Interactive session dedicated to Azerbaijan was held in Davos
28 January 2012, 22:30
An interactive session dedicated to Azerbaijan has been held in Davos.
President of the Republic of Azerbaijan Ilham Aliyev participated in the session.
The host of the session, the executive director of the Davos forum, Børge Brende, welcomed the participants of the interactive session on Azerbaijan and said that the country was on a path of sustainable development.
Noting that Azerbaijan was strategically located from a geographical standpoint, Brende stressed the importance of the fact that despite the global economic recession the country’s non-oil sector achieved economic growth of 9 per cent. He said that the focus of the session would be Azerbaijan's economic diversification.
Børge Brende noted that along with the oil sector, Azerbaijan is rapidly developing its non-oil economy. The executive director of the Davos forum said that the views of President Ilham Aliyev regarding Azerbaijan’s prospects, its role in the region and investments in the country were also of great interest.
Addressing the session, President of the Republic of Azerbaijan Ilham Aliyev said:
- Thank you very much. First of all, I would like to express my gratitude to you for organizing such a meeting. I am pleased to come to Davos again. This time we are participating a special event dedicated to Azerbaijan. I am very pleased that Azerbaijan is represented more broadly in Davos today. We traditionally exhibit our carpets and national cuisine here. Of course, we come from Baku and feel very much at home here.
Our country is developing successfully. Our economic development indicators in the past several years have been truly impressive: our economy has grown by 300 per cent since 2004. Of course, we do realize that most of this growth has occurred in the oil and gas sector. And this is quite natural for a country which has been independent for only 20 years.
All countries, in particular those in transition, should make the best of their resources and natural wealth to build a strong economy. This has been our goal and policy. The attraction of billions in investment to our oil and gas sector has helped us diversify our economy. We have now set a new objective. The new objective is to double the already tripled gross domestic product. But now we want to double the economy by developing the non-oil sector.
As a country producing oil and gas, we always view the gross domestic product from both energy and non-energy standpoints. Last year, for instance, the non-oil industry grew by 11 per cent and the non-oil sector by 9 per cent. Our next objective is to modernize and diversify the country and develop it for the next 10-12 years. Because the first program on the development of our districts was adopted in 2004. Thus, in 2014 we will embark on a new 10-year development period. We benefit a lot from major foreign investments. The total volume of investment made in our economy in the last 15 years is $110 billion. Last year alone a total of $20 billion was invested in our economy, of which $7 billion was foreign. This shows that Azerbaijan is still attractive for foreign countries and this is due not only to the oil and gas sector.
The volume of investment in the oil and gas sector is decreasing because all major projects have been completed. The investment in the manufacturing sector, tourism and services is on the increase. We have channeled the financial resources fetched by the sale of oil and gas into the real sector of the economy – the IT, education.
Several years ago I stated that we must turn the “black gold” into human capital. The experience of developed countries shows that it is possible to become a developed country only through technological and educational progress. For this reason, we are sending our young people to leading universities of the world and seeing the benefits of that.
We are already recognized as a country with a favorable investment environment. The volume of direct foreign investment in Azerbaijan is the highest in the CIS. The competitiveness of our economy is growing. According to the Davos Economic Forum, the Azerbaijani economy is ranked 55th in the world and first in the CIS in terms of competitiveness.
This is a major achievement for us. It proves that our policy of diversification is paying off.
Of course, the energy sector will continue to dominate our economy. This is natural because oil production constitutes about 50 million tons. Gas production this year will be close to 30 billion cubic meters. By implementing new projects and attracting investment, we can raise this figure to 50 billion. So no matter how hard we may try to develop the non-oil economy, energy will always dominate our GDP. But this is natural, it opens up new horizons for us. Because Azerbaijan’s economic and energy policy is now transforming into our country’s political clout.
The European Union views us as a country contributing to the Southern Gas Corridor that will deliver Azerbaijani gas to Europe, a country making it possible. We have made several important achievements in the past several months, signed transit agreements and agreements on the construction of a gas pipeline that will transport large volumes of Azerbaijani gas to Europe. We will benefit from that even more than from the energy projects we started in 1994. Because there were no companies capable of carrying out such large-scale activities then. Now we have large companies engaged in service, energy and non-energy sectors. They will contribute a portion of this investment of $20 billion in gas fields. Thus this wealth will be spread in a diversified manner.
In general, one of our biggest achievements playing a role in the economy is transparency.
Azerbaijan joined the Extractive Industry Transparency Initiative eight years ago and is now a full member of it. We have achieved complete transparency in our energy sector.
Now we are changing the system. We are applying this approach to the financial system as a whole. Thus, the prospects for the future are positive, the economy is stable, sustainable, self-sufficient, it receives strong support from the energy sector and creates a completely clear picture of the strategic future of the country.
Our ultimate goal is to turn Azerbaijan into a developed country. All our structures and ministries are working on that. We have the ministers of communications and technology, of finance, and of the environment and natural resources present here.
They will provide more detailed information on the sectors they represent.
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Then the host asked the head of state to share his views on the current state of regional and international affairs.
