Ilham Aliyev chaired meeting on results of first quarter of 2022
12 April 2022, 14:40
President of the Republic of Azerbaijan Ilham Aliyev has chaired a meeting dedicated to the results of the first quarter of 2022.
The head of state made an opening speech at the meeting.
Opening remarks of President Ilham Aliyev
- Three months of the year are now in the past. Today we will analyze the work done, and also talk about plans for the rest of the year. In the first three months of this year, our country has successfully developed in all areas. We must assess the results of these three months as a continuation of last year's success.
Last year was a very significant year in the life of our country. It was the first year after the war. Of course, last year was very important for the post-war period. Our main goal last year was to start the restoration of the liberated territories and assert the new realities at the international level, and the results in both directions are obvious.
The results of the post-conflict period, the results of the first year give grounds to say that we have reached all our goals. First of all, we have continued our contacts and active cooperation with international organizations, and the world's leading international organizations have acknowledged the new realities. First of all, an international event has recently been held in Shusha under the UN auspices – an event dedicated to the 30th anniversary of Azerbaijan's membership in the UN. It was a very significant event. It showed yet again that the UN is a body that fully recognizes the territorial integrity of Azerbaijan. Of course, when we were faced with the fact of occupation after joining the UN, we saw that the UN and its Security Council had adopted fair decisions. Unfortunately, those decisions had remained on paper for almost 30 years. However, the settlement of the Karabakh conflict, the unilateral settlement of it by Azerbaijan has also taken this burden off the UN. I would like to reiterate that this event in Shusha was of particular importance, and it is no coincidence that it triggered a wave of panic and hysteria in Armenia.
Our activities in other leading international organizations were also successful. The biggest international institution after the UN is the Non-Aligned Movement. Azerbaijan currently chairs the Non-Aligned Movement, and as you know, with the consent and support of all member states, our chairmanship has been extended for another year. This is a manifestation of the great confidence shown to us. The Non-Aligned Movement has demonstrated a fair stance on the past conflict immediately after Azerbaijan became a member of this movement, and I believe that further important events have taken place in this direction since the end of the war. The Non-Aligned Movement was in unequivocal solidarity with Azerbaijan before, during and after the war.
Another major international organization is the Organization of Islamic Cooperation. During the occupation, the Organization of Islamic Cooperation adopted numerous resolutions in support of our position. At a recent meeting of the Organization of Islamic Cooperation at the level of foreign ministers, several other resolutions were adopted in support of Azerbaijan's position, including one dwelling upon the destruction of Azerbaijan's historical and religious sites by Armenians. The organization's leaders have visited the liberated lands.
Then the OSCE, which gave a mandate to the Minsk Group. The OSCE has also fully accepted the new realities. I recently had a meeting with the OSCE Chairman-in-Office, and the meeting once again showed that the OSCE also fully accepts the new realities, and this is a very significant event. As for the OSCE Minsk Group, immediately after the war, the Minsk Group co-chairs arrived in Baku. This was their first and last visit to Azerbaijan after the war, and there was sufficient information about that meeting in the media, I do not want to repeat that. Our position has always been unequivocal. Whatever we said during the discussions, we voiced the same theses and opinions in our official statements. We have resolved this conflict ourselves. The Minsk Group was active for 28 years before the second Karabakh war. The co-chair countries have probably made hundreds of visits to Azerbaijan and Armenia over the years. The result is obvious. The result was zero. The reasons for that are known to the Azerbaijani public too. I would not like to talk about that too much. The result is obvious, and I want to say again that the result is zero and Azerbaijan has resolved this conflict on its own. We have resolved it by military and political means. Although the mandate given to the Minsk Group to resolve the conflict is de jure in force, it can already be considered invalid de facto. During the post-war period, before the last Russian-Ukrainian war, we expressed our views on this issue. Our foreign minister has met with the Minsk Group co-chairs at various international events, and we said to them, “Tell us what you want to do now? The Nagorno-Karabakh conflict has now been resolved, there is no and will not be an administrative territory called Nagorno-Karabakh in Azerbaijan. Tell us what you want to do, let us know, and then we will state our position. For more than a year now, we have not received any proposals on this issue. Under the current circumstances, the Minsk Group and its co-chairs are virtually non-functional. This has already been stated by high-ranking officials of these co-chair countries. Therefore, of course, there can be no talk of any group activity. I think that the OSCE can play a role as a credible international organization. As I mentioned, during my recent meetings with the OSCE Chairperson-in-Office I stated that civil society representatives, the media and other influential public figures could hold meetings within the framework of the OSCE, i.e. within this format, so that Armenian-Azerbaijani relations could be normalized. This is the issue on the agenda now. The Nagorno-Karabakh conflict has been resolved. Now the issue is the normalization of Armenian-Azerbaijani relations, and any international organization, an organization that can contribute to this area is certainly welcome to do that.
At the same time, our contacts with the European Union have intensified after the war. The European Union has also accepted the realities of the post-conflict period. At the initiative of the President of the European Council, Mr. Charles Michel, trilateral meetings were held in December and April. Information about the meetings has been provided, so I don’t want to talk much about that. But, of course, both the experts and the Azerbaijani public could see that the final communiqué did not contain the expression “Nagorno-Karabakh”, which is quite natural. Because Azerbaijan expressed its protest, so there is no word “conflict” either. This is natural, because there is no conflict. The conflict has been resolved. The European Union is now working on normalizing Azerbaijani-Armenian relations, and these issues were discussed at the April meeting, on 6 April. As you may know, Azerbaijan has made a proposal consisting of five principles to normalize relations between the two countries, and the Armenian side welcomed this proposal. These statements had already been made before the Brussels meeting. At the meeting in Brussels, I wanted to clarify this for myself and I did. Armenia accepts the five principles. So the territorial integrity of Azerbaijan is recognized and Armenia renounces its territorial claims to Azerbaijan. In other words, if it accepts the five principles – as it was confirmed at the April meeting – then these are part of these five principles. This is a very positive thing, and I think that it is a key condition for the normalization of bilateral relations. It was agreed that working groups would be established both on the border and for the preparation of a peace agreement. As you know, the foreign ministers of Azerbaijan and Armenia have recently had a telephone conversation, which I think was the first time it happened in the last 30 years. We also welcome that.
Because the relations between two countries should be resolved by the two countries. Those who want to help should help. This is how I see it. This is our position. I think that the working groups on the delimitation of the border to be set up by the end of April, as well as the working groups on the preparation of a peace agreement, should start their work soon. We have very high hopes for this process and are not wasting time. In any case, we are in favor of starting to resolve the issue without wasting time.
So I want to say again that our policy immediately after the war, our activities in international organizations, our relations with major powers in a bilateral format, as well as the developments and events in Karabakh and East Zangazur, have brought about these realities. I must also note that we were in close contact not only with international organizations, but also with neighboring countries. All neighboring countries have accepted the new post-conflict realities, and this should be considered a very positive development. At the same time, we are pleased with the launch of the 3+3 cooperation format. The first such meeting has been held. There was no agenda for the first meeting, as it was simply a meeting to create this format. We have plans for the second meeting and what issues should be discussed there. I think that the second meeting should be held in the near future. In other words, we shouldn’t waste time. We don’t need these formats simply for the sake of visibility. If these formats don’t produce concrete results, then they will lose their significance.
