Opening Speech of Ilham Aliyev at the meeting of the Cabinet of Ministers, dedicated to the outcome of the social-economic development of the first nine months of 2010

There are two months left until the end of 2010. We can say that all the programs planned for 2010 are being successfully implemented. Of course, other issues will be resolved before the end of the year and then we will discuss the outcomes of the current year. Today we will discuss the results of socioeconomic development in the first nine months of 2010.

The Azerbaijani economy developed successfully in the first nine months. If we consider that in 2009, a year that went down in history as one of a global crisis, our economy grew by more than nine per cent, today's economic development is very valuable. This year our economy grew by 4.1 per cent, the non-oil sector by 5.2 per cent and industrial production by 3.1 per cent. I believe that these figures should be seen as positive. If we consider that there was rapid economic development in Azerbaijan in recent years, it required a great effort to achieve further development on this already high basis. Our carefully thought-out economic policies have allowed us to meet these goals.

In short, the macroeconomic situation in Azerbaijan is stable, the economy is developing in different ways. We have managed to diversify our economy, and an excellent indicator of this is the development of the non-oil sector. At the same time, we are implementing a strong social policy. This, as ever, is one of the main directions of our policy. This year, the population’s incomes have increased by 11 per cent. If we compare this figure with inflation, we can see that incomes are twice as high. In the last quarter, the minimum wage and the minimum pension were raised from AZN 75 to 85. These trends were also observed in Azerbaijan in the past. In the coming years the government will take further steps to increase the population’s incomes. I would also note that we are still not satisfied with the current level of the minimum pension and wage. But if we compare ourselves with the CIS, we can see that the figure in Azerbaijan is at the highest level. We are successfully implementing a program of targeted social assistance. This program covers about 600,000 people. Every month 128,000 families receive an average of AZN 108 from the government. This shows again that social policy is a priority for us in the true sense of the word.

All issues relating to the social sphere have been resolved in nine months of this year. We have invested heavily in the social infrastructure. This year 23 health facilities were renovated, while 59 schools and additional buildings, as well as three regional Olympic Centers, were built. We have recently commissioned the Kura Olympic training center. This process is continuing and next year's budget will, of course, provide for additional measures to strengthen the social infrastructure.

We are satisfied with the work under way in districts. I often travel around the country to get acquainted with the situation. I can see that very important steps are taken every year towards improvement, industrialization, development of agriculture and processing sectors. It is no coincidence that the income generation process is well under way in Azerbaijan. 56,000 new jobs have been created this year and about 900,000 since 2003. This in itself testifies to the fact that a very complicated and difficult problem of unemployment is gradually being resolved. I am sure that even more strides will be made in the coming years to reduce the level of unemployment in Azerbaijan. Those who wish to work in Azerbaijan can be provided with jobs.

Considering the fact that major construction projects are being implemented in Azerbaijan, that the government provides great support for entrepreneurship – both through loans and other benefits – these factors will certainly play a role in the elimination of unemployment because the private sector is now at the forefront of employment processes. This is a result of the government’s attention and support for the private sector. 70 per cent of the jobs have been created in the private sector. If the government did not provide loans, did not take care of entrepreneurship, if the program of the development of districts had not been adopted in 2004, then, of course, the private sector could not develop at this level today. We support large private enterprises and must also support small businesses because international experience and the financial crisis of last year have shown that the economy of countries with advanced small business is more stable. Of course, we will support small businesses, while at the same time, the Azerbaijani government will make efforts to establish major international, multinational companies, private companies. Azerbaijani companies successfully operate in foreign markets today.

In short, things in the districts are moving in a positive direction. All our cities are improving, modernizing, becoming nicer, and this is very gratifying. Of course, Baku, our capital and beloved city, is among the most beautiful cities in the world. This is confirmed by everyone who comes to Baku. But I want all our towns and cities to be beautiful and modern, and to have all the conditions for comfortable life. It was with this purpose that we adopted a program on the development of districts. Today, work in the fields of education, health, infrastructure and all other spheres in districts is being carried out at a high level.

