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

Before the end of this year all the issues on the agenda must be fully resolved. There are sufficient funds in the budget. Infrastructure projects must be completed. In short, in 2014 we should and we will resolve all the issues on our agenda.

The public investment program must be fully implemented. I am sure that it will be. The implementation of the infrastructure projects is ongoing. In other words, there are no concerns in relation to these issues.

Before the end of the year we should implement another major project –the Shamkirchay water reservoir will be commissioned. It is one of the biggest projects implemented in recent years. Major investments have been made. A large water reservoir, a power station and canals are under construction on the river Shamkirchay. This will allow us the opportunity to expand areas under crops and open up new opportunities for farmers. This is a major project scheduled for opening before the end of the year. It is practically ready, with finishing work currently under way. In the near future we will celebrate its opening.

Next year's budgetis practically ready. Discussions are currently under way. It will be submitted to the Milli Majlis. The main priorities are known. We have repeatedly expressed our opinion on the matter. Social projects must be implemented in full. Of course, this refers to large-scale infrastructure projects ensuring the development of our country, including the projects of social infrastructure, the construction of schools, etc. In recent years we have built and commissioned about 3,000 schools. There are still schools that are in disrepair and unserviceable. Among social infrastructure projects, this issue, of course, will be given a higher priority.

We can say that modern healthcare facilities are created in all our cities, with some exceptions. They are either built anew or the central district hospitals built in previous years are renovated. There are only three or four cities in which hospitals are still not up to par. Next year and in 2016, work in this area will probably be finalized, and every Azerbaijani city will have a fine medical center fitted with modern equipment.

Among social and infrastructure projects I want to emphasize the construction of kindergartens. Recent years have seen tremendous progressin this area. A few years ago when we started to address this issueseriously, we were informed that the provision of kindergartens in Azerbaijan was only at 17 percent. The kindergartens built earlier were either in disrepair or, unfortunately, had been privatized and transformed into different facilities. Parts of the kindergartens were occupied by the IDPs. In short, it was a very serious problem, and it still is serious today. However, I can say that over the past two to three years the provision of kindergartens has risen from 17 to 42 percent. Dozens of new nurseries are built in Baku and the regions, and this process should be continued. These kindergartens were originally built so that their territory is quite extensive. Therefore, new buildingscan be constructed. New areas should also be allocated. Appropriate instructions on these issues have been issued.

We must try to ensure that the provision of kindergartens is 100 percent because social issues are successfully resolvedin Azerbaijan. At the same time, unemployment has declined sharply. At the moment, we can say that the vast majority of employees of new industrial enterprises and garment factories in the regions are women. Therefore, a lack of nursery schools leads to major problems. Additional stepswill be taken in connection with unemployment – weshould completely get rid of unemployment in Azerbaijan. Of course, both parents work in every family. In this case, there is a great need for the construction of kindergartens. In short,we must pay attention to this area in the state budget. On the ground, this is dealt with both by the private sector and local executive bodies. I believe that this work should be further accelerated.

Of course, special attention in next year's budgetmust be paid to military spending. I have repeatedly said that we live in a time of war, the war is not over, it continues. There is only a ceasefire. Therefore, issues relating to the acquisition of modern weaponry and precision-guided ammunition are and should be resolved. In recent years we have achieved a lot in this field. Our military hardware is demonstrated in exercises and parades,and meets the highest standards. The Azerbaijani army is among the strongest armies in the worldin terms of technical provision, and we have to continue this process. Appropriate instructions have been given. Some contracts have already been signed and new ones will be concluded as well. We need to organize military and technical provision at a high level.

In addition to this, military production is developing in Azerbaijan. In the last quarter of this year Azerbaijan hosted the first major international military exhibition. This is the result of the work carried out in Azerbaijan in recent years. The exhibition attracted great interest. Azerbaijan exhibited its military products. The world’s leading countries in this field also demonstrated modern weaponry and hardware. I want to say that our state budget must, of course, envisage relevant spending on local military production.

Of course, state investment projects and the investment program will be approved. I think that by the end of this year we have to approve this program in order to implement the investment projects next year, without wasting any time.