We are in favor of doing tangible work and have a very clear vision for the future development of the region. We know exactly what we want and we will continue to use every opportunity to achieve our goals. These are the main issues related to the post-conflict period. Most of this work was done in 2021, and some of it in the first three months of this year. This gives us the opportunity to say, if all this is implemented, that there will be peace in the region, in the whole of the South Caucasus, there will be calm, the risks of war will be greatly reduced, and we can live comfortably. We will be able to build and create, which is very characteristic of the Azerbaijani people. We are doing this and we will talk about it today.
At the same time, of course, we must never forget the occupation, the Armenian savagery. At the same time, we must not forget that Azerbaijan is strong and Armenia is weak today. The behavior of the Armenian side is based on these factors. We live in real life, and we must never forget the policy of ethnic cleansing Armenia pursued against us in the early 1990s, the Khojaly genocide, the occupation, and we must always remember it as Azerbaijanis. As a responsible people, we must always be ready for anything.
Of course, looking to the future, I am confident that Azerbaijan will become even stronger. The Azerbaijani public will see that again when we discuss other issues today. The development of Armenia will be up to itself, up to Armenia's attitude towards neighboring countries. Because it is clear to everyone now that Armenia cannot develop without normalizing relations with Azerbaijan and Turkey and that their 30-year policy of aggression cost them dearly. They have wasted the opportunity to become a truly independent country. Despite the occupation of our lands for 30 years, we have achieved full political and economic independence. This is why we are confidently and proudly saying our word from all the podiums now. Therefore, this perhaps is Armenia’s last chance. Either the country will develop or it will find itself in an even more precarious situation, I want to say again that, first of all, the relations with Azerbaijan and Turkey must be normalized on the basis of norms and principles of international law.
As I said, we have not forgotten and will not forget anything. Therefore, immediately after the war, along with all other reconstruction work, we, as always, continued to pay attention to the military field. I must say that after the war, new and large contracts were signed with Turkish and Israeli companies. The implementation of some of these contracts has started, others have been completed, and others still are continuing.
Each day of the 44-day war has been analyzed in depth, and, of course, this analysis allowed us the opportunity to build our future army on the basis of the real situation. Taking this into account, the purchase of new weaponry and equipment is also being arranged. At the same time, after the war, the Ministry of Defense has undergone restructuring. Structural changes have been made, and this will further strengthen and modernize our army. After the war, a new type of troops – the Commandos – was created, and I personally attended the opening of the first Commando military base in Hadrut. This is a very strong army contingent. I am sure that this contingent can now perform any task. We will increase the number of commandos every year. I think it would be inappropriate to disclose information about their numbers, but everyone should know that thousands of fully trained fighters have already been and will continue to be trained.
At the same time, the number of personnel of the Special Forces who showed special heroism in the second Karabakh war has been increased, and it will continue to be increased. We will allocate and are already allocating as much as it is necessary for military issues. In Armenia, the picture is completely different. They can only spend the financial aid allocated to Armenia from abroad or unrepaid loans. I want to clarify this issue as well. I believe that in order to establish peace in the region, the process of arming Armenia must be stopped. Armenia does not have the money to buy weapons. It never did. In the second Karabakh war, we destroyed Armenia's military equipment worth about 4-5 billion dollars. Some of this equipment was taken as spoils of war, and we are using it. Some of it is displayed in the Military Trophies Park. The question is: where does so much money come from in a poor country? Where do these loans come from? Were these loans then repaid or written off? If those loans had not been given to them, I am sure there would have been no need for the second Karabakh war. Armenia would have meekly come to us seeking an agreement, just as it did when signing the act of capitulation, accepting all our conditions and acting completely differently after the war. Therefore, if money is allocated for the armament of Armenia again, we will consider it as an unfriendly step and will take our steps accordingly.
I want to say again that as a country living at its own expense, we will, of course, allocate as much as we need to build an army.
In the post-conflict period, of course, we have taken all our steps in relation to the economy, to the restoration of our territories in a calculated and prudent manner, and the results are obvious. All plans for the post-conflict period in Azerbaijan are being implemented. The international community has acknowledged these realities from a political point of view. At the same time, the interest in Azerbaijan has increased – both respect and interest. We are seeing this interest in large-scale investment projects. In just three months of this year, two major investment projects were launched – the foundation of two renewable energy plants was laid. The 470-megawatt power plants are being built by foreign investors and will be commissioned next year. We can thus save up a large amount of natural gas and expand our export opportunities. At the same time, I think this is a very important issue for other investors. At present, there is a great interest in Azerbaijan as a result of ongoing transformation, transparency and personnel reforms, as well as due to our victory in the second Karabakh war. There are many applications for working together and establishing business relations. Azerbaijan today is one of a handful of countries in the world that has been able to attract so much interest.
Our economic indicators are also very positive. The results of the first quarter hardly need any explanation. The gross domestic product has increased by 6.8 percent. The world is entering a post-pandemic period, so to speak. It may be a little premature to use the word “post-pandemic”, but in any case, the current situation in the world and in Azerbaijan indicates just that. Therefore, I think that our economic growth of 6.8 percent can be viewed a tremendous achievement. In the non-oil sector, this is measured by even higher figures. Our non-oil economy has grown by more than 10 percent. Growth in industrial production is about 4 percent, but in non-oil industrial production it is more than 18 percent. These figures in themselves confirm the words I am saying. The diversification of the economy, the reduction of dependence on the oil and gas sector, the decline in both its share in the GDP and exports – all these are a reality.
Our foreign trade turnover has increased by more than 60 percent. Our exports have almost doubled. Of course, rising oil prices must also be taken into account. However, our non-oil exports have also increased significantly – by 45 percent.
This has been possible specifically as a result of the reforms. I have never compared Azerbaijan with other countries and am also unaware of the statistics. And yet I do not believe that many countries have similar statistics. Of course, our foreign trade turnover has increased and our foreign debt has decreased. If we compare this with April last year, we can see that our foreign debt in April last year accounted for 18 percent of the GDP, but now it is only 12.5 percent. In other words, we were able to reduce the external debt by more than $600 million in one year. This was made possible thanks to the implementation of the external debt management strategy. I once set an objective that we should be very cautious in obtaining loans. At the same time, state-owned companies used to take various loans without asking anyone. And when they could not repay those loans, the burden of payment fell on the state. At the same time, a very opaque picture was observed. We have put an end to that. No government agency can take a single manat in loans without the government’s permission. Every loan is now approved by the government, and we should attract loans only to projects that are important, to projects with a high-tech component, as well as projects being implemented in liberated lands. There is no need for taking loans for other projects. This is why we have reduced our foreign debt both in absolute terms and in relation to the GDP. Of course, the gross domestic product has also increased, but I don’t want to cite a specific figure as yet. But I think that if we continue to develop at this pace, there will be a very significant growth by the end of the year. The balance of foreign trade is also very positive. The positive balance in just three months has been more than $5 billion. This is a very large number. Experts will know that this balance is negative in most countries around the world. Countries import more than they export. In Azerbaijan, in just three months, we have earned $5.1 billion – our exports exceed imports. Of course, I am sure that this figure will increase even more by the end of the year. This has had a strong impact on macroeconomic stability. There has also been an increase in our foreign exchange reserves. Our foreign exchange reserves have increased in three months. Therefore, we can rightly be proud of all these indicators. But this does not mean that we should be complacent with these achievements. No! Developments in the world are moving in a negative direction. Clashes and wars are flaring up.
