Closing speech of President Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first six months of 2013 and future objectives

- I would like to note once again that the work done in the first six months of this year gives grounds to say that we will maintain these high rates and meet all the objectives set at the beginning of the year. We need to maintain the high growth rate and implement all the projects in a timely manner. This year, a very large state investment program is implemented. I am confident that the state investment program will be fully implemented by the end of this year. This, in turn, will create a better foundation for future years, because all the issues provided for in the state investment program will be resolved.
There is extensive building work under way in our country. Some of it has been mentioned in the speeches today.

Azerbaijan is a big construction site. The city of Baku and other regions are improving and built up. At the same time, we are implementing major industrial and infrastructure projects. As a result of the implementation of the state investment program, we are consistently resolving all of these issues. We follow the program and expand our investment opportunities by the year.

As I have said, $12.6 billion was invested in the first six months, and among this volume, of course, an important place is occupied by state investment projects. We have to make sure that this rate is maintained in the coming years too. Although a lot has been done, there is still a lot to do. Some infrastructure projects have either been completed or are close to completion. But we will pay particular attention to investment projects next year as well. Taking this into account, as well as the expected increase in wages and pensions, we need to constantly pay attention to macroeconomic stability. It is encouraging that the inflation rate has been very low since the beginning of the year. As I pointed out in my opening speech, the inflation is only 2 per cent. At the beginning of the year we set the task of keeping the inflation in single digits. And we see that we are achieving this. I am confident that inflation will be at an acceptable level until the end of the year. But to do this we must work very hard.

Government spending and budget expenditure are growing every year in Azerbaijan. We heard these figures today. Also increasing are the consolidated budget, investment projects, welfare payments, salaries, pensions, etc. We have repaid the vast majority of the deposits left over from Soviet times. Against this background the fact that inflation is kept at a low level is, of course, a great achievement, and I appreciate that. Keeping inflation low primarily carries a social sense. This shows the attitude of the state towards its citizens again.

By the end of this year the second state program will be completed. The first program adopted in 2004 was exceeded. Then the second state program covering 2009-2013 was adopted. Several months remain for its completion. And we can say today that this program will be exceeded too. We have to make sure that the program is fully implemented by the end of the year.

I believe that we have made great strides by adopting these programs. The programs precisely described all the work to be done. Of course, we have very specific programs related to the development of the country. I regularly express my views on these plans. But the fact that all of these plans and the entire work are reflected in a single program has certainly facilitated our work and at the same time stepped up control over its implementation. Therefore, I believe that the program should be fully implemented by the end of this year.

At the same time, the program on the development of Baku and its suburban settlements should be completed by the end of this year. It was a two-year program. Work was to be completed in the shortest possible time. Most of the work has been done. Creative work is ongoing in the suburban settlements of Baku, infrastructure projects are being implemented, the construction of schools and health facilities is under way, roads between and within settlements are under construction, and most of the program should to be completed by the end of the year.

In the coming months we will pay more attention to the construction of rural roads in the regions. We heard these figures today. Major funds were allocated for the construction of rural roads in recent years. These funds have provided hundreds of thousands of people living in the countryside with new opportunities. Roads mean life, development and comfort. The construction of rural roads is purely social in nature, and we must ensure that all rural roads are brought to normal condition in the coming years. I think that if this momentum is maintained, then we will achieve this. As you know, the construction of rural roads is financed from two sources - the state budget and the Contingency Fund of the President. This process will be continued until the end of the year.

On the whole, a lot has been done on the construction of roads. Most of the main roads have practically been built. The remaining work will be done in the next few years. We have completely renewed our road infrastructure. In recent years, all main roads have been revamped and comfortable roads built. These roads meet modern standards. Attention is paid to inter-city and rural roads. It shows the development of our country. At the same time, road construction has a special place among infrastructure projects. There can be no development, diversified development of the country and the development of tourism without roads. Of course, roads are built primarily for people’s comfort. This is the main goal, but there are also other goals. Therefore, issues relating to transport are resolved in a comprehensive manner.

The reconstruction of railways is ongoing, and this project will enable us to increase the speed of trains. This is very important for people’s comfort. At the same time, this is necessary for the active operation of international transport corridors passing through Azerbaijan. The Baku-Tbilisi-Kars railway is a strategic project. I am glad that Azerbaijan, as the initiator of the project, has assumed most of the work, and today the construction of the road continues. I believe that the Baku-Tbilisi-Kars railway will be commissioned on schedule. From an economic point of view, this project is of great importance. After that Azerbaijan will become a transit country. We are expanding our transit capacity. Today we have ample transit opportunities. And the commissioning of the Baku-Tbilisi-Kars railway will further expand these opportunities. We have a very favorable geographical location. But without the modern infrastructure this geographical location does not mean much.

Therefore, the investment made in the transport infrastructure and the North-South and East-West corridors passing through the territory of Azerbaijan will provide for the economic and political interests of our country in the future more effectively. The biggest seaport on the Caspian Sea is under construction in Azerbaijan. This was also our initiative and there was a great need for that. If we consider that the Baku-Tbilisi-Kars railway will be transporting at least 10 million tons of goods – i.e. this is our expectation, but the figure will increase further in the following years – then, of course, there is a great need for a modern seaport. At the same time, the new seaport under construction will enable us to move the seaport currently located in the center of Baku out of the city. And public places will be built there instead.

