Opening speech by Ilham Aliyev at the conference dedicated to the implementation of state programs on the socioeconomic development of regions of the Republic of Azerbaijan

- Today we will discuss the implementation of state programs on the socioeconomic development of regions of the Republic of Azerbaijan. As you know, the second state program was finished a month ago. So there is a need to discuss these programs. In fact, we discuss the implementation of these programs every year, we analyze them each year and provide guidance regarding future work.

The adoption of the first program in 2004 has played a special role in the development of the regions of Azerbaijan. Back in 2003, on the eve of the presidential election, I expressed my thoughts on the adoption of the first program. I said that if I was given the confidence of the people, I would first of all tackle the development of regions of Azerbaijan and a special program would be adopted.

And so it happened – the program was adopted. The first five-year program managed to create a major change in the regions. After this, the second program was adopted. The program covering the years 2009-2013 has also been completed. I can say that these programs have played a very important part in regional development and in strengthening the economic potential of Azerbaijan as a whole.

The reforms carried out in Azerbaijan and the sound policies have given an impetus to the comprehensive development of our country. Today Azerbaijan is looking to the future with very high hopes and optimism. The key to this is our economic independence, our economic strength and political will.

Over the last 10 years Azerbaijan has developed most rapidly in the world. The economy has grown 3.4 times. No other country has achieved such growth in the last 10 years. The main prerequisites for this are the reforms, the stability and public order observed in our country. Of course, stability and sound policies have created favorable conditions for the development of the economic sphere. In Azerbaijan, economic reforms are complemented by political transformation. There is consistency between these two areas. I think that from this point of view the experience of Azerbaijan can be of interest to other countries.

As a result of the implementation of two programs, industrial production has grown 2.7 times. Whereas in the first years of the program our economy and industry grew largely on the account of the oil sector, the successful development of our country in recent years has been provided by the non-oil sector. It is no coincidence that last year non-oil sector growth made up almost 10 per cent. This is also one of the highest indicators in the world. Overall, the economy grew by nearly 6 per cent last year.

Of course, the operation of the Baku-Tbilisi-Ceyhan oil pipeline, which was put into operation in 2006, paved the way for a major flow of foreign currency to the country. In those years our economic growth was mainly associated with the oil factor. But we were able to use our oil revenues very effectively. Azerbaijan's experience can serve as an example in this regard. We have ensured transparency and increased oil revenues, while the revenues were channeled into the real economy and infrastructure projects. So I believe that we managed to keep the right balance here too. Our foreign exchange reserves are growing year in and year out. But at the same time we have invested heavily in the country's economy. Due to these investments the development of entrepreneurship and the implementation of infrastructure projects have been possible. It is impossible to imagine Azerbaijan without that now.

In general, if the first program had not been adopted in 2004, the current realities of Azerbaijan could be completely different. Regional development, support for entrepreneurs, development of the non-oil sector, reduction of our dependence on imports and creation of the export potential are the indicators of recent years.

Of course, all these achievements are reflected in the statistics. As I noted, the economy grew 3.4 times, industrial production 2.7 times, agriculture 1.5 times. We have created 1.2 million jobs, of which 900,000 are permanent. Poverty has declined from nearly 50 to 5.3 per cent. Unemployment is 5 per cent. For by indicators Azerbaijan is ahead of even developed countries. Our foreign debt is 8 per cent. I think that this is also the highest indicator in the world.

This suggests that we are conducting our economic policies with great accuracy and care. The investments are either attracted from abroad or represent the funds allocated from the state budget. There is also investment from the State Oil Fund. We did not attract financial resources from international financial markets. In other words, we have attracted them at a very low level, so that the country does not borrow too much. Today, this indicator in developed countries exceeds 100 per cent. In Azerbaijan it is 8 per cent. For example, if the external public debt accounts for 50 per cent of the gross domestic product, it is considered acceptable. Even if we take credit resources in the amount of $30 billion now, this figure will still be at the highest level. This is a factor that clearly demonstrates the economic potential of Azerbaijan. I believe that the course for maintaining foreign debt at a low level in the coming years would be correct.