There are different views on sustainability in the future. There may be food shortages in the world, food prices are rising. We will talk about that as well today. I must also say that we have made all these achievements through our own efforts. We have not received a single manat in support from anyone. We are restoring the liberated lands on our own. Yes, we have invited foreign companies. They are working there as contractors. But so far we have not received a single manat from anyone. We rely solely on our own strength and our own talent. I want to emphasize this in particular. Because usually after such bloody wars and such devastation – the devastation in Karabakh and Zangazur is unique for the world, there was no such devastation even in World War II – donor conferences are held, international organizations get together and implement a restoration plan. Suffice it to look at the history of World War II. At that time, the Marshall Plan was implemented. If America hadn’t implemented the plan to rebuild Europe, it would have probably taken Europe 50 years to restore its potential on its own. International funding has been provided for other conflicts. But no-one is helping us, neither during nor after the occupation. In fact, most countries did not even want to call the occupation an occupation. I remember our activities in international organizations and bilateral talks during the occupation. It took us tremendous effort to incorporate the principle of territorial integrity of our country in those declarations. Many were refusing. However, it was as clear as day who is the occupier and who is the occupied country. This is double standards, this is injustice. We are still seeing that today, in the Russian-Ukrainian war. In the past, when we were liberating our lands from occupation using the famous “Bayraktar” drones, foreign experts and the media were describing it as a deadly weapon. In the Russian-Ukrainian war it is called an angel. This is the difference, this is double standards, this is injustice towards us. This is a reality. And we have created and are creating a new reality on our own. Therefore, I want to say again that I still hope that international organizations, large foundations, international non-governmental organizations engaged in charity will heed attention. Aghdam is the Hiroshima of the Caucasus. It's not me saying this. It is international experts. All cities like Aghdam have been razed to the ground by Armenians. We have not received a single manat from anyone. But this injustice cannot be tolerated. I think that our institutions, the government, the Presidential Administration, the ministries should all take serious action on this issue. If they do not want to help, let them say that we will not help you. We will then know what it is. It has been about a year and a half since the war ended. Not a single foundation has helped us. More than 200 people have been killed or seriously injured since the war ended. There are so many foundations and NGOs in the world that deal with this issue. What are they doing? Let them come and help us. We don’t have sufficient physical resources. We have purchased what we needed. We have purchased machinery, equipment and even drones capable of detecting land contaminated with mines. But we do not have enough specialists. We do not have enough manpower. Therefore, let them at least help us in this area. I repeat that we will restore everything on our own anyway. I said that we will rebuild both Karabakh and Zangazur as an exemplary region. Azerbaijani citizens will live there comfortably and prosperously. It will be an example for the whole world. But my appeal is to international organizations. Those involved in human rights, those championing the principles of justice should pay at least some attention to Azerbaijan and avoid double standards. In short, this shows everything, so to speak. I am confident that the economic achievements of the first three months of this year will be continued until the end of the year. Because we see that there are opportunities to achieve this. Thus, we will successfully complete this year as well.
Now I would like to listen to an update on some issues. First, with three months of the year now in the past, what is the situation with budget execution? The Minister of Finance, you have the floor.
Minister of Finance Samir Sharifov: Dear Mr. President, distinguished participants of the meeting.
The results of the first quarter of 2022 can be assessed as a continuation of the achievements of the Republic of Azerbaijan in 2021. Last year's socioeconomic results showed that after the great victory in the Patriotic War, Azerbaijan achieved significant progress in the economy by mobilizing its resources quickly. Thus, last year's GDP growth was exceeded by 2.2 percent, i.e., it reached 5.6 instead of 3.4 percent. We are seeing a continuation of this trend this year too. These positive trends are also reflected in the execution of the state budget for the first quarter of this year. In the first quarter, state budget revenues exceeded the forecast by 6.3 percent, or 418 million manats, with budget revenues amounting to 7.1 billion manats.
I would also like to note that the State Tax Service has exceeded the forecast for revenues by 539 million manats, or 23.8 percent, and by the State Customs Committee by 236 million manats, or 23.7 percent. On social insurance premiums, 1.41 billion manats were executed against the forecast of 961 million manats. I should note that the more significant share of over-fulfillment of forecasts for the State Tax Service, i.e., by about 90 percent, is due to increased revenues in the non-oil sector. In general, revenues from the non-oil sector in the first quarter accounted for more than 80 percent of total revenues and more than 80 percent of total tax revenues. Under such circumstances, the State Oil Fund transfers into the state budget were executed by 2.757 billion manats against the planned 3.180 billion manats, i.e., 13 percent, or 423 million manats less. It has to do with the fact that state budget execution has been very high.
Distinguished Mr. President, I must also note that the execution of budget expenditures in the first quarter of the year is usually not so high. This year though, it was 99 percent. Even with this high level of budget execution, the state budget surplus amounted to 1.38 billion manats in the conditions of an excess of budget revenues provided by fiscal authorities on the one hand and the under-collection of 423 million manats from the State Oil Fund, on the other. This is a very good indicator. As I mentioned, state budget expenditures for this period were executed at the level of 5 billion 630 million manats, or 99 percent. The primary state responsibilities, financial assistance from the state budget and other programs have been fully funded, and budget requests submitted by state budget organizations to the treasury have been fully implemented.
I want to note that the funds allocated from the state budget for implementing the Karabakh reconstruction program constitute 2.2 billion manats. The 346 million manats, or about 16 percent, have already been executed in the first quarter. The implementation of the state capital investment program has been provided at about the same level. Distinguished Mr. President, your instructions have been fulfilled.
In the first quarter of this year, 220 million manats were allocated under the food security program, mainly in the aftermath of food problems in the world. This is due to the provision of certain farming subsidies to agriculture. So much for budget execution.
President Ilham Aliyev: I see. Could you also bring us up to date with the future parameters of our foreign debt? As I said, there is a strategy that is being implemented successfully. 12.5 percent is a figure any country can be proud of. As you know, I set a task a few years ago that our foreign debt should not account for more than 10 percent of our gross domestic product. So we are approaching that. At the same time, of course, we should take loans and shouldn't give them up completely. Therefore, please bring us up to date with the situation for this year. How much money is to be repaid from the state budget this year, how many loans will be received, and what will be the short-term parameters of the strategy for the coming years? Tell us about that, please.
Samir Sharifov: Distinguished Mr. President, I would like to note that the implementation continues of the medium and long-term strategy for public debt management in the Republic of Azerbaijan, approved by your Order dated 24 August 2018. Work to implement the goal you set before us to reduce the ratio of foreign debt to GDP to 10 percent also continues. One of the crucial issues in this direction is gradually reducing the total public debt, i.e., foreign and domestic public debt in foreign currency and, taking into account this direction, increasing the share of domestic debt in the debt portfolio. When the strategy was adopted, this ratio was 94 percent, i.e., 94 percent was the share of foreign public debt. At present, it has been reduced by 82 percent. It is because the share of domestic debt has increased. To develop domestic public debt, i.e., domestic financial markets, we are offering more government securities and government bonds to the market. Since adopting the strategy, this debt has increased by 3.2 percent. At present, it is 2.5 billion manats, and the program is underway.
It is beyond doubt that when the execution of the state budget is good, i.e., when the fiscal authorities provide a surplus, there is no budget deficit, and as a result, we do not leave so much domestic debt. But this program will be continued.
Distinguished Mr. President, according to your recent decree, the total public debt will be maintained at 20 percent of the GDP in the medium term. The foreign debt will be reduced to 15 percent in the medium term and 10 percent in the long term.
