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

- I am confident that by the end of the year all the issues we are facing will be resolved and Azerbaijan will finish 2014 with a great success.

In the next six months we should certainly try to complete all the planned infrastructure projects. A great job was done in this direction in recent years, but there is still much to do, especially when we consider that the country is not facing any financial problems. As I said in my opening remarks, we have a good financial situation and there is enough money.

Therefore, there should be no delays in the implementation of infrastructure projects. The main conditions here are quality and pace. Of course, all relevant agencies should pay serious attention to quality. We need to ensure that all funds are expended at the appropriate level.

Among the infrastructure projects we have recently paid more attention to the construction of rural roads because there is a great need for that. This is evidenced by requests from the ground. This is the case probably because we have invested heavily in other infrastructure projects in recent years, in particular in projects related to electricity and gasification. The situation in this area is not yet fully satisfactory. Despite this, some successful steps have been taken.

Rural roads are an issue that concerns everyone, of course. In general, the funds being allocated for the construction of rural roads have been increasing in recent years, and a large part of our population, especially the people living in the countryside, have been provided with good roads. And yet there are many roads in poor condition. During my trips to the regions this issue is always discussed. The suggestions coming from the ground are subsequently incorporated in the public investment program. The construction of rural roads occupies a special place in the third program of regional development. At the same time, we have received complaints from citizens during the year. Also during the year, I try to allocate funds for the construction of rural roads from the Contingency Fund of the President. Perhaps a large portion of the funds from the Contingency Fund of the President is spent on the construction of rural roads, as this issue should be resolved. I think that if we maintain the current pace, all rural roads will be renovated in Azerbaijan in three to four years.

And this is our objective. All rural roads must be asphalted and built with good quality, so that our people did not experience any difficulties.

Drinking water and sanitation projects are implemented throughout the country, including Baku. Major investment is made from the state budget and loans are provided. Several such projects have already been completed in our city. I have also participated in their opening. During conversations with people I saw a positive attitude towards this. People who had been experiencing difficulties due to the poor quality of water for many years now have uninterrupted and round-the-clock supply of water that complies with the standards of the World Health Organization. We need to build drinking water lines to all our cities. At the same time, we supply drinking water to the villages too. Both "Azersu" and the Ministry of Ecology and Natural Resources are building water treatment plants of modular type in villages located along rivers.About half a million people living in such territories are now provided with clean drinking water.

With regard to gasification I should note that in the current year this process has been somewhat slow. In previous years it went faster and, of course, we should try to take gasification in Azerbaijan to 95 and perhaps even to 97 per cent. The possibilities for this are available. The funds are also envisaged in the state budget. At the same time, the State Oil Company of the Republic of Azerbaijan should also use its funds. Work in this area should go even faster. I am provided with a list of newly gasified villages quite regularly, almost every month. Therefore, this issue is under my control.

Recently, these references have been saying that one, two and a maximum of three villages are gasified a month. This is unacceptable and intolerable. The State Oil Company and "Azerigaz" should do this work faster.

Regarding land reclamation I want to note that the commissioning of the Shamkirchay water reservoir is scheduled for this year. This is a major infrastructure project. Tens of thousands of hectares of land will be irrigated. Coupled with the Takhtakorpu reservoir, it will greatly improve the supply of irrigation and drinking water in Azerbaijan. At previous meetings I also suggested that irrigated lands should have exact boundaries. So far, the information I am receiving is rather verbal – it states that 10,000, 20 000 or 50,000 hectares of land will be irrigated. But what land? Who has conducted this calculation? Who can say for sure whether it will be 10,000 or 20,000? Therefore, there should be a system of strict control here. We are allocating great funds for these issues. Of course, these projects are very important for the economy and social issues. But we need to know exactly how many thousands of hectares will be improved and how many hectares will be irrigated. Therefore, such information should be obtained in the coming months. All relevant agencies should work to provide me with this information. After that, we will certainly determine where to allocate loans and what agricultural produce will be cultivated on those lands, so that this work is not carried out spontaneously but systematically.

This year, a great amount of investment was made in the country's economy. The figure was mentioned here – 7.6 billion manats. This means that over the course of six months a total of $11.5 billion was invested. This is very a high figure. I am confident that this year too the volume of investment will exceed $20 billion. We are trying to maintain this pace. This allows us the opportunity to implement all infrastructure and social projects. Inflation, as I said, is very low. We must strive to ensure that it remains at a low level. Macroeconomic stability is the main issue of our economic development.

