Closing speech by Ilham Aliyev at the conference dedicated to the results of the second year in the execution of the “State Program on socioeconomic development of districts of the Republic of Azerbaijan in 2009-2013”

The Minister of Economic Development today provided extensive information on the work done. Speeches have been made by heads of executive authorities of four districts and businessmen. If all the heads of executive authorities had been given the floor, I am sure they would have also spoken about the work done because all our districts are undergoing rapid development. But due to time constraints, this is not possible. However, this is certainly not the only information I have about the work ongoing in Azerbaijan. I regularly visit districts, there is no district I haven’t visited. Every time I examine the work being done and issue further instructions. When I visit the same district next time, I am familiarized with the work done again, enquire about the way instructions are fulfilled. In other words, this process must be and is permanent, and state control is organized at a high level. At the same time, we should step up public oversight in Azerbaijan as well.

There is development in all districts of our country. In some places the work is more and in others less intense. However, it has already become an irreversible process. If we consider that our programs entail the development of all districts, the issues still awaiting solution will certainly be resolved in the next years. We must ensure that by 2013, when the Second State Program is completed, all our goals are met. If the Second State Program is implemented in full, the main economic, infrastructure and social issues we are facing will, in essence, be resolved.

Meanwhile, this year, i.e. before the end of it, we must fulfill all the tasks envisaged under the program. Investment will be continued. In 2011, we will continue the process of establishing a social infrastructure, building schools, medical facilities, Olympic centers. Attention will be paid to road construction. We can say that all our trunk roads, the construction ongoing there, have either already been completed or are nearing completion. The roads linking Azerbaijan with all neighboring countries will soon be completely ready. Thus, an issue very important to the development of our country will be resolved.

The heads of executive authorities of Astara and Tovuz Districts today provided information about the construction of rural roads. The construction of these roads follows a special instruction, resources have been allocated from the Reserve Fund of the President and roads are now under construction there. These roads are of great importance, they link dozens of villages that are home to tens of thousands of Azerbaijani citizens, and this process must proceed even faster. Such projects are being implemented not only in Tovuz and Astara, but also in other districts. Some time ago, a road connecting several villages was put into operation in Gusar District. Now, a project is under way on extending this road. Roads are under construction in Sabirabad, namely those connecting the villages affected by floods. The same holds true for other districts. Additional funds must be envisaged in this and next year’s budgets for the construction of rural roads. Some funds will probably be allocated from the Reserve Fund of the President, but the bulk must be provided for in the state budget. We must ensure that the main rural roads in Azerbaijan meet normal requirements in the coming two years, especially the roads linking several villages with a large population. I can say that 5,200 kilometers of roads were built in Azerbaijan in 2004-2010, and let me repeat that this process must be continued. A lot still remains to do. 

Of course, in order to ensure comprehensive development of districts, we must, and as a matter of fact we do, implement other infrastructure projects. Ten power plants have been built in the country in recent years. Not only do we provide ourselves with electricity now, we also export it in large volumes. Azerbaijan exports electricity to all neighboring countries – Russia, Iran, Turkey and Georgia. In other words, such opportunities exist, and this shows that the work done is paying off. Azerbaijan exports oil, gas, and now electricity. There was a time when electricity supplies to our districts were intermittent. That period is already history. We have created new power generation capacities. We are currently engaged in creating alternative energy sources. The use of renewable energy is under special attention in Azerbaijan, and preliminary work has already begun. I do hope that the construction of hydropower plants will be continued in 2011, while, at the same time, the process of installation of solar panels will be accelerated.

The process of gasification is under way throughout the country. The task has been set that all issues relating to gasification must be resolved this year and before the end of next year, so that 90-95 per cent of the population has gas supply. If we consider the fact that the prices of gas and electricity in Azerbaijan are regulated by the state – the price of gas is much lower than in neighboring countries and it will remain stable – the gasification process is, at the same time, of great social significance. I should note that the investment in the gas infrastructure is not commensurate with the resources fetched by gas consumption, i.e. gasification is not of business or commercial nature. This is a socially-oriented initiative. We must do that because all our districts and villages must receive gas. Considering that Azerbaijan is exporting gas to world markets today, then, of course, natural gas supply within the country should be organized to the maximum extent possible.