Today, one of the most important issues is our borrowing strategy – how much we will borrow. Distinguished Mr. President, at the same time, the approval by your recent Order of certain budget indicators of the Republic of Azerbaijan, first of all, on the non-oil base deficit, has created a specific framework for us. The total borrowing is projected at 4.3 billion manats for the next three years within this framework. This does not include debt refinancing. If we include debt refinancing, we are borrowing roughly 8.3 billion manats. The 1.3 billion manat part of the new debt will be the funds we will receive from the loans signed so far. In other words, they were signed for certain projects, but these loans have not been fully used. The new debt is estimated at 3 billion manats.
Distinguished Mr. President, I would also note that our current gross domestic product is relatively high. Considering the expected results by the end of this year, the Ministry of Economy has already provided us with new medium-term forecasts for the coming years in March. Given these forecasts, we believe that we may have additional opportunities for borrowing.
Mr. President, as you mentioned, international organizations intend to lend us reasonably large amounts. After some of your remarks, the European Union announced its intention to lend us 2 billion euros. They are ready to provide this amount through two banks – the European Bank for Reconstruction and Development and the European Investment Bank. On the other hand, other international financial institutions, primarily the World Bank, offer us their credit lines because of their extensive experience in reconstruction. The Asian Development Bank is also ready to provide significant loans based on programs initiated by the government of Azerbaijan. Here, so to speak, "the ball is on our court." Depending on what projects we choose, we can attract these funds within the loan framework you have set for us.
President Ilham Aliyev: The goals are clear. I want to say again that we must reduce our foreign debt to 10 percent of the GDP. To get closer to this, you need to submit suggestions on how much we have to buy and how much we have to return. The EU's lending proposals are, of course, positive. Because, as you know, after the war, the loan and grant package for Armenia was about 2.6 billion euros. Azerbaijan was supposed to receive only 140 or 160 million. Of course, we could not remain silent. It is a pretty positive development that the European Union has announced a 2 billion euros package for Azerbaijan. I consider it a very positive matter. But at the same time, I have looked at those proposals. There are projects we can implement without borrowing, of course. At the same time, our desire and fair position are that the terms and conditions on which a loan or grant is offered to Armenia should be the same for us. Whether we will use it is a different matter, but the approach should be the same, especially if we consider that there is no single structure in Armenia destroyed. In Azerbaijan, there is not a single sound building on 10,000 square kilometers. I can never leave that aside. Therefore, this must be taken into account.
As for our cooperation with leading international financial institutions, I know that a World Bank mission recently visited Azerbaijan. The Prime Minister has reported to me. They have made some suggestions. Of course, the European Bank for Reconstruction and Development and the Asian Development Bank are our traditional partners. The European Investment Bank has recently entered the Azerbaijani market. Their first project seems to have been related to gas infrastructure. Our relations with the Asian Bank for Infrastructure and Development are also developing. We are one of the founding countries of this bank and are also shareholders in it. We need to work with these major financial institutions around the world. We need to review this strategy from time to time to know whether we can borrow more or less and repay more or less. You should look at that and submit your suggestions.
Are there any other opinions on foreign debt? Does anyone want to provide information? Please.
Minister of Finance Samir Sharifov: Distinguished Mr. President, I would like to note that the World Bank offers us special conditions today. If we reach a full agreement with them by mid-next year, we can secure those conditions.
President Ilham Aliyev: You mean preferential terms?
Samir Sharifov: Preferential terms. Considering the reconstruction of our Karabakh, they have decided that they can give us loans on favorable terms.
President Ilham Aliyev: We can use that.
Samir Sharifov: Yes. As you rightly point out, we can choose the projects we need under these conditions. In other words, there are projects, such as the construction of roads, and we should not attract foreign currency to them. But in any case, we must consider our foreign exchange costs when choosing projects, and we could probably attract funds for these purposes.
President Ilham Aliyev: The world's leading financial institutions also provide loans to the private sector. I think they can allocate even more. This issue should always be discussed during your contact with them. For example, I am aware that leading financial institutions also provide loans to construct power plants with renewable energy. Not to us, but investors, to foreign investors. Therefore, their loans are necessary for local companies and local entrepreneurs. True, we have our mechanism, and the Ministry of Economy oversees this work. However, it is necessary to consider the issue of the World Bank, the European Bank for Reconstruction and Development and other banks giving loans to the private sector in larger volumes.
Everyone is aware that food prices are rising sharply in the world today. This process began several months ago. Of course, the Russian-Ukrainian war has accelerated this process, especially given that Russia and Ukraine are among the world's leading grain exporters. They also export other food products to world markets. There is and will be a natural scarcity now. I was recently informed that Kazakhstan has also banned the imports of wheat. Therefore, our wheat supply, of course, should be in the spotlight. The government has been instructed on this issue. Prompt measures have been taken, and stocks are being replenished. We need to stockpile more. But at the same time, we must know that this situation can and will continue for a long time. Therefore, first of all, we must increase our domestic security. Instructions on this issue have already been issued. Instructions have been issued to carry out more extensive planting work on liberated lands and other regions. Of course, the successful implementation of irrigation projects here can lead to great results. But in any case, in the current situation, I think that the rise of food prices and the prevention of artificial price increases is one of the most critical issues. What is the situation regarding this issue? The Minister of Economy, please bring us up to date on that.
Minister of Economy Mikayil Jabbarov: Mr. President, per your relevant instructions and relevant decisions of the government in this direction, we are working in conjunction with relevant agencies. This activity consists of three directions. First of all, there are permanent monitoring mechanisms. We monitor daily warehouse balances on food, flour, powdered sugar and many other products jointly with business entities and government agencies. The second direction is legislative regulation. Several decisions have been made in this regard, most recently by the Cabinet of Ministers. We are currently implementing a regime that provides for this balance. In other words, the export of products that are not produced in Azerbaijan and are highly dependent on our imports is carried out under a special control regime. At the same time, to not reduce the export potential of businesses and not lose export markets, we regulate the activities in the same way for the products manufactured in the country or capable of being manufactured so that this activity can be carried out accordingly.
Finally, the third direction is our work with businesses. Here, too, the state applies relevant incentive mechanisms. In particular, I would like to emphasize that under the relevant Order of the Prime Minister dated 5 April, a total of 115 million manats will be allocated as soft incentive loans to businesses and the mechanism of successful use of strategic food products during the pandemic. State subsidies have been allocated to repay loans and interest of many business entities, and we are doing this using a similar mechanism. What is the logic of this? It is as follows: to ensure permanent reserves, the entrepreneurs must increase the stock of those reserves. This, in turn, creates a need for more operating capital. We are using flexible mechanisms that make sure that the interests of entrepreneurs are not affected and, on the other, the tasks facing the state are fulfilled.
Distinguished Mr. President, in conclusion, I would like to note that in early 2020, from the first days of the pandemic, we observed a ban on the export of products from many major suppliers and the absence of some food products in other countries. We believe that satisfactory results have been achieved in Azerbaijan in this direction, both then and now.
According to your relevant instructions and in line with the current situation, food prices are another priority. In this regard, activities are carried out under the relevant decision on anti-inflation measures. Today, since both countries in conflict and at war are essential partners for Azerbaijan in terms of both food exports and imports, we are trying to build these processes in a coordinated manner.
In the first quarter of this year, Azerbaijan fully supplied the domestic market and exported 60,000 tons of various fruits, 37,000 tons of vegetables, 12,000 tons of sugar, and 3,500 tons of fruit and vegetables to different countries. On the other hand, we are already implementing the measures I have listed to simplify imports of these structurally dependent products.