My orders on the development of agriculture, the ongoing work and the reforms being implemented suggest that we will achieve even more rapid development in this field. Profound reforms are currently under way in agriculture, including structural reforms. We need to positively assess the performance of large farms. As you know, we started, if I may say so, with a small project, the first project on 5 hectares. It is visible how productivity has increased there. According to the information provided here, the process of creating 19 large farms on an area of 30 hectares is currently under way.

Eventually we will be able to increase productivity on the available lands and become self-sufficient in grain. Yield is equal to 56 quintals, but the national average is about 25-26 quintals. In other words, the productivity in the new farms is twice as high. There are most advanced technologies, machinery, fertilizer and agricultural services. We need to try to further apply this experience to small farms. Of course, in terms of the volume it will be different, but the approach should be similar. In essence, by creating large and modern farms we are setting a standard in our country. In the future, agricultural development in Azerbaijan should be based on the best international practices.

Of course, it is necessary to provide higher yields in all areas. At the same time, the introduction into circulation of new acreage is also envisaged as a result of the land reclamation projects I have mentioned. Under such circumstances, I want to say again that we need to know exactly how much acreage may be put into circulation in which district, so that we could ensure the implementation of all infrastructure projects, address issues related to roads, etc. I am confident we will achieve successful development in this direction. I have repeatedly said this before but I want to say again that the issue of identifying new export markets becomes relevant in this case. Here, of course, we should have greater access to traditional markets.

We need to expand into new markets. We need to access regional markets. We are working in this direction now, and we should try to take large amounts of agricultural products to the European markets. To achieve this, of course, a high level of quality is required. I believe that the approach used in Azerbaijan in this field today provides for quality. At present, Azerbaijan has the highest quality products. When we fully provide ourselves in this area and when high-quality and competitive products form the majority in the processing industry of Azerbaijan, then I am sure we will be ready to join the World Trade Organization. If we do this today, our farmers will suffer losses, the production volume will be reduced, the Azerbaijani market will be replete with cheap and inferior products, and thus our economic development, in particular the development of agriculture, would not be at the proper level. So the process of preparation for joining the World Trade Organization is under way now. This is our goal. We are committed to this goal, but in agriculture and industry preparatory work and these reforms should be carried out.

The electronic agricultural system, the purchase of new equipment and pedigree cattle – all of this is intended to make life easier for farmers and provide them with an additional source of income. Of course, this is one side of the issue, a social issue, because about half of our population is engaged in agriculture and lives in rural areas. We view this issue as a social one. At the same time, it is an issue which has great economic potential. We are not using it fully now. At the first stage, we need to provide ourselves with main agricultural products by 100 per cent. We are getting closer to this goal. Every year we address this issue while discussing the regional development program. Following this, we must also ensure the supply of agricultural products to world markets.

This year is the year of industry. The development of industry, of course, is in the spotlight. The attraction of investment both from abroad and from domestic sources is a positive fact. We, in particular, channel and will continue to channel investments into the growth of industrial production, and the structural reforms conducted for this purpose are obvious. We have created industrial estates. The state takes on greater responsibility here too by making a major financial contribution. The creation of industrial estates, cleaning work, creation of the necessary infrastructure, roads, communications, etc. – all of this is done at the expense of the state. We do this at the expense of the state budget for the private sector. In other words, we show concern about the private sector and take tangible and practical steps. I do not believe that any other government in the world is so actively involved in these issues.

Now we live in a market economy. Of course, it is the only acceptable way for us. But at the same time, our public policy, our steps related to industry and agriculture are purely social in nature. The government has exempted farmers from all taxes except for the land tax. Farmers are exempt from all state taxes other than the land tax. Subsidies, fertilizer and fuel are provided on favorable terms, roads are built, land reclamation activities are carried out, millions of manats are invested in the Takhtakorpu and Shamkirchay water reservoirs, so that the area of irrigated land could be increased.

Loans are available. Farmers have received soft loans of 300 million manats. Also, recommendations and method instructions are provided on how to use these loans. What other country provides so much care and attention?! I will tell you: no other country does. This is the main direction of our policy and we have achieved non-oil sector development thanks to that.

