure the national interests of our country and will continue to follow this path.
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Speakers at the meeting included Minister of Taxes Mikayil Jabbarov, Minister of Transport, Communications and High Technologies Ramin Guluzade, and Chairman of the Board of "Azharkhalcha" OJSC Vidadi Muradov.
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The head of state made a closing speech at the meeting.
Closing speech of President of Azerbaijan Ilham Aliyev
- There are less than three months left for the end of the year. I am sure we will complete all the work we plan on, including the State Investment Program, by the end of the year. I was recently informed that the situation with the implementation of the State Investment Program is good. All scheduled projects are being implemented.
We made changes to the budget several months ago because additional funds were included. We thought it was necessary to allocate additional funds to carry out the work that can be done this year, including the solution of social issues. Adjustments were made and our budget was increased. This in itself is an indicator that our financial situation is improving. Opportunities have emerged for us to introduce changes to the budget during the year and increase it. There are not many cases like that in the world. The economy of Azerbaijan is proving sustainable at any time. Even when the world was engulfed in the second wave of the financial and economic crisis a few years ago, the economy of Azerbaijan maintained its stability.
Preliminary reports have been made related to next year’s budget. The budget for next year will be both investment and socially oriented. All social projects will be implemented. At the same time, sufficient funds are provided for public investment. The main thing is that we should use these funds rationally, make sure that the key tasks facing the country are fulfilled and identify the right priorities. The state investment program should serve the real sector of the economy and be aimed at the implementation of infrastructure projects that have not been implemented so far.
Fundamental economic reforms have continued this year. We are seeing the results of these reforms. In particular, the reforms carried out in the tax and customs system have brought about major changes for the better. The reforms must be continued. It is necessary to take all the necessary steps related to the tax and customs issues that are still causing the concern of business people and the public, so that we could put an end to these negative phenomena.
Customs bodies have collected an additional more than 800 million manats this year. I appreciate that. I am sure that this amount will increase even more by the end of the year. This, first of all, shows that the economy of Azerbaijan is developing successfully, imports are growing, and the increase in imports is connected with the development of industry. If we consider that exports are significantly ahead of imports, we should treat the growth of imports as a positive fact. The surplus of our foreign trade in the first nine months amounted to 6.5 billion dollars. I know that some people believe that increasing imports can cause certain problems. It is certainly true, but only if our exports will not increase. Exports are growing even faster than imports. If we have a surplus of 6.5 billion dollars in nine months, it means that it will increase even more by the end of the year. The growth of imports is directly related to the development of industry and the improvement of people's well-being. One of the reasons for the increase in customs duties is the increase of imports. At the same time, I have to say that other factors have also played a positive role. These include structural reforms, transparency and the implacable fight against corruption and bribery, which have contributed to the collection by customs authorities of additional funds in the amount of more than 800 million manats.
Serious structural reforms are under way in tax bodies. The minister has reported about that. I must note that our main task is to eliminate the shadow economy. It is also true that no country has succeeded in doing that by 100 per cent; there is a shadow economy in any country but to a varying degree. Serious steps are being taken in Azerbaijan to dramatically reduce the shadow economy. In previous years, facts of tax evasion were widespread. Of course, this did not allow us the opportunity to fully utilize our potential. Such facts are being stopped now. All public authorities should assist the tax bodies. Relevant instructions have been given. Tax evasion must end. This applies to representatives of both large and small businesses. Entrepreneurs should know that if they want to continue working as entrepreneurs, they need to pay taxes in full. No-one has and will have concessions. I know that some entrepreneurs rely on certain government officials. This period is already in the past. No-one should count on anyone. If a government official takes illegal actions to create special conditions for entrepreneurs, he will be severely punished. All relevant agencies have received the right instructions, first of all the Ministry of Taxes. This ministry must pursue its policy in spite of everything and be guided by state interests. All government agencies, as well as entrepreneurs, should provide their support in this area. Those who don’t provide support will be punished.
One of the priority issues is the creation of an accounting system. I have repeatedly set this task in previous years too. Unfortunately, for certain reasons we were not able to succeed in creating the accounting system. This system is being created now. Tangible steps are also being taken to eliminate unofficial employment. I believe we have managed to achieve tax collection at this level over nine months of the year – if we consider that there were very large violations in this area in previous years – as a result of very active and focused measures by tax authorities.
