Speech by Ilham Aliyev at the interactive session dedicated to Azerbaijan

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.