Projects related to drinking water and sanitation are on our agenda today. This is a very important issue. Considering the great progress made in the field of gasification and electricity supply, I do hope that we will see profound changes in this area this year. The talks held with international financial institutions are bearing fruit. In some districts we have launched drinking water and sanitation projects, in others preparations are under way. While visiting districts, I always enquire about the progress of drinking water and sanitation projects, whether or not they have commenced. Where there are delays, we should pay special attention, and these projects must be completed in each district center before the end of 2012 at the latest. It will be better if they are completed even earlier because, I repeat, most of the financial issues have now been resolved. The work on the ground must simply be organized a little more expeditiously.

We are addressing issues of land reclamation. The importance of irrigation issues is increasing even more, especially when you consider that we need to allocate new acreage for the development of crop production. Certain work has been done in this area over the past few years. After the construction of the Shamkirchay water reservoir has been completed, tens of thousands of hectares will be irrigated. This will create additional opportunities for agricultural development. We are also implementing other projects and need to expand our acreage.

Along with this, it is very important for us to secure extensive agricultural development. But we also need to be attentive to the realities. No matter what methods we may use, the commissioning of new acreage will never lose its relevance. The instructions I issued some time ago are now being implemented. We must start setting up large grain production farms. At present, relevant government agencies are identifying new areas. I think we should certainly approach this issue comprehensively. We should not confine ourselves to just identifying such places. The whole infrastructure must be created. First of all, irrigation, other infrastructure projects, machinery, fertilizer, seeds, etc. The head of the Saatli district executive authority has said that new plots of 9,000 hectares had been defined in the district. This is a very good indicator. I think that in general we should commission at the very least 100,000, maybe even 200,000 hectares of new land for sowing.

Thus, we will develop grain production, which is the main sector for our food security, and this will play a major role in securing our self-sufficiency. As you know, comprehensive measures are being taken to develop agriculture. Hardware is being purchased and leased, agricultural services established, subsidies provided, fertilizer, fuel, etc. made available on concessional terms. In subsequent years, especially this year, more attention should be paid to these issues. Measures are being taken to develop livestock breeding. Purebred cattle is being purchased. Extra funds have recently been allocated again for the purchase of pedigree cattle abroad, so that agriculture could develop comprehensively.

I think that, along with grain production, we also need to pay special attention to the development of viticulture. It is no secret that through the efforts and on the initiative of great leader Heydar Aliyev, viticulture developed very intensively in Azerbaijan. In 1969, when he became the leader of Azerbaijan, grape production was 300,000 tons. But in his time, as a result of the work done, this figure rose to 2 million tons. That served the development of the Azerbaijan Republic, but in the first place it had a positive impact on improving people's lives.

Thanks to the development of viticulture, people living in the countryside significantly improved their living standards.

Currently, grape production in Azerbaijan is at a level of 120,00 tons. Of course, there are reasons for that and we know them. In the late 1980s, Soviet leaders launched an anti-alcohol campaign and for some reason it dealt the biggest blow to Azerbaijan. All the vineyards in Azerbaijan were destroyed, people were left high and dry and were deprived of the source of income. Azerbaijan’s viticulture, which was established through great effort and hard work, was in shatters. We all know that Azerbaijan and Azerbaijanis were discriminated against. Grape production was developed not only in Azerbaijan, but it did not sustain so much damage anywhere else. Ukraine, Georgia, Armenia, Moldova – viticulture was developed in these republics too. In other words, viticulture was a traditional activity there even before Azerbaijan. But their vineyards were never destroyed, while the biased and negative attitude towards Azerbaijan led to the destruction of viticulture here. 