There must be complete transparency in tax and customs authorities. Structural reforms must be continued. Implacable struggle against corruption and bribery is under way and will be continued. These comprehensive measures will improve the business environment. Conditions are being put in place to create healthy competition. The fight against monopolistic trends has assumed very large proportions. I want to say again: all relevant bodies, private and public companies should draw the right conclusions from my words. Tax and customs systems should set an example of transparency in Azerbaijan. I have given the instruction for the experience of leading European states in this field to be fully applied to Azerbaijan. Work in this direction is under way.
We will continue to work hard on building up competition in the economy. As you know, the ratings of Azerbaijan in this area are at the highest level. I have repeatedly spoken about this and want to say with a sense of pride again that, according to the calculations of the Davos forum, we are in 35th place in the world in terms of economic competitiveness. But we should also know that we need to go even further. Therefore, the report of the Davos Forum should be and is being fully analyzed. There are provisions in which we are still lagging behind. We must review them and further increase the competitiveness of our economy.
A lot of work is being done and steps are being taken to develop the non-oil sector. In particular, the decisions adopted recently have contributed a great deal to a revival. Suffice it to say that more than 300 investment promotion documents have been issued since the introduction of the investment promotion system. As a result of these projects, 20,000 jobs have been ere created. The total investment volume of projects implemented already and to be implemented after the activation of the investment promotion mechanism constitutes 2.7 billion manats. If we hadn’t applied this system, no-one would have invested these funds in Azerbaijan. Notice how a serious reform has helped us attract investments worth nearly 3 billion manats and create jobs for 20,000 people.
In my opening remarks I mentioned some issues related to industrial production. I would like to highlight the recently launched Azerspace-2 satellite. This is a great achievement, which further strengthens the positions of Azerbaijan as a space-faring nation. We currently have three satellites. The launch of the “Azerspace-2” satellite into orbit is a huge victory for us. At the same time, the work to be done in this area will bring us additional funds. I should also note that half, if not more, of the satellite’s capabilities have already been sold. The remaining 40 per cent has not been distributed yet. The potential of satellite services will also be distributed. This is a very profitable commercial project. It will fully justify itself and bring us a large amount of currency. This is a type of exports. At the same time, it is a very important project in terms of personnel training and technological development. We can be rightly proud of the fact that we have three satellites today.
There is a process of reconstruction and modernization of the oil refinery in Baku. This is also a very important industrial project. It will allow us the opportunity to produce higher quality petroleum products. Upon completion of the reconstruction, gasoline produced in Azerbaijan will meet “Euro-5” standards. This will have a positive impact on the environmental situation in our country. At the same time, the reconstruction and modernization of this plant will bring us great economic benefits.
“Khazar” automobiles are already produced in the Neftchala industrial estate. This is also a great event. I have been informed that about 300 cars have been produced. Much of them, more than 200, have already been sold. The annual production capacity of the plant is 10,000 automobiles. If there is domestic and external demand, the plant can reach this level.
Regarding industrial parks, I should note that new enterprises are being set up in the Sumgayit chemical industry estate. Investments worth over 2 billion dollars are envisaged there. Several important enterprises will be opened there next year.
There are two large spinning factories in the Mingachevir industrial estate. A total of 750 people were provided with jobs there. Mostly women work there. Investments of 80 million dollars were made in the spinning mills. This will expand our export opportunities by turning cotton into fiber there. We are already producing even more currency-intensive products. This process must be continued so that we can succeed in manufacturing finished products.
This year, I attended the opening of the Masalli industrial estate. The process of establishing industrial estates in Hajigabul and Sabirabad districts is currently under way.
The state will continue to support entrepreneurs. To date, the Entrepreneurship Development Fund has been allocated funds in the amount of 2.2 billion manats. This process continues. I am told that crediting is going on well this year too. The demand is high. This is very gratifying. I am sure that as a result of the activities of the Entrepreneurship Development Fund, thousands of jobs will be created in our country next year as well.
