Closing speech by Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in 2013 and the objectives for 2014

- In 2014, the dynamic development of our country must be secured. I think that the decisions made in previous years and the work upcoming in 2014 will enable us to successfully complete the current year as well.

The investment program will be fairly large. The investment program reflects the main infrastructure projects. There is still a great need for the implementation of infrastructure projects. Although a great deal has been done in recent years, much still remains to be done. It is not ruled out that the investment to be made in Azerbaijan in 2014 will be at the level of last year. Under such circumstances, the stability of the macroeconomic situation, of course, is the fundamental condition. Azerbaijan has accumulated extensive experience in carrying out economic reforms. Even the increase in wages, the repayment of deposits and the investments worth billions of dollars have had no adverse impacts on the macroeconomic stability. This is evidenced by the fact that inflation was only at 2.4 per cent last year. This is a very positive indicator.

We must strive to ensure that inflation stays at an appropriate level this year too. We always say that inflation should be measured by single digits. But nine is also a single digit. Last year, inflation in the country stood at 2.4 per cent, which, of course, makes us very happy. We must do our best to keep it at about this level this year as well. In this case, of course, we will have even better opportunities to improve people’s well-being. Thus, the implementation of the investment program, the attraction of foreign investment, the macroeconomic stability and its protection – all these factors will facilitate the successful development of our country. I am sure that our statistics, the gross domestic product and the development of the non-oil sector will be at a high level in 2014.

We will continue to support entrepreneurs. Some figures have been voiced here, suggesting that business people received favorable loans amounting to 275 million manats last year. This is also additional investment made in the real economy because these loans are provided only to be invested in the real economy. At the same time, it means a lot of support for the development of local entrepreneurship. There are these funds and the recommendation programs prepared by the Ministry of Economy and Industry, which are effectively used by entrepreneurs. There are plans to allocate funds only for profitable areas and projects that can generate income. It is as a result of this that all the loans are being repaid in a timely manner. Today, the repaid loans make up a significant proportion of the portfolio of the National Fund on Entrepreneurship Support. This year we will adopt a third program on the development of districts. Last year the second program was fulfilled. Its implementation has been completed. I can say that the adoption of these two programs and their implementation has brought about a serious turnaround in the regions. We can clearly see this both in the statistics and in real life. The regions have been revived, have improved and a modern infrastructure has been created in them. In addition, the construction of social infrastructure facilities has become widespread.

We have created jobs in the countryside. Over the past 10 years, 1.2 million new jobs have been created in Azerbaijan. Most of them are in the regions. This is having a positive impact on the process of recovery ongoing in the regions, prevents migration to cities, contributes to the growth of local production and reduces our dependence on imports. In other words, work in this area will be continued in the current year too. There are specific projects, and government assistance to entrepreneurs will be continued.

Of course, we will also approve the first year plan of the state program on the socioeconomic development of districts which will be adopted. When the investment program was approved as a whole, the regional program was taken into account as well, of course.

At the same time, we will adopt a new program on the development of Baku and suburban settlements this year, perhaps in the next few days. In 2013, this program was completed and a new one is being prepared. I believe that as a result of the implementation of the next three-year program, all problems existing in the suburban settlements of Baku should be resolved. The infrastructure, the social infrastructure, schools, health centers, roads, water supply, sewage, gas, electricity – in other words, we plan to resolve all the major issues, including job creation. I do hope that in the next three years we will be able to achieve complete realization of this program.

In my opening speech I expressed my thoughts on the development of agriculture. I want to say again that it will be one of the priorities of non-oil sector development in the coming years. We are also implementing a food security program. In recent years we have taken major steps in this direction and significantly reduced our dependence on imports. Today, the bulk of basic food products are made in Azerbaijan. The production of certain goods completely meets our needs, while in some areas we are still dependent on imports. As you know, I have repeatedly expressed my thoughts on this subject. I want to say again today that Azerbaijan must be able to fully meet its needs for basic food products. In other words, the food we produce must fully meet our needs. We are getting close to that and should seek to ensure that in the next five years, perhaps even earlier, when the implementation of the third regional development program is completed, all issues related to food security have been resolved.

