Ilham Aliyev attended a conference on the results of the third year into the “State Program on the socioeconomic development of districts for 2009-2013”
A conference dedicated to the results of the third year into the “State Program on the socioeconomic development of districts for 2009-2013” has been held at the Baku Expo Center.
The conference was attended by President Ilham Aliyev.
A presentation on the results of the third year of the State Program was made at the center. It described the successes achieved in the area of socioeconomic development.
The presentation provided detailed information about the social measures carried out in Azerbaijan in 2011, including the educational, healthcare and other social facilities built and renovated in the country. A variety of tables and diagrams described the work done to improve the supply of the population with electricity and natural gas and to upgrade the road and transport infrastructure.
Detailed information was provided about the healthcare and educational institutions built with the support of the Heydar Aliyev Foundation.
The section on the Nakhichevan Autonomous Republic provided information about the successes the autonomous republic has achieved in the socioeconomic sphere in the past year.
The stands dedicated to private enterprise development provided statistics on the private sector’s contribution to the GDP growth and different spheres of production and services.
A separate stand was devoted to the successes of Azerbaijani sportsmen in national and international competitions, the construction of new sports facilities and the overall attention of the government to the development of sports.
The section on environmental issues contained information on the measures taken in Azerbaijan for reforestation and protection of the environment.
Another stand contained statistical data and charts showing the transformation of the ICT sector into one of the most important sectors of the economy.
A separate section was devoted to Azerbaijan’s victory in the Eurovision Song Contest in 2011. It also described work on the development of the country’s tourism potential.
President Ilham Aliyev made opening remarks at the conference.
Opening remarks by President Ilham Aliyev
The successful development of our country is already a reality. This is confirmed by the people of Azerbaijan. The world community also receives sufficient information on our progress. Underlying our success is a prudent policy, the public and political stability in the country and successful economic reforms.
The public and political stability in Azerbaijan was established in the 1990s. The chaos and anarchy that dominated our country in the early 1990s were leading it to a precipice. At a crucial time for the country and under the leadership of great Heydar Aliyev, an end was put to all the negative phenomena and the successful development of Azerbaijan was ensured. The public and political stability established in those years and further strengthened today paved the way for investment into the country and contributed to its successful development. Our major economic reforms were also initiated in the mid-1990s. Today, these reforms are ongoing and entering into a new stage.
The modern period of our development has also been very successful. At the heart of our development, I want to say again, is our policy. Our policies in both public and economic spheres pursue only one goal: to protect the interests of the Azerbaijani people, strengthen our country and its positions in the region!
This is our main direction.
In order to achieve rapid development of the country, we are currently realizing quite extensive programs. Of course, the most important and significant of them is the State Program on the socioeconomic development of districts adopted in 2004. Following the adoption of the program our districts began to develop very rapidly.
The program was adopted in 2004. But I had thought about it in previous years too. In the run-up to the 2003 presidential election I had said that if the people of Azerbaijan trusted me, the program would result in the creation of 600,000 jobs in Azerbaijan over five years, i.e. by 2008. Some did not believe in these figures, others treated them with some skepticism. But I knew it was possible. I am very pleased that in a short time, in about four years, we created 600,000 jobs. Overall, in 2004-2008 a total of 760,000 jobs were created, which is of particular importance for the elimination of unemployment and poverty reduction. So the program adopted in 2004 provided an impetus for overall economic development.
Of course, much of our economy is formed in the oil and gas sector. But you can’t create too many jobs in the oil and gas sector. So our main focus was on the non-oil sector. The development of this sector aimed to diversify the economy and eliminate unemployment. And it did.
I would also like to note that in some cases our successful economic development is linked only to the oil and gas factor. Of course, oil and gas do and will continue to play an important part. But I want to say that our main oil export pipeline, Baku-Tbilisi-Ceyhan, was commissioned in the summer of 2006, while the program was passed in 2004 and launched shortly thereafter.
In short, there is sufficient information on the past period, all the work done is evident. In 2009 we started a new stage of the program. It was already called a state development program. But its focus was still on developing the districts. The second state program has been ongoing for three years now. I can say that all our tasks are being over-fulfilled. As to the first program, the issues it covered were certainly resolved. Additional measures were also taken. The same picture is observed today. We will implement this program on an even larger scale. Therefore, our development is ongoing.
At the first stage our focus was on expanding business opportunities and building up an industrial potential. For that, we first had to resolve electricity issues. Therefore, we identified this as a priority and managed to ensure our energy security in a short time. In the past, the electricity we had generated did not meet our needs. Now we have created a powerful system that can not only address our own needs but also enables us to export electricity to all neighboring countries.
Then we started the implementation of infrastructure projects. This is another broad area. When talking about infrastructure, we mean everything – roads, electricity, gas and water supply. Issues of social infrastructure are also very important. All these issues are reflected in our program, i.e. the current program. Of course, one direction is associated with infrastructure projects. We have developed this sector using the funds invested by the state. Another direction is related to social infrastructure. The first program led to the construction of more than 2,300 new schools. Last year we built and repaired over 200 schools. This year we will build or renovate more than 400 schools.