I said in my opening remarks that the development of agriculture is always in the spotlight. The 4.3-per cent growth is a positive fact. However, I am sure that the reforms carried out in the field of agriculture will produce even better results. In nine months, 5,700 units of agricultural machinery have been purchased. The provision of machinery has significantly improved. The Ministry of Agriculture is currently implementing major reforms. I have been informed and supported these reforms. I believe that long-term, sustainable development of agriculture will be ensured as a result of these reforms. We can significantly increase production in a deliberate and, systematic fashion, taking into account the fertility of lands, ensuring their effectiveness and, first of all, increasing the yields using the available land fund. At the same time, it is necessary to envisage extensive development of agriculture. We have implemented and are implementing numerous land reclamation projects. There are plans to set up 45 agricultural estates on the area of 192,000 hectares. Four of them were opened with my participation. According to the information available, the number of agricultural estates in operation will reach 13 by the end of the year.
Large farms have registered very good results in grain production. The crop averages about 50 quintals per hectare. The technological process used in large farms should be applied to all farms. Under such circumstances, we will be able to harvest more crops from the available acreage. This year, growth was observed in grain growing, as three million tons of grain were harvested. Productivity in wheat harvesting has reached 30 quintals. It is not a bad result but I think it should and will be increased.
There was a report on cotton production program for next year. We must develop cotton growing more effectively. It is necessary to increase the yields. We can’t be pleased with last year's yields. There were many reasons for that. Instructions were given to study them so that we could develop cotton growing by increasing the yields.
At the same time, if we look at the statistics, we can see that 90,000 tons of cotton were harvested in Azerbaijan in 2016. I won’t talk about 2015, as the yields were very low that year. Last year, the yields were 207,000 tons, or more than twice as high. This year there are plans to harvest about 250,000-260,000 tons of cotton. In other words, growth trend is very positive. I should also note that more than 190,000 people work in the cotton growing sector in our country now. After we began to develop cotton growing, these people were provided with jobs. We have increased the purchase price of cotton several times. The last increase happened recently, so that people engaged in cotton growing can earn more. Today, 190,000 people have work to do.
Modern technologies are being introduced now. A scientific approach is also applied here. I am sure we can significantly increase the yields. They should reach at least 20 quintals per hectare. But we know that the yields increase due to the application of modern technologies and proper agrotechnical services. I don’t want to cite any figures, but I think there is huge potential for development here.
Things are going well in viticulture. This year we have observed the establishment of new vineyards. A new winery that meets the highest international standards was launched in my presence. It has huge export potential. We are restoring and revitalizing the former glory of viticulture and winemaking. This is a very profitable sector for farmers. By restoring this sector, we are both expanding our export opportunities and creating excellent conditions for farmers and peasants. In addition, viticulture improves the panorama. When I was familiarized with the large vineyards in Shamakhi District this year, I saw that these plantations, as well as the opening of a winery, bring a completely new culture to the region.
Viticulture has great traditions in Azerbaijan. We are restoring them and, at the same time, attracting the most advanced global technologies. It is no coincidence that our exports are increasing. Azerbaijan has started opening wine houses. Such houses are already beginning to operate in several countries. There is a great interest in our wines. We have seriously analyzed all the issues related to winemaking. There were many gaps – in production, accounting and excise stamping. It looked as though someone was deliberately creating these gaps in order to create an opaque situation. I cannot explain this otherwise because there are not very complicated issues, i.e. issues that do not require great intellectual potential. It seems that all this was done on purpose to confuse the situation, evade taxes and engage in illegal production. Vodka was produced instead of wine. The issue is being seriously investigated. There must be complete transparency in this area. All conditions have been created for the wineries to work cleanly. If they hide their products again and sell unaccounted products, they will be severely punished. They should know that. There must be complete transparency. This is a very profitable area. Entrepreneurs should simply curb their greed.
It should be emphasized that the state provides support. It organizes export missions, arranges for the creation of wine houses and conducts negotiations on exports. I have personally held talks with some of my colleagues regarding the increase of Azerbaijan’s non-oil exports, and we achieved results. We are doing all this, and entrepreneurs should be aware of their responsibility.