In nine months of this year our currency reserves increased. I should note that our currency reserves increased even last year, the year of crisis. Although the main source of our currency reserves is the sale of oil and gas, the price of oil fell 3-4 times last year. But thanks to our sound policies and rational use of these opportunities, we have resolved these problems, allocated significant resources for infrastructure projects and, as was the case in the past, managed to prevent a reduction in currency reserves. According to the information provided to me today, our overall currency reserves now exceed $ 28 billion. This, of course, makes us even stronger, inspires us with full confidence that Azerbaijan will be developing for many years, for decades afterwards, will become an even more prosperous and wealthy state, and that the economic and social problems the country faces will be resolved even more quickly. In general, this shows again that the Azerbaijani economy is independent, relies on domestic resources, that Azerbaijan has a thought-out program, a strategy, a package of projects for each year to resolve socioeconomic issues. We regularly discuss these issues both in Baku and in districts so that to move all this work forward at the proper level and successfully resolve issues of coordination.

The issues set forth in the oil and gas sector for this year are being resolved, oil and gas production is growing. According to the latest figures provided to me, Azerbaijan will produce more than 50 million tons of oil and more than 28 billion cubic meters of gas by the end of the year. Much of this is exported, expanding our export opportunities and geography. Azerbaijani gas is transported to neighboring countries now.

Azerbaijani oil is exported to many countries around the world. We can say that our oil has already reached all continents. Of course, this creates favorable conditions for the development of both economic and bilateral relations with countries. Next year we must make even better use of our natural resources. In particular, we must strive to reduce losses in the gas sector and resolve issues of gasification in Azerbaijan more successfully.

The work we are carrying out in the energy, oil and gas sectors is not limited to domestic affairs. The work being done in the oil and gas industry has started to play an important role for the region, and more recently for the European continent. Neither we nor our partners consider Azerbaijan’s oil and gas policy only as an internal affair of Azerbaijan, as it already plays an important role in international relations, in the redrawing of the world’s energy map. Azerbaijan has turned into an independent and very reliable player in the energy sector. The work undertaken in our country, the specific strategies, tactics and development prospects affect regional countries, the world’s energy market, diversified supplies of oil to different markets. I must say that this is a very positive impact because Azerbaijan is using its natural resources and energy policies so that we have more friends and partners. Our energy policy serves only to deepen our cooperation.

Particularly important steps have been taken this year. Azerbaijan’s gas potential is now being realized more efficiently. Our natural gas exports are growing, we are looking for and finding new ways. We are working on new projects, investing and developing feasibility studies so that all our projects are effective. We are ready to work even more seriously on any project.

In short, the work done so far and especially the work to be done in the future will further strengthen Azerbaijan. Our country will benefit a lot from this policy from economic, political and all other standpoints. We will talk about that today.

Positive results of 2010 are obvious. The state budget for next year is a good indicator of that.

The state budget for next year has been developed on the basis of the achievements of this and previous years. Budget parameters have already been made public. In the coming year, public spending will amount to AZN 12.7 billion, or $ 15 billion. This is a very big amount. If we calculate the budget per capita, we can see that Azerbaijan is among leading countries in this field. Budget deficit is also at the required level, i.e. it is in line with the criteria once adopted by the European Union. This is also a great indicator. In other words, this work in Azerbaijan is conducted in full compliance with European standards. Our budget is investment-oriented. At the same time, social issues will certainly be resolved. As I said, social issues are a priority for us.

In short, the state budget for next year will allow us to implement all the projects planned. There are many such projects – both in the construction sector and social. We seek to facilitate the establishment of major industrial enterprises in Azerbaijan. The Azerbaijani State Investment Company is taking an active part in these matters.

The provision of loans through the National Fund on Support for Entrepreneurship, agricultural leasing, subsidies – we are faced with many questions. There are problems in the country awaiting solution. We are aware of these problems, and will talk about them today. We are working on the basis of specific programs for each year so that the country's economy and the country as whole develop intensively.

Military expenditures have a special place in the state budget for this year. This is not the first year when our military expenses are in first place. It is only natural because we live in a time of war, and the Azerbaijani state does everything possible to expedite and strengthen the process of building the army. The expenses allocated to the army today are increasing the power of our armed forces. At present, the Azerbaijani army is the strongest, most professional and most efficient army in the South Caucasus, and we will certainly continue to work in this direction.