A similar approach is applied to the field of industry. The government creates industrial parks at its own expense. If necessary, loans are provided to attract companies there. Many steps are taken to encourage companies.
I think that along with industrial parks we should begin to create industrial clusters. There is also a successful international experience in this field. It is available in developed countries. The entire production cycle should be concentrated in one place. In particular, as a result of such a project in steel, metal and aluminum industry, we must put in place the entire chain involving production, processing, development of small and medium-sized businesses, so that final products could be manufactured in Azerbaijan. I think that further measures should be taken in this direction.

At previous meetings I mentioned that each district should have an industrial zone. Work in this direction is under way and should be continued. Of course, the main burden is assumed by the government. And this is how it should be. A state policy is conducted in Azerbaijan in this direction. At the same time, we are aware of the available experience in this area in order to accelerate the development of industry, economy and agriculture in our country. We study the existing experience and see that banks are supposed to play a very positive role in this area. Banks allocate money to the real economy. It must be the case here too, but it is not. This area should be given very serious attention. Today, banks are provided with low-interest loans amounting to 300 million manats from the state budget, so that they could distribute the money among entrepreneurs. In other words, these are not banks’ own resources but the resources provided by the government. Banks distribute them and even earn money. So this is a great privilege, a privilege provided by the Azerbaijani government to private banks.

Our Central Bank provides loans to private banks when necessary, so that they could earn money. Every year the National Fund on Entrepreneurship Support provides banks with 300 million manats to make money. Why don’t they provide loans to the real sector of the economy? Why do they provide consumer loans more? In order to make money! I don’t mind that, but there is a public policy and the government supports private banks. As I noted, loans are issued and opportunities created for them to earn money. And they should realize their responsibility. How can they stay away when seeing the public policy, in particular the policy on the development of our country?! If this is the case, why should the government help these banks?! Therefore, very serious reforms should be conducted in this sphere. First of all, the issue should be analyzed. Such an analysis is probably available. I want to be provided with information on how much money private banks invest in the real economy in Azerbaijan. How much money in their loan portfolio is allocated in the form of loans or investments to the real sector of the economy and how much they allocate to other areas? I need to know this and then make the decision. I want to say again that I provide significant support to private sector development in Azerbaijan. Otherwise, there would be no such development today. But at the same time, the private sector should also be aware of its responsibility and contribute to our common cause.

The fight against negative phenomena is under way. This is an issue that is always in the spotlight. The fight against corruption and bribery is producing excellent results. This is seen and welcomed by the population. This is also acknowledged by international institutions. I believe that we have achieved profound changes in this area. As I mentioned earlier, different factors play a special role in that – administrative measures, punitive measures, institutional measures, transparency, the application of new methods.

The activity of “ASAN xidmət” has special significance. There have been more than 2 million applications in 18 months. What does this show? It shows that people have confidence in this institution, they see that they are not asked for a bribe there, there is no red-tape, everything is transparent, services are provided by young people, hundreds of volunteers are involved in this work. Look how much benefit there has been for the people, for educating the younger generation and for strengthening patriotism. In general, this system has brought about a new atmosphere in society. It has brought innovation to the sphere of public services.

Now we are sending mobile buses to the regions. I am receiving information from the ground that people won’t allow these buses to leave their region for another. Why? Because there they are asked for bribes! If it were not the case, then these buses would not be so popular. Therefore, I believe that relevant bodies – the Prosecutor's Office and other agencies, representatives of executive authorities – should pay serious attention to this matter. We need to ensure transparency everywhere. As for the activity of “ASAN xidmət”, I believe that we need to increase the number of buses. There are only two buses now. We must bring this number up to 10. Therefore, let the Ministry of Finance consider the issue and make suggestions. After some time we need to have 10 buses on the constant run so that people could be pleased.

We are addressing issues relating to transport. I must point out to two issues here. The construction of the section of the Baku-Tbilisi-Kars railway linked to Azerbaijan should be completed by the end of this year. Thus, after completion of the work on the territory of Georgia, we will do the part of the work that is attributable to us. The commissioning of the first stage of the Alat international trade seaport is also on the agenda. This should also happen in the coming months – the first and then the second stage. But we need to put into operation the first stage after a few months. After that the port located in the city center now, as I said earlier, will be moved away and public areas and parks will be set up in its place. As you can see now, public places are established in all vacated areas in Baku for people’s comfort and relaxation.

