Opening speech by President Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first quarter of 2013

- At today's Cabinet meeting we will discuss the socioeconomic results of the first quarter of this year.

The results of last year were very positive. Last year, the Azerbaijani economy developed successfully. All of the major challenges facing the country were resolved. The work carried out to diversify our economy was also at a high level. In other words, the results of last year created a solid foundation for the development this year too.

Azerbaijan has successfully continued the implementation of economic reforms. The reforms have already produced excellent results, and 2013 is no different from previous years in this respect. But I believe that in 2013 we will see even better results in terms of quality. I do hope that 2013 will be a record year, especially in terms of development of the non-oil sector of the economy.

As you know, the issue of diversification of the economy is our top priority in the economic sphere. Especially at a time when the work carried out in the energy sector has helped achieve all the goals, non-oil sector development, of course, should be a priority. In the first quarter of 2013, economic development was continued. I am particularly pleased with the development of the non-oil sector.

In the first quarter of this year, the gross domestic product grew by 3.1 per cent. I think this is a very good indicator. We have achieved this growth due to the non-oil sector. In the first quarter of this year, the development of the non-oil sector was 11.4 per cent. This, I believe, should be a key indicator for the analysis of the present-day Azerbaijani economy. As was the case before, those who analyze the economic development of Azerbaijan today sometimes link it to the oil and gas factor. Of course, our oil strategy, which began in the early years, in the most difficult period of our independence, in the middle of the 1990s, has given a great impetus to the development of the country’s economy, and today the oil and gas sector has an important place in the economy of the country. But our main achievements have been secured thanks to the wise economic reforms, and the 11.4 per cent increase in the non-oil sector this year is an indicator in itself. This shows that the country's economy and our country as a whole are reducing their dependence on the oil and gas sector. Thus, sustainable development is already a reality.

Macroeconomic indicators are also very positive. Inflation is only 1.2 per cent. Last year inflation was 1.1 per cent. When discussing the results of last year, I noted that this year's inflation should be in single digits. But we can see that the result is even better - 1.2-per cent inflation, of course, is very important for macroeconomic stability. At the same time, as I always say, at the heart of all of our goals is the human factor. Keeping inflation at a low level, of course, serves the well-being of our people.

Population incomes have increased by almost 6 per cent. We see real growth again. Agricultural growth has exceeded 4 per cent. This is also a very good indicator. Also, our foreign exchange reserves are growing, despite the fact that the implementation of major infrastructure projects in 2013 requires large financial resources. At the same time, the process of repayment of the deposits left over from Soviet times is ongoing. Salaries and pensions are increased and will continue to rise. Despite this, we are able to increase our foreign exchange reserves.

There are also significant expenses. These expenses, of course, serve to diversify the country's economy. The goal was set in previous years: we need to increase our foreign exchange reserves each year. And we are doing that. According to this indicator, in particular in terms of foreign exchange reserves per capita, Azerbaijan is in leading places in the world.

The Second State Program on the socioeconomic development of districts was successfully implemented in the first quarter of this year. This year the program will be completed. I am confident that the program will be over-fulfilled, as it was amended and new programs were adopted in recent years. As a result of this program, more than 1,100,000 jobs were created in our country, of which 30,000 were created in the first quarter of this year. Of course, this indicator is also directly linked to the progress achieved in the non-oil sector, because jobs are created mainly in the non-oil industry and agriculture.

Creative work is under way in the regions and the social infrastructure is being put in place. I believe that the key issues in this area will be resolved in 2013. Relevant instructions on modernizing and upgrading the social infrastructure have been handed out. A fairly large amount is envisaged for that in the state budget, additional funds are occasionally allocated from the Contingency Fund of the President. I can say that two regional development programs have made a great contribution to the economy of Azerbaijan. If we hadn’t adopted the first program in 2004, economic diversification would be of the question now.

