Closing 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

- The progress reports made here today provided a summary of the work done on several directions. In fact, if we speak about the work done in the last 10 years in detail, it may take us a few days. A lot has been done on each field and in each direction. Over the past 10 years, each ministry and government agency has done a lot of work on the development of Azerbaijan. The second state program has been completed. The first and the second state programs have been exceeded. Now we expect to adopt the third state program. I am confident that in the next five years we will do the work we could not do so far, and all the problems facing the regions will be resolved.

Of course, in the coming years we should provide for the overall economic development of our country. The macroeconomic situation will remain stable. Last year's results give reason to say that. Last year the country's economy received a record amount of investment - $28 billion. At the same time, last year we increased salaries and pensions and repaid Soviet-era bank deposits. So the country's economy received major investments and a large amount was released into the economy. Despite that, inflation rose only by 2.4 percent. This suggests that our economy is healthy, the macroeconomic stability is maintained and population incomes in the last 10 years have consistently exceeded inflation by several times. Therefore, in order to maintain and further speed up the rapid pace of development in the coming years, the macroeconomic situation should and will be stable. There is full control over that, and there will be additional wonderful opportunities for our successful development.

Today we have no problems with the finances. Our financial situation is good and stable. Our financial system is healthy. In the coming years, thanks to the development of the petroleum and non-oil sectors, our country is expected to receive a large flow of foreign currency. These funds, of course, will be stored transparently, used for main expenses and for addressing social issues. At the same time, the implementation of infrastructure projects and support for entrepreneurship will also be in the spotlight.

The ongoing reforms are evaluated by leading international financial institutions. The credit ratings of Azerbaijan are growing. Even in the crisis years three major rating agencies raised the credit ratings of Azerbaijan. According to the calculations of the world’s top economic institution – the Davos World Economic Forum, the Azerbaijani economy is ranked 39thin the world in terms of competitiveness. This is also a result of the reforms ongoing in Azerbaijan.

In short, in the next five years we will have sufficient economic, financial and technical resources to successfully implement the third program. Of course, over the last 10 years we have accumulated a lot of experience. In the last 10 years, thousands of new companies have appeared in Azerbaijan, and we strive to strengthen local companies, in particular through preferential loans provided for their participation in public projects. Today, most of the work in the construction industry is done by local companies. This improves the financial state of these companies, leads to the creation of jobs, payment of more tax into the budget and the accumulation of experience. So I am sure that the implementation of the next program will be successful.

In the next five years we should fully complete the implementation of infrastructure projects. We started this work 10 years ago and had a lot to do. We can say that the entire infrastructure needed to be updated. The reports made here contained some figures. For example, with regard to electricity we have upgraded all our power plants and built new ones, while equivalent fuel consumption has declined sharply. Water lines and gas pipelines are being built and reconstructed. The lines, the communication lines built in previous years fell into disrepair and were no longer usable. So we are doing all this work over again, from scratch, so that the new infrastructure could serve the people of Azerbaijan for decades. So there is work that still needs to be done. I am sure that in the next five years all infrastructure projects will be fully realized.

Power lines will also be updated alongside the entire power engineering sector. Gasification, as I said, should be brought to at least 95 percent. All cities should complete drinking water and sanitation projects, and they should cover most of the villages too. It was mentioned here that whereas 10 years ago water was provided to only 26 percent of the population on a round-the-clock basis, now this figure has reached 55 percent. But 55 percent is not a figure to boast of either. In Baku this figure is at a higher level. While 10 years ago only 29 percent of the Baku population received water around the clock, at the present time this figure has reached 78 percent. But in a city like Baku this figure should be 100 percent, as well as in all other cities and villages. So a lot remains to be done. Funds for infrastructure projects have been envisaged, including sufficient funds provided for in the investment program for this year. We will continue to update power lines, electrical services, gas supply, the construction of water and sewage lines, rural and inter-city roads. In short, I am confident that this segment of the economy will receive even more momentum in the next five years. Thus, as a result of the third program, all infrastructure projects will be fully implemented.