These issues must be addressed so that we could take into account the future. It has been indicated here and we all know that the demographic situation in Azerbaijan is very positive. For this indicator we are in first place in Europe, and Azerbaijan’s population will gradually increase further. Population growth is directly linked to economic development. If we look at the dynamics of economic development, we can see that there is a direct relationship with population growth. Therefore, our food security issues should be calculated not for the current population, but for the future. Of course, the rapid development of agriculture is a priority.

At the same time, land reclamation and irrigation projects will result in the inclusion of tens of thousands of hectares of land into circulation. The Takhtakorpu water reservoir has already been commissioned, while the construction of the Shamkirchay reservoir is under way. Therefore, we should apply the most advanced technology here. We should thoroughly study the experience of developed countries. We can see now that some farms have a yield at least twice as high as conventional standards. Therefore, if we make rational use of the existing lands, we can further improve productivity. I think that all the basic food can be produced in Azerbaijan by 100 per cent.

But in the future, of course, we will have tremendous export potential here. We must take population growth into account. As for the reforms, there is a need for structural reforms. We need to put in place an even more effective structure here.
There are issues related to the provision of subsidies. I have repeatedly expressed my thoughts about that. I believe that we will create an effective mechanism and fully ensure transparency in this area too. This will allow us to continue developing agriculture in the future too.

At the same time, we should continue the process of creating large grain production farms. We already have first experience. This is a positive experience, and we will continue our efforts in this direction.

There are specific opinions and suggestions regarding the purchase of agricultural machinery and its production in Azerbaijan. We are updating and will continue to update our technical depot. The government allocates and will continue to allocate funds. This year the construction of the Shamkirchay water reservoir should be completed. This will give a great impetus to the development of agriculture in the western region. As I said, tens of thousands of hectares of land will be irrigated. The boundaries of irrigated land must already be determined. We need to know exactly how many thousands of hectares of land will already be irrigated. Therefore, we need to carry out registration of the land fund. We need to finish this project. I want to say again that we should apply the most advanced practices existing in the world. We need to know with absolute certainty what our capabilities are and build our plans in accordance with that.

At the same time, artesian wells were drilled in more than a hundred villages in 2013. Funds were allocated from the Contingency Fund of the President. I think that artesian wells should be drilled in at least 200 villages this year. The project will also be of great importance in the provision of population with drinking water. This year, the implementation of infrastructure projects will be continued.

Key issues related to electricity have been resolved. It was noted here that we celebrated the commissioning of the “Janub” power plant last year. This power station with a capacity of nearly 800 megawatts will address the needs of the entire southern region. Currently, the construction of the “Shimal-2” power station is under way in Baku. It will probably be put into operation this year. It will generate about 400 megawatts of electricity. In recent years we have been able to significantly strengthen our energy potential, but the needs are growing. Considering the development of our economy and industry, as well as the future development as a whole, we must continue to attract investment to power generation projects. We will probably resolve the issue of building a major power plant in Baku. There is a need for that. Our energy potential must always exceed the needs. This is the case today and it must be the case in the future too.

Therefore, the attention being paid to power generation should not be reduced in the coming years. Of course, we will implement these projects. We should also work harder on creating renewable sources of energy. I have repeatedly expressed my thoughts on this subject. Of course, some projects are already being implemented, in particular hydro power plants under construction, including those in Nakhchivan. It is possible to say today that almost one hundred per cent of electricity needs in Nakhchivan is provided by hydro power plants. This is a great support and a huge contribution to the energy security of Nakhchivan. In other regions of the country, namely in Fizuli, we have built a hydro power plant with a capacity of 25 megawatts. In addition, a hydro power plant of nearly 25 megawatts has been built on the Takhtakorpu water reservoir. A hydro power plant with a similar capacity will be built on Shamkirchay. Alternative energy sources have been developed at the Balakhani waste disposal plant. Power stations are also built on small rivers. This work should go even faster. I have repeatedly said that we have a map of all our water sources and we know where and how much power we can generate. Even more funds should be invested to do that.

Work on the development of solar and wind energy should go even faster. I have expressed my thoughts about that several times. There are even companies in Azerbaijan that produce solar panels. But work on the development of solar energy is not going very fast. In 2014 we need to make the necessary adjustments here, so that the work could go faster. If we consider that there are enough sunny days in Azerbaijan, failure to use these opportunities would be a big mistake, of course.

