Closing 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

- The figures voiced in speeches today show that there is dynamic development in all the areas. I am sure that 2013 will produce good results both in the social and economic spheres. Enough has been said about the work done in previous years and in the first quarter of this year. I would like to express some of my thoughts on the challenges ahead. In fact, all the tasks associated with the work upcoming in 2013 have already been defined. The state investment program is being implemented. At the same time, we are implementing the programs adopted in previous years. Some of them must be completed this year. As for the main issues, i.e. those requiring attention, among them, of course, the main goal is to diversify the economy. Of course, the figures I have cited in my opening remarks give reason to say that very important results have been achieved in this direction. I think that the fact that our non-oil economy has grown by 11.4 per cent means that we are perhaps the fastest growing economy in the world.

We know that both in the region and on the continent the processes in the economic sector are not doing so well. Some countries are in crisis. In Azerbaijan, thanks to a sound economic policy, the non-oil sector has grown by 11.4 per cent. This is really a great indicator, and we have to consider that this increase follows dynamic growth of the previous years. It is one thing to achieve a result after starting from zero or a negative indicator.

Our non-oil sector is growing from year to year. This is confirmed by the results of last year. Overall, our non-oil sector grew by 9.7 per cent last year and by 11.4 per cent in the first quarter of this year. So I want to say this once again, and I believe that this figure is the most important among all the other statistics. It demonstrates the dynamic development of our country. It suggests that successful development of our country will be ensured at all times.

Nevertheless, there are issues waiting to be addressed. In some areas we need to improve our work. I think that in some areas we should carry out fundamental reforms. We have to ensure complete formation of a sound competitive environment. A great deal has been done in this direction. But I cannot say that sound competition in Azerbaijan has been fully ensured.

The 11.4-per cent growth in our non-oil sector actually shows that the business environment is good. But at the same time, if we can create completely sound competition and take more serious steps against monopolistic trends, I am sure that our performance will be even better. We need to increase the production of competitive goods - both to increase exports and supply the domestic market with competitive products.

In recent years our main focus has been was on reducing imports, increasing domestic production and creation of jobs. To achieve these goals, we have implemented a comprehensive action plan at state level. Of course, the infrastructure projects provided for in the state investment program have contributed to the development of the private sector and production of competitive goods. If it hadn’t been for government spending and if we hadn’t implemented modern infrastructure projects in the regions, there would be no talk of the business environment.

In addition, entrepreneurs are provided with increasingly bigger concessional loans from the National Fund on Entrepreneurship Support every year. This year, this amount constitutes 250 million manats. Of course, this also stimulates domestic production. So our main goal was and still is maximum self-reliance and minimization of dependence on imports. At the current stage, I think, the production of competitive goods should be given more attention.

First of all, we have to supply the domestic market with competitive products so that citizens of Azerbaijan could be provided with high-quality goods produced in the country. At the same time – as I said at the meeting with entrepreneurs in February and I want to say again today – our rapidly growing economy and non-oil sector, of course, dictate the need for accessing foreign markets. In other words, if we do not secure strong positions in foreign markets, if we do not get those positions, we may have some problems after supplying the domestic market because the development of agriculture and the food processing industry has been going so fast that the volume of production will increase. But if products are not competitive, it will be increasingly difficult each year to access foreign markets. Therefore, I think that the increase of production of competitive products will be one of our top priorities. Work in this direction is under way and business projects are being examined. I think that the advice given to entrepreneurs by the state and government will give an impetus to the production of competitive goods.

We need to expand the range of export products. Again, if these products are not competitive, we can not achieve that. New enterprises should be based on modern technology. In particular, all of the enterprises set up with state support should be based on modern technologies. At the same time, the enterprises established without government support should have strict control procedures to ensure that obsolete equipment is not imported to Azerbaijan. Only the most advanced technologies should be used in Azerbaijan. Our overall policy is that the most advanced technology and experience should be applied to any field in the country.

Along with this, I believe that one of the important issues for the economy is personnel training. We are seeing that.

Sometimes we see modern technology being imported, but human resources are still somewhat lagging behind. Therefore, we should pay even more serious attention to the training of qualified professionals. This training, of course, should be consistent with the overall development of the economy. First and foremost, we should pay attention to the training of personnel for the industries that develop more rapidly. But, at the same time I believe that, in general, the issue of personnel training requires special attention. This issue is also related to the involvement of young people in this work. The promotion of young people should go even faster.

In general, as you know, Azerbaijan is successfully pursuing a youth policy. The state program "Azerbaijani Youth" is being realized. To improve employment opportunities for young people, work is under way on the organization of their education at a high level.

The biggest problem young families are facing in life is the housing problem. I believe that the procedure of mortgage lending should be improved. It should be revised.