We saw the same attitude later, in 1988. The leader and the entire leadership of the Soviet Union joined the game started by Armenian nationalists. In fact, the activities of Soviet leaders played a crucial role in instigating the Nagorno-Karabakh conflict. Throughout history, Azerbaijan and Azerbaijanis were treated unfairly, there was a biased attitude towards us. We have always faced and are still facing double standards. This policy used to come from Soviet leaders, we saw this particularly clearly in the late 1980s, while now we see it from other places. This shows one thing: we must become even stronger, pursue our policies more confidently, build a bright future for the Azerbaijani people, hope and rely only on ourselves and govern the country only by the will of the Azerbaijani people. Our current realities show that we have achieved great and historic successes in this. Azerbaijan, as an independent state, is enhancing and strengthening. Azerbaijan, as an independent state, is conducting its own independent policies. Some don’t like the fact that we are conducting independent policies, some are annoyed, and willy-nilly there are different attempts, at times provocative, to put pressure on Azerbaijan. We must know the reason for this. And the reason is that we are conducting an independent policy and Azerbaijani interests are above anything else for us.

This is a historic moment. We must remember that.

But I want to say that we may adopt a special program on the development of viticulture, attract financial resources, take all the measures necessary to develop viticulture through a special program. It is well known that the development of viticulture is a long process. We cannot achieve that by providing loans for one, two and even three years. Here we probably need to think about long-term loans. It is possible to allocate additional resources or set up a special fund for the development of viticulture where long-term loans could be arranged, for example, for 10 years. We need to identify areas, make further effort to create and develop large farms. In any case, the Ministry of Economic Development should do all the preparatory work on these issues and report on this shortly.

Along with this, we should also pay great attention to seed production in our country. Work in this direction has now been started. Recently I examined the work of a major seed plant, and this sector has great prospects. This is a profitable and at the same time necessary sector for us. According to the information provided to me then, we can now provide ourselves with seeds by about 30 per cent. We must ensure that we can provide ourselves with seeds by 100 per cent. To do that, we must either expand existing plants or build new ones, or both must proceed in parallel. In any case, this is a very important sector for agricultural development. This year and afterwards, we should pay special attention to that.

Certain funds have been allocated in recent years for the construction of cold-storage warehouses through the fund on the development of entrepreneurship, and we saw the wonderful results of that initiative immediately. Cold-storage warehouses have been built in all regions. In the coming years, perhaps, we need to build new warehouses. We can see the results of this wonderful initiative. The harvested crops are stored there and do not spoil. This benefits both the farmers and citizens, as it allows us to keep consumer prices at a normal level. In the coming years, we should continue to pay attention to this sphere. But I believe that modern refrigeration plants and cold-storage warehouses of this level were never built in Azerbaijan in such a short time, in a matter of 1-2 years. We have also built grain storages. The granaries built are already meeting our needs. If additionally required, extra loans will be allocated through the National Fund on the Support for Entrepreneurship.

I have already indicated that AZN 125 million will be provided through the National Fund on the Support for Entrepreneurship this year. Of course, these resources will work, create new jobs and we can further encourage local production.

In general, over 900,000 new jobs were created in the country in recent years starting from 2004, and I can say that this program has played an important part in significantly reducing poverty. As of the end of 2010, poverty level in Azerbaijan was 9.1 per cent. If compared with 44-49 percent in previous years, this is a great achievement. But even 9.1 per cent is too much even though poverty levels may be higher even in developed countries. But we must note, as we should treat statistics fairly, that their criteria are certainly higher. Those considered poor there are not considered as such here. This is also the case. Therefore, if we are modernizing our country and our strategic course is to create a strong state, then we certainly need to know all these criteria. We know the criteria for developed countries. Our goal is to become a developed country. I think that in the first place we should deeply study the experience of EU countries. We have very good and effective bilateral relations with European Union members. These relations are based on mutual interests and mutual respect. In my opinion, the experience of the European Union is the most advanced in the world and the criteria existing there in the economic sphere, in social security and political reforms are, of course, at the highest level. We must and we do study this experience, so that all criteria in Azerbaijan are at the level of developed countries.