I have to say as well that our economic reforms are also acknowledged by influential international organizations. Azerbaijan is a country that relies on its internal capabilities, pursues economic and political development on its own. Our economic course is assessed quite highly by international structures. Therefore, despite the fact that some countries are still facing the bitter consequences of the crisis today, Azerbaijan has not experienced any signs of financial and economic crisis in the midst of the crisis and now. The key to this is the independent policy of Azerbaijan, the independent economic policy and our financial position. And life is already showing that it is the only right way.
A continuation of the reforms will, of course, further strengthen our development. But let me say again, as it is very significant, that this is acknowledged by international structures. In particular, the major rating agencies - Standard & Poor's, Fitch and Moody's - have raised the credit rating of Azerbaijan. These are the most authoritative rating agencies. At a time when the credit ratings of some European countries are falling, Azerbaijan's rating is rising. The Davos World Economic Forum has been describing the Azerbaijani economy as the most competitive economy in the CIS for the fourth consecutive year. Today, in terms of competitiveness, the Azerbaijani economy is ranked 46th in the world. I can say that the Davos Economic Forum is international forum Number One in the world.

Of course, this forum has both political and economic directions. Azerbaijan is an active member of the Forum. This year the World Economic Forum was held in Baku for the first time, and it was a great success. The opinions voiced during the forum, including those about the Azerbaijani economy and the development of our country as a whole, have been very positive. These views and assessments, I can say, are the highest rating possible. Because it is one thing when some trumped-up nongovernmental organization compiles a false rating and arranges countries in it on the basis of political orders. And it is quite another thing when influential international organizations - the World Bank, the World Economic Forum, the International Monetary Fund, and other influential international organizations – approve and appreciate the processes taking place in Azerbaijan.

In other words, economic reforms will be continued. The Azerbaijani economy is based entirely on the principles of a market economy. Currently, 83 per cent of the gross domestic product is generated in the market economy, in the private sector. The companies owned by the state are also gradually moving towards the principles of international accounting and international management. This process is ongoing and should go even faster. The state-owned companies, i.e. the state companies operating in strategically important areas for our country, should be managed by corporate methods. Let me say again that there have been great achievements in this direction in recent years.

As for the solution of social issues, as I said, these issues are also, as always, are our top priority. Otherwise, poverty would not have declined from 50 to 6 per cent in the last 10 years. I can say that this is also a very significant indicator for a country rich in oil and gas. In many cases countries rich in oil and gas are faced with the process of stratification - the rich get richer and the poor get even poorer. I can say that the successful implementation of our social and economic policies has prevented these consequences.

As for the solution of social issues, I want to mention social infrastructure projects. Hospitals, schools, cultural institutions and sports facilities are built. The creation and renewal of the social infrastructure will be continued this year and beyond. The citizens receiving targeted social aid are also looked after by the state. A total of 123,000 families receive this assistance from the state, and each family receives benefits in the amount of 117 manats on average. Of course, I would like to see the number of families in need of social assistance drop dramatically. I am sure that the successful development of our country, the creation of new jobs and social programs will significantly improve the quality of life of people of this category in the near future. But there are still families in need of government support, and we are dealing with their concerns. We will try to continue increasing financial assistance provided by the state.

Salaries and pensions will be increased this year. I believe that the results of our social policies will be very positive. When dealing with social issues, we, first of all, certainly note the problems of the internally displaced persons. We are constantly engaged in these issues. The past few months have also seen very important events in this direction. At the end of last year, we celebrated the opening of a large settlement in Mushfigabad. Recently we celebrated the opening of another large township in the Masazir settlement. A few days later we will celebrate the opening of a large neighborhood in Mingachevir. All the apartments are built with high quality. The entire infrastructure is provided - schools, kindergartens, health centers, water, gas, electricity, other infrastructure. This year, the State Oil Fund allocated 300 million manats for construction work alone. A certain amount has been allocated from the Contingency Fund of the President, and it is possible that more will be allocated in the future, before the end of this year.

It is possible to say that we build a town for the IDPs every year. This year, 20,000 IDPs will move into new houses and apartments. The process of resettlement from dormitories has already begun. The internally displaced persons who were settled in "Finnish settlements" will be fully relocated from there this year, and the concept of a "Finnish settlement" will disappear once and for all, as has the concept of a "tent camp".

But we know that there are still displaced people living in difficult and tough conditions - in schools, kindergartens, dormitories, in military units. They will also be relocated. Both this and next year, and indeed in subsequent years, this issue will be at the center of attention for our budget, for the budget of the State Oil Fund and for Azerbaijan as a whole.

As far as the analysis of international issues is concerned, I can say that Azerbaijan has managed to strengthen its international positions at the beginning of this year. Our bilateral relations are expanding and strengthening, while the number of our partners is growing. Azerbaijan is capable of defending its position in the international arena.