It is true that certain reforms are under way in this direction now. But I think that a lot still needs to be done, and the mortgage amount should be increased. We need to see: if there are funds in the budget, we could do that this year, if not, then the loans allocated for mortgage should be increased next year so that the housing problem of young people could be resolved quickly.

We always work on food security, and this issue was high on the agenda at a meeting with businessmen. I want to say again that we have all the possibilities to fully provide ourselves with food products. In fact, not only can we provide ourselves, we can also create great export potential. Here we have to go in two directions. Of course, in the fields of crop raising and livestock breeding priority should be given to intensive methods. At the same time, the process of creation of large farms has begun. We have large plots of land that are still not in circulation. It is necessary to carry out land reclamation activities and infrastructure projects there, so that tens of thousands of hectares of new land could be included in the circulation. This will lead to new jobs and, at the same time, fully ensure food security.

Food security is as important an issue as energy security, perhaps even more important. It is not ruled out that it will become one of the major issues in the coming years as global trends suggest.

There is a struggle for resources in the world: for energy and water. There is some uncertainty over the production of food products now. Therefore, I believe that every country should strive to fully provide itself with basic food commodities – in particular, a country such as Azerbaijan, which has excellent geographical features. There are countries where livestock breeding and crop production are out of the question. There are desert soils there. Fortunately, this is not the case here and it is possible to produce a variety of food products in Azerbaijan. We have nine climatic zones and strong financial capabilities.

So we have to guarantee our food security by 100 per cent. This does not mean that we do not participate in the process of integration, in the ongoing global integration. We do! Of course, we have built our economy on the principles of a market economy. But we remember that certain difficulties with grain experienced by some exporting countries have inevitably had a negative impact on us. The contracts signed in previous years were suspended and remained unfulfilled, and we had to look for a way out of the situation. Therefore, in order to feel completely confident and safe, we have to provide ourselves with basic food commodities. Of course, the process of creation of land reclamation and irrigation systems should go on.

Speaking about the agrarian sector, I believe that we also need to start building vocational schools for agriculture. Such practices existed in Soviet times. I believe that we need to revive them. In general, the establishment of secondary vocational schools and their transition to a qualitatively different stage is in the foreground.

Going back to the issue of personnel training - we see that work in Azerbaijan is going very fast in all directions, industrial and agricultural production and the service sector are growing. So many service centers are emerging now! Tourism is rapidly developing. We are often confronted with a lack of personnel and may feel it even more acutely in the future. Therefore, relevant government agencies and ministries should work together to discuss and agree all these issues.

We have a very precise and specific program of economic development. We act upon this program, and in many cases are even ahead of our plans. But from a conceptual point of view, the heads of all ministries and government agencies are aware and know what is in store for us. Therefore, we need to agree on these issues also between ministries.

At the same time, the project "e-Agriculture" must be implemented and an electronic system for the registration of farmers created. If we can achieve this, then this, along with other measures, will accelerate the sustainable development of the agricultural sector. Very much was done in previous years.

Looking back at those years now, we can see that there is no shortage of equipment, fertilizer or fuel. Therefore, all these issues are gradually being resolved. Agricultural services are being set up, loans are provided and the state gives its support. Even the purchase of breeding stock has been assumed directly by the state. At the same time, funds are allocated through the National Fund on Entrepreneurship Support. Farmers are exempt from all taxes except for the land tax.

Subsidies should be improved. I talked about this at the previous meeting and do not want to repeat it now. So this area is also a priority in addressing both economic and social issues, because 47 per cent of our population lives in agricultural regions.

I don’t think there will be any problems with the implementation of the state investment program. The program will be implemented to the extent necessary. Last year, $22 billion was invested in the country's economy from a variety of sources. Most of that was domestic investment. But foreign investment is at the level of almost 30 per cent. This is also a great indicator as it shows that Azerbaijan is an attractive country for foreign investors. This applies to the energy, oil and gas sector. At the same time, large investment is made in other sectors of the economy. With this in mind, I believe that at least $22 billion will be invested to Azerbaijan this year. There are also plans to increase pensions and salaries. This year, the process of repayment of deposits left over from Soviet times will be completed. All of these factors may inevitably have a negative impact on the macroeconomic situation. Therefore, macroeconomic stability, as always, should be in the spotlight. But we are pleased that inflation was 1.1 per cent last year and 1.2 per cent in the first quarter of this year. We should always try to keep the inflation at its lowest level.