Over the past 10 years our country attracted $160 billion in investment. The volume of investment in recent years continues to grow. Last year it reached a record level – $28 billion was invested in the Azerbaijani economy. Domestic investment already exceeds foreign. This is also a very positive phenomenon. But domestic investments are still dominated by public funds. And this is only natural because infrastructure projects and other programs necessary for the economy are being implemented. But the private sector is also increasing investment in Azerbaijan. This was made possible primarily thanks to the stability in our country and is a testament to people’s confidence in the future of Azerbaijan. So I am sure that in the coming years the volume of investment will not reduce, because there is still much to do.

In general, the investment in the amount of $160 billion has given a great impetus to the Azerbaijani economy. These positive trends are strengthening. State and private, foreign and domestic investment is expected in the future.

Although the major oil contracts have already been signed and are being implemented, Azerbaijan is still a very interesting and attractive country for foreign businessmen. Today, more money is invested in the development of the non-oil sector. Of course, we welcome that. The investment climate is very positive. For the volume of direct foreign investment per capita, Azerbaijan is at the forefront in the CIS.

Over the past 10 years we have also paid great attention to the development of private enterprise. In particular, to enable entrepreneurs to invest in the economy, the government has implemented specific programs to attract financial resources. The National Fund on Entrepreneurship Support has invested a total of 1 billion 200 million manats.

Entrepreneurs were provided with concessional loans. Special recommendation plans were also prepared to facilitate business development. The National Fund on Entrepreneurship Support is already allocating loans for the development of the most important sectors of the economy.

Thus, in recent years we have increasingly provided ourselves with basic food products. A few years ago I set the task that we should be able to provide ourselves by 100 per cent. We have not reached this level yet. We will talk about that today. But due to the activity of entrepreneurs and prudent public policy in this area we have also taken serious steps in this direction.

I regularly meet with entrepreneurs. Over the past 10 years I have personally attended the opening of more than 1,200 facilities in the regions. I have always supported and will continue to support entrepreneurs. This means both political and financial support. In other words, the preferential loans provided by the government are giving a great impetus to the development of entrepreneurship.

In the last 10 years the implementation of infrastructure projects was a priority issue. We understood perfectly well that if these projects are not implemented, the development of our country would be impossible. In particular, since 2004 we have taken very serious steps to create energy potential of our country. In 10 years we have built 17 power plants in Azerbaijan. Their total generation power is 2,300 MW. For comparison, I can say that our total generation capacity is 6,300 MW, of which 2,300 MW have been created in the last 10 years. If these power plants had not been built, about 30 per cent of our country would be left without light today and there could be no talk of any industrial development because the development of industry in Azerbaijan should, of course, be provided by infrastructure projects. Therefore, we primarily tackled the construction of power plants. I can say that today we fully and excessively provide for our energy security. At the moment we have export potential of nearly 600-700 MW.

But Azerbaijan is developing dynamically. The population is growing and the economy is developing. We have major plans associated with the future industrial development. Azerbaijan will assert itself through high technologies. Azerbaijan will become a modern industrial country. We will create hundreds, perhaps even thousands of new enterprises. So our energy potential must always be one step ahead of our needs. Therefore, in the future we should ensure the construction of power plants. Of course, we will pay attention to renewable energy as well. There have also been serious steps in this direction in recent years.

Over the past decade much has been done in the area of gasification. This is both a social and economic issue. In places where there is no gas, people consume more electricity, which is very unprofitable from an economic point of view. At the same time, this leads to an increase in electricity demand. Therefore, of course, preference was given to projects on gasification. All cities and most villages of our country have now been gasified. In general, Azerbaijan has been gasified by nearly 90 per cent. But, of course, some villages do not have gas lines yet. This is part of our program. Over the next five years the level of gasification should be brought to 95-96 per cent.

