Opening speech by Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in nine months of 2015 and objectives for the future

Today's Cabinet meeting will discuss the socioeconomic results of nine months. I can say that the Azerbaijani economy has been developing successfully this year. This in itself is a good indicator, because the developments unfolding in the world and the region are obvious. Both the region and Europe are in crisis – economic, military and political. Under such circumstances, economic development, of course, is a huge success. There is one reason for that. It lies in the fact that Azerbaijan pursues a thought-out and independent policy. We are going down our own path. It is a path of development and progress, and we have made great strides on this journey.

Azerbaijan has achieved stability. The Azerbaijani people live in security and prosperity. Civil unity and accord are strengthening in Azerbaijan. All our people are rallied around one goal – to strengthen Azerbaijan, to further enhance stability and to continue socioeconomic development.

Of course, an independent policy also creates us certain problems, because today's world is dominated by polarization. This process is under way. Large countries want to expand their sphere of influence, and the fact that there is an independent and principled country that has its own position and is not afraid of anyone certainly annoys them. But this should not worry us. I do not pay attention to that, because the main thing for me is the security, development and stability of our country. Therefore, Azerbaijan will continue to follow the path of independence.

The world today is already talking about an Azerbaijani model of development. Our experience in the political sphere, in the regulation of international relations, in domestic development and in the issue of multiculturalism is also studied. In addition, I believe that our model of economic development can also be attractive for many countries today, because we are going along the path of diversification. The country's economy is already diversified. The non-oil sector accounts for about 70 per cent of the gross domestic product.

We have managed to rise to this level as a result of reforms carried out in recent years. Independence, an independent policy and national interests – this is the main task, the main issue for us. We will continue to defend the choice of Azerbaijan despite all the pressure and, in some cases, provocations. We will not deviate from this path. Our socioeconomic indicators once again confirm that we are on the right track.

In nine months, the Azerbaijani economy grew by 3.7 per cent. If we consider that we have achieved this at the expense of the non-oil sector, it is a very high indicator. In general, the regional processes, the bloody clashes and the economic recession, of course, inevitably have a negative impact on our economic development. In addition, the sharp fall in oil prices since the beginning of the year from $100 to 50 and lower has certainly had an adverse impact on our revenues. Despite this, as a result of the reforms carried out, Azerbaijan's economy is still developing. I believe that in the current conditions 3.7 per cent is an excellent indicator. The most gratifying thing is that our non-oil economy grew by more than 6 per cent, which, as I have said, is the result of reforms.

Industrial production has increased by 2.1 per cent and non-oil industry by more than 10 per cent. This, too, is a very positive indicator attesting to the successful implementation of the industrialization policy in Azerbaijan. The task we set a few years ago is being fulfilled. The future economic development of Azerbaijan will be linked to industrial and agricultural production. Therefore, the growth of the non-oil industry by more than 10 per cent both pleases and inspires us, of course. We have to go down this path. Additional measures will be taken to stimulate the development of industry. We will discuss this later.

This year has been declared a Year of Agriculture. I am glad that in the Year of Agriculture our agriculture has achieved a growth of 6.7 per cent. This has been facilitated by reforms ongoing in the country, as well as the support provided to farmers by the state, subsidies, technical support and, in general, our public policy. The establishment of large farms has also contributed to major changes, particularly in the area of crop production.

Inflation in Azerbaijan in nine months has been very low – 3.7 per cent. Population incomes have increased by 5.8 per cent. Thus, population incomes, as it happens every year, are ahead of inflation. This means that real incomes grow every year. This happens despite the fact, as I said earlier, that this year remains difficult for the country and for the region.

The country's economy has received investments in the amount of $16 billion from various sources. Of these, $9 billion is domestic and $7 billion foreign investment. This is also an excellent indicator, because the world today is experiencing a shortage of finance and liquidity. Many countries, including Azerbaijan, are trying to attract more investment. We are also investing major funds in our country. At the same time, Azerbaijan is considered an attractive country for foreign investors. We should try to improve the investment climate, and additional measures will be taken in this regard.

This year, a number of successful projects have been implemented in the social sphere. I should note that the process of creating a social infrastructure is under way. Although our expenses are naturally reducing, we have allocated a fairly large amount this year to create social infrastructure. These funds have helped us to build or repair 34 schools, 26 kindergartens and 11 medical institutions in the country in the first nine months. This shows our intentions and our policy. I have repeatedly said that the focus of our policy is on the citizens of Azerbaijan. Therefore, the social sphere will be in the spotlight as a priority area next year.