This year, the implementation of social programs will be continued. In my opening remarks I already expressed my views about that – the increase of wages and pensions, the implementation of a targeted social assistance program, the creation of a social infrastructure. Hospitals, schools and other social facilities are built in all the regions, and this work will be continued.
The minister has provided information about health here. Indeed, we have been able to achieve major progress in this field in recent years. We have created modern clinics, diagnostic and dialysis centers. I want to say again that the human factor is the most important issue. Human health is also the most important issue. I want to go back to the issue of personnel training again. The most sophisticated equipment is installed both in our regions and in Baku. In some cases, it is not inferior to the equipment of leading clinics of the world, and in some cases it even surpasses it. I know this because during occasional meetings with foreign guests representing the health care system I am also told that we have the most modern equipment. But sometimes personnel training falls short of this level. Therefore, personnel training should be in the foreground. Of course, first of all, we need to ensure high-level personnel training in Azerbaijan. In the first place, we must ensure that qualified doctors are trained in the country proper. Along with that, our doctors are seconded to foreign clinics and undergo internships as part of various programs. At the same time, well-known health experts and scholars are working in Baku. I believe that we need to further accelerate these processes.

The Minister of Taxes has raised the issue regarding the amount of non-cash payments. We have done a lot of work in this direction in Baku, particularly in 2012. But we are still not at the proper level with this indicator. In all developed countries, non-cash payments account for the vast majority. Here this is not the case. But we must try to get closer to the level of developed countries in this.

In general, we apply positive experience in every area. Wherever there is progressive and positive experience that is beneficial for us, we have to apply it, and we do. Otherwise, we will not be able to modernize our country.

Azerbaijan should be among developed countries. Therefore, we are studying positive experience and applying it to every area in Azerbaijan. This is a natural and normal process. I believe that we can increase the volume of non-cash payments and at the same time achieve even greater success in collecting taxes and preventing negative phenomena more quickly. This is a well-established approach in the world, in developed countries. And we have to apply it even faster.

Our country is fighting against corruption and bribery very hard. This fight is comprehensive. Corruption and bribery are among the biggest challenges for society, our biggest wound. We must not only learn but also apply the experience of developed countries in this field. I have repeatedly expressed my thoughts about this, but I want to say once again that punitive and administrative measures alone are insufficient to achieve what we want. Of course, there must be punitive measures too and law enforcement authorities should continue their efforts in this direction. Administrative measures are and will be taken as well.

However, I believe that the expansion and application of institutional measures, the implementation and continuation of systemic reform will give us even better opportunities in the fight against corruption and bribery. We need to narrow the existing ground for corruption and bribery to the maximum extent possible. The "Electronic services" and "Electronic government" projects are very important steps in this direction.

The contacts between government officers and citizens in this direction should be kept to a minimum. Again we must apply the experience of developed countries to the maximum extent. Therefore, Azerbaijan must and will pay even more attention to the development of the ICT sector.

In the last few months we have taken very significant steps in this direction. Among them I would like to note the activities of “ASAN Xidmət”. This service is expanding its activities. Thousands of people have already applied to “ASAN Xidmət”. We are expanding the activities of “ASAN Xidmət”. I think that by the summer of this year it will cover all the districts of Baku. At the same time, big cities such as Sumgayit and Ganja will be covered. I believe that next year this service should be set up in all the other regions. And until that the service will be provided through mobile buses. These buses have already been purchased and will be delivered to Azerbaijan in the coming weeks. By means of these buses the service will start operating in different regions.

In short, there should be institutional reforms, "E-government", transparency and, of course, a strong political will. Such a strong political will is there. If we want to become a developed country, we have to wage even more serious fight against corruption and bribery. I am confident that we will prevail in this fight.

Along with this, the accountability of civil servants must also increase. Civil servants serve and should serve the people. I have expressed my thoughts on these issues. Civil servants should serve as an example for every citizen, an example of modesty, purity and service to the motherland. Civil servants should be selected people. Both their professionalism and moral qualities should be at a high level. The relationship between civil servants and citizens must be based on respect. Where there are mistakes and violation, of course, measures are taken, and this process will be continued in the future.
The principles of social justice must be applied to society in full. This is required by our fundamental law - the Constitution. The overall normal behavior must be such that the principles of social justice are not violated. Because I can say that injustice is something people are particularly concerned about - in life, in politics or in any other sphere. Therefore, there must be justice, social justice, and all the decisions should be fair. If a decision is fair, even if someone does not like it, it will have to be reconciled with because it is fair. But if a decision is unfair, then, if I may say so, there can be no greater injustice.

In previous years we did a lot to increase industrial production. Our non-oil industry has grown in the first quarter of this year. This is a positive indicator. But a lot of work will be done in the future to modernize our industrial production, of course. Among them, I want to point to the creation of technology parks. Work in this direction is already under way. We have selected three main centers. In fact, these are traditional centers - Baku, Sumgayit and Ganja. The process of creation of technology parks is under way there. I believe that we should add Mingachevir to this list because Mingachevir is also an industrial city. There is almost no agriculture there. Decisions must be made on the construction of modern industrial complexes in Mingachevir. I have already given instructions on this issue. The entities interested in investing are also recommended to pay attention to Mingachevir. I think that if we succeed in that, then there will be four main industrial centers in the country. I believe that this is enough for a country such as Azerbaijan. The technology parks will have advantages. The enterprises operating there must be of strategic importance for our country, for our economy. Of course, only competitive and export products should be produced there. I am sure that in the coming months we will see the creation of new technological parks.

