Opening speech by Ilham Aliyev at the meeting of the Cabinet of Ministers dedicated to the results of the first quarter of 2016 and objectives for the future

First of all, I want to ask you again to observe a minute of silence to honor the bright memory of Azerbaijani soldiers who died heroically preventing the Armenian armed provocation.

May Allah rest the souls of our martyrs! Sit down. May Allah grant their families patience and perseverance, and healing to our wounded soldiers.

As you know, earlier this month Armenia committed yet another armed provocation against Azerbaijan. The provocation was foiled and the enemy was given a fitting rebuff. Azerbaijan managed to defend its land and further strengthen its military positions. This bloody standoff shows once again that Armenia continues its occupying policy, does not want peace and is trying to undermine the negotiating process. We have enough reasons to say that. First of all, the fact that negotiations have been held for more than 20 years shows that Armenia simply wants to see the negotiations as a never-ending process. On the other hand, as soon as there is some progress in the talks, Armenia tries to disrupt them in various ways. This is evidenced by examples from recent history. At the end of 2014, a meeting of the Presidents of Armenia and Azerbaijan was held in Paris on the initiative of the French President. Both sides assessed the meeting positively. After the meeting, we expected even more positive dynamics in the talks. But less than two weeks after the negotiations, Armenia launched large-scale military exercises on the occupied territories, on the territory of Agdam District. That step was purely provocative. For some days the armed forces of Azerbaijan did not respond to this provocation but then the Armenian armed forces attacked our positions using helicopter gunships. The Azerbaijani army had to bring down one of the helicopters. Armenia needed that as a pretext to once again accuse Azerbaijan of aggression. After that, negotiations were not conducted for more than a year. At the request of the Minsk Group, the Presidents of Azerbaijan and Armenia met in December last year, but that meeting was fruitless. The mediators are trying to resolve the issue. As you know, the leadership of Russia, the United States and France are making efforts and issuing statements. This includes very valuable statements regarding the status quo, saying that the status quo is unacceptable and must be changed. But Armenia ignores it.

I am aware that this year the co-chairing states have put forward new proposals for the continuation of negotiations. During my visit to the United States, among other issues, the Nagorno-Karabakh conflict was widely discussed with the political leadership of the United States. They noted that they support the territorial integrity of Azerbaijan. All co-chairing countries –the USA, Russia and France – support the territorial integrity of Azerbaijan. There is no country in the world, except for Armenia, that would not support our territorial integrity. Obviously, the discerning positive dynamics in the negotiations prompted Armenia to resort to this provocation. I want to note once again that Azerbaijan is defending its own land. We are not after the land of another state, but we will not give our land to anyone. We will never allow a second Armenian state to be created on Azerbaijani land.

As you know, after the bloody clashes the international community expressed concern over this issue. The leaders of co-chairing countries made a statement reaffirming their commitment to the peace talks and negotiated settlement of the problem. We also want that. We have repeatedly stated that we want a peaceful and negotiated settlement of the issue. We only want to resolve the problem. We are declaring today that we remain committed to the negotiations. We hope that these talks will lead to a solution of the problem. The solution is very simple – the Armenian armed forces must vacate the occupied lands, Azerbaijani citizens must return to their native homes and then peace and security can be established in the region. As for the principle of self-determination of peoples, this principle should not violate the territorial integrity of countries, and that these expressions are reflected in the Helsinki Final Act. All conflicts must be resolved on the basis of the territorial integrity of countries.

As you know, the settlement of the Armenian-Azerbaijani Nagorno-Karabakh conflict is our primary goal. The stronger Azerbaijan becomes in political, economic and all other fields, the closer a solution to the conflict, of course. We must further accelerate the momentum of our development. The sustainable development in Azerbaijan should be continued. The progress made in economic and political spheres in recent years indicate that we are on the right track.

In the first quarter we, as always, conducted a very active foreign policy. I believe that we worked ever harder in the first quarter. In the first quarter, I paid a number of visits abroad – both official and working ones. I have taken part in the Davos Economic Forum, the Munich Security Conference and the London Conference "Supporting Syria and the region". I have paid visits to the United Arab Emirates, the Islamic Republic of Iran, Turkey and the United States of America. The geography of all these visits is an indicator in itself. It shows that Azerbaijan is pursuing a very active and multifaceted foreign policy and the number of our friends is growing. On the basis of mutual respect and interests, Azerbaijan fruitfully cooperates even with countries that do not have particularly close relationships with each other.