In addition to short-term measures to eliminate inflation together with the Central Bank and other relevant agencies, we believe that steps can be taken on medium and long-term measures. I want to take this opportunity to thank you for the positive solution to the issues raised, especially for your support in assisting small and medium-sized enterprises and food producers.
President Ilham Aliyev: I have been told that inflation has risen to 18 percent in the last three months. It is a significant figure, of course. But we must also know that part of this is imported inflation. Because the rising prices of food and other products in the world are, of course, also affecting our domestic prices. At the same time, I must note that the population's income increased by about 20 percent in three months, and if we compare inflation with population incomes, we will see that real incomes increase. But this does not mean that we should ignore that. Therefore, it is necessary to take and strengthen anti-inflation measures. Of course, the main issue here is to prevent artificial price increases. Because in such cases, in such a geopolitical situation, some shady entrepreneurs try to take advantage of that by raising prices without any reason. Particular attention should be paid to this. Do you have a word on food security?
Prime Minister Ali Asadov: Inflation can be divided into two parts. In other words, the 18 percent you are talking about is food inflation. Our overall inflation rate is 12.2 percent for three months. Imported food accounts for more than 60 percent of inflation. The Minister of Economy stated the reason for this. You mentioned that there are often cases of price increases and abuse in these situations. Since the beginning of the year, during the period when we kept subsidies for bread, the processes following the increase in the price of the so-called "factory bread" by five gapiks have been monitored to this day, and entrepreneurs are aware of that. These processes are rigorously controlled. With your permission, I would like to mention two critical points regarding reserves.
At the beginning of the pandemic period, starting from March, on your instructions, these processes were carried out mainly in the direction of supplying the republic with food and other deficit products, including medicines and medical supplies. The public is also aware, Mr. President, that in connection with the Ukraine-Russia war, the price of grain has risen to its peak. But it is not just the price. The point is that the import of grains follows a certain process of its own. As you have mentioned, given the leading role of Ukraine and Russia in world grain production, we are increasing these reserves, given that Ukraine will face difficulties this year. I want to touch upon one more point. On your instruction, concrete projects are being prepared to reduce the dependence of local production on imports, and the measures will be submitted to you soon. You mentioned the ongoing planting in Karabakh, in the liberated territories, and it is also underway on other large farms.
Mr. President, Mikayil Jabbarov said that daily monitoring is carried out on each product, mainly in terms of prices, warehousing and national stocks of the 12 main products used by the population, which are included in the minimum consumer market. Of course, it is a time when most countries are only prioritizing their supplies. Taking into consideration, we are also looking primarily at our resources. If a local production wants to export its products, entrepreneurs apply to the Ministry of Economy and their applications are promptly considered within five days. So I can say that we have enough stocks of essential food products in Azerbaijan today.
President Ilham Aliyev: I see. Speaking of this issue, we must first increase the production of food wheat. Of course, we must stockpile it. Because our total grain production accounts for 60 percent of the country's demand, and we are only 25 percent self-sufficient in food wheat. Therefore, the goal is to provide ourselves with at least 70-75 percent of food wheat. There are potential and opportunities to achieve this – both in our country's liberated lands and elsewhere. Public investment spending should be increased this year and in the coming years. At the same time, entrepreneurs should be provided with targeted loans and preferential loans to develop this area because wheat is an essential food product. Our geographical location and climate and the quality and conditions of the soil in some places preclude us from being 100 percent self-sufficient in wheat today. But we must work towards that, and in less than six months, we are now engaged in large-scale cultivation on the liberated lands. As a result of urgent measures, we are sowing for the second time, and this year we will sow about 50,000 hectares. It is an outstanding result. Additional funding should be provided for measures to increase productivity both on the liberated lands and elsewhere. First of all, irrigation, irrigation systems, fertilizer and other issues must be addressed.
The number of houses and apartments we have built for the families of martyrs and those disabled in the war is growing. This was one of the priority issues during the occupation, and these issues were resolved after the Second Karabakh War. The goal here is that the living conditions of the families of martyrs – the families of martyrs of both the first Karabakh war and the Second Karabakh War and those disabled in the war – must be resolved soon. Necessary steps were taken in this direction both this and last year. The Minister of Labor and Social Protection of the Population, please update us on this work and what will be done by the end of the year.
Minister of Labor and Social Protection of the Population Sahil Babayev: Distinguished Mr. President, one of the main directions of the policy pursued under your leadership after the liberation of our territories as a result of the victory of the Azerbaijani Army is the expansion of state support for the families of our martyrs and those disabled in the war. Under your instructions, measures have been taken in several areas in this regard. First, 103,000 social payments were assigned to 93,000 people as social benefits - this covered members of the families of martyrs, those disabled in the war, and war veterans. I want to emphasize that by your relevant decree, the pension of the President of the Republic of Azerbaijan paid to this category of people in early 2021 has increased by 60 percent. Since this year, their disability benefits have increased by 60 percent. In general, as I mentioned, 103,000 social payments were assigned to 93,000 people.
Another area was employment support measures. This framework took employment measures concerning 11,000 family members of martyrs and those disabled in the war. Half of them were involved in self-employment programs and were allowed to start a small family farm. Another direction was the employment program, where more than 2,000 family members of martyrs and those disabled in the war were hired within the framework of the employment marathon, especially as a result of the active participation of our entrepreneurs in this program. One of the most critical aspects of this program, as you mentioned, was housing. Last year, about 3,000 apartments were provided to the families of martyrs and disabled war veterans. In the first quarter of this year, 200 apartments were provided to this category of people. By the end of the year, we plan to provide 1,500 apartments to the families of martyrs and disabled war veterans. In this context, the plan is to open the next residential complex soon, after which this process will be accelerated.
Mr. President, I would like to emphasize that 6,300 apartments have been provided to this category of people over the past three years by your decrees. In general, this figure is 12,500 apartments in the years of independence. A total of 6,300 of them have been implemented within the expanded program over the last three years. The provision of an additional 1,300 apartments by the end of the year is essential for improving the living conditions of this category of people.
Another area was rehabilitation. Within this framework, the ministry has provided a total of 23,000 rehabilitation services to 8,000 soldiers wounded in the war. I want to emphasize that 190 war veterans who have lost their limbs have been provided with 200 fourth-generation electronic prostheses. In addition, 16,000 rehabilitation aids were provided to about 3,000 soldiers wounded in the war. This process is also being successfully implemented and will continue to be implemented. We have only six remaining veterans who lost their limbs during the Patriotic War and have not been provided with prostheses. The reason for that is their treatment program because they can receive prosthetics only after a certain point in their treatment. Under your decree last summer, the establishment of Unified Coordination Centers began in August to carry out work in this area in a coordinated manner – both in DOST centers and in the regional branches of the State Social Protection Fund. To date, Baku and 33 districts are covered by the Unified Coordination Center. Three more centers covering 15 districts will be established in the next two months. Over the past six months, 26,000 of our citizens – members of the families of martyrs and disabled war veterans – have been admitted to these centers, and 26 services provided by six different central and local executive authorities are centralized and provided to them.
President Ilham Aliyev: Thank you.
X X X
The head of state delivered closing speech at the meeting.
Closing remarks by the President Ilham Aliyev
- We need to talk about the work to be done before the end of this year. I will talk only about the work to be done in Karabakh and East Zangazur and our plans because it would take a long time if I also talked about the efforts across the country. As a result of implementing the investment program in the country, the work is going according to plan, and citizens in each region see that. Many projects are being implemented based on appeals from citizens. People address issues of concern to me, to the Presidential Administration, to the government, to various government agencies, and every appeal is carefully reviewed. Therefore, when developing the investment program, of course, preference is given to proposals from the ground.