As for the regional development program, work in this direction is going according to plan. By the end of this year the second state program will be completed. Of course, infrastructure projects prevail here. And there are no problems with these projects.

This year we should also complete the program on the development of the suburban settlements of Baku. This is a very large program. But the period of its implementation is very short - only two years. We must try to ensure that all of the planned projects are implemented by the end of this year. I know that all the schools in Baku will be renovated by the end of this year. This process is already under way. There will be no school left without renovation by the end of this year.

Gasification issues in Baku have been resolved by almost 100 per cent. But the quality of gas supplies sometimes creates problems.

Attention should be paid to the construction of rural roads, intra- and inter-village roads. Water and sewage projects are very large projects indeed. We need to complete most of the work by the end of this year. In any case, when approving this program I set a very short period of time. We could have stretched it to five years because the volume of work is extremely large. But we have consolidated all our efforts for two years so that the problems that accumulated over many years could be resolved in the suburban settlements of Baku. I think this is also a very important social project.

The construction of the Baku-Tbilisi-Kars railway is ongoing. We thought that we would complete this project in 2013. But it may be left for the next year. But in general I can say that there are no problems with the implementation of this project. Most of the work will be done before the end of this year. Let me say again that this project is the initiative of the Azerbaijani state. We have provided political support for this project and at the same time assumed most of the financial burden. But we are seeing now that this project has gone beyond regional plane. Those who opposed the project in the earlier years now support it. I remember very well that when we were seriously discussing the Baku-Tbilisi-Kars railway project with partners, we were faced with the question: "Why isn’t Armenia part of this project?" The question even emerged that "if Armenia is not a member of this project, international support will not be forthcoming". But despite that, thanks to the joint will of the Azerbaijani, Turkish and Georgian states, we are implementing and will implement this project. Armenia is isolated from this project too. This is our principled position. As long as our lands remain under occupation, Armenia cannot be a party to any regional project.

The implementation of the Baku-Tbilisi-Kars project is a historic event.

At the same time, I want to point to the rapid development of tourism in Azerbaijan in recent years. In particular, a very significant event in this area occurred in the first quarter - the “Shahdag” ski center began to operate. This, I believe, is also a significant event because Azerbaijan had never had a ski center before. Neighboring countries did, but Azerbaijan didn’t. I believe that this project is already proving effective. The state has assumed the main technical and financial burden. And this is only natural. This is also our contribution to the private sector and to the development of the region. This will create thousands of jobs. In Gusar District there already are hundreds of new jobs, and good jobs. People working there are getting high wages. At the same time, we have created a wonderful recreation center for the citizens of Azerbaijan. According to the information provided to me, the services of this complex have benefited 50,000 people recently, in the first two months. This is a very high figure. If we consider that there is only one small hotel there, the arrival of 50,000 people is a very significant event. By the next winter season at least three new large hotels will open their doors. New recreation areas, parks and streets are under construction. In other words, the "Shahdag" resort should become one of the most modern and beautiful resorts in the world. This is the goal that has been set.

When attending the opening of the "Shahdag" resort, I remembered my first trip there. When I first arrived there, there was not a single building nearby. There were only mountains and snow around us. There were no dwellings, no buildings, nothing.

To be honest, when starting this project I even thought to myself wondering whether we will be able to do that. But I am very glad that we have been successful is resolving this issue. This shows that any project we start must be completed successfully. All infrastructure projects have been realized - water supply, sewage, electricity, gas lines. A beautiful four-lane road, hotels, elevators, medical centers, training sites and modern leisure facilities are under construction there. I believe that this will be one of the most beautiful recreation areas in the country.

I am glad that after this project another ski resort is also being put in place in Gabala District. While on a visit there recently, I saw that a second ski resort is being created in Gabala. This resort will also be ready by the end of this year.

In conclusion, I want to note that the year of information and communication technologies in Azerbaijan starts successfully. Azerbaijan is a space-faring country. This is a great historic achievement. The “Azerspace-1” satellite is in orbit. Its management has already been transferred to Azerbaijan. We manage this satellite from Baku. We have already started talks with partners on launching into orbit of the second and third satellites. This is also an innovation, modernity and development.

At the same time, I want to note that our second program on the development of districts concludes at the end of this year. A lot has been done but there is still much to do. Therefore, I believe that we need to work even harder on the preparation of the third state program. By the end of this year the third five-year state program should be ready so that we could adopt it in early 2014 and thus ensure the successful development of our country. Thank you.