While citing data on the production and consumption of some agricultural products at one of the conferences on regional development, I was also surprised to see that we are importing olives from abroad. The olives we have on the Absheron Peninsula grow everywhere. Therefore, a serious instruction was issue to establish olive gardens, ensure their irrigation and organize the production of olive oil in Azerbaijan. We can’t be content with the volumes of production that existed earlier. My instructions in this direction are being followed; new olive gardens have been set up over the past few years. They are being established on hundreds and maybe even thousands of hectares of land. Our production is increasing, the production of olive oil is growing, and we have started to export it. In fact, this is a very high-quality olive oil. In terms of olive production and exports, we are at a decent level on a global scale.
My comments also apply to tobacco growing. This sector was disappearing too. No state support was provided, but as soon as we started to deal with this issue, create drying chambers and take steps to encourage tobacco production, we saw excellent results immediately. When we produce tobacco, we buy cigarettes abroad. There are countries where tobacco does not grow at all, but they export cigarettes to us. This is an absurd and intolerable situation – simply because this issue was not dealt with properly and the sector was unattended. Maybe it was believed that this was the way it should be. We are fundamentally changing the situation now. New cigarette factories are being set up in Azerbaijan. We will largely provide ourselves with cigarettes and create export potential. What is the situation in tobacco growing? Whereas in 2015 we produced 3,400 tons of dry tobacco, this year there are plans to produce 6,000 tons – almost twice as much. Nine thousand people work and make a good living in tobacco growing. This is the result of the work done.
Vegetable production is our traditional export sector. But we still need to improve our work there. I should say that Azerbaijan ranks first in terms of the export of tomatoes to Russia. We must try to maintain this leadership. I would also like to note that numerous greenhouses are being created in Azerbaijan. According to recent data, new greenhouses are being set up on an area of about 400 hectares, and the vast majority of them are designed for the production of tomatoes. Therefore, we have to determine how many additional markets can digest our produce. At the same time, we need to ensure the processing of tomatoes so that we can sell our produce abroad at higher prices.
There is progress in the field of fruit growing. I should note that the exports of persimmon from Azerbaijan have doubled. Pomegranate production is developing. I have held a special meeting on hazelnut growing, and the results are obvious. In 2016, hazelnut gardens covered an area of approximately 30,000-35,000 hectares. Today, thanks to the establishment of new gardens, this figure has reached 70,000 hectares. The goal has been set to increase it to 83,000 hectares by 2020. This means employment, income and currency. This may bring hundreds of millions of dollars to our country, i.e. to the farmers who will spend them, improve their well-being and live better. And this will have a positive impact on our balance of payments. At present, 17,000 people are engaged in hazelnut growing and make a good living.
The situation in sericulture was probably the most deplorable. We had almost completely lost this sector. In 2015, it was reported that only 236 kilograms of cocoons were produced and cocoon breeders did not know what to do with them. We created a whole chain – stimulation, education, delivery of seedlings, the creation of a cocoon-breeding center in Gakh at present. All this work is producing excellent results: more than 500 tons of cocoons have been harvested this year. Whereas 10,000 people were involved in this work last year and 3,000 in 2016, this year there is a total of 22,000 people. These people earn good money in a matter of 30–40 days without making too much effort, and the Sheki silk factory works to even greater capacity. There, too, hundreds of jobs have been created. Of course, we are engaged in the modernization of the Sheki silk factory. Work will be carried out both to increase jobs and expand export opportunities.
Speaking about agriculture, I want to say in conclusion that we should, first of all, meet the domestic demand, increase the yields, apply a scientific approach and expand export opportunities.
Small businesses also play and will continue to play a role in that. ABAD centers, “Easy support for family businesses”, are being set up now. I welcome that. This should become even more widespread. I addressed the private sector in one of the meetings. I suggested that they support this initiative, and private companies have signed agreements with ABAD centers and are sponsoring them. This sponsorship is worth several million manats and supports farmers and family farms.
Of course, the development of agriculture will also be linked to the use of a self-employment system. This system, of course, will cover not only the agricultural sector. Here, too, it is necessary to create 6,000-7,000 jobs every year. The self-employment program will become a very important tool, a tool to eliminate unemployment and poverty, especially in the regions. At the same time, families receiving social assistance from the state today will build their own lives and significantly increase their financial capabilities after they have been provided with state support.