The creation of a healthcare infrastructure is an issue of great importance. We have opened more than 400 modern medical facilities in Azerbaijan. The development of highways, too, was of great importance because our roads were in poor condition. There can be no development without roads. No enterprises or tourist sites can be built. For business development, roads and electricity are crucial. To provide for a comfortable life, we are rapidly creating the social infrastructure. We are implementing these projects even more rapidly now. We are carrying out extensive water and sanitation projects covering the entire country. These projects are purely social. While the instructions on electricity supply have both social and business aspects, water supply projects are purely social. We now have the opportunity to invest even more in the social infrastructure. Of course, we have acquired these possibilities ourselves.
There are many countries rich in oil. There are countries producing and exporting a lot more oil and gas than we do. But not every country can boast of economic development like ours. So I want to reiterate that the basis of our success is formed by sound economic policies and economic reforms. These reforms are appreciated by the international community.
Leading economic institutions of the world support and appreciate the processes taking place in Azerbaijan, sometimes they take delight in them. Major rating agencies lower the credit ratings of developed countries and raise the rating of Azerbaijan. In the crisis years, leading financial institutions have appreciated the reforms in Azerbaijan. This is also very important. Of course, the most important issue for us is to realize our plans, secure economic development and prosperity. But when we see that influential international organizations recognize our success, it is very gratifying.
2011 was also successful for the development of our country. One feature of 2011 was the rapid growth of the non-oil sector in Azerbaijan. While overall economic development was around 1 per cent, maybe even less, our non-oil economy grew by over 10 per cent.
This is the result of the programs we have adopted. This is precisely our goal – to develop the non-oil sector, non-oil industries. This is evidenced by the results of the first month of 2012 – the non-oil industry has grown by more than 10 per cent. A powerful process of industrialization is under way. I spoke on this issue several years ago. I said industrialization should go rapidly in Azerbaijan, and we are seeing that.
The emerging industrial enterprises will determine our long-term development strategy. The government of Azerbaijan fulfills all of its obligations, and does it with a vengeance. There is no such support for the private sector in any other country. First and foremost, it is political support.
I regularly meet with business people in Baku and in the districts. I have personally attended the opening of about 500 industrial enterprises in the districts. Many more businesses were opened without my participation. In total, more than 40,000 new businesses have been created. The opening of an enterprise means jobs, wages, local production, opportunities for import substitution, development, revitalization of our country.
In addition to the political support, the Azerbaijani government provides entrepreneurs with economic support. The National Fund on Support for Entrepreneurship has thus far, including 2012, provided favorable loans worth 900 million manats. Their vast majority of the loans was channeled into districts and perhaps all of them into the real economy. So these loans have done a great job. I am very pleased that entrepreneurs treat this government support with due responsibility. All the loans are repaid on time. Currently, most of this year’s loans worth 200 million manats is made up of the funds that were granted in previous years and have already been repaid. So it is a large amount. Of course, the volume of loans provided to entrepreneurs will be increased every year, so that every entrepreneur can receive an even larger loan.
I want to say again that underlying our success are economic policies, reforms, the current public and political stability, and a strict discipline in the executive branch. Without the discipline we could not succeed. I have repeatedly said to all the heads of executive bodies: be next to the entrepreneurs, help them, don’t interfere in their affairs, don’t hamper them. Our development depends on the development of entrepreneurship. We have chosen this direction and it is paying off.
But at the same time, while studying the experience of developed countries experiencing crisis now, we see again that the principles of a pure market economy don’t always work. What do we see in Europe? Governments take on huge commitments. To save banks and large companies from bankruptcy, the government invests in them. We embarked on this policy in 2004. I remember that in some cases we were more dependent on loans from international financial institutions. We were advised and recommended that the government should not intervene, that the private sector should develop on its own and the state should stand aside. How can this be? This is our country. Whether public or private, it is an Azerbaijani company. How can we not help it?! Our support is important. The wonderful atmosphere in the political sphere and in Azerbaijan as a whole has strengthened this support.
The financial support, the provision of loans, as well as the preparation of business plans, in particular for small businesses, have already become part of the government agenda. The Ministry of Economic Development has prepared very explicit advisory plans. These plans are aligned to business opportunities. Anyone can build a business he can afford. In other words, we agree to that, as long as there is development. At the same time, business people are well aware how many benefits are provided. In agriculture, entrepreneurs are exempted from all taxes except for the land tax.
This decision was made in the 1990s to stimulate agricultural development. There is no need for stimulating agricultural development now, but the decision remains in force, we are not repealing it in order to help entrepreneurs.
Fertilizer and fuel are provided on concessional terms. Funds are provided for every hectare of cereal crops. We must and will do that. Entrepreneurs, for their part, should work to benefit themselves and the state. My requirement for business people is that they should work hard in their districts and areas of expertise and pay taxes on time. They shouldn’t have any arrears to the state. They should create jobs, expand their businesses, live better and become even richer. I think business people will agree with that.
Of course, when businesses join various social projects, this further improves my attitude to them. I can say that entrepreneurs have been showing responsibility in this area in recent years by implementing social projects, contributing to social measures in the districts, in particular the construction of schools. I support that. But I want to say again that entrepreneurs are not required to do this. This is a voluntary thing. If they do this, then thank them. If not, let them look at those who do and try to support this work ...