I think we should start the construction of a fertilizer factory in Azerbaijan. It is high time we did that. In fact, we should have done it long ago. Certain researches were conducted, options analyzed. I think that a modern fertilizer factory that we need and that would address our needs must be built in Azerbaijan this year. Appropriate instructions have been issued in this regard, and I think that this factory will be of great importance, including for agricultural development.

In my opening remarks I noted that the products made in Azerbaijan must be of high quality. Processing enterprises are being established in the agricultural sector. The vast majority of the enterprises being set up meet international standards. We must apply the most advanced technologies so that not to have problems in accessing external markets afterwards. Currently, neighboring countries are our biggest market. This is a big market and it is acceptable and beneficial – both in terms of distance and in terms of ease of access. We have established good businesslike relations with all our neighbors, which, of course, has a positive impact on the business sector. However, we must ensure that our products are available anywhere in the world, especially when we consider that the quality of our agricultural products is very high and, in comparison with products from other countries, ours are natural. Such products are now called “organic” or, speaking our language, natural. This means good and clean produce without fertilizer and chemicals. People coming from foreign countries and eating our fruits and vegetables in Baku understand what real fruits and vegetables should taste like. That is our great advantage, and we can deliver environmentally friendly products to world markets. We simply need to have processing plants, packaging, as Shahin Mustafayev said today, and a modern approach. This is our wealth and we must use it rationally.

The state should, of course, provide support in accessing external markets, and it does. When visiting foreign countries, I often take a large group of business people with me. There, we also conduct business forums to promote Azerbaijani businesses in partner countries and create conditions for our business people. They too must participate, and they do now, in various tenders conducted in these and other countries. Our companies now operate in some countries. My colleagues, heads of different countries are informing me of their activities. I am very pleased that the activities of our companies are positive and there is a positive public opinion about them in these countries. We must focus on ensuring that state support becomes even stronger so that our companies could access foreign markets even more actively.

Also being discussed is the possible establishment of Azerbaijani houses and trading houses in foreign countries. I believe that Azerbaijani houses must be set up in major cities of developed countries. A special plan is being prepared to do that. I think that the resources of the State Oil Fund of Azerbaijan must also play a role in this, especially when you consider that there are proposals on diversifying the oil fund disbursement. Some funds may be invested in real estate, which will fetch more revenue. Besides, we cannot keep all our assets in a single financial instrument. In other words, funds may come from the Oil Fund and the process of establishing Azerbaijani trading houses, houses of Azerbaijani culture in major cities of developed countries must begin. I think we should start this work this year. We must chose certain places, this would be an effective initiative in terms of trade, and Azerbaijan will demonstrate its capability even more clearly. At the same time, citizens of foreign countries will receive complete and accurate information about Azerbaijan, this will become one of our propaganda tools. Along with this, by channeling some of the State Oil Fund resources into this work, we will invest in real estate. Therefore, by implementing this initiative, we will meet several goals. 

The lands suitable for agricultural purposes should be used for the intended purpose. Central and local executive authorities and municipalities must ensure rational use of these lands. Those breaking the law in this area will be severely punished. Subsidies are provided to encourage agricultural production, and this procedure must be simplified. There is a great need for that. We must ensure food security, it is necessary to fight monopolistic trends. At present, this fight is not at the desired level. With regard to food security, we must take additional measures to develop production of foods that are not produced in the country at the proper level, and to establish new enterprises. The figures I have show that we provide ourselves with some products, while in certain cases we depend on imports. For example, 93 per cent of meat is produced in Azerbaijan, we can say that the situation is quite good here. Production of poultry has increased, we can now provide ourselves by 80 per cent. 85 per cent of milk and dairy products are produced in Azerbaijan. As for vegetable oil and butter, we rely on imports. We provide ourselves with sugar by 150 per cent, we even export it. Therefore, in areas where we do not depend on imports, we must avoid artificial price hikes.