As for the work in Karabakh and East Zangazur, no one lives there yet. This is why we must do the work there in a centralized manner. Last year, large-scale landscaping and construction work was launched, and major infrastructure projects were implemented. If I list them all today, it will take a long time.
I want to reiterate my instructions on the work to be done before the end of this year and in the next two years. The first is related to the master plans of cities. At present, the master plans of Aghdam and Fuzuli have been approved, and work has begun based on these master plans. I have already gotten acquainted with the progress of my work. The master plans of other cities should be approved soon. Master plans for Shusha, Jabrayil, Kalbajar, Zangilan, Gubadli, Hadrut and Sugovushan settlements should be prepared and approved this year. Then additions should be made to our investment program for Karabakh and East Zangazur. As it was noted here, a total of 2.2 billion manats are envisaged. But a little more than 300 million manats was used in the first quarter. Of course, after the master plans have been approved, we will only deal with specific issues. First of all, I mean the construction of residential buildings because other infrastructure projects are also being implemented. To speed up the demining process, about 100 million manats are envisaged in the state budget for this year, which is a priority for us. Because without resolving this issue, we cannot place people in those areas. But once we are sure that those areas have been cleared of mines, we can start placing our citizens there.
As I mentioned earlier, new equipment is being purchased, including the most modern equipment, drones and other modern devices. There is, of course, a great need for the support of international experts. We now have three agencies – ANAMA, units of the Ministry of Defense and the Ministry of Emergency Situations – engaged in demining. Of course, the issue of involving local companies was discussed some time ago, and as far as I know, local companies are also involved in this work. Because this initiative will give an impetus to the development of entrepreneurship – unfortunately, the demining process in our country will take a long time. At the same time, local companies can gain experience and provide their services here. As for foreign companies, their offers, of course, have not been quite acceptable to us in terms of the price. Because there is a considerable difference between the prices offered by local companies and those charged by foreign companies, therefore, I think that the more local companies are established along with the three government agencies, the better. Also, the purchase of the most modern machines and mechanisms through the state must be provided.
Work on arranging electricity supply will be continued in the liberated areas this year. Four 20-megawatt hydroelectric power stations were built on the liberated lands last year. Two are in Sugovushan, one in Gulabird village of Lachin district, and one on the Lev river in Kalbajar district. When the nefarious enemy left our lands, they destroyed and set on fire more than 30 power plants, and the ruins of those stations are still there. Everyone can see that, especially in Kalbajar and Lachin districts. We started the restoration of those stations last year. This year, five stations will be restored by AzerEnergy, and the capacity of these stations will be 27 megawatts. However, it would be better if the remaining stations were restored and operated by entrepreneurs afterward. Because, of course, the state can take on this work too, but there are many other costs for the state – this is the first. Secondly, it can be a good investment for entrepreneurs. If we consider that all the liberated regions are now connected to other regions of Azerbaijan by power lines, the energy produced there will be included in the overall system. I think it can be very attractive for entrepreneurs. I am aware that the Ministry of Economy and the Presidential Administration are engaged in this work, and some suggestions have been made. I think that proposals should be made for each station, and perhaps entrepreneurs will get more enthusiastic after this meeting hearing this information from me. It would be good to hold a special presentation for entrepreneurs interested in this issue regarding the location of the remaining stations. I am talking not just about the stations destroyed by the Armenians. At present, foreign companies are applying to us to construct wind farms, especially in Kalbajar and Lachin districts. If this is of interest to foreign companies, it means there will be a profit. We must also involve local companies, either together with foreign companies or separately. The potential of solar power plants in the Jabrayil and Zangilan districts is exceptionally high. So we must make the best use of all of them. We need to increase the share of renewable energy in our total energy balance by 30 percent. I issued this instruction earlier, and we may reach an even higher figure in the future. Also, we can save natural gas and export it at its current high price.
As I mentioned earlier, there are already lines connecting all regions. Nine power substations were built on liberated lands last year. This is a very good indicator. At the same time, power lines were laid from Dashkasan, which has the most challenging natural terrain, across the Kalbajar mountains – from Dashkasan to Kalbajar. The height of the mountains there is 3,500 meters, and we were able to do it in challenging, complex conditions in the winter months. AzerEnergy specialists deserve high praise. This year, work on constructing “Khudafarin” and “Giz Galasi” Hydroelectric Power Stations should be accelerated. Negotiations are underway with the Islamic Republic of Iran, and I think they should also be accelerated so that we can reach an agreement here as soon as possible. Because the capacity of these stations will be very large – 240 megawatts, and after these stations are built, half of this capacity will reach us. We can take advantage of these opportunities. Negotiations are underway with BP on constructing a solar power plant in Jabrayil. I do hope there is a result soon. I think this station will have tremendous potential.
In general, I have already voiced this figure. Renewable power plants in the liberated lands alone will have a capacity of more than 9,000 megawatts, and we are receiving numerous proposals from the world's leading companies. We have power lines with neighboring countries, and our export opportunities are expanding. Last year, electricity exports increased even further in comparison with 2020. We have a unique potential here, both in the country and the Caspian Sea. But I would like to draw your attention to this issue in the context of the work to be done in the liberated lands. At the same time, the construction of power lines from Zangilan via Iran to Nakhchivan and from there to the Iranian energy system and Turkey is also on the agenda.
Last month, Iran and Azerbaijan signed a memorandum on constructing bridges and railway bridges. At the same time, the memorandum contains a clause on the construction of power lines. This is why we must start this work as soon as possible. In any case, concrete specific must be made this year on the work to be done in Azerbaijan. After the construction of lines from the Jabrayil substation to Zangilan and the final agreement with the Islamic Republic of Iran, this line can be extended across Iran.
At the same time, the construction of road bridges and railway bridges is also on the agenda. Of course, this does not rule out the opening of the Zangazur corridor. The Zangazur corridor must be opened. An extensive exchange of views was held in Brussels on 6 April on the railway and highway through Zangazur. A project to build a road through Iran to Nakhchivan and worldwide markets are already being prepared. I hope that a groundbreaking ceremony can be held soon, and thus a new international transport corridor will be opened. In general, all our plans related to transport infrastructure have been implemented on time. If these significant investments had not been made in the port, railways, airports, highways and other infrastructure, Azerbaijan would be deprived of these new opportunities today.
Conversely, we can maximize our transport infrastructure now. New cargo ships and tankers are being built at the shipyard. In other words, all these are timely steps. If we hadn’t built the shipyard, we would not be able to use these opportunities today. We are not dependent on anyone now. We can build as many ferries, tankers and cargo ships as we want, and we will increase the volume of cargo transportation across the Caspian Sea this year and next year.
I should also note that a 60-kilometer section of the 100-kilometer Horadiz-Aghband railway is ready. So we are moving fast. A four- and six-lane highway are also being built.
I would like to draw your attention to one more issue. Armenia must also see that it cannot thwart our plans. If it doesn’t grant us passage through Zangazur, it will lose and, first of all, violate the 10 November statement. Because the 10 November statement explicitly states that there must be a connection between the western regions of Azerbaijan and the Nakhchivan Autonomous Republic, which is Armenia's obligation. If they don’t want to fulfill their obligation, then we will not be under any obligation to fulfill our commitments either. They should know this and not procrastinate. We will achieve what we want sooner or later anyway. They should move a little faster. Otherwise, they will still find themselves at an impasse yet again.