The government of Azerbaijan will continue to strive for a comprehensive development of the country. We have thought-out programs and policies. The second state program will last until 2013. I am sure that the program adopted in 2009 will be over-fulfilled. Thus, by the end of 2013, key infrastructure issues in our country must and will be resolved. The major infrastructure projects that are ongoing and are nearing completion have created such confidence. Of course, I think we have to work hard in the next two years to implement the state program ahead of schedule and on a large scale, and to ensure successful development of the country.
Major investment is made in Azerbaijan. This is a very positive phenomenon. We welcome foreign investment. Our successful economic development began with foreign investment. The signing of the “Contract of the Century” brought Azerbaijan international recognition, but initially foreign companies were very reluctant to invest in the non-oil sector. It was impossible to make them do that. But we have channeled our oil revenue into the non-oil sector, so the government assumed the investment burden. While most of the investment in the oil and gas sector has thus far come from abroad - although this balance is changing now, in the non-oil sector the main burden rests with the Azerbaijani state. Last year, our country received over $20 billion in investment, of which $13 billion was domestic. The public investment program for this year is also very large. The state alone is expected to invest 7 billion manats in the country's economy this year. Of this, 5.7 billion manats will be invested as part of the investment program, i.e. from the state budget, while 1.3 billion manats through government-guaranteed loans. This is a very large amount which will enable us to maintain a high rate of economic development in 2012, in particular in the non-oil sector, and to do even more work. I hope that about as much will be invested by the private sector this year.
Such opportunities are available. Such opportunities are brought about by the ongoing and starting projects. I believe that this year's investment in the economy should be at least $20 billion. Thus, thanks to this investment, we will secure all-round development of our country even faster. The implementation of the program and, in essence, the development of our country will be even more successful.
I want to repeat that overall I see no problems in the economic sphere. We managed to ensure successful development even in the years of the global financial recession – in 2008-2009. The people of Azerbaijan practically did not feel the impact of the crisis. It is now said that the second stage of the crisis is impending. But it is not felt in Azerbaijan either.
Why? Because we have a thought-out and clever policy. We are implementing our programs in proportion to our possibilities. We need Azerbaijan to develop in such a situation, in such circumstances, in calm conditions.
I have repeatedly said this and want to say again that our goal is to become a developed country. When I said this a few years ago, some may have treated it with doubt. Now I am sure everyone can see that this is possible. The political clout of our country is growing. We are acquiring a say in world affairs. The world community supports us. We have become a member of the UN Security Council.
Our capabilities in the region are expanding. There is a growing number of countries interested in cooperating with us.
Other countries are now working to attract Azerbaijani investment. We are now accessing foreign markets with our investment and companies. I will talk about this later. We must support our companies not only in Azerbaijan but also abroad. Our State Oil Company has turned into an international energy company, a company with great authority and great business opportunities. The scope of SOCAR’s activities is expanding in Europe and other continents. Azerbaijan's share in the fuel balance of some countries has reached 20-30 per cent. We are successfully resolving energy security issues. Of course, this meeting is devoted to the development of the non-oil sector but we know too well that if one of us had made a mistake in the energy policy, we wouldn’t talk about today's successes.
Our energy policy is flawless. The foundation of our oil strategy was laid by the great leader in the early 1990s, and this strategy is ongoing. Of course, there are new issues and challenges now. Azerbaijan is becoming an exporter of both oil and gas. Perhaps it is more important for the world as an exporter of gas. We are ready for this responsibility. At home and together with our strategic partners, we are putting forward initiatives that will bring Azerbaijan only success. We have not backed down on anything, in fact, we have strengthened our positions and protected our interested.
Today, Azerbaijan’s gas resources are playing an important part in European energy security. In the coming years, our role will further increase. We know this. We also know that gas is not a renewable source of energy. Some countries providing Europe with gas are running out of it. European demand for gas will gradually grow. We also know by how much it will grow.
Considering a ban on nuclear energy introduced by some European countries in the aftermath of the terrible accident in Japan, the demand for gas will grow further. So the need for Azerbaijani gas will increase significantly.
Our energy policy is to create diversified export opportunities, and we have created them. We have four gas pipelines. At present Azerbaijani gas is transported to most neighboring countries. In the future, it will be transported to an even greater extent. Of course, as an owner and exporter of gas, we are defending our policies. Our policy complies with the interests of consumers.
We are working on major transnational projects. If these projects are implemented, we will ensure a long-term successful development of our country. It will be achieved even without them, but these projects will make Azerbaijan an even more powerful state. Azerbaijan will enjoy even greater authority. Our positions in the region and the world will become even more effective. I want this to happen. We are creating a strong state, a strong state based on a strong economy and a strong policy.
Our economic potential, the diversified economy, the oil and gas factor, transit opportunities we have created ourselves are great assets. I want to say again – we realize our own strength.
We simply don’t want to show it in some cases. But if necessary, we do. We are confident. I believe that a strong Azerbaijan is a very important factor for the region and the world. Because we have pursued a policy of good will. Our policy is one of cooperation. Our energy policy is also aimed not at enmity, but at friendship. In the energy sphere we often help our friends. First because they need help, second, because this is our philosophy and, third, friendly relations will secure our business interests to an ever greater extent. We are seeing that a growing number of countries want to work with Azerbaijan in the energy sector.