With regard to water projects, work is being done on the part of "Azersu". At the same time, the boring of artesian wells is of great importance. Last year water was provided to 104 villages in this way. On the basis of an order I signed at the beginning of this year, funds were allocated for the boring of artesian wells in 250 other villages this year. Thus, hundreds of thousands of people will be provided with new water sources. Treatment plants have been built in villages located along the river. These opportunities benefit hundreds of thousands of people, and it is also provided for in the investment program for this year. In the next five years, we should completely resolve the problem of water and sanitation.

Land reclamation projects are also being implemented. Last year we celebrated the opening of the Takhtakorpu water reservoir. I believe that we will celebrate the opening of the Shamkirchay water reservoir before the end of this year. Thus, we will complete two huge land reclamation projects, and then we will need to think about what should be done on the newly irrigated lands. In fact, we have to think about that already because the documents being submitted to me point to various figures. First of all, we need to know how many thousands of hectares of land will be irrigated. We need to know that for sure. Therefore, all relevant bodies – the Ministry of Economy and Industry, the Ministry of Agriculture, the State Committee for Land and Cartography and the "Land Reclamation and Water Resources" Open Joint Stock Company – should work together to provide me with accurate information – how many thousands, perhaps even hundreds of thousands of hectares of land will be suitable for crops as a result of the construction of the Shamkirchay and Takhtakorpu water reservoirs and canals and what products it is advisable to grow on these new lands that will be put into circulation. We need to know this exactly in order to plan our workeven more effectively.

The development of agriculture will still be a priority in the economic sphere in the coming years. We have always paid great attention to that. New measures will be taken associated with the development of agriculture. Structural changes should be carried out in the ministry. There is a great need for that. The new structure should meet modern requirements. Preference should be given to the reforms of systemic nature. The development of agriculture should be based on the most modern and advanced methods. The experience of countries that have achieved great success in this area is studied and our delegations are sent to various countries. This experience and technology is then imported so that we could fully and effectively use our natural possibilities.

We should and we will increase productivity. There are great opportunities to do that. A report made here mentioned that the productivity of large grain growing farms has increased to 55 quintals. The country average is 27.5 quintals. So it is twice as high. This experience should be applied everywhere else. The government offers its opportunities, assumes the infrastructure and communication issues, the issues of irrigation. The government also provides loans to entrepreneurs. The entrepreneurs only need to effectively use this land and increase their productivity. If total productivity increases by at least 60-70 per cent, if not twice, then all our domestic needs will be met and there will be a great export potential.

The acquisition of modern machinery required for agricultural development will be continued. This is also necessary. All equipment must be updated. We should import the most advanced machinery. Appropriate instructions have been given and the process has already begun. Machinery was acquired in previous years too. If we hadn’t purchased the machinery then, we would be faced with big problems today. But it is still necessary. We can’t fully provide ourselves with modern machinery. In the next three to four years, and possibly sooner, we will fully provide ourselves with the latest technology – combines, tractors and other machinery.

I noted this in previous meetings and I want to point out today that we should create a system of electronic registration of farmers.

We need to arrange the regions according to their specialization. I have repeatedly expressed my views on this matter. Some work has already been done. But it is necessary to provide more specific and serious proposals so that we could create such specialization. In addition, each type of cultivated products should have a set of stimulating factors. A spontaneous approach will not work here. There should be a special approach to every region and every type of products grown. I am confident that the structural reforms I mentioned and the use of new approaches to the development of agriculture, the modern approaches will create favorable conditions for resolving these issues.

We do not have system of electronic registration of lands, so it must be created. If we want to develop our agriculture using modern methods, we must apply the best practices to each industry in Azerbaijan. We must also enable agricultural development on a scientific basis. With this aim we will conduct some structural transformation. Science should serve the end result. Only in this case can science be useful.