As for other infrastructure projects, I can say that the construction of the Barda-Aghdam railway is continuing this year. It will probably be commissioned next year. At the same time, railways and railway stations should be built in Aghdam and Fuzuli. Project proposals must be submitted and reviewed by relevant authorities and then submitted to me.
Another issue related to the transport infrastructure is the opening of Zangilan International Airport. This is also scheduled for this year. This will be the second international airport in the liberated lands after Fuzuli. As for the construction of Lachin International Airport, we plan to do so in 2024. There is a lot of work to be done, the mountains have to be blown up, and the territory has to be cleared. There is extensive ground disturbance work to be done there. But it will definitely happen.
As for the construction of roads, the roads from Naftalan to the village of Talish should be fully operational this year. They will also connect Naftalan with Sugovushan. Both places are very conducive from the tourism perspective. Naftalan has already become an international tourist center, and the distance to Sugovushan is very short. Tourism opportunities have recently started to be explored in Sugovushan – tourism, accommodation and sports. So this road is essential, and we will be able to easily reach Sugovushan from both the direction of Naftalan and Tartar. Therefore, this road should be commissioned this year.
A new alternative road bypassing Lachin is also scheduled for commissioning this year. This road is significant, and we must put it into operation this year. The roads to be commissioned this year also include the Fuzuli-Hadrut highway, the Gubadli-Eyvazli village road and others. In particular, the construction of military roads will be continued in Kalbajar and Lachin districts. Last year alone, about 700 kilometers of roads were built in places where there were never roads before. These roads have been built to the Azerbaijani-Armenian border.
It is now possible to serve comfortably at the border. I want to inform the Azerbaijani public about ongoing projects. Concerning automobile roads, work is powering ahead on the Barda-Aghdam highway. The Kalbajar-Lachin highway and a 4-kilometer tunnel are being built. A highway is being built from Khudafarin to Gubadli and from there to Lachin. The Jabrayil-Hadrut road is under construction. Victory Road has been opened, but the 4-lane Fuzuli-Shusha highway, as well as Horadiz-Aghband and Aghdam-Fuzuli roads, are also being built. One of the most critical roads is the Togana-Kalbajar highway because after this road and the 12-kilometer tunnel have been built, there will be no need to cross the Murov Pass. We will be able to pass through a tunnel easily.
The construction of the Kalbajar-Istisu highway will be continued this year. This also has a significant symbolic meaning. The Istisu sanatorium was very popular in Soviet times. Many residents from Azerbaijan itself and different parts of the Soviet Union would go there for rest. But when Mehriban Aliyeva and I were in Istisu, we saw an appalling sight. The sanatorium and water sources were destroyed entirely. I said that this savage tribe had put its nose everywhere, even there. There were only ruins of the former sanatorium. So I decided that a new modern hotel should be built there. Currently, a hotel project for about 150-160 people is being prepared. We must also start producing medicinal drinking water. This instruction has also been issued. Initial contacts have been established now, and I think that the foundation can be laid for both essential and symbolic projects this year. At the same time, I am confident that we will restore this historical justice and create an international resort there. Because after the commissioning of Lachin airport and the construction of the Toghana-Kalbajar highway and tunnel, it will be very convenient to come to Kalbajar from both Ganja and Lachin. I am sure that it will not be long before Istisu regains its glory. Drinking water sources are now being developed in the liberated lands. Among them, of course, the drinking water project of Shusha is a priority. Because people already live in Shusha. Residential buildings are also being built in Shusha, and people will return there soon. Therefore, the Shusha drinking water project should be fully operational this year. While fleeing Shusha during the war, the Armenians blew up those water lines and committed another atrocity. During the occupation, they destroyed all 17 water springs in the city. These are savagery manifestations, showing that Shusha has always been a foreign city to Armenians. They were always jealous of Shusha, cherishing an ugly dream of occupying Shusha one day. Unfortunately, in May 1992, Shusha was occupied due to national treason. Now we have returned to Shusha. We are the owners of Shusha, and we will live there forever. The restoration of Shusha, along with all other liberated lands, is, of course, vital, and I think it should be a priority. The Azerbaijani people also appreciate this approach. Now restoration work is underway in Shusha, some historical sites have been restored, and I want to issue instructions on the work to be done this year. Historical sites are being restored, the Heydar Aliyev Foundation is restoring three mosques, and the construction of a new mosque will begin in the coming months. The location has already been determined, and we have laid its foundation.
Other historical sites are also being restored. There are some proposals and sketches, and, of course, we must restore the historical image of Shusha. No project that could damage the historical and architectural ensemble of the city should be carried out there. The foundation of a new TV tower has been laid in Shusha, and the project will probably be launched shortly. The required funds must be allocated. A school for 960 pupils and a 90-bed hospital are under construction. The foundation of these projects has been laid. The former post office building will house “ASAN service,” a DOST center and other facilities serving the population. The post office building will be overhauled while preserving its original architectural appearance.
I should also note that the foundation of a residential area has been laid in Shusha, and the construction of houses has begun. A site has been selected for the construction of a new five-star hotel. It is a place where the self-styled entity wanted to build a so-called parliament. There was another devil's lair there as well. It disappeared during the war too. A project for a five-star hotel has been submitted to me now. It will be a beautiful building in line with the architecture of Shusha. The building of the mayor’s office is being overhauled, and a new conference hall is being built right next to it. Because now there is no place to hold major events in Shusha now. Therefore, the conference hall will be adjacent to the mayor’s office, where the most prestigious events will be held soon.
The Kharibulbul festival will be held in Shusha again next month. Last year, the people living in Azerbaijan demonstrated their talent at this festival organized at the initiative of the Heydar Aliyev Foundation. This time, we have invited folk bands from around the world. I already have preliminary information and don’t want to announce it ahead of time, but I think it will be an exciting festival. We have already revived this tradition. As you know, TURKSOY has declared Shusha “the cultural capital of the Turkic world” in 2023.
Irrigation projects in the liberated areas are planned for this year. The peculiarity of these projects is that preparations take a lot of time. Because the design work must be done correctly, and places must be chosen correctly. Where will the canal be built? Where will the reservoir be built? These are time-consuming issues. This is why I am not pushing anyone. But at the same time, we must find the resources for implementing the already approved projects. It has been noted here that we are now implementing the budget with a surplus. In the first three months of this year, tax authorities collected more than 500 million manats above the forecast and customs authorities have collected more than 200 million manats in taxes. So we have these opportunities now.
Irrigation will be one of the critical factors in providing food security for both the liberated lands and the country as a whole. These projects must be implemented so that they are integrated into our overall irrigation system. It is necessary to pay serious attention to that because the natural terrain of the liberated lands, especially the Kalbajar, Lachin and Gubadli zone, is such that both irrigation water and drinking water can flow from there to Aghdam, Barda and other places. It must be integrated into our overall irrigation system. At the same time, we must use our rivers as a source of drinking water. During the occupation, our rivers were subjected to environmental terror, our rivers were under occupation, and the enemy deprived us of our own rivers. We could not use the water of the Tartar River. The Tartar River is one of the largest rivers in Azerbaijan. As the water was in the hands of the Armenians, they cut off the water in the summer, perpetrating ecological terror against us. In winter, they released it, causing floods.