Azerbaijan, SOCAR are invited to participate in privatization projects. So we enjoy confidence and a good reputation.
We will continue to pursue independent policies in all directions. Azerbaijan has already gone beyond a regional plane and is now in a global plane. We already participate in G20 meetings. A recent meeting of G20 Foreign Ministers in Mexico was attended by our Foreign Minister. Only 10 non-member countries were invited and Azerbaijan was one of them. This is a reality.
To develop our country even faster – I want to come back to our main topic – we need to continue improving the business environment and create better conditions for entrepreneurship.
The state fulfills its obligations. At the same time, we are waging a serious struggle with the still existing negative phenomena. The fight against corruption and bribery does not stop for one day. This struggle is already producing good results and they will be even better. We must remove this evil, rid our country of it. We must turn Azerbaijan into an example in any field – political, economic, fight against corruption and bribery, and we will do that.
So I think this meeting will give a new impetus to the program. This meeting is attended by both entrepreneurs and heads of local executive authorities. This format has already become traditional. The discussions to take place today and decisions to be made afterwards will create new opportunities for implementing the state program in 2012.
Other speakers at the conference included the Minister of Economic Development, Shahin Mustafayev, the head of the Ganja City Executive Authority, Elmar Valiyev, the chairman of the board of the ATENA dairy and livestock complex, Elshad Rasulov, the head of the Agdash District Executive Authority, Rafig Niftaliyev, the deputy director of the AzMDF plant, Vugar Aliyev, the head of the Agsu District Executive Authority, Anvar Seidaliyev, the executive director of the “Nakhchivan” automobile plant, Polad Sadikhov, and the head of the Lerik Distrct Executive Authority, Rovshan Bagirov.
The conference spoke about the work done to implement the “State Program on the socioeconomic development of districts for 2009-2013” and future tasks.
Closing remarks by President Ilham Aliyev
I am confident that all the issues provided in the state investment program for 2012 will be resolved. This year should also be successful for our country, in particular, we expect major development of the non-oil sector.
The projects started earlier and the ongoing ones are bearing fruit. In 2012 we will also open large enterprises and factories. So our non-oil capacity will be further enhanced. I want to repeat that there are all the possibilities for the development of private enterprise. Business people and heads of executive authorities have provided information about the processes taking place in the region.
I can say that we are witnessing an almost identical picture in each region and district. There is development, improvement, creation, social projects are implemented. In general, there is a lot of excitement. This pleases me a lot. I regularly travel to the districts, examine the situation and am always happy to see changes for the better. Our country has a great capacity and a great potential. This potential has been created due to the talent of the Azerbaijani people, and we need to make sure that all our tasks are met by government agencies and the private sector.
In recent years, the share of our private sector in the gross domestic product has been increasing. In general, our gross domestic product grows very rapidly. Over the past eight years it has tripled. No other country has ever achieved that. It is encouraging that the share of the private sector is also growing – it is now at the level of 83 per cent. This shows that Azerbaijan has long completed the transition to a market economy. Some time ago I said that we have already completed the transition period. Azerbaijan is no longer a country in transition. We are a country going through a period of rapid development, a developing country, and I want to reiterate that we will continue our policy to become a developed country.
As I mentioned in my opening remarks, a major public investment program will be realized. Seven billion manats is a huge amount. We need to make sure that this amount is used efficiently and all the projects work. There should be no backlogs. We must eliminate all the red tape. At the same time, there should be even more rigorous control over these major public projects. Where there is control, there is quality of work.
This year, as in previous years, major funds will be allocated for infrastructure projects, road construction in particular. Work is underway on the main roads. This year, as in the past, major investment started to be made in rural roads. We paid serious attention to this area in previous periods too.
But even more funds will be invested in this area, especially in 2012 and 2013. The construction of rural roads has been entrusted to local executive authorities. They should do the job with great efficiency and quality. This is tremendous responsibility because earlier this work was carried out by central executive bodies. But central executive bodies have other projects. They should focus on highways and inter-city roads. As for rural roads, local executive bodies know this job better. Even last year each district received orders, prepared reports and plans. As you can see, from the beginning of this year funds are allocated from both the state budget and the President’s contingency fund. The aim is to rebuild all rural roads. This, of course, is the ultimate goal.
At the same time, an actual goal has been set for the end of 2013, all calculations carried out and our financial and technical capabilities examined. Thus, 80 per cent of the rural population will be using beautiful roads by the end of 2013. This is what we can do now. If we can achieve further development, then we can amend this program this and next year. The goal is that 80 per cent of the rural population must use repaired and new roads. But the main goal, of course, is to bring all rural roads to order. We will achieve that goal.