Thus, the confidence of the international community in us is growing. Azerbaijan is known as a very reliable partner. It plays a stabilizing role in the region. I should also note that in the first quarter Azerbaijan received 10 foreign heads of state and government. There have also been official visits. Heads of state and government also attended the Fourth Global Forum in Baku.

I want to say again that this is evidence of our successful foreign policy. This policy will be continued. I want to note once again that the world treats Azerbaijan with great respect and sympathy. It is no coincidence that we were a member of the UN Security Council a few years ago. It was no coincidence at the time, and the success we have achieved today shows that again.

At the same time, a new format of regional cooperation is emerging. There is a regional format of Azerbaijan-Iran-Russia. Our foreign ministers have met. A day or two earlier, Iran hosted a meeting of the foreign ministers of Azerbaijan, Iran and Turkey. There are other trilateral formats. There is a format of Azerbaijan-Georgia-Turkey. All these tripartite initiatives are very important for security and cooperation in the region. As you can see, Azerbaijan participates in all formats.

In the first quarter, economic reforms were carried out even faster. In general, I should note that 2016 will be a year of deep economic reforms. From the beginning of the year, we have been working very hard in that direction. Many orders have been signed and laws adopted. Improving the business environment, increasing our export potential, attraction of foreign investments to Azerbaijan and increasing local production – very serious decisions have been made in all these areas. Financial discipline and transparency – I want to say that further measures will be taken in this direction.

The entire economic and financial sector in Azerbaijan should develop based on the experience of the most advanced principles of leading countries. First of all, it is necessary to improve control mechanisms and ensure complete transparency. Thus, our revenues will and should increase even though the oil prices have fallen sharply and are still at a very low level. This, of course, has a serious impact on our revenues. However, I believe that thanks to the development of the non-oil sector we will be able to successfully overcome this situation.

The economic indicators of the first quarter are not very positive. The gross domestic product has dropped. And it is natural. We expected this to happen. But I think that during the year the gross domestic product must be increased. In any case, we are trying and will continue trying to achieve that. This is suggested by the fact that the non-oil industry in Azerbaijan increased by more than 5 per cent in the first quarter. This indicates that the reduction of the gross domestic product is primarily due to the fall in oil prices and the resulting situation. Of course, our revenues have declined. Investments made by the state have also dropped. We, of course, take into account this situation.

But growth of the non-oil industry by more than 5 per cent, of course, is a good indicator that gives us hope for more rapid development of the non-oil sector in Azerbaijan. Today, the non-oil sector forms a major part of the Azerbaijani economy. We have achieved that and, of course, we should try to enable the non-oil sector to play a greater role in our exports in the future.

In the first quarter, 37,000 jobs were created, including 31,000 permanent ones, while 13,000 jobs were closed. We see a positive balance here too. I should also note that jobs were mainly created in the public sector. This issue was addressed on my instructions, because some work in the construction and other sectors had been postponed. Therefore, to keep the unemployment rate at a low level, I decided that jobs should be created by state-owned companies and government agencies. Jobs involving public works are being created. The creation of this number of jobs in the first quarter, of course, is meant to ensure social protection of our people.

The social policy has always been and will be a priority. The steps taken in the first quarter show once again that Azerbaijan is a social state. Our policy is centered on the people of Azerbaijan. The interests of Azerbaijani citizens are above everything for us. All economic reforms and our successful oil and gas policies are aimed at improving people’s lives.

The world is experiencing a crisis now. The economic and financial crisis is not over yet. Azerbaijan is a part of the global economy, but, at the same time, we are one of the countries that have overcome this crisis with minimal losses. I can give you another example: although oil prices have dropped three to four times, wages and pensions have been increased by 10 per cent this year. This is also one of the rare phenomena. Usually even the countries not rich in oil and gas either freeze and reduce salaries, or experience problems with the payment of salaries. Despite the global crisis, we have raised salaries and pensions. Other measures of social orientation are being taken, including the launch of new initiatives and new forms of income generation. I am sure that the unemployment rate in Azerbaijan will be very low as usual.

Thus, we have carried out serious economic reforms, and these reforms should be deepened further. We are conducting a very strong social policy, so that people do not suffer from this during economic reforms. Additional steps will be taken to improve the welfare of our people.