The construction of “ASAN xidmət” centers continues. New centers will be opened in the cities of Imishli and Sheki before the end of the year, and another four to five centers are scheduled for opening next year. According to the latest update, “ASAN xidmət” centers have processed 24 million applications. It is safe to say that almost 100 per cent of those who applied are pleased and satisfied with the services provided.
Serious reforms are under way in the social sphere. I have set very serious tasks before the new leadership of the ministry to take the rigorous measures against those violating social justice. A serious fight against corruption and bribery should be carried out in this area. Transparency is provided and violations in this area are being eliminated. The most advanced electronic technologies should also be applied in administrative and institutional ways in order to ensure full transparency and fairness. I am regularly updated about the work done. We are creating an analogue of “ASAN xidmət” in the social sphere – centers of sustainable and operational social security. Both the name of the centers, DOST, and their significance are remarkable. I believe that our citizens will see positive changes in this area in the near future. They are already seeing them, information is already coming in from the field, but we are still at the first stage of reforms.
At the same time, construction of houses for martyr families and those handicapped in the Karabakh war will go even faster. When participating in the opening of one of such houses this year, I said that additional funds would be made available to speed up work in this area. Following that, 20 million manats were allocated for this purpose from the President’s contingency fund in the current year, so that hundreds of apartments and cars could be granted to the families of martyrs, veterans and those handicapped in the war.
The problems of internally displaced persons are always in the spotlight. I can say that more than 100 settlements have already been built. There was a significant event this year – the private sector built a large IDP settlement for the first time. Than a thousand apartments were built and provided to the IDPs by the private sector in the settlement of Gobu. I welcome that. I believe that this process should gain momentum in Azerbaijan. We have large companies possessing major financial capabilities. They must display socially responsibility.
Buildings and houses have been constructed and provided to the displaced people in Sumgayit, the settlements of Kurdakhani, Mehtiabad, Ramana, Masazir, as well as Absheron, Terter and Garadagh districts this year. In nine months, 2,900 IDP families were provided with houses and apartments. By the end of the year, another 2,800 families will be provided with new homes. Thus, a total of 5,700 families, or about 25,000 people, will be provided with houses and apartments this year. This is the result of the work done. Therefore, the number of IDPs provided with houses and apartments will reach 300,000 before the end of this year.
Sufficient funds will be provided for these purposes in the future, including next year. At the same time, we must carry out very serious reforms in this area. It is necessary to keep records and ensure transparency. Unfortunately, this is not the case now. In some cases, non-IDPs seek to have their names added to this list and receive an apartment from the state. There are such cases, and IDPs face negative facts. There are issues related to sequence. In other words, injustice must be eliminated and the gaps that open the way for violations must be removed. Apartments should, first of all, be granted to those standing in a line and living in the most difficult conditions. This instruction has been issued. Apartments should be provided only to IDPs. There are also reports that the houses built for the IDPs are occupied by other people. For example, after learning that a house would be knocked down and people would be relocated to a new place, local executive authorities and other bodies sometimes include the names of non-IDPs in the list of residents. This is the worst dishonesty. Receiving unreasonable benefits and income by taking advantage of the status of an IDP is the biggest sin and dishonesty. Those who do this have neither conscience nor honor. Therefore, we will rigorously fight them – they should know that. It is necessary to ensure complete transparency and reporting, and this will be done.
All infrastructure-related issues scheduled for the end of this year are being addressed. Gasification has reached 94 per cent. The goal was 95 per cent and we will achieve it by the end of the year. There are plans to commission the “Shimal-2” power station by the end of this year. This will give our system an additional 400 megawatts. This is a lot of electricity. At the same time, serious reforms and analysis are underway in our energy system. The reasons for the breakdown that took place this summer have been fully investigated and appropriate administrative measures taken. Serious steps have been taken related to investment, the technical condition of our energy sector, and international consultants have been involved in this work. This year and in 2019, we will allocate additional funds to this area to ensure the creation of generation capacity, full stability of power lines and substations. At the same time, additional steps will be taken to increase the generation capacity of existing stations because the stations built earlier do not operate at full capacity. When I am provided with information, I look at the table and see that although 80 megawatts are provided for, only 15 are used. They were operated so irrationally that some of them almost lost their potential. We will restore them. Of course, this will take some time but there should be a completely different approach to this area. We export electricity and have sufficient potential. After providing ourselves for the future, we will increase exports.