The process of gasification is under way in the districts. The State Oil Company has received the necessary instructions. Although the State Oil Company is a large company, we provide it with all possible support. The public investment program provides for a large amount for the gasification of districts. There is another specific objective: to gasify 95 per cent of the population by the end of 2013. This is a realistic goal, and if we achieve it, I think we will resolve all the issues related to gasification. This issue requires major funds and technical capabilities. New lines are laid, the old ones are replaced. This process is under way both in the districts and in Baku. We need to move in two directions: restore the aging infrastructure established in previous years and in parallel with that create a new infrastructure. There are new technologies, new pipelines, there very durable lines, and we will use them.
I said in my opening remarks that among the infrastructure projects related to the implementation of the first program, we have paid more attention to energy supply. Although we are already self-sufficient in electricity, the issue is still relevant because the economy is growing, we have a strategic development plan, strategic views. We know that in 10 or 20 years from now, our economy will grow rapidly. The new enterprises, the new conditions for businesses are opening up excellent opportunities. So our demand and domestic consumption will continue to grow. Our energy capacity must exceed domestic consumption by at least 10 per cent. Although we have provided for our own energy security and are exporting electricity to other countries, we are currently implementing major projects. The biggest of them is the “Janub” power station in the city of Shirvan. It will have a capacity of 780 megawatts. This station should be commissioned this year. The “Shimal-2” station located in Shuvalan will have a capacity of 400 megawatts. Its foundation was laid last year and the station is to be commissioned next year.
This year we should put into operation the Fizuli hydro power station with a capacity of 25 megawatts. Next year we must commission a hydro power plant with a capacity of 25 megawatts at the Takhtakorpu reservoir. Along with the projects we started last year and those ongoing this year, the construction of small hydropower plants continues on small rivers. We have embarked on the development of renewable energy. Last year I attended the opening of the first such station in Gobustan. This is a wonderful experience, such projects have a good future. An enterprise manufacturing solar panels is already being set up in Azerbaijan. We must make better use of solar and wind energy. The construction of a new power plant with a capacity of 300 megawatts is planned in Baku. Perhaps we should carry out engineering design this year. The investment program for this year also provides funds for the restoration of power lines. A lot needs to be done in this area. Some transmission lines are in disrepair. Transmission towers sometimes collapse in districts, leaving villages without electricity. Therefore, “Azerenergy” has been asked to pay special attention to this area, assistance will be provided from the state budget.
Water supply and sanitation projects are ongoing. These projects were spoken about here. I want to say again: these are major social projects that require a lot of money. These projects require hundreds of millions, perhaps billions of manats. Baku, its suburban settlements, all our cities and district centers must have sanitation and drinking water, and the steps taken in this direction are encouraging. Ambitious goals have been set. But, I repeat, these goals must be realistic.
Of course, I would love to see these projects completed in all our cities and districts by 2013. But it is probably impossible. So the realistic goal is that water supply and sanitation projects must be completed in most our cities and districts by the end of next year. I think we will achieve this 100 per cent. Again, we will see. If we have extra financial resources this or next year, we must spend them primarily on water and sanitation projects. Then we may be able to do even more.
Water and sanitation projects are either already under way or are about to start in all our regions, in every district. Also, as mentioned here, the construction of modular water treatment plants continues in the villages along the rivers. According to my information, such facilities have been built in 188 villages. People used to drink water from rivers and canals, now they drink clean water, and the number of such people exceeds 300,000. Now 340,000 villagers already have such an opportunity. An instruction has been given to take further measures this year and beyond – we need to provide the population of villages along the rivers with clean water.
Land reclamation issues will continue to be in the spotlight this and next year. This has already been mentioned. Two major projects are ongoing. These are the biggest projects in this area. Possibly, the biggest non-oil investment across the country is channeled into this area. We are creating two large water reservoirs. In essence, we are creating large lakes – the Takhtakorpu and Shamkirchay reservoirs. Tens of thousands of hectares of new land will be covered. This will give a powerful impetus to agriculture. These projects require major funds. This is an investment in the future. This investment will not pay off immediately, this is not our goal. This investment will return in the form of additional crops, it will first benefit the farmers and then the state. So this is also huge private sector support, because our agriculture is completely controlled by the private sector, is at its disposal. So we will make no mistake if we view these projects as steps towards private enterprise development.
We will take further measures to develop agriculture. Quite serious programs have been adopted. New initiatives are being pursued in the area of crop production. I told last year's meeting that we must start creating major crop production farms. A year has passed, but there are no results. I know that this is a big and serious issue. We need to identify new plots of land, implement infrastructure projects, resolve irrigation issues. But I think we should pay more attention to that. I think that at a meeting next year we should be able to talk about initial successes, otherwise those who are indifferent to my instructions will be punished. Be aware of that. This is necessary for food security in our country. This is an excellent and timely initiative. It must be fulfilled without delay. I have instructed all relevant agencies regarding this, because this work should be duly coordinated. This work should be dealt with by all relevant agencies. Overall control will be exercised by the Cabinet of Ministers.
Major effort is made to develop animal husbandry. A total of 10 million manats was recently allocated from the contingency fund of the President to the Ministry of Agriculture, so that it could import more purebred cattle. This process has been ongoing for years. We will thus significantly improve our thoroughbred cattle. The imported cattle is highly productive, and we must strive to gradually set up large livestock and dairy farms. An entrepreneur from Agjabadi has spoken about that here. It is indeed Azerbaijan’s biggest dairy company. I am glad that it is already addressing livestock breeding issues. We need such businesses. After a while I will tell you to what extent our domestic production meets our needs. Special attention should be paid to dairy, livestock and crop production enterprises.