Therefore, I mentioned in my opening remarks that the rising oil price will inevitably lead to the appreciation of all imported foods. It is hard to fight this, but it is unacceptable to artificially increase the prices of agricultural and food products manufactured in Azerbaijan. Those doing that must be brought to account, while the Ministry of Economic Development and other structures must exercise rigorous control over prices on consumer goods. We must take administrative measures, but at the same time, anti-monopoly measures will be the best step. Work in this direction must proceed more rapidly. Of course, we provide ourselves with vine crops, fruit and vegetables by 100 per cent and more.

It is necessary to take additional measures to improve the business environment in our country. At present, the overall situation is positive. But there are drawbacks too. The business environment in Azerbaijan should be at the level of developed countries. There is nothing to invent, everything must be the way it is there. We know their experience and should apply similar practices. All government agencies should work actively to improve the business environment, to eliminate the shortcomings. We are aware of these drawbacks and shortcomings. We simply need to do all this work correctly.

The process of business development and creation of new enterprises is progressing fast in our country. Of course, new enterprises should employ qualified professionals. This has been noted by a representative of the Sumgayit industrial park today. This is a very correct idea. The process of professional training in Azerbaijan should go even faster. Appropriate instructions to that effect have been issued and the Ministry of Education is dealing with the issue. The process of establishing vocational schools and bringing them up to date should go even faster. Along with this, various agencies should arrange training courses. We need both technical experts and managers. Everything in foreign companies is done by management these days. A person may work in one sphere today and in another tomorrow. If he is a good manager, he can work anywhere. This principle hasn’t gained sufficient momentum here yet. It is considered here that if you are a petroleum specialist, you should deal with oil all your life. If you are in power engineering, you must work in the energy sector. If you work in gas production, you must deal with that. This approach may have been justified in the past, but not today.

The experience of leading transnational companies shows that someone heading an oil company today may be at the top of a telecom company tomorrow, and then manage a major food manufacturer. This must be the case here too. Therefore, we must pay great attention to training professional managers. The demand for managers will gradually increase because the economy is developing so rapidly and so many new businesses are emerging that, as I know, in some cases managers are invited from abroad. I don’t mind that, it is natural. Azerbaijan is part of the world community. Those coming here for work certainly see only hospitality. But we need to train our own personnel as quickly as we can.

One of the most important issues for our country, including the development of private enterprise, is the strengthening of the fight against corruption and bribery in Azerbaijan. I already spoke about this at a Cabinet meeting earlier this year and appropriate instructions were issued. I can now say that significant processes pertaining to this issue are under way throughout our country. We are seeing the first positive results and must ensure that such results become even more noticeable, even more efficient. This is not a one- or two-year process, this is not a campaign, it is our conscious choice. If we really want to see Azerbaijan as a modern country, see development in all areas, we must wage serious struggle against negative phenomena. Corruption and bribery are a great evil, a deep wound and a cloud on our reputation. We must ensure transparency in all areas. Of course, we are and will be taking administrative measures. Punishments are and will be applied. At the same time, we must carry out structural reforms in such a way as to completely eliminate corruption and bribery. That is the purpose of the resolutions I have signed recently. In other words, we should use structural transformation and institutional methods to step up the fight against corruption and bribery. But, of course, by conducting structural transformation only, we cannot achieve the desired result. Therefore, all government agencies, all public companies, local executive authorities, central executive bodies must know that every public officer has to work so that never to be ashamed to look people in the eye. 

