Speech by Ilham Aliyev at the meeting on economic and social issues under the President of Azerbaijan
25 February 2019, 11:45
The socioeconomic indicators of the first month of the year suggest that the ongoing reforms are producing excellent results. 2018 was a year of profound economic reforms. In particular, an impetus was given to a new stage of reforms after the presidential election. 2017 was a year of economic stabilization. In 2017, we took very important steps related to economic stability. This allowed us the opportunity to begin very serious reforms in 2018 that are now manifesting themselves. If we look at the results of January of this year, we will see that economic growth, i.e. growth in the gross domestic product, is at about 3 percent. This is the highest figure in the last two to three years. It indicates that a high rate of economic growth will be ensured and continued in Azerbaijan in 2019.
At the same time, the results of a successful industrialization policy we have been pursuing in recent years are obvious. In the first month of this year, industrial production in the non-oil sector increased by about 14 percent. I believe that this is one of the highest, perhaps even the highest indicator in the world. It shows that the work carried out in the field of industrial production and the decisions made are producing tangible results.
The economic, the macroeconomic situation remains stable, the rate of the manat has been stable for more than a year, and inflation is at its lowest. All this has become possible thanks to the work done and it shows again that there is no alternative to social and economic reforms. In the coming months of 2019, very serious reforms will also be carried out and deepened further so that there is development and progress in every area of life in our country, so that our people live even better.
The negotiations and meetings I held within the framework of the Davos World Economic Forum in January show again that major businesses are showing a great interest in our country's economy. The number of companies interested in cooperating with Azerbaijan and investing here is growing. In the coming years, the priority will be on attracting foreign investment to the non-oil sector. At the same time, my meetings with heads of leading international financial institutions held in Davos indicate that the reforms carried out in Azerbaijan are of great interest and are receiving good feedback. We are engaged in very fruitful business cooperation with leading international financial institutions of the world – the World Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank. High-ranking representatives of these leading financial institutions of the world have recently attended the meeting of the Advisory Council of the Southern Gas Corridor in Baku, and I am confident that our cooperation with these institutions will continue to be very successful.
In January, we adopted the fourth State Program on socio-economic development of the regions and summed up the results of the third program. The third program has been exceeded. We have met all our objectives. Thus, major infrastructure projects were implemented in the last five years, especially in the regions and in Baku. The fourth program is designed for five years and will enable us to realize the projects that have not been implemented yet and complete the projects that are still underway.
The serious economic reforms carried out and the work related to transparency have had a positive impact on budget revenues. I should note that in the first month of the year alone our revenues increased sharply. Tax authorities have collected more than 80 million manats in excess of the plan. Customs bodies have collected more than 20 million manats above the plan. Our total revenues have increased by 105 million manats, and this is only one month. What does this mean? This shows that the reforms in this area, the steps being taken in connection with transparency are producing results. At present, excellent conditions have been created to deepen the reforms further.
I should also note that in the first month of this year, the revenues of the State Oil Fund increased significantly as well. In other words, our financial situation is improving and remains stable, and this, of course, allows us the opportunity to channel additional revenues primarily into the social protection of our citizens. I have repeatedly expressed my opinion on this issue. At the end of last year and at the beginning of this year, I said that we should spend additional revenues first of all on the social protection of our citizens because this is a priority issue for us. Improving the social well-being of our citizens is a top priority for us. Very serious steps have already been taken and will continue to be taken in this direction. In general, I want to note that 2019 will be different from previous years in terms of social development and social protection of the population.
Back in December last year, while attending the opening ceremony of a building constructed for military personnel, I said that social issues of martyr families will be resolved. As you know, the first decree I signed after the presidential election was associated with the payment of 11,000 manats to the heirs of the martyrs. The lists were updated and a preliminary analysis showed that payments would be provided to almost 9,500 martyr families. However, further clarification was carried out. In December, I said that as a result of this clarification the figure would increase, and it did. Currently, the state provides payment in the amount of 11,000 manats to more than 12,200 martyr families, and this program will be fully implemented by the end of this year. In parallel with this, at a meeting with martyr families they raised the issue of increasing the amount of benefits. A decree was immediately signed and the allowance was increased from 242 to 300 manats. As our material capabilities increase, this issue will certainly always be in the spotlight. Recently, we also increased the allowance paid to the families of those killed in Afghanistan – it was increased from 220 to 300 manats. This is also a fair approach. In a nutshell, we are consistently pursuing our policy on all these issues. As our material capabilities increase, we first of all resolve these issues.