At the end of last year we adopted the State Program on the development of viticulture. This also demonstrates the government’s intentions. Last year I spoke extensively on the development of viticulture. Why viticulture was once destroyed in Azerbaijan – I have spoken about that and there is no need for repetition. This program demonstrates the priorities of the state. Of course, the private sector has always been and will always be engaged in this work. New vineyards are emerging, and we welcome that.
The goal of the program is to assist the private sector as much as possible, so that viticulture could develop and the wonderful tradition initiated by the great leader in the 1980s is revitalized. This is necessary both for the country's economy and, above all, for farmers. They know that the income earned in viticulture cannot be made in any other field. At the heart of this program is also private enterprise development and the desire to enable farmers and peasants to earn more and live even better.
We have initiated projects related to horticulture, particularly on the basis of modern technology. Last year I visited one farm in Guba District. It is an intensive gardening farm. Although Guba District is already noted for gardening and beautiful apple orchards, the new system may increase the yield several times. And this means additional revenue and more crops. So intensive gardening is also in the spotlight.
In general, we need to make broader use of modern technologies in agriculture. To this end, delegations were sent to countries that have achieved great development in agriculture in order to learn from their experience. We need to bring in the latest technology. Just as we import the latest technologies in construction, road construction, architecture and other fields, we must bring in modern technology in this field. Then the yield, even under the current land fund, will significantly increase. If we consider that, as I said, major land reclamation projects are implemented and tens of thousands, perhaps even hundreds of thousands of hectares of new land will be introduced, we can imagine the agricultural development conditions that will emerge.
Food security is important for each country. We have been dealing with that for several years. When we realized that we must rely on domestic production, our steps in this area became even more effective. The financial and economic crisis and the drought in some countries led to problems with grain a few years ago. Traditional suppliers banned exports. Despite signed contracts, grain imports were suspended. Then we thought that we should meet our needs not only in crop production, but also in every sphere through domestic production. And it is possible – we have great lands, hardworking people, government support. Therefore, food security, along with the energy and transportation security, is a very serious matter.
In the past we never provided ourselves with food. In Soviet times there was a common national economic complex and all major food commodities were delivered from other republics. Over a short time we managed to achieve a serious breakthrough. We haven’t yet achieved food security completely, although there is major progress. Now I want to provide some figures. Of course, we always keep this in focus and these figures determine the provision of loans through the National Fund on Entrepreneurship Support. We first need to provide loans to the areas where production could meet domestic needs.
So at present grain production accounts for 65 per cent of our needs. As a result of the measures to be taken, this figure will reach 84 per cent by the end of 2013. If it is 84 per cent, it will be a good figure, but not the limit. We provide ourselves with meat by 88 per cent. The forecast for 2013 is 95 per cent. Poultry is at 81 per cent now. Recently we allocated more loans for poultry, so production increased, and in two years, by the end of next year, should reach 92 per cent. Potato production is already at 102 per cent and will be 114. Fruit production is at 117 per cent, so there is an export potential. Melons are at 100 per cent, eggs at 77 per cent and should be 100 by the end of next year. Production of sugar is at 160 per cent. But it is also true that raw materials for sugar production are mainly imported. At the same time, local production is at 160 per cent and there is a huge export potential. Salt production in Azerbaijan is at 47 per cent and should reach 75 per cent.
Currently, the production of milk and dairy products accounts for 70 per cent of our needs, and by the end of next year this figure will be almost 80 per cent. Vegetable oil is at 65 per cent, butter at 50 per cent. This should also increase. These are basic food commodities. What do these figures show? First of all, they show that major progress has been made. The second conclusion is that the figures for the end of next year are based on reality. These are not just our intentions. This will be achieved through loans and as a result of new businesses to be put into operation. At the same time, the figures show that we still can’t meet domestic needs for some items. Perhaps it will take four to five years. But we must do it. Butter, vegetable oil and grain – we must provide that. Of course, while discussing our investment plans, we must put this table in front of us and proceed from that in securing out agricultural development.
At the same time, as in any field, we must look forward and know what will happen in 10 or 20 years. I hope that in 2015 we will provide ourselves with basic food commodities by 100 per cent. Loans will be granted, more land introduced, etc. What next? Then we must find new markets, supply even more products to traditional markets. I have asked the Ministry of Economic Development to start exploring for new markets. Right now, so that we are ready. In 2015-2016, we will have huge volumes of agricultural products to be exported. If we don’t export them, we can’t ensure agricultural development – the domestic market will be flooded. True, the population and the needs grow, but not in such great volumes. Our annual population growth is 1.5-1.7 per cent. So if we don’t access new markets, it will limit the development of agriculture. We must and do work on accessing new markets. Relevant agencies should work together to this end. We will replace imports and also access the markets of other countries with our exports. So the Ministries of Agriculture, of Economic Development and of Foreign Affairs should hold discussions on the subject. If necessary, a working group should be set up.