I want to say again that we are already seeing the first results of serious fight against these evils, and I do hope that we will see even more impressive results in the near future. I want to appeal to the people of Azerbaijan again. I have already done this once, and that appeal produced excellent results. Myself, the Presidential Administration, is receiving letters, both expressing thanks and complaints, from all regions. This direct link has always been open and will remain as such. We should all strive to make Azerbaijan a modern state, eliminate all negative phenomena that do not suit our country, pull it back and impede its development. We have wonderful opportunities, great prospects – a strong state, a strong economy, strong social policies, infrastructure projects. Azerbaijan’s economic development remains unprecedented in the whole world. In a short period of time, over seven years, our economy grew by 2.8 times. The poverty level has dropped 4.5 times, around 900,000 new jobs have been created. There is creation, improvement, construction work everywhere, Azerbaijani citizens live in stability and security. We have the lowest crime rate. Some 30-35 crimes a day are committed in Azerbaijan, a country with a population of 9 million people. This is several times less than in other countries. Hence, there is security, stability, improving welfare. At the same time, there are negative phenomena, bribery, unfounded claims, which undermine our society from within. In some cases people are being bullied, there is racketeering and unreasonable demands. This is unacceptable! We are trying to provide good conditions for people to live well. Over 500,000 people in Azerbaijan receive social assistance from the state. Over 100,000 families receive monthly assistance of AZN 106 from the state. We are giving this money to the poor, they must be able to live. All people must live and live well. True, this depends on the person. There are all the opportunities in Azerbaijan. Those who have skills, knowledge and opportunities live better. This is the case everywhere. Serious work is and will be carried out regarding these issues. Everyone must know this and make conclusions for themselves.

This year has been declared the Year of Tourism in Azerbaijan. Five five-star hotels will be opened in Baku alone. Recently, I have attended the opening of two beautiful modern hotels in Naftalan. Two days ago I was familiarized with the construction of the Shahdag summer and winter tourist center in Gusar District. Beautiful hotels are under construction there as well. We have excellent conditions and great opportunities for the development of tourism. Modern hotels and tourist complexes must be and are built in every region. I believe that in 2011 this work will proceed very rapidly. Thus, both our citizens and foreign visitors will be provided with excellent services.

Our country is pursuing the policy of industrialization, and further measures are required for the development of industrial production. Azerbaijan has traditionally had several industrial centers. Currently, new industrial enterprises are being established in these centers, and we must turn several Azerbaijani cities into powerful industrial centers. First of all, I am talking about Sumgayit. Sumgayit was once established as a petrochemical center. Now the petrochemical industry is being revitalized, work is returning to normal levels, reforms are under way. At the same time, Sumgayit is turning into a modern industrial city. The Sumgayit industrial park, other enterprises are being established. Therefore, Sumgayit is emerging as a new and modern industrial city. There are large plots of land there. There are factories built in the past which are not functioning now, there is professional workforce, the railroad, the town is not far from Baku. Therefore, Sumgayit must develop as an industrial center of our country.

At the same time, Ganja must also develop as an industrial center. A modern industrial center must also be set up in Garadag District of Baku. Industrial production should certainly be and is being established in other cities. But, in my opinion, it is first necessary to establish these three centers, and we must approach this issue systematically and comprehensively.

This year is the Year of Tourism, but this does not mean that the Year of the Environment is over. Every year must be the Year of the Environment. A lot was done last year – trees were planted, oil-polluted ponds cleaned up, drinking water projects implemented. Although this year is one of tourism, the Year of the Environment should be continued this year, and all local executive bodies should work as they did last year. If we consider the fact that the people of Azerbaijan treated this issue with a great enthusiasm, this work will be continued.

In other words, much still remains to do, programs are being implemented. Most importantly, we work on the basis of programs. Each sector, each region, each district has a specific program, and they are being implemented. We occasionally meet in this expanded format or during my visits to regions, and discuss issues. This is an ongoing and vital process that allows us to solve problems, explore, enquire and analyze problems, identify solutions, attract financial resources, technical capabilities and professionals, and take all the necessary steps to meet our goals.

I have no doubt that these remarkable trends will be further strengthened in Azerbaijan in the coming years, that our country will become stronger and more powerful, while the people of Azerbaijan will live better with every year. Thank you.