Next year, our total military spending will be at AZN 2.5 billion, or more than $3 billion. If we consider that the entire state budget of Armenia, which continues to keep our lands under occupation, is slightly above $2 billion, we can see that the task we have set earlier that Azerbaijan’s military expenses should exceed Armenia’s total budget has already been fulfilled. It is a reality today. Over time, we, of course, will further increase our costs, including those on defense. In contrast to Armenia, we are doing it at our own expense, do not depend on any country, do not owe anything to anyone and do not ask anyone for help.

Unlike Armenia, we are building our economy and army thanks to the will and hard work of the Azerbaijani people. The revenues earned by our people are being channeled into a critical area for Azerbaijan – army construction. We will continue this work in the future. Our lands are under occupation. We are striving to put an end to this occupation soon.

As you know, an OSCE fact-finding mission has recently visited occupied territories. I think that this is a very positive fact. Five years ago, in 2005, a first OSCE fact-finding mission was sent to the occupied lands. The report prepared by that mission clearly showed what crimes have been committed by Armenian occupiers, Armenian vandals.

The recent mission must certainly make comparisons and reflect in its report the destruction and crimes that have taken place there. I do hope that the mission’s report will be fair and objective, is not balanced because mediators often apply a balanced approach to negotiations. There can be no talk of a balance in this issue because this is our land, all buildings are destroyed by the Armenians, not a stone was left standing, all our historical monuments, mosques and homes are destroyed and looted. All of this has been committed by Armenian vandals. All material assets have been destroyed and looted by Armenian marauders.

The crimes committed in the occupied territories exhibit the bestial face of the Armenian fascism. We know this, and it is very good that the international community will also receive information about that. I do hope, let me repeat, that this report will be objective and reflect the reality. This mission is special because it includes representatives of the UN High Commissioner for Refugees. This is a very important fact from both political and practical standpoints. I hope that we will soon see this report.

As for the settlement of the conflict, I want to say once again that Azerbaijan has a principled position on this issue and will not retreat a single step from it. Nagorno-Karabakh is Azerbaijani land, and this issue must be resolved within the framework of Azerbaijan’s territorial integrity. No issue can be resolved outside of this principle. We cannot tolerate a second Armenian state on historically Azerbaijani lands. The first Armenian state was founded in 1918 on Azerbaijani lands - on the territory of the Erevan Khanate, the Zangezur mahal.

A second Armenian state cannot be created in Nagorno-Karabakh, which is ancient Azerbaijani land. We will safeguard this principled position in all international organizations. With our work and steps being taken and by strengthening the country we are nearing the day when our lands will be liberated from invaders.

With regard to international organizations, I can say that all leading international organizations have expressed their positions on this issue. A significant role, of course, is played by four UN Security Council resolutions. Furthermore, decisions and resolutions of the Council of Europe, the Organization of the Islamic Conference and more recently of the European Parliament unequivocally support the territorial integrity of Azerbaijan and demand an end to the occupation.

This is a political and legal aspect of the issue. The practical side also strengthens our position because it is impossible to compare Armenia and Azerbaijan today. Azerbaijan is a prosperous, progressive, modern, dynamically developing country which relies on its own resources, while Armenia is a country sidelined from communications, is in a dependent position, barely able to make ends meet thanks to the offerings of other countries and circles. It is therefore impossible to compare these two countries. This is confirmed by the figures I have cited today and our future plans. I have absolutely no doubt that this gap will increase further over the years and by further building up our military capabilities, we will succeed in resolving the issue.

Armenia should not forget about a demographic issue either. Today Azerbaijan has a population of more than 9 million people, while Armenia is experiencing a large-scale exodus because people are tired of the intolerable conditions existing there. The police regime established there does not allow people to live freely. Armenian invaders have shed the blood not only of the Azerbaijani people. War crimes have been committed not only in Khojali and other places. In 2008, they committed atrocities and crimes against their own people. The army has killed more than 10 citizens. In other words, Azerbaijan is very different from Armenia from political, economic and demographic perspectives. I am confident that the development of all these issues will lead us to our goal.