We also need to know that a certain part of our budget is provided by transfers from the Oil Fund. Oil prices have dropped, so the government should set the budget price of oil correctly. We have already talked about this. We will talk again so that there are no problems with budget execution. By and large, Azerbaijan has developed such a large economic and financial potential that I do not believe that a decline in oil prices can greatly affect us. But in any case, we must be prepared for that and make plans in accordance with this, because the global economy has not yet recovered from the crisis. There are other factors causing a decline in oil prices. We must consider all of them and prepare our investment programs accordingly. I want to reiterate that relevant instructions have been given. In the first place, social issues will be completely resolved – social security, military spending and infrastructure projects.

I am sure that next year inflation will be at a low level – in single digits. This will allow us to constantly improve the well-being of our people, because rising inflation and the depreciation of the manat may, of course, have a negative impact on people's lives. Therefore, the rate of the manat is stable and inflation is very low. These factors have a direct positive impact on the living standards of people.

We need to increase our export potential. A lot has been done in this regard. New opportunities are opening up. In particular, there are new opportunities for the export of agricultural products. We need to effectively use these capabilities. The work done in this area in the previous period and at the moment suggests that we will achieve this goal because reforms are under way. A modern approach should be applied to agricultural development. We provide equipment. Modern agricultural machinery is bought and imported from the state budget and the Contingency Fund of the President. The achievements of modern science should be applied in Azerbaijan.

I think that as a result of the implementation of projects related to land reclamation, the Takhtakorpu water reservoir and the Shamkirchay reservoir, which is scheduled for opening soon, tens of thousands of hectares of new land will be introduced into circulation. Of course, we need to plan the upcoming work on these lands because we are certainly thinking about what products will be cultivated there and what steps the government should take to make the best use of these opportunities. After all, tens of thousands of land plots will be irrigated, so unstable weather conditions and drought will not have a impact on us.

Modern processing enterprises are being established in Azerbaijan. Our agricultural products are supplied to world markets in a processed form. I want to say again that there are great opportunities for increasing our export potential now. We simply need to further enhance the export capacity by additional investments and further measures related to the development of entrepreneurship. Of course, we must provide the domestic market with products grown in Azerbaijan. Recent years have seen great progress in this area. We can say that we are providing ourselves with staple foods to the highest extent, except for grain. This, of course, is a very important factor in ensuring food security. Of course, we have to access our traditional markets with even greater volumes of products and also find ways to new markets.

As I said in my opening remarks, the development of the non-oil sector will remain a priority. I think the service sector currently plays a special role in this field in Azerbaijan. Tourism is rapidly developing, as evidenced by the experience of this year. This year we commissioned several fine and modern hotels. Tourism opportunities in the region are expanding. Five-star hotels are opening in the regions now. I personally attend all of these opening ceremonies, and I believe that there is great potential. We have to work even harder to attract foreign tourists. Today the world community receives sufficient information about Azerbaijan.

Various presentations, exhibitions, cultural programs, in particular, the activities related to the first European games, are held on a regular basis. We need to better promote the tourism opportunities of our country because we have beautiful nature. There is any kind of tourism in Azerbaijan. There are beautiful beaches, the Caspian Sea, mountains, forests, ski tourism. We already have the infrastructure. Airports, highways and beautiful five-, four- and three-star hotels are built in all our regions.

This year is the "Year of Industry", and special attention has been paid to the development of industrial production, of course. A number of plants, factories and industrial sites have been opened. In previous meetings I also noted that we need to ensure food security and become self-sufficient with food. Now we need to apply the same approach in relation to building materials. I believe that there is great development in this area. In other words, we are already self-sufficient with cement. The biggest cement plant commissioned this year has eliminated this problem. Thus, we have completely overcome the dependence on imports. At the same time, there are extra volumes in the production of cement and our export capacity will increase. Of course, such a thoughtful approach should be and is applied to any production sphere. We simply need to organize this business even better. Of course, we know what building materials are imported to Azerbaijan, and this area should be given a priority. We once applied a similar approach in relation to food products. We identified the foods imported to Azerbaijan, their volumes and share in domestic consumption. We prioritized these areas, allocated loans, mobilized farmers and entrepreneurs, and provided government support. Today we provide ourselves with precisely these products. A similar approach should be applied to building materials because Azerbaijan has enough raw materials and now even the industrial capacity. We need to provide ourselves and arrange exports to the maximum extent possible. Here we have in mind the development of aluminum, steel and metallurgy. There is great potential here too. As I said, we have already provided ourselves with cement by 100 per cent.