I believe that very positive changes have taken place in the field of social assistance. Transparency is being provided. Due to these measures and reforms, this sector is worrying people less. We all know that there were numerous complaints related to this area in previous years. The new system, transparency and social justice have eliminated most of the complaints.

I should also note that thanks to the transparency, the number of people receiving targeted social assistance has dropped by 16 per cent, because the persons not eligible for targeted social assistance on any criteria are not getting it. Those really in need are receiving it, and they are paid more. Today, targeted social assistance is provided to about 500,000 people, or 114,000 families. Each family receives assistance in the amount of 153 manats a month on the average. This is an excellent indicator. I am confident that as a result of poverty reduction in the coming years, the number of people in need of social assistance will reduce further. Our goal, as we declared many years ago, is to completely eliminate poverty as a phenomenon in Azerbaijan. We need to eliminate this social evil. Poverty is at a low level in Azerbaijan – at the level of 5 per cent. It should not exist, and I am sure that we will get very close to this in the coming years.

Quite a lot has been done in the infrastructure sector and in the implementation of infrastructure projects this year. Naturally, as a result of reduced oil prices, our revenues have declined, and so have our expenses. We use only our own resources. We are not inclined to external borrowing. After the depreciation of the manat, our external debt increased because foreign debt is calculated in US dollars. Whereas before the depreciation our foreign debt amounted to about 7-8 per cent, now it has increased to 11-12 per cent. Not because we took additional loans, but because the manat has depreciated. Twelve per cent is also a great indicator. In some developed countries this figure is above 100 per cent. We want our foreign debt not to exceed 10 per cent. To achieve this, we need to build our work only on the basis of domestic resources. Therefore, we must envisage expenses in accordance with what we earn. Reasonable work has been done in the implementation of infrastructure projects. Projects of rural roads, drinking water, sewage, projects related to gasification – all this has been implemented this year, and my regular trips to the regions allow me the opportunity to witness this wonderful change and development.

This year we have created 87,000 jobs, of which 67,000 are permanent ones. This is also a great indicator. The process of job creation should be carried out continuously. I have repeatedly spoken about this, and we must build our economic development model in accordance with this, because economic development, stability and well-being of the Azerbaijani people have contributed to positive demographics. More than a hundred thousand people are born every year, which means that we will certainly need to take extra measures to create jobs in the future. Therefore, this area should also have a new development strategy. I am sure this will be the case.

The jobs created in the regions serve comprehensive development of the national economy, of course. But I should also note that although 67,000 permanent jobs have been created in nine months, about 30,000 jobs have also been closed. This is also a reality. We need to know this reality. We must conduct a serious analysis in order to ascertain the reasons for this process. In fact, it is a natural process. As is the case in any other country, jobs are created and closed in Azerbaijan. We have always registered a positive balance, which is still in evidence today. The creation of 67,000 permanent jobs in a year of crisis is a good result. If we subtract the number of closed jobs, it means that about 40,000 jobs have been created. However, we need to analyze the closure of jobs as well in order to find out reasons for these processes. There may be both objective and subjective reasons. We will talk about it today.

Transport sector is of great importance to the country’s economy. As you know, this sector has received perhaps the biggest funds of all infrastructure projects in recent years, because our geographical location necessitates the creation of a modern transport infrastructure within the country. At the same time, it is necessary to expand our transit opportunities, which should bring us even larger political and economic dividends.

Further development of the transport sector should be even more thoughtful. Today, there is a tough competition for transit cargoes. New transit routes are opening up. Countries of the region are in competition with each other. This is natural as long as it is a sound competition. Azerbaijan should not be a passive observer here. Sometimes we wait for someone to knock on our doors and ask us for permission to transport goods through our territory. We have to be proactive, determine the cargo and offer good conditions. After all, it is a very serious matter. At the end of the meeting, I will address the issue more widely.

I want to note that this year has seen very significant events for the expansion of our transit opportunities. In August, the first container train arrived in Azerbaijan from China through Kazakhstan. A section of the Baku-Tbilisi-Kars railway for which Azerbaijan is responsible is ready for use now. As far as I know, work in Turkey is drawing to completion. According to the information provided, this line should be ready in Turkey next year. Therefore, all relevant agencies, of course, should work in a coordinated manner. This line will bring us huge dividends. At the same time, there are good results related to the North-South transport corridor, which will further enhance the geo-political and geo-economic importance of Azerbaijan.

In nine months, we have done a great job and taken steps to establish the Southern Gas Corridor. As you know, the Southern Gas Corridor was initiated by our country, and significant steps aimed both at the development of the Shah Deniz-2 field and the implementation of the TANAP project have already been taken. We have tried and will keep on trying to make sure that the project is implemented in a timely manner. We should try to make sure that an important part of the TANAP project – Azerbaijan is the key shareholder and the responsibility rests on us – is put into operation in a timely manner, in 2018.