Rapid development of agriculture today takes place in all developed countries, so it should be the case with us too. This has already been said here. At the same time, I want to return to the previous thesis that we must and we will provide new acreage which will be put into circulation.

It was mentioned in the reports that we need to and we are creating major farms. But at the same time, we should not forget about small and family farms. In this area, too, there is a wonderful international experience. We simply need to apply it to Azerbaijan and to set up family farms, in particular in dairy production. The government will provide its support, including financial support in the form of loans.

It is necessary to ensure complete transparency in the provision of subsidies. I said this last time,I spoke about this a year ago, and I have to express my views on this subject again today. We have not achieved transparency here. Transparency is not provided, and the people present here know why it is not provided. This is my last warning. The issue of subsidies should be based on a stringent control and accounting system. The Ministry of Agriculture has received these instructions. A positive role in this should be played by representatives of local executive authorities, because in some cases the subsidies do not reach the farmers. So specific proposals will be made and a new executive order signed. It will be a very serious order aimed at reforms in agricultural development. I want to reiterate that all representatives of central and local executive authorities should serve a common goal. The common goal is to create transparency, facilitate the development of agriculture and help farmers.

One of the main problems farmers are facing is associated with the sale of their produce. The government, of course, should and will provide assistance. We must make sure that produce made in Azerbaijan is taken to the market in the first place, and relevant government agencies should regulate these issues. Although there are products made in Azerbaijan, we import the same products from abroad. There should be rigorous control in this area. If we produce these products ourselves, why should we import them? Each country must protect and protects its own market. Azerbaijan is also moving in this direction. As you know, we are not a member of the World Trade Organization yet, despite the fact that we are insistently invited to join it. We can say that this question is regularly put to Azerbaijan: why doesn’t Azerbaijan enter the World Trade Organization? There are reasons, the first of which is the protection of local manufacturers and the protection of the domestic market. We must first create conditions for our own farmers and companies. If we, as they say, open our market to poor quality and cheap foreign products, local production will "die" and the farmers will suffer losses. This is why we are not doing that. And today I want to say that we will become a member of the World Trade Organization, but only when we know ourselves. When Azerbaijan’s agricultural and industrial sectors are dominated by export-oriented products, we will become a member of the World Trade Organization and see whether we are still invited with the same degree of insistence. After all, the Azerbaijani market is a dynamic and growing market. Azerbaijan is becoming a rich country and its population is growing. Of course, as they say, free access to this market requires great effort. I want to say again that the strengthening of local production, the reduction of dependence on imports and the increase in export-oriented production are priority issues. All state agencies should work to resolve these issues.

In some regions the lands suitable for agriculture are being misused. This issue also needs attention. The focus should be on the quality of products. Our advantage is that agricultural products grown in Azerbaijan are natural and of high quality. We shouldn’t worry too much about the quantity and should try to preserve the natural quality.

We need to pay attention to the establishment of agricultural estates and logistical centers. Both Azerbaijan and other countries should create logistical centers. We need to expand into new consumer markets. Today Azerbaijan exports its agricultural products, and in the future this trend will further increase. Therefore, access to new markets is an important issue. In short, food security in Azerbaijan must be fully provided by domestic production. In recent years we have largely but not fully provided ourselves with basic food products. I want to provide some figures. Our self-sufficiency with meat and meat products is 94 percent and with poultry 92 percent. In this area, we have made significant progress because the National Fund on Entrepreneurship Support has allocated large loans for the construction of poultry farms. We provide ourselves with eggs by 96.5 percent, with milk and dairy products by 75 percent, with grain by 65 percent, with grapes by 94 percent, with potatoes by 98 percent, with melons by 100 percent, with fruits and berries by 126 percent, which means that we have a great export potential, with vegetables by 100 percent, with salt by 72 per cent, with sugar and sugar products by 174 per cent, which makes it our biggest export potential, with vegetable oils and margarine by 70 percent, and with butter by 50 percent.