President Ilham Aliyev said:
- Azerbaijan has been an independent state for 20 years. Everyone knows that Azerbaijan has an independent policy and strategy. All our political initiatives, including those related to regional cooperation, have a very positive foundation. Our goal is to establish a partnership through projects and cooperation with a significant number of regional states. From a geographical point of view, Azerbaijan is situated very favorably, on the Silk Road, at a crossroads of Europe and Asia. As I have mentioned, our initiatives cover regional states which also derive benefit from Azerbaijan’s development and activities. At the international level we receive tremendous support. We always feel it. Most of our initiatives are supported by the international community. But this support manifested itself particularly well when Azerbaijan was elected a member of the UN Security Council. It was not easy. The important thing was that Azerbaijan was supported by a total of 155 countries in this vote.
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Speaking next, Finance Minister Samir Sharifov said:
- In his opening remarks Mr. President spoke about Azerbaijan’s economic indicators. Azerbaijan has been experiencing strong economic development for several years now. This development mainly occurs because of a significant expansion of energy production in Azerbaijan. At the same time, the policy of our country is to diversify the economy. From this perspective, we have set the goal of doubling the gross domestic product in the next 10 years.
Samir Sharifov spoke about the work being undertaken in this regard in various fields. The minister noted that despite the global financial crisis, Azerbaijan has achieved socioeconomic development and financial stability. The finance minister said that the exchange rate of the national currency remains stable, stability has been ensured in the financial, banking and tax systems, and the development in this area is ongoing. Samir Sharifov indicated that the successes Azerbaijan has made in the financial and banking system are appreciated by international lending agencies. He stressed that at a time when the world is dominated by a financial crisis and the credit ratings of most countries are reduced, the credit rating of Azerbaijan has even been raised.
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Speaking next was the Minister of Communication and Information Technologies, Ali Abbasov:
- According to international rating agencies, Azerbaijan is between developing and developed countries for the level of development of information and communication technologies. Thus, one of the priority areas related to the development of the ICT sector in Azerbaijan is the creation of a space industry. This year Azerbaijan plans to launch its first artificial satellite. Another priority is the infrastructure sector. Other priority areas include the creation of the “electronic government” and public information services, including information security. We are also making efforts to further expand Azerbaijan’s participation in regional ICT projects.
Ali Abbasov pointed to a favorable business and investment environment for the attraction of foreign investment to our country, as well as cooperation with foreign companies.
Then, the Minister of Environment and Natural Resources, Huseyngulu Bagirov, noted that the economy of Azerbaijan is developing rapidly and important work is done in the area of environmental protection and ecology. Indicating that our country has made great strides in this area in the past 10 years, Huseyngulu Bagirov said:
- Let me bring the following to your kind attention. As you know, the felling of forests has become a global tendency. We have eliminated this trend in Azerbaijan. Thus, our forest cover has increased by 0.5 per cent of the total territory of the country. This work is ongoing. Seven million trees covering an area of 10 hectares were planted in Azerbaijan in 2011 alone.
We have doubled the size of protected areas, from 480,000 to 1 million hectares. This is a very large figure. We are working on projects to increase the number of endangered species.
Then the minister of environment and natural resources provided information on the work being done in the area of environmental protection, prevention of air pollution, etc.
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Responding to questions about channeling oil revenue into human capital and training young people in foreign countries, President Ilham Aliyev said:
Yes, this is one of the important issues facing us. We attach great importance to it. Our country’s non-oil sector needs skilled workers more than the oil sector.
We have qualified professionals, geologists working in the energy sector, and the State Oil Company of Azerbaijan is investing a lot in education. The company has a specific program in this regard.
In the current circumstances we need managers. Private or public companies, regardless of the sector of the economy they work in, as is the case in developed countries, need managers well-versed in management, qualified professionals in the service sector. Three five-star hotels were opened in Baku last year alone. Three more will be opened this year.
We need to train people to work there. Of course, we can achieve this by means of investment. But this is one side of the issue. The main issue is the use of the international experience and cooperation in this field. We have no problems with financing. Information technology and education are priority areas for us. We must join our efforts and achieve maximum efficiency in these areas.
President Ilham Aliyev also answered questions related to the information and communication technologies in Azerbaijan:
- Employment, innovation, technology, education and business – these are the areas of the future. From this perspective, the sphere of information technology is of top priority for us. We established the Ministry of Communications and Information Technologies only in 2004. Over this period we have achieved a lot in this area. We have created a regional center of information technologies in Azerbaijan, as is the case in the oil sector. Baku annually hosts the International Conference and Exhibition of Information Technologies, called BakuTel. Our space industry and first telecommunications satellite – it will be the first but not last, the 3G technology, we are already working on a license for 4G. Currently we plan to submit “electronic government” and “electronic signature” projects. Several months ago I signed an executive order in this regard. This order requires all ministries and government agencies to prepare and submit a list of electronic services.
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The president and CEO of the Japan’s GGC, a company working in the fields of engineering and construction, petrochemicals and oil refining and dealing with all types of hydrocarbon projects, said that despite the expansion of company activities in other countries, it has been unable to achieve this in Azerbaijan, but has a desire to do so.
President Ilham Aliyev said:
- Currently, the State Oil Company of Azerbaijan (SOCAR) plans to invest several billion dollars in the construction of new refineries and petrochemical plants in Baku. These plants will apply the latest technologies. We welcome all types of investments. But, of course, we can’t tell companies where to invest. Companies are independent in their investment choices. For me as President, the investment made in the development of industrial areas is particularly important. Our country has a program on industrial development. We can finance investment and strategic projects at our own expense.
Currently, SOCAR is investing billions of dollars.
