Speech by Ilham Aliyev at the Azerbaijan-Italy business forum

Dear Minister,

Dear ladies and gentlemen, dear friends.

I am very pleased that an Italian-Azerbaijani business forum is being held as part of my state visit to Italy. I am sure that it will be very productive, and as a result of the forum, economic and trade relations between the two countries will rise to a new level. I am sure of that. There are many factors that give reason to say this. As you know, today is the last day of my state visit to Italy. At the invitation of President Mattarella, I am paying a state visit to your beautiful country, and this is evidence that our relations are at a very high level. In 2018, President Mattarella paid an official visit to Azerbaijan. I can say that after that visit, a powerful impetus was given to the relations between the two states. The signing of more than 25 documents yesterday and today is clear evidence of that. After all, the signing of so many documents is possible only between countries that are very close to each other. These documents cover many areas. The documents covering the political, economic, cultural, humanitarian spheres, education, energy, space industry, military industry and other areas provide an excellent basis for our further cooperation. Among them, I want to specifically note the Joint Declaration on Strengthening Multidimensional Strategic Partnership. This is a very serious political document essentially defining the main priorities of our further bilateral cooperation. The document contains very important points. They testify that our ties are close to being allied because one of the articles there states that we will support each other in international organizations taking into account our interests.

As for the economic sphere, as the Minister said, Italy is the first trading partner of Azerbaijan. But we also need to know that this became possible primarily due to the export of crude oil from Azerbaijan to Italy. Our main task is to diversify our trade relations. I believe that such opportunities will be created by the implementation of projects in the non-oil and gas sector.

Azerbaijan has been supplying Italy with crude oil for many years. Crude oil from Azerbaijan accounts for 18 percent of Italy’s consumption, and Azerbaijan is in first place. As a result of the successful completion of the TAP project, Azerbaijan and Italy will interact in the gas sector as very reliable partners over the next decades. The TAP project is close to completion. It is 92 percent through. As you know, this is the fourth segment of the Southern Gas Corridor. To date, work in the remaining three segments has been completed. I am sure that at the end of this year we will celebrate the final commissioning of the project. Yesterday, during a meeting with the Chairman of the Council of Ministers, Mr. Conte, I invited him to a formal ceremony to be held in Azerbaijan. He accepted this invitation.

Azerbaijan and Italy are located at two points of the Southern Gas Corridor. There are five more countries between us. Indeed, it is very difficult to find an analogue for this unique infrastructure project both technically and financially, and also from the point of view of international cooperation. The project connecting seven countries, funded by leading international financial institutions and being implemented with the participation of many leading companies is the embodiment of Italian-Azerbaijani friendship. We have managed to realize it only in the conditions of friendship. We can say that we are already at the last stage of the project.

At the same time, our main task now is to deepen economic cooperation after the implementation of TAP. During a luncheon yesterday, I met with the leaders of leading Italian companies. Many of them have been working in Azerbaijan for many years. Others want to start working. We also want this, the contracts signed, as Minister has said, amount to billions of euros. I am sure that further cooperation will be even larger-scale, because we, as strategic partners, must support each other in the field of trade and business.

I believe that it is possible to choose many areas for further cooperation. In essence, they are reflected in the agreements that were signed yesterday and will be signed today. I want to specifically note the transport sector. Azerbaijan has completely updated the transport infrastructure on its territory. A report of the Davos World Economic Forum ranks Azerbaijan 34th in the world in terms of the transport infrastructure. In terms of railway efficiency, we are in 12th place and in terms of air traffic efficiency in 11th. Azerbaijan, a country without access to open seas, has already become one of the international transport and logistical centers. The East-West transport corridor passes through the territory of Azerbaijan. This became possible after the commissioning of the Baku-Tbilisi-Kars railway implemented on the initiative of Azerbaijan. At the same time, the North-South transport corridor passes through the territory of Azerbaijan. Azerbaijan is the only country participating in both important transport corridors, which have essentially paved the way for large-scale international cooperation. We are currently working on the North-West and South-West transport corridors. Cargo is already being transported along these corridors to world markets. In one of the memoranda signed yesterday, a solution was found between the Azerbaijani railways and the corresponding agencies of Italy. We will purchase railway equipment from Italy.

A very promising sector is the space industry. Azerbaijan already has three satellites. The experience of Italy in this area is very interesting for us. So far, there have been no ties in the field of space industry between the two countries. However, according to the document signed yesterday, we will establish cooperation in this area.

Italian companies are helping us to increase industrial production and diversify the economy of Azerbaijan. As part of Mr. Mattarella’s visit, we participated in the opening of a large petrochemical enterprise together. One of the leading Italian companies commissioned two large industrial enterprises worth about $1 billion in Azerbaijan. It worked as a contractor. Currently, this company is heavily involved in the reconstruction of an oil refinery in Azerbaijan. The value of the contracts signed exceeds 800 million euros. This is only a beginning. I am sure that Italian companies will play a role in the further industrial development of Azerbaijan.

I should also note that the non-oil industry of Azerbaijan grew by 16 percent last year and in January this year by a further about 14-15 percent. This suggests that great attention is being paid to industrial production and the private sector invests heavily in this sector. I am sure that work will continue to be carried out in this direction in the future.

Among the documents signed yesterday, I want to specifically note another one. It concerns the military-industrial complex. This is also just the beginning. Until now, there was no cooperation between Italy and Azerbaijan in the field of military industry. But on the basis of the signed memorandum, such cooperation has begun. I am sure that by the end of this year all the necessary technical and commercial conditions will be agreed upon and we will successfully cooperate in the field of military industry.