Gasification projects are under way. I receive regular information about that. We can say that work on gasification is completed in several villages every month. It Baku it has reached 96 per cent. In the coming months, I am sure, it will reach 100 per cent. In general, the level of gasification in the country should reach 95 per cent, and we will achieve that in the coming years.

The construction of rural roads was particularly widespread last year. Large funds were allocated both from the Contingency Fund of the President and from the state budget. This year, this area will continue to receive special attention. This has a great sense and is very useful. We are creating excellent opportunities for people living in the villages, and funds are envisaged for this purpose in the current year too. First of all we should complete the ongoing projects because some projects have yet to be completed. There are new projects. We are now receiving proposals from the ground. We are doing this work on the basis of appeals from local executive authorities and citizens expressed during my trips to the regions. So I am sure that this year will also produce good results.

I can say that the most important of infrastructure projects are those on drinking water and sanitation. Last year I attended the commissioning of drinking water projects in several cities, and this process will be continued in the current year too. Overall, 55 per cent of the country’s population is provided with drinking water round the clock. Of course, it is a very low figure. It is also true that the issues of drinking water and sanitation have always been very acute in Azerbaijan. Our districts did not sewage lines at all in the past. Sewage lines in Baku have become outdated and no longer meet today's standards. Therefore, these projects require large financial and technical resources. We have already started these projects, and the work is progressing well.

Currently, 78 per cent of the population of Baku is provided with drinking water round the clock. This is a huge progress. When we started these projects, this figure was below 50 per cent, i.e. less than 50 per cent of the population received water round the clock. Today we have reached 78 per cent. This is good progress. But such a beautiful city as Baku should reach a level of 100 per cent. The population of Baku and all our cities and settlements should be provided with quality and clean water meeting the standards of the World Health Organization.

Most of the work here, of course, is carried out by the "Azersu" Open Joint Stock Company. At the same time, as I said, the "Irrigation and Water Management" Open Joint Stock Company should also carry out work involving the drilling of artesian wells. The Ministry of Ecology and Natural Resources provides for the installation of modular sewage treatment plants in villages along the rivers. Hundreds of villages are covered by these projects. The first pilot project was implemented last year. This is primarily a Caspian water desalination project which is meant for irrigation purposes. This pilot project has already been implemented. We need to expand this practice. In the future, if necessary, we will be able to use the Caspian water for drinking. So I can say that these projects are among top priority projects of social infrastructure. I call them infrastructure projects because they are purely social in nature, and funds are invested only for people’s health and comfort.

In the transport sector we will continue road construction projects this year. The list of all these projects has already been approved. The construction of motor roads is under way. I think that we need to pay special attention to the construction of the Baku-Astara highway, because this work isn’t going very fast. Work on the Baku-Gazakh-Georgian border and the Baku-Russian border highways is going faster. But we haven’t been able to achieve the required pace in the construction of the Baku-Astara-Iranian border highway. Therefore, this project should be given more attention this year.

As I mentioned, this year we should complete the first stage in the construction of the trade seaport in Alat. Thus, I believe that this year we will relocate the Baku trade port from the city center. As a result, wonderful public spaces will be made available for our people. These areas will have parks, gardens and promenades. The boulevard will be extended beyond the seaport and will be connected to the boulevard under construction in the direction of the "White City". Eventually, a beautiful boulevard covering several kilometers will be put in place.

The construction of the Baku-Tbilisi-Kars railway is progressing on schedule. I think that it will be implemented on time. We have repeatedly spoken about the importance of this railway and I think there is no need for any additions. Here, of course, we are once again seeing the cooperation among three countries. Azerbaijan, Georgia and Turkey have been cooperating successfully in both energy and transport sectors for many years. I believe that the construction of the Baku-Tbilisi-Kars railway will also be a wonderful result of this cooperation.

The construction of the underground is ongoing in Baku. Several stations are under construction. In previous years we adopted a large program associated with the underground. A total of 50 new stations will be built. The investment program will, of course, address these issues as well.