This table clearly shows which sectors we must give priority to in the coming years, so that all the figures here are not lower than 100 per cent. And we can achieve that. Therefore, the production of milk and dairy products at 75 per cent can’t satisfy us of course. It should be at 100 per cent. Public entities and entrepreneurs should pay more attention to this direction. Azerbaijan produces little butter and vegetable oils. This table shows everything explicitly. This table should be a kind of a roadmap for both public authorities and entrepreneurs. I have been voicing these figures every year and on some types of products there is progress. However, on a number of sectors the situation is the same as in the previous year. In particular, the production of butter, fruits, berries and melons has not increased.

In my opening remarks I expressed my thoughts associated with the development of entrepreneurship. Support will continue to be provided. This support has been instrumental in getting a lot of work done. Over the past 10 years Azerbaijan has created 55,000 new businesses. The government has provided concessional loans to the tune of 1 billion 200 million manats. For example, last year we granted loans amounting to 275 million manats. All these loans are repaid on time, which becomes further support for entrepreneurship development, as these funds are re-issued to entrepreneurs in the form of loans. I should note that entrepreneurs treat these loans with great responsibility by repaying them on time. In the future, we will provide concessional loans to the tune of 270-300 million manats annually. Thus, by the end of the program in 2018, loans amounting to about half a billion manats will be provided. These funds will be invested in the real economy.

The banking sector has grown rapidly in Azerbaijan in recent years. Our banks have grown and matured. I think it is time for banks to provide the real economy with more financial resources. At the moment it is not the case. However, one of the functions of banks is to give a greater momentum to the economy. In particular, the government provides great support for the development of the banking sector. The government has taken very effective measures to enhance public confidence in banks. As you know, deposits are insured and this step has greatly increased public confidence in banks. Therefore, banks should also be aware of their social responsibility and allocate more in the form of loans for the real economy.

The introduction of information and communication technologies in the regions will be continued in the coming years. Every city should have broadband internet. In this area Azerbaijan has made great strides in a short time. Today we are among space-faring nations. The number of Internet users exceeds 70 per cent and is growing fast. Therefore, the development of information and communication technologies in every city is of great importance, especially when we consider that we are moving towards e-government and the “ASAN xidmət” service has already come to the regions. Therefore, this sphere will also be the focus of constant attention.

The fight against corruption and bribery will continue to be waged very seriously. It is a great social evil, a large ulcer. The Azerbaijani government is doing everything possible to eliminate corruption and bribery. The scope for bribery is narrowing. Measures of systemic nature are taken and reforms carried out. At the same time, we are taking and will continue to take penalty measures and use administrative methods. However, I believe that the biggest effect will be produced by measures of systemic nature. I want to emphasize the activities of “ASAN xidmət”. In just one year “ASAN xidmət” has provided services to a total of one million people. Complete transparency has been ensured, cultured and respectful service worthy of citizens of Azerbaijan is provided. Therefore, the functions of “ASAN xidmət” will continue to be expanded. These principles should guide all other structures that are in direct contact with the people.

I am confident that in the coming years our fight against bribery and corruption will yield even more wonderful results. The reason to say this is provided by the work carried out, the reforms undertaken and our strong political will. There should be no room for corruption and bribery in Azerbaijan. Let all civil servants hear and know this and be able to always look people in the eye with a clear conscience.

Every civil servant should be aware of his responsibility. Every civil servant should work honestly, be with the people, be humble, businesslike and patriotic, not take bribes, not exalt himself above the people, gain the respect in the regions and areas where he works, be faithful and loyal to the motherland, and not fall under the influence of any external circles. These are the basic principles. I expect every civil servant to comply with these principles.

We have built a strong state. Today, Azerbaijan is a state that is highly respected in the world. It is no coincidence that in the election to the UN Security Council the vast majority of the international community supported our candidacy – 155 countries, or two-thirds of the world.