As the Minister said, Italian companies have vast experience in the field of agriculture. Some companies operate in Azerbaijan. One of the Italian companies is even engaged in the development of winemaking in Azerbaijan, and very successfully. The products of this company are exported to foreign markets. We attach particular importance to this sector. Last year, a record volume of grapes was harvested in Azerbaijan – about 200,000 tons. The bulk of this are technical varieties. Therefore, I believe that the development of winemaking is a very promising sector. Italy has vast experience in this area. Azerbaijan also has experience, and we have no problem accessing relevant markets.

I would like to mention other branches of agriculture. Italy has extensive experience in the field of olive production. Azerbaijan has already started exporting olive oils. We invite Italian companies to this area as consultants and contractors. Azerbaijan and Italy are the leading hazelnut producers on a global scale. I think we are in third or fourth places. This sector also has great prospects. Azerbaijan is also involved in the exports of hazelnuts to Italy, and as far as I know, Italian companies are showing great interest in this area. We invite them to Azerbaijan to participate, alongside us, in the development of these and other sectors because today the yields in Azerbaijan have been growing fast as a result of the use of new technologies. Italy’s extensive experience in this area, of course, would precondition this cooperation.

I believe that Italy has unique experience in the field of tourism. In terms of the number of tourists, I think Italy ranks first or second in the world. This area is also developing in Azerbaijan. Last year, the number of tourists visiting Azerbaijan increased by almost 20 percent. I am glad that over the past three years the number of tourists coming from Italy to Azerbaijan has increased by about 40 percent. This has a very positive effect on communication between people.

I want to emphasize the cooperation between Azerbaijan and Italy in the field of culture. It has been already eight years since a monument to brilliant Azerbaijani poet Nizami was erected in the Villa Borghese park. Appropriate steps have been taken related to the activities of the Culture Center of Azerbaijan in Rome. A beautiful building was constructed in the city center. I am sure that the Culture Center of Azerbaijan will start functioning in Rome in the near future.

We are open to cooperation in all other sectors. As for Azerbaijan’s plans for the future, infrastructure projects will be a priority, and we invite Italian companies. I am sure that within the framework of the business forum, a presentation will be made regarding the work to be done in Azerbaijan, and Italian companies will be informed. In particular, issues on the current agenda include drinking water projects, land reclamation measures and improving the environmental situation on the Absheron Peninsula. Due to oil production, there is a great need for improving the environmental situation on the Absheron Peninsula, where Baku is located. The Azerbaijani state allocates large funds for this purpose. As far as I know, Italian companies are not active in this area yet. It is possible to say that this area is covered by other European companies. Therefore, I am inviting Italian companies to this area. I am sure that members of the Azerbaijani government will provide the necessary information on this issue.

I am sure that the signed memorandum in the field of electric energy will be implemented. Once again, I would like to cite the report of the Davos World Economic Forum. It indicates that Azerbaijan ranks second in the world in terms of access to electricity. All our residential settlements are provided with electricity. We export electricity. In January this year, relevant documents on the construction of wind and solar power plants with a capacity of 440 megawatts were signed with two large companies. We are inviting Italian companies to this area. We have huge potential associated with renewable energy. In Azerbaijan, as in Italy, there are a lot of sunny days, but unlike Italy, there are also many windy days. Sometimes this creates problems. But I believe that this is a favorable factor for the production of renewable energy. Therefore, we invite Italian companies to this area.

As for the overall economic development of Azerbaijan, the economic situation in our country is very stable. Our external public debt is at a very low level, accounting for only 17 percent of the gross domestic product. According to the strategy I have approved, it should be reduced to 10 percent within a few years. Our foreign exchange reserves are six times higher than the external public debt. Therefore, we can repay the external debt at any time. So this allows us the opportunity to attract funds for important projects from international financial markets as well, even though the report of the International Finance Corporation, IFC, describes Azerbaijan already as a donor country, and these opportunities will grow in the future.

I should also note that Azerbaijan makes large investments and implements large projects outside the country. So far, investment worth about $17 billion has been made outside our country. Italian companies also participate in these projects. We talked about this yesterday. We are inviting Italian companies to participate in projects that will be implemented in foreign countries with financial support from Azerbaijan in the future.

In general, over the past 16 years, the economy of Azerbaijan has grown 3.4 times. This is a record high on a global scale. At the same time, the revenues received are distributed fairly. An important factor to talk about this is that 16 years ago, almost 50 percent of the population of Azerbaijan lived in poverty. Today, poverty rate is at 4.8 percent. In a word, there are no serious economic problems facing the country. The main issue is improving the business climate, and reforms have also been carried out in this area. This will probably be discussed today. I want to note that the Doing Business report of the World Bank ranks Azerbaijan among 20 most reforming countries in terms of the measures taken in the field of improving the business environment.

I don’t want to take too much of your time. I know that the agenda of the business forum is very extensive and all questions of interest to Italian companies will be answered. Concluding my speech, I want to note the following. I have already given relevant instructions to members of the government in connection with the fact that Azerbaijan and Italy, as strategic partners, opened a new page in the history of our ties yesterday. Italy for us is the main partner country in Europe, and I am absolutely convinced that the same partnership should be in the field of business. Italian companies should be in the forefront in projects that are being implemented and will be implemented in Azerbaijan by the state. This is our desire. I am sure that the interests of Italian companies coincide with ours. I believe that the business forum will be an important step in this direction.

Let me once again express my deep appreciation to President Mattarella, Prime Minister Conte and Minister Di Maio for their hospitality. I wish the Italian people continued prosperity and happiness. Thank you!