Due to the growth of industrial production the activities of industrial parks is of particular importance. There are already first results in this direction. The Sumgayit industrial park is already in operation. The new chemical technology park is beginning to operate. Industrial parks are to be established in other cities, in Mingachevir.

The process of establishment of the Balakhani industrial park is under way. This year we need to take even more serious steps in this direction. In fact, I have repeatedly said that our successful development should be achieved through the non-oil industry. The growth of our gross domestic product will also be possible through industrial production.

In 2014, we should take serious steps regarding the development of the steel industry. This is a very promising industry, especially if we consider that we have enough local raw materials and natural resources for the development of the steel industry. The construction of a modern metallurgy plant, of course, would be a huge achievement. I think that special attention should be paid to this industry this year.

Every year, the focus is on improving the environmental situation. Comprehensive measures are already taken, but we need to take even more serious measures. In particular, it is necessary to inspect the factors that pollute the air once again. Of course, we need to speed up the transition to the "Euro-3" standard. "Euro-3" is not the limit either. We need to do more work in connection with the "Euro-4" and "Euro-5" standards. Of course, a large role in these matters belongs to the refineries operating in Azerbaijan. They should also be reconstructed. The construction of a new refinery is planned in Baku. But before it is built, it is necessary to take environmental measures at the existing plants. In general, we need to seriously fight the factors that cause air pollution.

According to my information, the biggest factor is cars. Last year Azerbaijan imported more than 100,000 cars. This, of course, is something that confirms the improved well-being of our people. But at the same time, it is huge workload for our road infrastructure. We are building roads, road junctions and tunnels. Quite possibly the projects implemented in Baku and Azerbaijan are not implemented elsewhere in the world. So many roads and tunnels have been built. So much money has been allocated. But the imports of 100,000 vehicles, most of which have been brought to Baku, certainly creates the problem of traffic jams and worsens the environmental situation. Therefore, we have stopped importing cars that do not meet environmental standards or specifications. I think that this year the Ministry of Ecology and Natural Resources, other relevant agencies and the entire Cabinet of Ministers should consider this issue again. We can’t allow the imports of cars polluting the environment in Azerbaijan. The automobiles that are out of order should not be brought to the country at all. I want to receive specific proposals so that we could resolve this issue once and for all.

Serious examinations should be conducted at the enterprises polluting the air. The Ministry of Economy and Industry, the Ministry of Ecology and Natural Resources and other relevant agencies should provide me with a list of such companies. It is necessary to take serious measures there. Either the owners of these enterprises – whether public or private entities – install the necessary treatment facilities or these companies should be closed. Clearly! The enterprises polluting the air and poisoning the people are not needed. I can say that fines do not work here, because the process of fining is very complicated. In addition, the amount of fines is not big enough for anyone to cease operations now. So it is either necessary to install treatment facilities or the plants will be closed. Without any hesitation! I think that this will make a major contribution to improving the environmental situation. We are planting millions of trees, creating public areas, building drinking water and sewage lines, while companies polluting the air bring all our work to naught. So it is a very serious matter. It is a matter of health for every citizen of Azerbaijan. And health comes first.

Other environmental measures will be taken too. This year we will begin a project to clean Lake Boyukshor, and its first stage should be completed next year. The Ministry of Economy and Industry has already informed me about that. Work will begin this year, a third of Lake Boyukshor will be separated by a dam. Environmental measures will be taken there. I am sure that this experience will be successful. Then the rest of the lake will be cleaned. The total area of Lake Boyukshor exceeds 1,000 hectares. It is a huge lake. It is located in the city center and, as you know, the waste water, the produced water and the waters contaminated by oil are discharged into it, which significantly deteriorates the environmental situation in Baku. It is therefore necessary to implement these projects. It is time to seriously deal with other lakes too. Several years ago I set out my thoughts about that. I even provided the names of all these lakes. So the time has come. It is necessary to clean all the lakes. Where this is not possible, it is necessary to drain them, i.e. a plan of integrated activities must be put in place. We can also adopt a special program, and we will do so.

Information on other industries has also been provided here. With regard to the development of the space industry: the launch of the first satellite, as I said, is a great historic event. But this year we need to take concrete steps to prepare the second and third satellites. Perhaps we should open tender procedures. There are quite a few companies interested in cooperating with us. Therefore, the space industry in Azerbaijan will develop. This year specific steps should be taken for the launch of more satellites.