The establishment of industrial clusters should be continued in the future. I have repeatedly talked about industrial parks and do not want to repeat anything. The future development of Azerbaijan must be associated with the development of industry. It should also be noted that Azerbaijan currently has sufficient funds, and we need to attract public investments to the industrial sectors representing strategic importance for us. Of course, the Azerbaijan Investment Company should take on a greater part of this work, and by attracting foreign investors we will achieve even better results in this sphere.

Last month, the first phase of the new Baku International Trade Sea Port, the Ferry Terminal, was put into operation in Alat. I am sure that in the next two years the trade sea port will become fully operational. Thus, it will be the largest international trade sea port in the Caspian Sea. Its annual freight capacity amounts to 25 million tons of cargo and one million containers. It will be the largest port on the Caspian Sea. It is expected to increase the volumes of freight traffic across the Caspian Sea. The Baku-Tbilisi-Kars railway project is drawing to a close. The port is ready. The shipyard was commissioned in September last year.

During the recent Caspian summit in Astrakhan I informed my colleagues about this and said that they too can take advantage of these opportunities. It is no longer necessary to buy ships abroad. Our shipyard can build any ship. We need to establish coordination among littoral states at a higher level. There is also a great need for coordination between ports.

Air transport is also developing. New aircraft are being purchased. Last quarter saw a significant event – “Azerbaijan Airlines” have organized direct flights to New York. This is a great achievement. It is some kind of a quality sign, because the procedure for obtaining permission to fly to American cities is quite complicated and requires very high standards. Currently, Baku-New York flights are already carried out. This is a great achievement, as our citizens and foreign guests will be able to fly directly. At the same time, I want to say again that this is evidence of the high level of our airline.

Next year funds will be allocated from the State Oil Fund to improve the living conditions of the IDPs. Every year we allocate 300 million manats for construction work alone. Thousands of our compatriots are provided with new homes. Every year, 4,000 to 5,000 families, i.e. at least 20,000 people, move into new homes. Of course, this work will be continued.

As I mentioned, on 20 September we laid the foundation of the Southern Gas Corridor. It has a great symbolic meaning. We could conduct the groundbreaking ceremony on another day. But I thought that the "Contract of the Century" was signed 20 years ago, on 20 September, and determined the development of Azerbaijan. If it hadn’t been for resolute approach of great leader Heydar Aliyev at that time and if he hadn’t taken this wise step, it would be unclear how Azerbaijan would develop today. The signing and the successful implementation of the "Contract of the Century", as well as the construction of the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum oil and gas pipelines, are a historic achievement. This contract has allowed us the opportunity to improve our economic and financial capacity. I felt that the Southern Gas Corridor is a project of the 21st century, and it would be good if we conducted the groundbreaking ceremony exactly 20 years later, on 20 September. And so it happened. The foundation of the Southern Gas Corridor was laid in a ceremony attended by many senior government officials and its construction began. This is a great and historic event.

I want to say again that this is a project that will bring Azerbaijan great benefits in the coming decades, at least for a hundred years. Perhaps today we cannot entirely appreciate the extent of the benefit. When we were starting the construction of the Baku-Tbilisi-Ceyhan oil pipeline, we saw it only as a project, of course. But look at the scale of change this project has brought about. Our international cooperation has expanded and financial opportunities increased.

We have started to invest in foreign countries and fully ensured our own economic and energy security. Therefore, both during and after the construction of the Southern Gas Corridor, we may receive benefits that are difficult to imagine at this stage, but all of them will bring benefits to Azerbaijan because our gas resources are fairly large. This is known to all, because this information was disclosed earlier. This project will allow us to maximize the supplies of our resources to world markets and expand the scope of our coverage, as several countries are our partners at the present time. But the number of these countries may increase. So this project has great potential and, of course, will assert Azerbaijan as a very important country.

I have repeatedly said that our initiatives serve the deepening of regional cooperation. I have also said that Azerbaijan's role in the region today is so great that not a single initiative can be put forward without respect for our interests. This project will multiply our importance. Azerbaijan will become stronger and expand its influence. Of course, during this project coordination work with partner countries should be carried out at a high level. I have already talked about this with my colleagues. Perhaps in the coming months it is necessary to set up a coordinating council or a working group, so that these issues could be discussed with all the countries involved – transit and consumer countries. This project should be organized on the basis of high environmental standards.