The number of our partners in the world is increasing. In my opening remarks I said that a growing number of states are interested in cooperating with Azerbaijan. We also want to expand our cooperation and take our products to traditional and new markets. In particular, we need to take our agricultural products to European markets. To do this, only a desire is not enough. For this, quality products must be grown. Our agricultural products, fruits and vegetables, are of high-quality and natural. There are no and shouldn’t be any chemicals in them. This is also a very important issue. We shouldn’t bend over backwards to increase the output, because this will compromise quality. We don’t want our fruits and vegetables to have an artificial taste in a few years, as is the case some countries – you don’t know what fruit or vegetable it is when you eat it. Therefore, we must preserve this naturalness, this quality, not increase output at the expense of quality. Now we have very modern processing plants, especially those built in recent years. They must comply with all certificates and standards. To access EU markets, we must create enterprises that have such opportunities. So it is a very serious matter, a matter not for today, but for the future. But if we don’t undertake it today, we will be late.
At the same time, we must and we will increase domestic production of construction materials. I would like to provide a few more figures. Currently, cement production in Azerbaijan meets 44 per cent of domestic needs, in 2013 it will be 75 and in 2014 a total of 125 per cent.
The new cement plants under construction in Azerbaijan will be commissioned and in two years we will have the capacity to export 25 per cent of cement. Where are we going to sell it? Now there is a struggle for cement markets. We know this ourselves. There are many companies trying to sell cement to us, asking us to buy from them. This is a reality. After addressing our domestic needs, we, of course, will not be buying cement abroad. When should we think about sales? Today! In 2014, this figure will be 125 per cent. We must build our work so that there are no problems in 2014.
In addition, we are commissioning large enterprises with government support. An aluminum plant producing 50,000 tons of high quality aluminum operates in Ganja. During the opening, I was told that this figure would reach 100,000 and 200,000 tons. Aluminum is in demand everywhere. There is no need to look for markets. But what should we do? We should create an industrial park under the Ganja aluminum plant. The private sector should join in this work. The government should allocate space, provide the infrastructure, while the private sector should produce finished goods. Of course, we can sell aluminum ingots, but it will be a half-hearted job. Why should we buy aluminum products abroad? We produce aluminum, so let's make finished products ourselves, sell them at home, stop imports and then start exports. Please take this issue seriously – both entrepreneurs and the Ministry of Economic Development. An aluminum-based industrial park should be established in Ganja.
The process of establishing an industrial park of the chemical industry has started. A large petrochemical complex will be built. “Azerkimya” has received the instructions and plots of land have been allocated in Sumgayit. We will succeed in manufacturing new finished products in the chemical industry too. The establishment of the chemical industrial park has already begun. In general, the process of establishing industrial parks is well under way. It is a positive process. The Sumgayit industrial park with about 10 enterprises is already in operation, thousands of jobs have been created, while finished products can be exported to any country. Another industrial park will be established under the waste disposal plant in Balakhani. Jobs will also be created there, and one branch will be covered by the Balakhani industrial park. So the process of industrialization I have repeatedly spoken about will receive a powerful impetus.
We need to take Azerbaijani companies to foreign markets. Currently, the State Oil Company is actively working abroad. We should try to help other public companies, the companies capable of operating in foreign markets. The opportunities of the State Oil Company are expanding. I believe that our flag carrier AZAL should access foreign markets, maybe consider buying another airline and organize work in some other countries. This will also be possible with government support. “Azerenergy” is busy with domestic projects now, which is natural, but there will come a time when domestic projects are over and the company will need to access foreign markets. Our State Oil Company has been managing gas networks of some countries. “Azerenergy” can also take steps in this direction. The Caspian Shipping Company should step up its foreign operations. At home, using the funds provided by the state, ferries, tankers and ships are bought. We can create a similar system abroad. This is something worth considering.
At the same time, we must also help private companies access foreign markets. Again, the Ministries of Foreign Affairs and of Economic Development should work together and give me a specific proposal. This is not the first time I have talked about it, but I see no real results.
Give me specific proposals. We have inter-governmental commissions with other countries. This issue should be discussed by these commissions. Partner countries should provide our companies with preferential treatment. We think it will be fair. Thus, we need to take private companies to external markets. Our banks are doing that and should do it even more rapidly. Why shouldn’t five or 10 of our banks work in other countries, not just one or two?! Why shouldn’t they be in leading positions there? The government, for its part, will support them. If need be, we will provide political and other support.
We are creating a major transport and logistical center in Azerbaijan. We have five international airports, the most modern aircraft fleet. The Heydar Aliyev International Airport is under construction, the new terminal building will be a unique architectural monument. New runways, an international sea port in Alat are under construction. It will be the biggest port on the Caspian Sea. The Baku-Tbilisi-Kars railway is a project implemented on the initiative and with financial support of the Azerbaijani state. It is under construction and hopefully will be put into operation next year. Thus, the ongoing regional projects will make Azerbaijan a logistical and transport hub of global importance. This is our wish, we are trying to achieve this and we will.
We have a favorable geographical location. But without the infrastructure, geographical location doesn’t change much. Our policy in this area is very correct. Roads, railways, air and sea transport. The Azerbaijani state allocates an enormous amount annually to buy ferries, tankers, aircraft, to implement the railway project, etc.