Work on other infrastructure projects is progressing on schedule. This year, a total of 1,200 kilometers of roads have been built laid. The goal was 2,000 kilometers. We will achieve this goal. Roads of 600 villages are being improved this year. Drinking water and land reclamation projects are being successfully implemented. We have provided water to 100,000 hectares of land this year. More than 270 sub-artesian wells were drilled and another 30 will be drilled by the end of the year.
I would like to mention some projects now and mention the steps taken in connection with land reclamation. A total of 1,900 hectares have been provided with water as a result of the construction of the Upper Mil Canal; 2,720 hectares in the villages of Mugan, Padar, the village of Garasu of Hajigabul District as a result of the work done; 7,000 hectares as a result of the reconstruction of the Absheron canal on the Absheron peninsula; about 12,000 hectares following the second phase of the construction of the Shamkir-Samukh-Goranboy irrigation canal; 12,500 hectares following the construction of the Neftchala main canal together with the pump station; 13,100 hectares as a result of the concrete coating of a new tributary of the Araz river; 1,700 hectares in Shabran District, about 900 hectares in Gakh district; 1,600 hectares for orchards in Khazar, Pirallahi and Khizi districts; 750 hectares in Goshagishlag area of Khazar District; 11,000 hectares on winter pastures of Sabirabad and Salyan districts; 7,500 hectares as a result of the reconstruction of "H" canal to improve the provision of farmland in the villages of Sarkhanbayli, Moranli, Bala Hashimkhanli, Alilanbayli of Sabirabad District; 500 hectares to provide water to farmland in the villages of Khanliglar, Kamarli, Aslanbayli, Gaymagli, Ikinji Shikhli of Gazakh District; 28- hectares for irrigation of lands in the village of Jojug Marjanli of Jabrayil District; about 20,000 hectares in Khizi, Siyazan and Shabran districts as a result of the reconstruction of the Samur-Absheron irrigation system, and other projects, including 8,700 hectares as a result of the drilling of sub-artesian wells. So much land has been provided with water in just one year. Of course, we will increase the yields. Proposals are already being prepared and we will do additional work in this direction next year.
I want to say a few words about the social infrastructure. About 20 schools have been refurbished and built in Baku this year. Hundreds of schools have been refurbished in the regions. There are plans to build 137 modular schools. Repair and construction work has been carried out in 42 medical institutions.
Work is under way and analysis is being done to improve the environmental situation in our country. First of all, oil-polluted areas are being cleaned. The Ministry of Ecology and Natural Resources has received appropriate instruction and funds. Oil-polluted places on the Absheron Peninsula will be cleaned, parks and lakes will be created in these places and landscaping will be carried out. This work is under way and is planned for next year too. We are also working to create new sewage treatment plants on the Caspian coast. We can’t be pleased with the current situation. The sites responsible for air pollution have received a strict warning. In the evening, the city of Baku becomes engulfed with smoke. Celebration facilities release smoke without prior treatment. Therefore, a strict warning has been issued and those not complying will be closed. I have asked for the appropriate legal framework to be prepared. As far as I know, many such sites have started installing treatment plants after the first warning. I recommend that they speed up this work because there will be no second warning and they will simply be closed. Therefore, all large and small facilities and sites polluting the air and releasing smoke and carcinogen into the atmosphere should install treatment facilities in a short time. Relevant bodies should monitor that. I have told the Baku City Executive Authority and the Ministry of Ecology and Natural Resources to inform me, so action will be taken immediately.
Tree felling cases have reduced, but have not yet been completely eliminated. Let me say again: if someone cuts a tree without the approval of the Ministry of Ecology and Natural Resources, they will only have themselves to blame.
It is necessary to put an end to illegal construction Baku and other cities, and this is being done. A relevant order has been signed. No building can be constructed without the permission of the State Committee for Urban Planning and Architecture. I have spoken on this issue earlier too. I can say that this issue has already been resolved. In former times, municipalities placed the blame on the executive authorities of a district, the executive authorities of a district on the executive authority of Baku and the executive authority of Baku on municipalities. In other words, they played the blame game. In reality, however, they worked together and received large profits from illegal buildings. This has ended and the order has already been signed. Those who violated this procedure will be prosecuted and the buildings constructed illegally will be immediately demolished.