In general, the establishment of public places in Baku has gained momentum in recent years. New parks and alleys are set up, roads opened and public places established. I can say that for the number, size and beauty of public places Baku is in one of the leading places. The Seaside Boulevard has been expanded. Old buildings that are in a dilapidated condition are removed from the city center. Underground parking lots and above-ground parks are set up instead. Just look how many people are delighted and pleased with this comfort! At the same time, tens of thousands of people spend their leisure time in these new parks during the day.

This process shows once again that where there is a sound policy, there are results. Of course, all resettlements should be carried out within the framework of law. Citizens must be properly compensated. I want to note that the compensation being paid is almost twice the market value. We all know what prices there are in different parts of the city, and the compensation being paid is almost twice the market value. This, too, is a testament to the attitude of the Azerbaijani state to its citizens. We believe that all resettlements should be governed by these principles.

The process of building new roads is ongoing in Baku because there is a great need for that. If we hadn’t started the program, the municipal transport would be in a completely paralyzed state now. In the course of this year we are expected to import nearly 100,000 new vehicles. So if we do not expand the roads, relocate facilities and build new road junctions and tunnels, the city transport will come to a complete stop. We are well aware of the situation in some cities. Their transport is practically paralyzed. In the historical parts of Baku it is very difficult to do expansion work. It is not possible because there are historical buildings there. But where it is possible, we are building and will build new roads. There is no other option. This requires major resources. After all, the construction of roads is an issue which in itself requires large resources. Relocation, compensation and transfer of communications – we will do all of this work in a comprehensive manner.

As for social issues, I spoke about that in my opening remarks. In the coming months we expect to raise salaries and pensions. Other social measures will be taken as well. The construction of the social infrastructure in Baku and the regions is ongoing. I believe that we have achieved a lot in this area. Most of the loans envisaged for the development of entrepreneurship have been allocated. This year, these loans are envisaged in the amount of 250 million manats. Most of the loans are granted at the expense of previously issued and repaid loans. These loans are proving very efficient and contribute to the real economy. It is also a contribution to the development of entrepreneurship. So from now onwards entrepreneurs will receive concessional loans in the amount of at least 250 million manats every year, which will promote the development of the non-oil sector and entrepreneurship and create better conditions for meeting the objectives facing the country.

I have repeatedly expressed my thoughts about food security. This topic is constantly raised in meetings with entrepreneurs. I believe that we have taken very important steps in this direction in recent years and are already approaching complete self-sufficiency on some indicators. In previous years we achieved complete self-sufficiency on some other indicators. The state policy on private enterprise development, the coordination of all this work, the implementation of infrastructure projects and, of course, the development of the non-oil sector will enable us to completely ensure food security.

We still have lands that are not in circulation. These lands should and will be reclaimed. As mentioned, 5,000 hectares of lands have already been included in the turnover, and their yield is 54 quintals per hectare. This is double the average yield. In fact, we had expected these figures because all activities on these new and large farms are carried out at a high level. Agro-technical, land reclamation activities and provision of fertilizer – all of this work, of course, is carried out at the expense of state loans.

I think that we certainly need to expand this experience. We need about 40-50 large farms to fully meet the demand for grain. At the same time, we must apply this experience to smaller farms. This is the objective behind my latest decision on the purchase of agricultural machinery. I want to repeat that the establishment of "Agroleasing" enterprises has been a turning point in this area. If we hadn’t set up "Agroleasing", we would not have even a hundredth part of this machinery now. The farmers do not have the opportunity to acquire this machinery on their own. The government has played a role. In the coming years, further measures will be taken to purchase agricultural machinery, including harvesters. Additional funds may be allocated before the end of the year. Over the next three to four years, we should fully provide ourselves with the latest machinery because we will set up new large farms in the future. We are talking about tens of thousands of hectares of land. The existing farms should also have new equipment. Therefore, the Ministry of Agriculture should make proposals in this direction so that we could plan our work and know how many tractors and harvesters should be purchased and when and so that these issues are fully resolved.

Along with this, land reclamation activities are also an issue of great importance. This year we will commission the Takhtakorpu reservoir. It is an ambitious infrastructure project which has historic significance. It is one of the biggest projects to be implemented in the non-oil sector in the years of independence, perhaps even the biggest. This project is purely social in nature. The irrigated area will be significantly increased. At the same time, drinking water issues will be resolved.

The Valvalachay-Takhtakorpu water canal is now ready for opening, and the filling of the Takhtakorpu reservoir with water will soon begin. By the end of the year, this ambitious project, which also includes a power plant, will be completed.
Along with this, other land reclamation activities should be carried out. I believe that a special program on land reclamation may be adopted in the future, so that we could draw up a strategy and plans in the form of programs and consistently address these issues. We are already doing that. New canals are built, artesian wells drilled, and the Takhtakorpu and Shamkirchay reservoirs set up.