The road infrastructure also plays an important part in the comprehensive development of our country. Road construction issues have been the focus of constant attention. First of all, we started with the highways, then built inter-city roads, then rural roads and the roads within the villages. Today, this process has become very extensive. Road projects are implemented in every district. The heads of district executive authorities present here are actively involved in this work. When I visit each district, I receive new proposals from them. Major funds are and will be allocated both from the state budget and from the Contingency Fund of the President for the construction of rural roads. In the next five years all our villages should and will have good asphalt roads.

Over the past decade much has been done to create the social infrastructure. Water supply projects are being implemented. I attribute water supply projects to projects of social infrastructure because these are primarily socially oriented measures. Today projects of drinking water and sanitation are implemented in every city of our country. In several cities these projects have already been completed. I have participated in their opening. People are provided with high-quality water meeting the standards of the World Health Organization around the clock and in an uninterrupted manner. In the next five years all our cities and most villages will have new water lines and sewage systems. Thus we will fix the problem of water shortage which has always created great difficulties for the people of Azerbaijan.

We have also implemented other social infrastructure projects and built 2,700 schools. We have built and renovated more than 500 medical facilities and created 41 Olympic sports centers. Eight such centers are under construction and more are yet to be built. We have restored our culture centers.

So the essence of state regional programs is that they cover all areas. The program adopted in 2009 was published in the media. Every citizen can read what work will be done in his district and village. Azerbaijani citizens have actively contributed to the drafting of these two programs, because these programs were created on the basis of proposals from the ground. People on the ground are more aware of what needs to be done and what problems should be dealt with first. Thus, the suggestions received from the ground were summarized and incorporated into a program and financial resources allocated. Every year when the state budget is adopted, the implementation of the program is taken into consideration and investment envisaged. Thus, these programs are of specific nature.

In general, all our work is specific. All our promises are kept. We are far from populism and never give unrealistic promises. But what we promise is fulfilled. And the implementation of two programs confirms that.

Over these years Azerbaijan has made great strides. Our cities have become landscaped. Every city and district does work on landscaping, builds public areas, improves parks, alleys, culture centers, streets and buildings. Of course, Baku is an example for every city. Baku is one of the most beautiful cities on a global scale today, it is one of the most beautiful cities in the world. Naturally, other cities also want to be like Baku. But every city has its own character and history. The main thing is that everywhere, every city and every village should have good conditions for people to live, work and have rest.

Today, Azerbaijan is a strong state and the Azerbaijani people live in safety. We provide for this security, public order and economic development. Azerbaijan is among the countries that speak their word on a global scale. We have our own opinion on every issue. In order to pursue an independent policy in the international arena, the entire work within the country should be properly organized in the first place. Of course, our economic strength and economic independence have significantly strengthened our political independence.

Azerbaijan addresses food security issues. We are addressing issues of transport security. Today we are becoming a transport hub for the entire world – not only for the continent but also for the whole world. Of course, infrastructure projects improve our geographical position because without the infrastructure and logistics, our geographical location would not matter much. The same holds true for natural resources. If the natural resources on the seabed are not extracted, they have no value. This value appears only when natural resources are extracted. Therefore, energy, transport and food security are the areas we focus on, and every direction is producing excellent results.

Today, Azerbaijan has become an indispensable partner for the continent in terms of energy security. In December last year we signed the “Contract of the 21st century”. The contract of the 20th century is successfully implemented and the contract of the 21st century has been signed. A big event attended by heads of state and government from various countries was held in this hall. Azerbaijan has assumed the biggest economic workload and responsibility. We are ready for this responsibility. We are aware of this responsibility and, by showing leadership, we will be able to implement these major projects.

The ambitious energy projects that will be implemented under our leadership are now the biggest energy and infrastructure projects of Europe. These words are an indicator in themselves. The leadership is again in the hands of Azerbaijan. We are confidently going forward. We are fulfilling all our tasks. We are working in the name of all-round development of our country. This development and the progress observed in the regions as a result of the implementation of two programs, of course, make us even stronger.

Today we will hear reports on the work done. We will hear more specific thoughts and facts. Work related to the adoption of the third state program is already under way. Work on the third state program has been under way for several months now, and it will be adopted. Thus, we will adopt an action plan for the next five years.