At the same time, in order to improve the municipal transport we need to import new buses. As a matter of fact, a new organization, Baku Bus, is being established. It should provide services of the highest level, while the buses to be delivered are the most beautiful in the world. This is our goal: the people of Baku should be provided with the best equipment, cars and buses. I believe that the new buses will be delivered in a few months. The Baku city executive authority has been assigned to resolve all issues related to that –parking space, drivers, the whole system, transparency. This should be the best system in the world.

The construction of the underground is under way. I think that we need to allocate additional funds to this area, because some projects are somewhat delayed due to a lack of funds. The lack of funds has occurred not because they were not allocated, but simply because the work is going fast. But we need to further accelerate this work, because the underground is the main means of transport. I think that the reforms carried out both in the operation and construction of the underground go down well with our people. The suggestions from the ground also show that.

As always, we will continue to address the problems of the internally displaced persons at a high level this year. This year, at least 20,000 displaced persons will move into new homes and apartments. This process is already well under way. New settlements are built both in Baku and the regions, and we are doing this work with the highest quality.
The cleaning of Lake Boyukshor was mentioned here. The project is being implemented. This is a very large project, which is of symbolic nature. There are more than 10 contaminated lakes around Baku. The biggest and the most contaminated of them is Lake Boyukshor, and we have started with that. We will gradually clean this lake. We have divided it into two parts and may divide it in three in the future. At the same time, a road will be built. A dam is already being constructed. It will be useful for the municipal transport and at the same time it will be easier to clean up the lake in parts. I believe that by the summer of next year the first part of the lake will be commissioned. A clean lake covering an area of ​​300 hectares in the city center will be placed at the disposal of our people. The area around the lake will be used to create green areas, promenades and a boulevard. So there will be a large park and a lake for the city. This is also an issue of great importance from an environmental perspective and for people’s recreation.

In parallel with this, there are also plans to clean up Lake Zikh. Perhaps we should start cleaning the lake in the coming months. We have started with two lakes, but all the lakes will be cleaned in the coming years. Oil waste, sewage water and produced water had been dumped into these lakes for years. Today these lakes are a source of environmental catastrophe. They are poisoning our city. But we will clean these lakes and turn them into beautiful environmental projects, which will a very positive impact on the ecology of the city.

The cleaning of the Balakhani landfill, the creation of a plant and a waste disposal landfill there had a huge impact. There is no longer that harmful smoke which used to envelop the city in previous years. The air in the city is changing now. We have switched to the "Euro" standard. Cars below the "Euro" standard are no longer imported to Azerbaijan.

This too will have a significant positive impact because automobiles are the main contributors to air pollution. In addition, an upgrade of our refinery is planned. A project has already been submitted. I do not want to talk about it in detail at this point. Perhaps we will discuss it separately, but our plant is to produce gasoline of at least "Euro-5" standard and I have set the timeline: we must resolve this issue in three years.

Cleaning of oil-contaminated lakes and territories and land reclamation. If we look at the earlier appearance of the Bibi-Heybat bay, we can see how much work has been done. Trees have been planted and a park established there. It was a major disaster zone. A James Bond movie was filmed there. About 10 years ago it was filmed as a major disaster area. You can look at the plight of Bibi-Heybat captured in the film and compare it to its present. Now we are creating art and sport towns there. In preparation for the European games we are also building a large aquatic palace and outdoor areas there. There will be large swimming pools, recreation areas and playgrounds there. And after the games they will be available to our people.

This is the work we are doing. Therefore, environmental issues are given constant attention. In six months, more than 2 million trees have been planted both in Baku and the regions. I always say that this should be an ongoing process. The more trees we plant, especially on the Absheron Peninsula, the more we will contribute to public health.

In other words, the amount of work we are doing is so immense that it is impossible to describe it in a meeting format. Today I have identified only the key questions. I want to say again that the results of the first six months are encouraging. Our country is developing dynamically and confidently. The country's economy is sustainable. I am confident that we will successfully meet all our objectives before the end of the year. And I wish members of the Cabinet of Ministers continued success. Thank you!