This year, large-scale construction programs related to the internally displaced persons will be implemented. Whereas apartments and houses were built for 5,900 IDP families last year, this year the figure will be increased to 6,000 to 7,000 IDP families. Relevant instructions have been issued. This program will be implemented in the regions, in Baku and in Sumgayit.
This year, 800 apartments will be acquired and provided to martyr families. Last year, 626 apartments were provided. So in two years more than 1,400 apartments will be provided to martyr families. I am sure that all martyr families that have not yet received apartments will be provided with ones in the coming years, in the near future. I should also note that to date the state has provided apartments and houses to more than 6,500 martyr families.
This year we have significantly increased the minimum wage – by 38 percent. This is a huge increase - from 130 to 180 manats. It covers 600,000 people. However, we can’t be content with this figure at all. Therefore, appropriate instructions have been issued to prepare proposals for further increases of the minimum wage. Now, of course, we must assess the financial burden of this. In the future, the minimum wage and pensions will be consistently increased.
A very serious decision was made concerning minimum pensions. The minimum pension was also increased by about 38 percent, slightly more – from 116 to 160 manats. Today, Azerbaijan ranks second in the CIS in terms of the minimum pension. However, it should also be noted that this is not yet the limit. Of course, the increase in wages and pensions is one of the main issues on our agenda. The increase in the minimum pension will improve the pension coverage of 223,000 people.
One of the problems causing people’s concern over the years has been the issue of documenting the multi-apartment buildings that were constructed in due time but were not officially commissioned for whatever reason. We have put an end to this problem too. Following a decree I have signed, this issue should already be considered to have been resolved. In the near future, relevant state bodies will carry out all documentation work and provide a solution. The 400 multi-apartment buildings are home to about 60,000 families, or 300,000-400,000 people. So this was also a very serious step. We have resolved this issue as well.
Scholarships for students have been increased. Scholarships of about 100,000 students have been raised. This is also a very serious social step. Growth is envisaged in the future too.
One of the issues of concern to our people is associated with problem loans. This issue has been discussed for a long time. Government members have received appropriate instructions. Since last year, very active work has been underway and a package of proposals is being prepared. I know that this issue is being discussed in the Milli Majlis. Various suggestions have been made. Of course, we wanted this issue to provoke a serious public debate, and we succeeded in that. However, I can say that a working group is seriously dealing with this issue at the final stage. For more than two months, work has been under way on proposals. This is not an easy question. In addressing this issue, we see the main task in improving the well-being of our people and reducing their financial burden. This should first of all be perceived as a serious social initiative.
I can say that the serious discussions held over several months already create the conditions for achieving a result. I hope that we are in the final stage of this analysis. I do hope that this issue will also be resolved in the near future and Azerbaijan will demonstrate its leadership in addressing this issue and show a very serious example. We know that some countries have made relevant decisions related to such steps, but they have not been implemented. So the main condition here is not a good intent, but a correct analysis and selection of the most acceptable option for our people. Of course, the first question is whether we have enough financial resources to do this. Today I simply want to announce that this issue is already in its final stages.
I want to mention another issue. For several months now, we have been working on a serious social package. I have already spoken about the first manifestations of this social package. Raising the minimum wage, the minimum pension, student scholarships and the provision of other benefits are components of an extensive social package. At the same time, the issue of social benefits, which will be significantly increased, will be resolved.
That is, all this, this very large program will cover more than 500,000 people. If we analyze all the initiatives I have listed and determine the number of people suffering from problem loans, then approximately 2.2 million people will greatly benefit from the implementation of social initiatives of the state.
This is a very serious social package. I want to say again that the implementation of this package is first of all based on our strong political will. I have repeatedly said this and I want to say again: our policy is centered on the people of Azerbaijan. At the same time, our financial capabilities allow us to do this. We have created and received these financial opportunities. As a result of the reforms, our revenues, our budget revenues are increasing, should and will increase. Therefore, I want to say again: our economic development is closely connected with the solution of social issues. And this is natural. We have a strong will. We are conducting a strong social policy. At the same time, the announced and ongoing serious economic and social reforms allow us the opportunity to channel additional financial resources into improving the well-being of our citizens. I am sure that, in general, the year 2019 will be successful for our country. In 2019, Azerbaijan will follow the path of success and development.