Of course, international standards will be applied because we are paying great attention to environmental issues. The cleaning of contaminated areas, tree planting, the construction of a waste disposal plant, the implementation of drinking and sewage water projects in recent years have largely changed the situation for the better. As a result of new sewage projects, the release of wastewater into the Caspian Sea is being prevented today. Wastewater is sent to treatment plants. A major environmental project is currently under way in the Bibi-Heybat zone. Once it was an area polluted with oil. Today, a sports camp is under construction there and some events of the European games will be conducted there. Now it is a well-maintained territory. There are even drilling rigs there and production continues. Now we are landscaping the area around the oil rigs. Of course, we are implementing major environmental projects. The cleaning of Lake Boyukshor is also a historic achievement because wastewater and produced water was discharged into this lake for decades. It was a great environmental disaster right in the center of our city. Today, the process of cleaning the lake is under way. The first part will be ready by the summer of next year.

Therefore, environmental issues should be given constant attention because they are our life, our children's lives and the future of our nation. We need to protect nature and try to clean all contaminated sites. I can also mention the White City project. The White City is being created on the territory of the Black City. Here, too, there is a huge symbolic meaning. Business people used to come here from abroad, worked in the oil industry of Azerbaijan, made large profits and billions of revenues. But what did they leave behind? A black city! They left this environmental disaster to us. What part of the money these foreign oil barons earned was spent on environmental issues? Nothing was invested in the environment. They simply came here to make profit and they did make a lot of money. What did they leave to us? Only a black city!

Today the independent Azerbaijan is eliminating this environmental disaster. It is also quite symbolic because there will be a White City instead of the Black City. The White City will be one of the best urban development projects not only in the South Caucasus or in this vast region, but also globally. The contours of the White City are already discernible.

This is how we need to implement other projects as well. We have to attract business people here as well. I am aware that there is great interest in the construction of houses in Azerbaijan today – in Baku and elsewhere. This interest slightly declined once, but our economy is growing fast and this interest has increased significantly again. This work may be organized very well. If a person or a company wants to build a house, environmental measures must be taken as well. People should be resettled. I think that the time when space was provided for the construction of houses is now in the past. Those who want to build a house should turn to city or district executive authorities. The latter should provide them with space either on the site of former industrial plants and factories that are in disrepair or in places that require environmental measures.

We have done this in Baku. Look what we have created at the industrial sites that were once unusable. The Heydar Aliyev Center was built on the territory of a plant named after Lieutenant Schmidt. There was also an environmental disaster there. When I went to look at it, I was horrified: how can one organize production in such conditions? Everything was destroyed. Now some people have actually forgotten that there was a plant named after Lieutenant Schmidt there. Or let’s take the area where the Olympic village has been created. On the territory opposite the "Koroglu" metro station there were plants producing roofing slate and tubes. They also polluted the air. And now there is a beautiful Olympic village there. We have to go this way both in Baku and in all our cities and regions.
The White City boulevard is under construction now. It will be open to the public perhaps in a few months. Thus, from Bibi-Heybat, from the Flag Square in the direction of the city, work is also going on. From the sports camp to the White City, to the oil refinery, there will be a wonderful promenade – a boulevard of almost 16 kilometers.

In conclusion of my speech I want to say a few words about preparations for the first European Games. Work is progressing on schedule. All sports facilities are being renovated and built. Of course, a great focus is on transport issues. This work is also progressing well. The focus is also on security matters. We will conduct the first European Games at the level of Summer Olympic Games. I am sure that it will be the case.

Look at the representative sporting events and forums – the Humanitarian Forum and the Forum for dialogue among civilizations are held in Baku. We will now hold the World Youth Forum. Baku has hosted and will once again host the Davos World Economic Forum. So Baku hosts economic, humanitarian, sports and political forums. And it is no coincidence. It is evidence of the steady development of our country. In 2012, we held the "Eurovision" song contest with great success. People are still saying that Baku held arguably the most beautiful competition. Next year Baku will host the first European Games and in 2016 the World Chess Olympiad. In 2016, we will also host a "Formula-1" Grand Prix. This is a competition of global proportions which is even more interesting than the World Cup in football. And it will also be held in Baku. In 2017, we will hold Islamic Solidarity Games. In 2020, some games of the World Football Cup – both group stage games and quarter-finals – will be held in Baku. Quarter-finals will be held only in four cities – Baku, Rome, Munich and St. Petersburg. This is the level of Baku and the result of our work.

I am sure that by the end of the year all our goals will be achieved. We will complete 2014 and start 2015 successfully. Thank you!