A gas line in Karabakh, where the Armenians live, was in disrepair, and there was no gas supply there for some time. They raised a hue and cry because of that, saying that Azerbaijan was causing a humanitarian catastrophe there. They had cut off the gas supply for Nakhchivan for 15 years and kept it that way. The winter in Nakhchivan is harsher. The frost reaches minus 30 degrees. The people of Nakhchivan lived without gas from 1990 to 2005. Who deprived them of gas? The Armenians and the Armenian leadership, the Armenian state.
Did anyone, any organization or country raise its voice back then? No! They didn’t care. But when there was no gas in Khankendi for one week, there was no one left in the world who wouldn’t call us – from America to Europe. First of all, there are countries in Europe with no gas. There is no gas there at all. Gas lines were never built there. I don’t want to name those countries. There are also countries where the level of gas supply is 3-5 percent. Is there a humanitarian catastrophe there? They have been without gas for one week. Is this a humanitarian catastrophe? Then why wasn’t Nakhchivan a humanitarian catastrophe when it was deprived of gas for 15 years? This is the question. Is there an answer to this question? Yes! Double standards and discrimination. We have now restored the gas supply, and the Armenians must appreciate it. We have simply shown goodwill. If we didn't want to, we wouldn't restore it. Who can say anything to us? Did we have to restore it? No! We have restored it and hope that they will also understand that they are citizens of Azerbaijan, that they must and will live under the Azerbaijani flag. The sooner they understand this, the better for them. This is why we did that. We showed humanism. But we have never forgotten that Nakhchivan was left without gas. In 2005, according to an agreement with Iran, we supplied gas from Iran to Nakhchivan, laid a gas line from Astara to the Iranian Astara and are doing swap operations. Since then, Nakhchivan has been supplied with gas from Iran in this manner. But our gas was cut off. Our water was cut off.
A special report was prepared and adopted by the Parliamentary Assembly of the Council of Europe a few years ago – a report on Armenia's environmental terror against Azerbaijan. Everything was clearly stated there. We were deprived of water from the Tartar River. However, when Heydar Aliyev built the Sugovushan reservoir, it was intended to irrigate 100,000 hectares of land in Barda, Aghdam, Goranboy, Yevlakh, Aghjabadi and other districts, and water flowed there. We have now returned to Sugovushan, restored the water, and new canals will be built. Other rivers, too – the people of Azerbaijan and indeed the rest of the world should know what the Armenians deprived us of. The Hakari River is one of the largest rivers, but we could not use its waters. The Bazarchay River. It is also called the Bargushad. The Lev, the Zabukh, the Tutgun, the Turgay, the Basitchay, the Gargarchay, the Guruchay, the Kondalanchay, and the Okhchuchay rivers. All these rivers were occupied and mercilessly exploited by Armenians. The catastrophe of the Okhchuchay River is before the eyes of the world now.
We have raised this issue. When we raised the issue, we were promised that the company that caused the disaster would come and clean it up. But a year has passed now, but we haven’t received any proposals. “Cronimet” is the company that contaminated the Okhchuchay River. It is a large company, and according to some foreign media, it had an illegal business relationship with representatives of Serzhik Sarkisyan’s former junta regime using corruption schemes. Together they operated the copper plant there. After that, the Armenian government bought this plant from those corrupt Armenians. But should “Cronimet,” the company responsible for this disaster, be held accountable or not?
I said that the issue should be raised in international courts. I do not want to go into too much detail now. We will make a legal claim, preparations are underway, and international experts have been involved. We will expose the Armenians all over the world for their atrocities. This also applies to foreign companies that have exploited our natural resources. Do the foreign companies that illegally exploited our gold and other fields believe that they will get away with that? They won’t! We will bring them to justice and disgrace them. “Cronimet,” which has turned the waters of the Okhchuchay River yellow, should come and clean it up. Or do they think that time has passed and we have forgotten everything? We have not forgotten and will not forget anything.
Notice how many reservoirs there were in the occupied territories. Khudafarin - the largest reservoir with a capacity of 1 billion 600 million cubic meters, Giz Galasi, Sugovushan, Khachin, Kondalanchay-1, Kondalanchay-2, Ashaghi Kondalanchay, Aghdamkand – these reservoirs were under occupation. We are restoring and will restore them. As for specific projects, I should also say what will be done in this area. The construction of the Hakarichay reservoir is on the agenda. It will be a new reservoir. The Sugovushan water reservoir and canal will be renovated. The length of the canal is 5.2 kilometers, and after the repairs, it will be possible to supply water to a larger area from Sugovushan. The Khachinchay reservoir and a 7-kilometer canal will be renovated. I should also note that the Khachinchay reservoir is proper under Mount Farrukh, right next to the village of Farrukh, and the Armenian military positions were threatening the operation of this reservoir. In other words, it was a huge source of danger. Shots were repeatedly fired in the direction of Aghdam from there and other villages.
I think no one in the world wouldn’t know of Mount Farrukh, and Mount Farrukh, the great mountain of Azerbaijan, is under our control now. The Azerbaijani flag flies there now. Mount Farrukh is of great importance for the safety of the Khachinchay and the use of this water. After that, we plan to renovate the Ashaghi Kondalanchay, Kondalanchay-1 and Kondalanchay-2 reservoirs. The reconstruction of the Tartarchay Left Bank canal, the water management complex of Aghdam, Fuzuli and Jabrayil districts, as well as identification of water sources, is also on the agenda. Because the water sources of the Soviet era may not be suitable now for several reasons. Therefore, these complex measures are envisaged now, and the preparation of a project on the Bargushad reservoir must be completed this year. Based on a recently submitted proposal, a new reservoir is to be built in either Zangilan or Gubadli district, and the construction of these canals will allow us the opportunity to irrigate 10,000 hectares of land soon. I want to say again that all this work must be integrated into our standard water management system.
As for other projects, I should say that residents of Aghali village will settle in Aghali already this year. This year, Aghali village will be opened. This is the first pilot project. The establishment of the Dovletyarli village in the Fuzuli district will begin this year. This is a project that covers several villages. There will be a larger settlement than Aghali village. In other liberated areas, village reconstruction projects are being prepared so that we will restore the villages in parallel with the cities.
The construction of three schools should be completed this year – school No. 1 in Aghdam, a school in Jabrayil and, as I mentioned, a school in Shusha. All three schools are intended for 960 pupils. Four hospitals are under construction. A hospital will be commissioned in Shusha this year. The construction of a 210-bed hospital in Aghdam and a 180-bed hospital in Fuzuli has already begun. The foundation of a Jabrayil hospital will be laid shortly.
I have attended groundbreaking ceremonies of two industrial parks in the Aghdam and Jabrayil districts, and the Minister of Economy recently reported to me on the work to be done there. The interest is great, local companies are very enthusiastic, and I am sure that the extensive area intended for those parks may not even be sufficient soon, perhaps in a year or two or three years. Therefore, I am delighted that Azerbaijani entrepreneurs join this work with great enthusiasm. I understand that it may not be economically viable at the initial stage. But I view it as a civic duty on their part, and I am glad that they responded to my call. At the same time, considering the potential of the liberated areas and transport routes, I am confident that every manat invested here will pay off.
In other words, we are taking comprehensive measures to return the former IDPs. Residential buildings, infrastructure, jobs, opportunities for agriculture, industrial parks – we will do this in a planned manner. This is a list of things to be done in the liberated lands this year alone, and I am sure that all our plans will be implemented. We will achieve what we want. The people of Azerbaijan will continue to be regularly informed about the work being done in the liberated lands.