Azerbaijan, of course, is a shareholder in other projects – Shah Deniz-2 and TAP, but we are not the main shareholders. Therefore, the main responsibility for operatorship rests on other organizations. As far as TANAP is concerned, Azerbaijan is the main owner. This project being our responsibility, I am sure it will be implemented in a timely manner.

Army building is an area that is always in the spotlight. We always pay great attention to this sphere. This is natural, because Azerbaijan is in a state of war, the war is not over and the Armenian-Azerbaijani Nagorno-Karabakh conflict is not a frozen conflict. This is clear to everyone, including the mediators dealing with this issue.

Army building will be a priority area next year too. This sphere will receive as much money as necessary. The process of purchasing and manufacturing of new machinery, weapons and ammunition is currently under way. At the same time, military units and bases are built at the highest level. This year, we put into operation a large naval base. A new infrastructure is emerging in the regions close to the line of contact. Our fighting capacity is increasing. The situation at the contact line is no secret to the Azerbaijani public. We have full advantage, are dealing crushing blows to the enemy and giving adequate responses to all of the enemy’s provocations.

Yet another enemy provocation was foiled last month. A major provocation was prepared against us and many saboteurs were mobilized for an attack on Azerbaijani positions. Our army stopped that provocation. As a result of a pre-emptive strike, the enemy suffered heavy damage and many of the invaders were eliminated. Of course, the Armenian side, as always, immediately raised a hue and cry. But there arises a natural question: on what territory were the occupiers killed? In Armenia? No, they were on our lands, on occupied lands. The question is what they were doing there? In fact, the vast majority of the people killed there were citizens of Armenia, not even the residents of Nagorno-Karabakh. In other words, the Armenian army conducts an aggressive policy on our lands. This is as clear as day. Unfortunately, the international community and mediators do not want to see that. They fail to send serious messages to the invader. This is why they have got out of hand and resort to various provocations against us. But their provocations fail time and time again. Just like in November of last year when a helicopter that attacked our positions was destroyed. In September this year, they also suffered heavy losses. And we will punish them every time.

We must and we will restore our territorial integrity. The Nagorno-Karabakh conflict must be resolved on the principles of international law. The territorial integrity of our country is no less important than the territorial integrity of any other country. The issue must be resolved within the framework of international law and the territorial integrity of Azerbaijan. We are strengthening our economy and building up our army. We will take the necessary action at any time.

The Armenian dictator is even making statements that completely contradict the official position of Armenia. He declares that Nagorno-Karabakh is an integral part of Armenia. First, Nagorno-Karabakh is historical and native Azerbaijani land and an integral part of Azerbaijan from the standpoint of international law. This is recognized by the entire world community and the United Nations, and no country considers Nagorno-Karabakh as part of Armenia, does not accept and never will accept it as an independent entity. Therefore, this strange and irrelevant statement, to say the least, was apparently made in a very tense psychological state. It exposes Armenia as an occupier and disgraces its leaders. Everyone should be responsible for what he says today, especially someone holding a high public office. But one can hardly expect anything more from the junta, because the current Armenian government consists of war criminals who committed the Khojaly genocide, those who were heavily involved in the policy of ethnic cleansing carried out against the civilian population during the occupation of Azerbaijani lands. It is impossible to expect anything more from them. However, it is also true that the ruling Armenian regime and dictatorship has become a threat to the Armenian people proper. The Armenian people can no longer stand it either. They are fed up with this criminal and corrupt regime. There is a huge resettlement from Armenia. So much so that they are seeking salvation in Azerbaijan. They are coming to Azerbaijan. Look at how the regime has got out of hand, at what dirty deeds it is committing against its own people. Even today, people migrate from Armenia to Azerbaijan and live peacefully here. There can be no confrontation, no misunderstandings on ethnic or sectarian grounds in Azerbaijan.

Azerbaijan is a strong country that has achieved great progress in economic and political spheres. Azerbaijan is playing a very positive role in regional security. Azerbaijan is a stabilizing factor. No project can be implemented in the region without our participation and consent. Our economic and military potential multiplies our strength, and today we are in control of the situation on the contact line. We will gradually become even stronger, while Armenia is weakening. There is no room for development in Armenia. There are no objective factors for the development of Armenia under this dictatorial regime.

We will go our own way. We will meet all our goals by the end of the year. I am confident that we will successfully complete next year too.