Azerbaijan is a country that is worthy of great respect in the world because our words and deeds are always the same. Azerbaijan is a reliable partner. Our foreign policy is a logical continuation of the domestic policy. Our foreign policy aims to further strengthen the country. We secure our national interests by means of a flexible and focused foreign policy. Our activities in international organizations are very effective. Azerbaijan has been a member of the UN Security Council for the second year. We are and will be saying our principled word in this most influential structure on all matters.

A few days ago, while addressing the MGIMO forum, I reiterated the official position of Azerbaijan on the Armenian-Azerbaijani Nagorno-Karabakh conflict. I want to say once again that the internationally recognized territorial integrity of Azerbaijan is not, never has been and never will be the subject of negotiations. We will never tolerate a second trumped-up Armenian state on Azerbaijani lands and will seek, by all possible means, to resolve this conflict in the near future.

This conflict must be resolved on the basis of international law, the four UN Security Council resolutions must be implemented unconditionally and the occupying forces must withdraw from our lands.

Along with this, we must continue to build up, and we are building up, our strength - political, economic and military. This is our sovereign right. I want to say again: I have no doubt whatsoever that Azerbaijan will restore its territorial integrity. Every day and every month brings us closer to victory. Every month and every year makes Azerbaijan stronger and Armenia even weaker. This is already seen by and known to all the parties and countries involved in this issue. The course of history is such that Armenia will not be able to compete with Azerbaijan. Their main hope is for external forces, the Armenian lobby and its accomplices, the political circles of some other countries. Our hope is for our own strength, for the Azerbaijani people, for truth and justice, for international law and for our own growing strength. I am sure that Azerbaijan will restore justice and secure its territorial integrity.

At the same time, I want to say again, we worked very hard during the conflict. In the course of the conflict, we have turned from a backward country into a developing one. Over this period, we have conducted revolutionary reforms in the economic sphere. We have managed to strengthen our country. Today, Azerbaijan and Baku are among global centers.

Look how many international events are held in our country and in our city. International events - economic forums, forums on culture, on dialogue among civilizations are held in Azerbaijan almost every month, and sometimes even several times a month. In other words, I want to say again, Baku and Azerbaijan have become world centers. Political issues, issues of regional importance are discussed in Baku.

The main topic of the Davos forum held in Baku was the ties between countries of the South Caucasus and Central Asia and the future of this cooperation. This forum was held specifically in Baku. In other words, the international community also recognizes Baku as a regional center. This is a reality. But, at the same time, I want to say again that our desires, intentions and the work carried out has long gone beyond the regional framework. The issues resolved in Azerbaijan, the decisions made here have an impact not only on the development of the region, but also on some developments unfolding on the continent. We have already become a major international factor to reckon with. Without our consent and without respect for our national security interests, political initiatives cannot go forward.

In many cases, we initiate important decisions related to the energy diplomacy. The processes ongoing in this field depend on our decisions. This is also a reality. Our word concerning economic cooperation, transport issues and the functioning of corridors that link Asia with Europe is crucial. This word means the initiatives and their implementation. Such is the present-day Azerbaijan.

But our policy, I want to say again, is a policy of good will. We are building our relations with all countries on the basis of mutual respect and non-interference in each other's affairs. These are the principles adopted on a global scale and in the international arena. We know how to run our country ourselves. We do not need advice from the sidelines. We are a strong country. There is unity between the people and the government.

Our economic performance is the best in the world. Our economic development is the most rapid in the world. Suffice it to look at the results of the last 10 years. The level of development observed in Azerbaijan is very rare for the world - in political, economic, energy and cultural spheres. Evidence of this development is the transformation of our country into one of the world's centers, the assessments of international rating agencies and our election to the UN Security Council.

Therefore, I want to say again that in the area of foreign policy we are interested in developing equal relations with all countries in the future.

Our principled position on foreign political issues is yielding positive results in all areas. We defend and will continue to defend our independence. Azerbaijan was part of other countries and empires for centuries. For centuries we were deprived of independence. The processes taking place in Azerbaijan were controlled from other centers. But we have been living as an independent state for 21 years. There is no greater happiness than that. There can be no greater value than that. We are an independent state in the true sense of this word. We will protect and strengthen our independence. And to do that we must have a strong economy.

The reforms conducted in the economic sphere, as well as the solution of social issues, are making us stronger and enabling us to say our word in the world. Therefore, we have adopted programs related to economic issues and regularly evaluate the creative work being done in the country.