Speech by Ilham Aliyev at the Azerbaijan-Czech Business Forum

Dear Mr. President!

Dear guests, ladies and gentlemen!

I would like to welcome Mr. President to Azerbaijan again. Today we are attending a very important event, a business forum which is part of a visit of the President of the Czech Republic to our country. I am sure that the results of the business forum will meet our expectations and will be in line with the relations taking shape between our countries.

The visit by the President of the Czech Republic to our country is an important event. I would even say that it carries historic importance because it is the first visit. This is the official first visit by the Czech President at such a high level in all the years of cooperation between our countries. There have been visits by other senior officials, but the official visit of the President is certainly particularly important. And the visit has been very successful.

We had very fruitful negotiations this morning and discussed a broad range of issues, including economic cooperation and contacts between business entities of our countries. And I think we must give an important signal to the business entities today and encourage them to establish closer cooperation. Business communities are always very sensitive to political nuances and I have to say that political relations between our countries are at a high level. There are no problems between our countries. There is a mutual interest in developing these relations and strengthening the cooperation in both bilateral format and within the framework of Azerbaijan’s cooperation with European institutions. Therefore, on such a solid political foundation I think businesses should say their word. There are already certain successes, and the fact that Mr. President is accompanied by a delegation of business people is an indicator of a mutual interest between our business groups. I think a presentation has already been made today on Azerbaijan’s economic achievements and opportunities, so that a complete picture is provided about what is going on in our country, how the economy is being transformed and what reforms we are implementing.

For us, economic independence was the foundation of our overall independence. We became independent less than 20 years ago. This year we will be celebrating the 20th anniversary of the restoration of our independence. A lot has been done over the course of these years for Azerbaijan to secure its place on the world map as a dynamically developing country with a developed infrastructure and transparent economy. We used to be part of a certain political system, the system of a planned economy and socialism. In our case the share of the private sector in the economy was equal to zero. Today, the private sector accounts for 80 per cent of Azerbaijani economy, drastic economic reforms have been carried out. Good conditions have been created for businesses, and every year we try to take further steps to reduce bureaucratic barriers and obstacles and make life easier for the businesses.

We have managed to create a favorable investment environment, attract major investment from around the world. This investment mainly comes from developed countries. Most of it was made in the oil and gas sector in the early years of our independence. It was natural because in the early 1990s Azerbaijan aroused economic interest only as owner of energy resources. Our goal was to transform this interest into investment in our non-oil economy. To do that, we were required to demonstrate ourselves as a reliable partner so that foreign investors could be confident that their investment would be protected here and the state would fulfill all of its commitments. To ensure that, our key commercial contracts were also discussed in parliament and signed into law. I think this is one of the rare occasions in world history when a commercial deal, a major investment project becomes a law. This was done to provide investors with the guarantee that we will never violate our obligations. And we managed to secure confidence and attract major investments – they are measured by tens of billions of dollars, and create a favorable investment environment. For many years Azerbaijan has been a post-Soviet leader for direct foreign investment per capita.

The major investments in the energy sector first of all enabled us to accumulate financial resources. At the same time, the country earned a good reputation in international economic circles. Thirdly, we succeeded in attracting investments to the economic sectors that are of top priority for us, namely the non-oil sector, agriculture, infrastructure, transport, tourism. It is largely thanks to the policy of diversification that the dramatic drop in the oil price which we witnessed several years ago passed off almost unnoticed for our country. The drop of the oil price by four-five times was a serious test for our country as our main revenues are fetched by the sale of oil. But even in 2008, 2009 and 2010, in the years of the global recession, our economy continued to develop.

A solid foundation has been laid for Azerbaijan’s diversified economy, and we are now focusing on this. We are paying great attention to the development of modern technologies. It is important for us to ensure that the products manufactured in our country meet international standards and are export oriented. At the same time, we are pursuing the policy of maximum self-sufficiency, including the products of agriculture, because food security issues are highly important now.

Azerbaijan’s first telecommunication satellite will be put into orbit next year and Azerbaijan will become a country with its own space industry. A lot is also invested in modern information technologies, the network of Internet users is expanding and we are a regional leader in this respect.

Very must is invested in the tourism sector. We intend to use and are already using our geography and natural conditions to attract tourists. Six new world class five-star hotels will be opened in Baku this year alone, which is also an indication that world brands are viewing Azerbaijan as a country they can and should invest in. Most importantly, they believe in the future of our country. We are in favor of long-term investments, we are in favor of long-term partnerships and are implementing drastic and very important economic reforms with this aim.

Of course, without political transformation economic reforms can only have a short-term effect. Therefore, we are pursuing a very consistent policy in the sphere of political reforms. We have established very constructive relations with European entities, have been members of the Council of Europe for 10 years, are working with the EU within the “Eastern Partnership” program. We intend to continue modernizing our country and turn Azerbaijan into a developed state. I think we have all the opportunities for that. First of all, the state policy, the program, state support for the private sector, entrepreneurship, educated youth and the powerful middle class emerging, as well as natural resources and financial independence, which is also quite important.

At the early stages of our oil projects, I remember seeing many debates in foreign media suggesting that Azerbaijani economy would be lop-sided, that we would be affected by the Dutch disease and the oil revenue would not produce the desired effect. But our policies and the prudent use of energy resources have resulted in the fact that no-one is talking about the Dutch disease any longer, while everyone is talking about our economic development.

Azerbaijan’s gross domestic product has almost tripled over the last seven years. The industry has also growth three times. The level of poverty has dropped five times. These are the indicators of the market economy and social issues complementing each other. We have implemented major infrastructure projects – communication and transport projects. We have implemented major oil and gas pipeline projects and today Azerbaijani oil is reaching, among other markets, the Czech Republic which, I am sure, is contributing to diversified supplies and economic development.

We are currently developing one of the world’s biggest gas fields, Shah Deniz, which has reserves of over one trillion cubic meters. Azerbaijan’s total proven gas reserves constitute 2.2 trillion cubic meters. But I am sure that these reserves will further increase because we are still at the stage of developing new fields, and Azerbaijan’s gas potential will be playing an important part in the energy security of our partner countries.

Today we have diversified ways of delivering our energy resources to world markets. There are three oil and four gas pipelines that transport our energy resources in all directions – to the north, west and south. This allows us the opportunity to feel confident because we do not depend on one route of supplies. Thus, diversification has been fully ensured. And we understand the consumers who are trying to diversify sources of energy supplies as well. So the coordination of efforts between producers and consumers, the balance of interests and diversification, as well as free competition, are what we are striving for.

All necessary reforms will continue to be carried out in Azerbaijan. We are implementing a major program on the development of our districts, so it is not only Baku but primarily our districts that are developing. Over 900,000 jobs were created in Azerbaijan as part of the program on the development of districts over the last seven years, and the vast majority of these jobs are in the districts.

We have created the Azerbaijan investment company and this must have been mentioned here today. It acts as a co-investor in the projects that are important for our economy. And I would like to take this opportunity to invite business people from the Czech Republic to be our partners, participate in projects as investors or contractors, and I am sure there are opportunities for that.

I would also like to take this opportunity to thank the banks of your country for financing important infrastructure projects being implementing in our country. And I hope that this cooperation will be continued successfully.

So I want to salute our dear guests again and express hope that both this visit and this business forum will have good results and we will be meeting more often.

Thank you for your attention.