The Shamkirchay water reservoir will probably be put into operation next year. This will mean irrigation of tens of thousands of hectares of new lands. But at the same time there are other possibilities. We should make better use of small rivers. In other words, I believe that a precise and detailed program meeting international practices should be developed and introduced in this area.

All relevant instructions related to industrialization have been allocated. I simply want to note again that this area continues to be a priority. The process of creation of industrial parks is ongoing. In the coming months we will celebrate the opening of new enterprises in these parks. Azerbaijan’s industrial potential is growing and increasing. In the first quarter of this year, our non-oil industry grew by nearly 3 per cent. I am confident that this growth will be even larger in the coming years. The large industrial complexes currently under construction in Azerbaijan will create a powerful industrial potential of export orientation. These issues are at the center of attention. Baku, Sumgayit, Ganja and Mingachevir are our main industrial cities, and the construction of industrial estates there will be ensured in a planned manner.

Along with this, the focus is constantly on increasing the production of export products. Of course, our first focus is on the domestic market. We must provide the domestic market with industrial products, building materials and food. This is the first issue. But when we consider the scale of the ongoing and future work, we can see that we shouldn’t limit ourselves to the domestic market. Our production will exceed the domestic demand many times. So I already give these instructions on a regular basis. I believe that there is very useful. We must look for ways to expand into new markets, especially now, when the global recession is still ongoing and the purchasing power in some countries has declined. The demand has also dropped. Therefore, it will not be so easy to enter new markets. First of all, we must produce competitive goods. At the same time, we should pursue a very active police to be able to access new markets, introduce ourselves and sell our products there.

The fight against corruption and bribery is producing excellent results. The country's population feels that. At the same time, it is noted by international organizations dealing with this issue. A recent survey by international organizations also shows that the population of Azerbaijan welcomes the steps being taken to combat corruption.

Nearly 70 per cent of the population believes that a very serious and effective fight is waged in Azerbaijan in this area. I can say that on a global scale this indicator is at about 20 per cent. In Azerbaijan it is 70 per cent. This is an indicator and the main result of the work we are doing. I am very happy that this fight is yielding results. I think that we need to be even more active. We need to narrow the field for corruption and bribery. I want to say again that penalties are and will be applied. At the same time, we are taking and will continue to take administrative measures and systemic steps. Among them, of course, a special place is occupied by "e-government" and electronic services. I would like to highlight the activities of the “ASAN xidmət” center. This service has earned great respect in a short time and is expanding its activities.

According to my instructions, the number of services provided there is increasing. In the future, we have to see how to apply the lessons learned there in a short time to other areas. We will do that because this is the path we have chosen. At the same time, of course, the responsibility of civil servants does and should play a role here. Every civil servant should fight corruption. Every government officer must take these principles as a basis. The rapid development of Azerbaijan is a reality. We have a bright future. Let me say again that Azerbaijan will join the ranks of developed countries. There is no doubt about that. Therefore, we have to get rid of all unpleasant phenomena and take Azerbaijan to one of the leading places in the world in this respect.

Among the infrastructure projects I want to emphasize those on water and sewage. These projects will continue to be implemented in the coming months and years. The realization of other infrastructure projects is nearing completion. All projects related to power supply are practically over. The latest major power plant with a capacity of 780 MW was recently put into operation in the city of Shirvan. We can say that the latest station meets the highest standards. The consumption of fuel there is at the required level and all specifications meet international standards.

The process of gasification is powering ahead. The task has been set of providing gas to 90 per cent of all our settlements by the end of the year. This work has now gained momentum in the regions. We must provide maximum gasification. Therefore, water and sewage projects are the main priority today. As you can see, we commission or lay the foundation of a water supply project almost every week and every month in different locations around the country. This process has already become widespread. Sufficient funds are provided in the state budget. Water and sewage lines are priority infrastructure projects today.

In connection with energy security I said in my opening remarks that the decisions made by Azerbaijan are of great international importance. The projects we have put forward enjoy tremendous international support. The TANAP project is supported by the international community and has become international. As a result of the implementation of the Southern Gas Corridor, Azerbaijan will be a very important and indispensable exporter of gas for at least 100 years. We do all this for the present day and the future of our country. Of course, energy projects will attract additional investment. According to preliminary calculations, "Shah Deniz-2" and other related projects will lead to the investment of nearly $40 billion in Azerbaijan. Of course, this investment will have a positive impact on other spheres close to the oil and gas sector, including the service sector.

Next year's budget has to be prepared in this quarter. Work on the budget is already under way. The budget, of course, must be both investment and socially oriented. An important place in the budget should be occupied by defense spending. At the same time, all infrastructure and social projects, as well as social benefits, will be taken into account.
At the same time, as I noted earlier, the second part of the program on regional development is to be completed at the end of this year. The new and third program will be adopted next year. Relevant agencies are working on drafting the new program. The next program will cover 2014-2018 and will enable us to further develop Azerbaijan and successfully resolve all the problems. Thank you!