Baku is one of the most beautiful cities in the world, and we can’t trash our city for the sake of someone’s greed. There are rules of urban planning, the height of a building in accordance with the place. There are air flow rules. In our case, all this was violated – as if they were building a wall. There was no room for air movement. Trees were cut down in the yards and buildings erected instead. Local authorities turned a blind eye to that and were probably were together with them. This is the end. I want to stress that. Addressing the people, I first want to thank them because these greedy people often couldn’t achieve what they wanted precisely because of people’s activity. The people stood vigil, guarded the buildings, did not allow them to be knocked down and reported, and I welcome this activity. I have repeatedly said that public oversight must be strong, and we are already seeing that. So let me appeal to our citizens again. If they see illegal construction somewhere, let them immediately inform – first of all, the State Committee for Urban Planning and Architecture, the Executive Authority of Baku and the Presidential Administration. Order is being restored in this area too.
There is progress in the field of city transport. We are carrying out reforms to improve the city transport – in the direction of regulating traffic, opening new roads and acquiring vehicles. This year, an additional 300 new modern buses will be delivered to our city. I have issued the instruction and there are plans to deliver at least 300, and if financial capabilities permit, 500 new buses next year. The state should take on leadership in this area, because we are all very worried about the horrific accidents that have happened recently. This is a huge tragedy and a great loss for the people. Why? Because the driver is not aware of his responsibility. There is no proper control over their psychological, narcological condition, professionalism – only for the sake of money. Companies need money. This is why accidents occur. A bus collides with a train and innocent people die. Law enforcement agencies respond very seriously to such facts. There must be control over such cases because sometimes the perpetrators evade responsibility after a certain time. Therefore, in order to put an end to this, relevant bodies should conduct very strict inspections. There must be rigorous control over bus companies. There should be strict inspection of the technical parameters of buses. I want to say again: unfortunately, the private sector has not been able to achieve what we want in this area. This area was generally placed at the disposal of the private sector. There was an opinion that they would manage it well and responsibly. What are we seeing now? They acquire dilapidated buses and put them on our streets. This poses a threat to people, to air and does not comply with any norms at all. We have a state agency – the Bakubus company. We must continue this work through them. If private companies want to work in this area, they should introduce serious changes to their work, while government bodies should exercise strict control over them.
I have issued a relevant instruction in connection with domestic waste. This area is not regulated in Baku properly. Therefore, it is necessary to create a single chain – from home right up to the Balakhani plant for processing domestic waste. Relevant bodies are preparing proposals on this issue now. I have asked to involve international consultants so that the experience of leading cities of the world is fully applied to this field in Azerbaijan.
At the same time, I have instructed the Baku City Executive Authority to improve the courtyards of buildings, create conditions both the elderly and children, clear the yards from all illegal structures, update the elevators and install new elevators where necessary. So very serious steps will be taken in the area of housing and utilities. In the city of Baku, new parks and boulevards are being set up. Baku today is a city of beautiful parks and alleys. The old and unusable industrial enterprises are being removed from the city center and beautiful parks are being created instead. This year, one of such parks has been created on Babek Avenue, below the Heydar Aliyev Center, on Yusif Safarov Street, and handed over to citizens. We will continue to work in this direction.
I want to mention a few projects related to the railway. At the beginning of the year, I said that the launch of the Baku-Ganja through train should be completed by the end of this year. There is not too much time left for the end of the year. We will probably see that. In any case, sufficient funds have been allocated. Work is under way in other directions too – on the reconstruction of the Baku-Yalama railway, construction of the Baku-Gabala railway. At the same time, the construction of the Baku ring road continues. This will also be a very important project for urban transport, and we must link it to the construction of the underground. I should also note that the State Investment Program for the current year envisages sufficient funds for the construction of the underground.
At the beginning of next year, we will adopt the next State program on the socioeconomic development of regions. The third program will be completed this year. It is possible to say that it has exceeded the plan. The fourth program is being prepared now – work is in its final stages. The fourth program should reflect the work we have not yet done, so that all the tasks before us are completed. Thank you.