This year we should implement large-scale projects in the field of regional development. The implementation of the planned projects will require about 2 billion manats. Part of these funds should be provided through preferential loans of the state, while others at the expense of entrepreneurs. At least we have set this goal. We must try to achieve this goal. Thus, the investment to be made in the country’s economy, the non-oil sector will contribute to further recovery and creation of new jobs. Therefore, we will have new export products.

In the first quarter, we worked hard in other areas as well. The transport sector. As I have already mentioned, we were very active in the field of North-South transport corridor. The main prerequisite for the creation of this corridor is the Azerbaijan-Iran-Russia trilateral cooperation. As you know, during meetings with both the President of Iran and the President of Russia I have repeatedly raised and discussed these issues. I can say that there is overall agreement. This transport corridor is necessary for us both in economic terms and in terms of security and tourism. We will thus offer our transit opportunities to other major countries, while the state budget of Azerbaijan will receive huge economic benefits from this. This will not only speed up existing and potential trade among the three countries. At the same time, this corridor will be joined by Pakistan, India and Nordic countries, and the volume of goods passing through our territory will increase significantly.

Of course, everything is being done to create the East-West transport corridor. We are working in a tripartite format here too, but it is different – the Azerbaijan-Georgia-Turkey format. My visit to Georgia at the end of last year and to Turkey this year have been very instrumental for the creation of this corridor. Note that Azerbaijan is again at the center of two corridors. If we did not have very positive relations with neighboring countries based on friendship and partnership, none of these projects could be implemented. I have always said that relations with the neighbors are very important for us. We have no problems with any of the neighboring countries except for Armenia. On the contrary, our relations with neighboring countries are expanding and strengthening day by day. This is the main condition for security, stability, economic development and cooperation. Let me repeat: Azerbaijan's role in this area is valued highly, and there are already excellent results.

At the same time, we are developing relations with all countries and international organizations. As you know, high-ranking officials of the European Commission, two of its vice-presidents, visited Azerbaijan in the first quarter. We discussed energy, political and economic issues, security and other matters. The President of the European Commission visited Azerbaijan last year. We are currently working on a new format of cooperation. My participation in the Washington summit on nuclear security is an indicator in itself. It was attended by more than 50 countries, including Azerbaijan. If we consider that Azerbaijan is not a nuclear state, that there is no nuclear power station in Azerbaijan and the nuclear industry is not developed, the invitation of Azerbaijan to this prestigious event is a manifestation of the US government’s and President’s respect for us, and reflects our role in this region. It is stated that Azerbaijan is a reliable partner in the prevention of illicit traffic of nuclear materials.

During the visit, I had very good, fruitful and sincere conversations and talks with the political leadership of the United States. These negotiations show once again that the relations between us are very important for both sides. We work together in many areas, and these ties open up new possibilities for both sides. The main issues on the agenda here are political ties and cooperation in the fields of energy, security, trade and economic issues.

As for our energy policy, the second meeting of the Southern Gas Corridor Advisory Council was held in Baku in the first quarter. This event has been held in Baku for the second time. This was made possible because of our initiative. Two years ago, we put forward the initiative to hold such a meeting, and it has already become traditional. The second meeting of the Advisory Council was a great success, as very important decisions were made. The Declaration adopted in the end reaffirmed the leading role of Azerbaijan in this sphere. The implementation of the Southern Gas Corridor is progressing according to plan. The necessary investment is being made. Coordination between countries and companies is at a high level. I am confident that this strategic project will be implemented in a timely manner.

The Fourth Baku Global Forum was also held in the first quarter. It was attended by representatives from more than 50 countries, current and former heads of state and government. The Forum, which has become one of the leading international forum in the world, is an ideal platform for discussions. The fact that such forums are held in Baku, of course, multiplies our value. And at the end of this month, Baku will host the Seventh Global Forum of the Alliance of Civilizations. I believe that this is also a result of the successes Azerbaijan has achieved in the field of multiculturalism and dialogue between civilizations. This year has been declared a Year of Multiculturalism in Azerbaijan. Our achievements in this field are highly appreciated by the international community.

Of course, there were other important events in the first quarter. We simply have no time to talk about all of them now. In short, despite the fact that the world is going through a financial and economic crisis today and our revenues have decreased, we have reduced the risks to a minimum thanks to operational steps, deep economic reforms and elaborate foreign policies. I do hope that the positive dynamics will be maintained in 2016. In the second quarter, the economy will grow even faster and we will meet all the goals set at the beginning of the year.