- Dear ladies and gentlemen.

Distinguished guests!

I want to welcome all of you to Azerbaijan. Let me express my appreciation for the opportunity to participate in such a great event.

My special thanks go to Professor Schwab and all the participating countries in this forum for supporting our country and accepting our invitation to attend the World Economic Forum being held in Baku.

As Professor Schwab has noted, I have participated in this forum seven times. I can say that this participation, the presence at discussions and communication with the world’s business elite have helped us a lot in diversifying our economy. Our economic development begins with the energy sector, and this sector is still quite attractive for foreign investment.

At present, our main goal is to diversify the economy. To do that, we have to assert ourselves in the international business community not only as a country with an important geographical location and natural resources, but also as a country committed to reform, transformation and diversification. I can say that the World Economic Forum and the opportunities opened up thanks to the meetings held in Davos have facilitated the establishment of relations with international companies which did not know anything about Azerbaijan in the past. Our country is relatively young – our independence is 21 years old. But Azerbaijan is a country with a great history, customs, traditions and culture. I am sure that you will have a chance to learn more about Azerbaijan. But we have been an independent country for only 21 years.
Professor Schwab has said that he first visited Azerbaijan in March 1993. Perhaps those days were the most difficult for our young independent country. Our independence was less than two years old at the time, and I think that the situation in Azerbaijan was the most difficult among all post-Soviet republics. There was internal strife and civil confrontation, there was war between Armenia and Azerbaijan, and these events led to the occupation of 20 per cent of our internationally recognized territory.

But 1993 was a turning point in terms of development. In the middle of 1993, the situation began to stabilize. We launched very serious, fundamental political and economic reforms, and Azerbaijan introduced itself to the international community. It was a period of transition from a planned economy to a market one, from a one-party rule to a multiparty system, from totalitarianism to democracy. I can say that from a historical point of view 21 years is, of course, a short period of time. But at the same time, it was a period of real change. At the initial stage of reforms Azerbaijan managed to attract major investment to its energy sector. We are grateful to foreign investors and major energy companies for investing in Azerbaijan. At the next stage, we managed to move the vector of economic development off the energy sector into the non-energy sector and attracted investment to the sector that is not associated with oil and gas. At the same time, we continued political and economic reforms, and this process is still under way. This will create opportunities for Azerbaijan’s sustainable development in the coming years.

We have a very favorable geographic location. But without the infrastructure this location does not really matter. We have natural resources, we have created a diversified network to transport our hydrocarbons. Azerbaijan does not have access to the open sea. Therefore, to transport our oil and gas we had to build pipelines. This was one of the biggest challenges facing us in the late 1990s and early this century. This task was completed successfully. At present, we have a diversified network of pipelines. There are seven oil and gas pipelines to transport Azerbaijani oil and gas to international markets, to European markets. At the same time, Azerbaijan has begun to play the role of a transit country in the transportation of hydrocarbons for our partners on the other side of the Caspian Sea.

But in the last 10 years our main goal has been to diversify the economy. If you pay attention to the economic development of Azerbaijan, you can see that in the last 10 years our economy has been one of the fastest growing economies in the world. The gross domestic product has grown three times –by 300 percent, while industrial production has increased 2.5 times. We have managed to reduce unemployment –at present the unemployment rate is 5.2 percent.

Ten years ago, almost half of our population lived in poverty. Now the poverty rate is 6 percent. Budget expenditures have increased almost 20 times, while inflation is at a level of about 1 percent. This development has been observed for the last 10 years.

We are also very pleased to see an assessment of our achievements by the World Economic Forum. In terms of economic competitiveness, the World Economic Forum has ranked Azerbaijan in 46thplace in the world. Our country has been ranked first in the CIS for the fourth consecutive year. Our economy continued to grow even during the financial crisis. And when the oil price fell sharply, our economy continued its development because our non-oil sector produced good results. Such major credit rating organizations as Fitch, Standard & Poor's and Moody's have recently upgraded the credit rating of Azerbaijan. This is also a good indicator of the reforms.

We are currently converting oil revenues into human capital, and one of our main forward-looking objectives is education.

Education is the most important factor in the successful development of any country. Investment in education, relations between our universities and the leading universities of the world enable us to plan our economic future on the basis of a very serious intellectual potential. At the same time, we are now investing in new technologies. Today, the sphere of information and communication technologies is becoming a priority in Azerbaijan. Azerbaijan has already joined the club of a limited number of countries with a space industry. In February this year, we successfully launched our first satellite Azerspace-1, and this is only the beginning of our space industry development.

In other words, the years of independence have not only been those to transformation of the political and economic systems. It was a period when invested was made that would bring revenues in the coming years.

At the beginning of reforms one of our priorities was to create a positive investment environment. Over the past 10 years more than $130 billion was invested in Azerbaijan. A certain part of this investment was foreign. The good investment environment, the predictable political situation, the stable situation in the country and, of course, the regional ties are among prerequisites for the success of each country.

One of the topics to be discussed today, of course, is regional cooperation and integration. I was very pleased to see the results of voting. In fact, I was expecting that because Azerbaijan is playing a part in regional cooperation. The projects we started in the mid-1990s were aimed not only at the economic development of Azerbaijan, but also at the broader regional cooperation. We became the first country to declare the Caspian Sea open to foreign investment. We are the first country to have created a corridor from the Caspian to the Mediterranean and Black Seas. Oil and gas corridors subsequently began to play the role of a common geopolitical and energy corridor. We are now nearing completion of an important railway project linking Azerbaijan, Georgia and Turkey, and as our friend Mr. Starr has said, it will not be a purely regional project. This will be a project that will link Europe with Asia through Azerbaijan and neighboring countries.

I am very proud to say that we are playing a major role in this project not only with our financial resources, but also with our commitments and political will. Of course, as far as our government is concerned, the energy factor is no longer a top priority. But our energy potential has played and will play an even greater role in the energy security of the region and Europe.

Two years ago we signed a memorandum on strategic partnership in the energy sector with the European Union. It is being implemented now. One of the most important achievements of the recent period has been the Trans-Anadolu pipeline project, TANAP. The project was initiated by Azerbaijan and received strong support from our partners in Turkey and Georgia. Azerbaijan undertook the major financial commitment to implement the project and began the construction of the pipeline which will serve for at least 100 years. When you consider the vast gas reserves of Azerbaijan and the potential resources of the region, this corridor may play an important role for decades to come. Of course, regional cooperation can take place only in politically stable and developing countries.

We will talk about transport routes, cooperation and integration. This is possible only if all the countries involved in the process have the same attitude. I am glad that the Caspian region, Central Asia and Azerbaijan are in this region – we see our future in close relations and cooperation, in integration and consolidation of our efforts to provide a better life for our peoples and a better future for our countries.

Dear friends! I want to welcome all of you to our country again. I want to express my gratitude to Professor Schwab and his delegation for conducting this forum in Baku. I am confident that the results of this event will have a very serious impact on our daily lives and the region will become more stable, predictable and prosperous. Thank you very much!