We have built a strong economy. In a short time we rose to the 39th place for competitiveness. Over the past 10 years there has been no other country that would develop at such a pace as Azerbaijan in the economic sphere. This is the highest and unprecedented development.

The situation in the country is very stable. Stability is maintained. The main conditions that preserve stability are the unity between the people and the government and popular support and confidence in what we do. This is the main contributor to stability. The domestic situation is stable. The certain pressure from the outside, as you can see, has no effect. The activities of some treacherous opposition groups have no effect. Those who try to stop us remain in a miserable situation again. This was also shown in the last presidential election. The vast majority of the people did not succumb to their smear campaign and the people voted for the reality and for the person they believe. Therefore, there is no room in Azerbaijani politics for the elements who are receiving donations from abroad and who have sold their conscience to foreigners. This was also shown in the last election. The last election was the end of the opposition. It was the peak of their disgrace.

Why, in the presence of all these factors, should 23cturn a blind eye to corruption and bribery? Why should this wound shake us from the inside? Why should it poison us? So I urge everyone to make the right conclusions. Penalties are and will continue to be taken. No-one has and never will have the immunity here. Civil servants are servants of the people. I am the first servant of the people and all civil servants should work like this. So I want to say once again that the people involved in bribery in the coming years will be most severely punished. If someone does not make the right conclusions, let them do it now. In the next five years Azerbaijan should become a model country in the fight against corruption and bribery.

In the next five years, of course, we will update the social infrastructure in the regions. We will continue to build schools, hospitals and cultural institutions, and address the problems of the internally displaced persons. In the past year 28,000 persons moved to new homes and apartments. This year the figure will be about the same. So this issue is always in the spotlight.

The tourism potential of the regions is growing and strengthening. Domestic tourism is growing fast and I am sure that there will be a major increase in foreign tourism. There is some growth already, but it is not at the desired level yet. There should be bigger growth. New travel destinations are being set up. In the last five years alone we have created the "Shahdag" ski complex. There are already four beautiful hotels there and another is under construction. There is a "Tufandag" ski center. There is a hotel and an international airport not far from it. We are restoring the former glory of Naftalan. Naftalan used to be an all-Union center of tourism. Today we are transforming it into an international center of tourism. There are two beautiful hotels there and a third is under construction. The restoration of the "Galaalti" medical center is drawing to a close. It will also be a very important facility for the development of spa tourism.

The tourist potential of the southern and western regions and of the Nakhchivan Autonomous Republic is quite broad. Here, too, we are doing a great job. Of course, we should take serious environmental measures. I have repeatedly expressed my thoughts on this subject. We must protect the environment, clean Baku and the Absheron Peninsula from the wastes that was accumulating there for centuries. We are transforming the "black city" in a "White City". At the same time, the work carried out in all the regions and the opening businesses must meet the highest environmental standards.

This year is a year industry. Special attention will be paid to industry. The process of creating industrial estates is well under way. There are plans to establish industrial estates in the regions - in Ganja, Sumgayit and Mingachevir. At the same time, all cities should have special industrial zones, industrial areas, because our economy, the industrial capacity and the population are growing. No matter how many jobs are created, they should still be created. There are countries where the population is shrinking and jobs are not such a serious problem there. The population of Azerbaijan grew by more than 170,000 people last year. This increase is a very positive fact and a manifestation of our economic development. But our economic opportunities and industrial capacity should conform to this. Therefore, in every city, probably on the outskirts of cities, there should be special industrial zones. The government should build communication lines, establish the infrastructure and create opportunities for new businesses, so that entrepreneurs can establish their enterprises there.

In short, I want to say that over the past 10 years all our goals have been met. Two government programs have been exceeded. This has provided huge support for the development of our country. I am confident that the third program will also be implemented in a timely manner and will thus ensure the successful and dynamic development of our country.

Thank you.