In general, when it comes to the future, I have already said this several times and want to say it again: of course, the second state program will be successfully implemented. I have no doubt that by 2013 all our tasks will be over-fulfilled. No-one should have doubts about that. We have defined our strategy and need to prepare a strategic development plan for the next decade – a strategic development plan covering 2013-2023.
Appropriate instructions have been given. I won’t go into detail now, I just want to define the goal again. The goal is that over the next 10 years, in 2013-2023, Azerbaijan must become a country with a high-income population. For the next decade we have to set the goal of doubling our GDP. This is a tall task, considering that our GDP has already tripled. Now we have to double the already tripled economy. We understand that it will be impossible to do that with oil and gas because we have reached a high level of oil production and it is unnecessary to further increase it. I think we need to maintain production at this level, so that our people could use it longer. But we can achieve this by means the non-oil sector. In 2013-2023, the joint activities of government and private entities will enter into a new phase. So a plan of joint activities of public and private entities must be developed.
Of course, we will adopt the state development program. A five-year program covering 2014-2018 will be adopted. At the same time, we need to elaborate the strategic directions of joint activities of public and private entities. We must bear in mind that our private sector is no longer what it was 10 years ago. Our private sector is sustainable and strong, and as a result of the measures to be taken in the future it will become even stronger. If the goals I have outlined are met – and they must be met – the private sector will become even stronger. So we need to double the GDP and turn Azerbaijan into an even more powerful country.
Our political influence and economic power are growing. This is seen by those who like us and those who don’t. There are quite a lot of those who rejoice in our successes. But there are forces that don’t like us, our detractors. They can be divided into several groups. First, our main enemies are Armenians of the world and the hypocritical and corrupt politicians under their control. The politicians who don’t wish to see the truth and are engaged in denigrating Azerbaijan in different parts of the world. Members of some parliaments, certain political figures, etc. who live on the money of the Armenian lobby. We know them all. There is no need to name them. This is one group. Another group includes those who don’t accept Azerbaijan’s independent policies. In other words, they don’t accept that Azerbaijan can pursue an independent policy. We do and we will pursue an independent policy. This policy, I want to repeat, serves the interests of the Azerbaijani people. It does not and never will serve the interests of anyone else. The interests of the Azerbaijani people are above anything else. We do and we will fight to protect these interests. The results and recent history show that we can succeed even alone.
The third group includes those who just envy us. The realities of Azerbaijan show that we are truly developing and achieving historic progress. Look what we have achieved in both political and economic spheres in recent years. I want to repeat that while the ratings of developed states are falling and some developed countries are on the verge of a default, Standard & Poor's has raised the credit rating of Azerbaijan.
The World Economic Forum in Davos, the world's most influential economic think tank, has placed Azerbaijan in 55th place in the world and in first place in the CIS for competitiveness. This is not an artificial nongovernmental organization that can say what it wants. The World Economic Forum is a renowned international organization, and this is its opinion.
Azerbaijan is a young and independent nation. Our independence is only 20 years old. But we are already a member of the world's leading institution – the UN Security Council. We have won this right in a difficult fight because we didn’t turn from our course, were fair and gained the sympathy of the world community.
A total of 155 countries supported Azerbaijan’s candidacy. When referring to “public opinion” and the “international community”, we need to remember this event. The international community is not a member of any organization. Any organization regardless of its significance or its members do not reflect the opinion of the international community. The international community means the United Nations where nearly 200 countries are represented. Of them, 155 supported Azerbaijan. This is our great political success, and we are already influencing global processes, having our say. On that historic day, the day we were elected a member of this structure, I said we would restore and uphold justice in the Security Council, and we will.
After that, Azerbaijan was invited to a meeting of G20 foreign ministers. What does this show? It shows that our country is very important for the world. G20 includes 20 countries, hence its name. Ten non-member countries were invited and Azerbaijan was one of them. Of the former Soviet Union countries, only Azerbaijan was invited. Can those who don’t like us remain indifferent to this? Of course not.
Besides, we live in one of the most beautiful cities of the world. Baku is one of the most beautiful cities in the world. It has always been the case, and now we have put so much effort to make our city even more beautiful. Plus, the success of our talented young people in the Eurovision song contest is the success of all the Azerbaijani people and our state.
The UN Security Council, the invitation to attend the G20 meeting, the high assessment Azerbaijan has been receiving from powerful economic entities of the world, the evaluation of Standard & Poor's, the victory in Eurovision – all this, of course, is a thorn in the side of those who don’t like us. Therefore, we should not be surprised when someone writes something somewhere or makes an acid look. We shouldn’t pay attention to that. This is natural. The main thing is that our success is comprehensive and it will be continued in all areas. I have no doubt about that.
Azerbaijan will become even stronger, and the best answer to those who write about us, about our country, authors of those defamatory articles is our reality, our work and success. Azerbaijan is a dynamic country. Azerbaijan is a strong country. The number of our friends is increasing. But there will always be those who don’t like us. But the fact that they are in our way can’t make us abandon the chosen path. Our path is one of justice. Our path is one of righteousness, development and progress. We are and will be going along this path successfully. Thank you!