We will continue the construction of social facilities. All this is part of the investment program. I can say that last year repairs were carried out in almost 300 schools and more than 80 health facilities. Most of the work has been done in this direction, but much still remains to be done.

This year, as was the case in the past, very serious fight will be waged against corruption and bribery. This struggle is producing excellent results. Comprehensive measures are being taken. “ASAN xidmət” started to operate early last year, which brought about a big change in this area and introduced novelty. “ASAN xidmət” is a product of Azerbaijan, an Azerbaijani invention and an Azerbaijani brand. In a short time this service has benefited hundreds of thousands of people. I have not heard of any complaints or dissatisfaction to this day. All services are provided in a transparent and courteous manner. The number of services provided by “ASAN xidmət” must be increased. Regional centers of the service should also be established this year. Centers already exist in Ganja and Sumgayit. Mobile services are also provided. This year, we have to build at least four and maybe even five “ASAN xidmət” centers in the regions. This should be reflected in the investment program.

However, the fight against corruption is not limited to the activities of “ASAN xidmət”. All state bodies, particularly those that are in contact with citizens, must wage very serious fight against corruption and bribery. We know our sore spots. We also know what we need to do to cure these sore spots. We have the political will. It is strong enough. Persons involved in corruption on the ground, in the central executive authorities and local executive bodies should be removed from their positions and prosecuted. The anti-corruption department is already doing this work and instituting criminal proceedings. It is necessary to take more stringent measures so that we could get rid of this evil. I believe that even more impressive steps will be taken in this area in 2014.

Things are going well in the oil and gas sector. As I said in my opening remarks, the “Shah Deniz-2”, TANAP and Trans Adriatic Pipeline projects are our historic victory. It is the largest infrastructure project in Europe and its implementation has already begun. I believe that all of the work will be done in a timely manner .

We are entering a crucial year in terms of preparations for the European games. As you know, the European games will be held in 2015. We have been allowed only two and a half years to prepare for the games although preparations for Olympic Games usually take seven to eight years. However, we intend to conduct European games at the level of summer Olympic Games in two and a half years. I am confident that we will achieve that. The organizing committee has been set up and is working. All relevant agencies should pay more attention to this issue, so that we could complete most of the preparatory work this year. This year we need to complete the construction of the vast majority of sports facilities. The construction of the Olympic Stadium, the Gymnastics Center, the Aquatic Palace and the Shotgun Shooting Center is under way. The Heydar Aliyev Sports Complex, the Palace of Hand Games and other sports facilities are undergoing major overhaul.

In short, I am sure that we will not have any problems in this direction. However, preparations for these games are not limited just to the construction of Olympic facilities. Security issues are of tremendous importance as well. Very serious attention should be paid to transport, accommodation of visitors and athletes, the establishment of the Olympic village and other issues. This year, I want to say again, will be crucial in terms of preparations for the games. I am sure that we will conduct these games at the highest level. If we consider that these will be inaugural games, the standards set in Azerbaijan will be adopted as the standards for European games in general.

Last year was declared the year of the information and communication technologies in Azerbaijan. The main reason for that was the fact that we launched our first satellite into orbit last year and, in general, the ICT sector received considerable attention. I believe that this year we should pay even more attention to the industrial sector, which determines the dynamics of the further development of our country. Industrial parks, new industrial enterprises, production of export-oriented industrial goods, the establishment of processing plants and major industrial estates – all of this work will contribute to the further development of our country, further reduce our dependence on the oil and gas factor and determine the sustainable economic development of the country for years to come.

Considering all these factors, I believe that we should declare 2014 the year of industry. A relevant order will be signed shortly. A plan of specific measures on the development of industry will be drawn up and approved. These measures will be taken in the year of industry.

Year 2014 is beginning. In the first week of the year we have already opened two large facilities. The “Tufan” ski center was opened in Gabala and the largest medical facility built in the years of independence, the Baku Health Center, was opened in Baku. So we are getting off to a good start of the year. I am sure that 2014 will also be successful for our country and our people. Thank you.