Opening speech by Ilham Aliyev at the conference on the results of the third year into the “State Program on the socioeconomic development of districts for 2009-2013”

The successful development of our country is already a reality. This is confirmed by the people of Azerbaijan. The world community also receives sufficient information on our progress. Underlying our success is a prudent policy, the public and political stability in the country and successful economic reforms.

The public and political stability in Azerbaijan was established in the 1990s. The chaos and anarchy that dominated our country in the early 1990s were leading it to a precipice. At a crucial time for the country and under the leadership of great Heydar Aliyev, an end was put to all the negative phenomena and the successful development of Azerbaijan was ensured. The public and political stability established in those years and further strengthened today paved the way for investment into the country and contributed to its successful development. Our major economic reforms were also initiated in the mid-1990s. Today, these reforms are ongoing and entering into a new stage.

The modern period of our development has also been very successful. At the heart of our development, I want to say again, is our policy. Our policies in both public and economic spheres pursue only one goal: to protect the interests of the Azerbaijani people, strengthen our country and its positions in the region!

This is our main direction.

In order to achieve rapid development of the country, we are currently realizing quite extensive programs. Of course, the most important and significant of them is the State Program on the socioeconomic development of districts adopted in 2004. Following the adoption of the program our districts began to develop very rapidly.

The program was adopted in 2004. But I had thought about it in previous years too. In the run-up to the 2003 presidential election I had said that if the people of Azerbaijan trusted me, the program would result in the creation of 600,000 jobs in Azerbaijan over five years, i.e. by 2008. Some did not believe in these figures, others treated them with some skepticism. But I knew it was possible. I am very pleased that in a short time, in about four years, we created 600,000 jobs. Overall, in 2004-2008 a total of 760,000 jobs were created, which is of particular importance for the elimination of unemployment and poverty reduction. So the program adopted in 2004 provided an impetus for overall economic development.

Of course, much of our economy is formed in the oil and gas sector. But you can’t create too many jobs in the oil and gas sector. So our main focus was on the non-oil sector. The development of this sector aimed to diversify the economy and eliminate unemployment. And it did.

I would also like to note that in some cases our successful economic development is linked only to the oil and gas factor. Of course, oil and gas do and will continue to play an important part. But I want to say that our main oil export pipeline, Baku-Tbilisi-Ceyhan, was commissioned in the summer of 2006, while the program was passed in 2004 and launched shortly thereafter.

In short, there is sufficient information on the past period, all the work done is evident. In 2009 we started a new stage of the program. It was already called a state development program. But its focus was still on developing the districts. The second state program has been ongoing for three years now. I can say that all our tasks are being over-fulfilled. As to the first program, the issues it covered were certainly resolved. Additional measures were also taken. The same picture is observed today. We will implement this program on an even larger scale. Therefore, our development is ongoing.

At the first stage our focus was on expanding business opportunities and building up an industrial potential. For that, we first had to resolve electricity issues. Therefore, we identified this as a priority and managed to ensure our energy security in a short time. In the past, the electricity we had generated did not meet our needs. Now we have created a powerful system that can not only address our own needs but also enables us to export electricity to all neighboring countries.

Then we started the implementation of infrastructure projects. This is another broad area. When talking about infrastructure, we mean everything – roads, electricity, gas and water supply. Issues of social infrastructure are also very important. All these issues are reflected in our program, i.e. the current program. Of course, one direction is associated with infrastructure projects. We have developed this sector using the funds invested by the state. Another direction is related to social infrastructure. The first program led to the construction of more than 2,300 new schools. Last year we built and repaired over 200 schools. This year we will build or renovate more than 400 schools.

The creation of a healthcare infrastructure is an issue of great importance. We have opened more than 400 modern medical facilities in Azerbaijan. The development of highways, too, was of great importance because our roads were in poor condition. There can be no development without roads. No enterprises or tourist sites can be built. For business development, roads and electricity are crucial. To provide for a comfortable life, we are rapidly creating the social infrastructure. We are implementing these projects even more rapidly now. We are carrying out extensive water and sanitation projects covering the entire country. These projects are purely social. While the instructions on electricity supply have both social and business aspects, water supply projects are purely social. We now have the opportunity to invest even more in the social infrastructure. Of course, we have acquired these possibilities ourselves.

There are many countries rich in oil. There are countries producing and exporting a lot more oil and gas than we do. But not every country can boast of economic development like ours. So I want to reiterate that the basis of our success is formed by sound economic policies and economic reforms. These reforms are appreciated by the international community.

Leading economic institutions of the world support and appreciate the processes taking place in Azerbaijan, sometimes they take delight in them. Major rating agencies lower the credit ratings of developed countries and raise the rating of Azerbaijan. In the crisis years, leading financial institutions have appreciated the reforms in Azerbaijan. This is also very important. Of course, the most important issue for us is to realize our plans, secure economic development and prosperity. But when we see that influential international organizations recognize our success, it is very gratifying.

2011 was also successful for the development of our country. One feature of 2011 was the rapid growth of the non-oil sector in Azerbaijan. While overall economic development was around 1 per cent, maybe even less, our non-oil economy grew by over 10 per cent.

This is the result of the programs we have adopted. This is precisely our goal – to develop the non-oil sector, non-oil industries. This is evidenced by the results of the first month of 2012 – the non-oil industry has grown by more than 10 per cent. A powerful process of industrialization is under way. I spoke on this issue several years ago. I said industrialization should go rapidly in Azerbaijan, and we are seeing that.

The emerging industrial enterprises will determine our long-term development strategy. The government of Azerbaijan fulfills all of its obligations, and does it with a vengeance. There is no such support for the private sector in any other country. First and foremost, it is political support.

I regularly meet with business people in Baku and in the districts. I have personally attended the opening of about 500 industrial enterprises in the districts. Many more businesses were opened without my participation. In total, more than 40,000 new businesses have been created. The opening of an enterprise means jobs, wages, local production, opportunities for import substitution, development, revitalization of our country.

In addition to the political support, the Azerbaijani government provides entrepreneurs with economic support. The National Fund on Support for Entrepreneurship has thus far, including 2012, provided favorable loans worth 900 million manats. Their vast majority of the loans was channeled into districts and perhaps all of them into the real economy. So these loans have done a great job. I am very pleased that entrepreneurs treat this government support with due responsibility. All the loans are repaid on time. Currently, most of this year’s loans worth 200 million manats is made up of the funds that were granted in previous years and have already been repaid. So it is a large amount. Of course, the volume of loans provided to entrepreneurs will be increased every year, so that every entrepreneur can receive an even larger loan.

I want to say again that underlying our success are economic policies, reforms, the current public and political stability, and a strict discipline in the executive branch. Without the discipline we could not succeed. I have repeatedly said to all the heads of executive bodies: be next to the entrepreneurs, help them, don’t interfere in their affairs, don’t hamper them. Our development depends on the development of entrepreneurship. We have chosen this direction and it is paying off.

But at the same time, while studying the experience of developed countries experiencing crisis now, we see again that the principles of a pure market economy don’t always work. What do we see in Europe? Governments take on huge commitments. To save banks and large companies from bankruptcy, the government invests in them. We embarked on this policy in 2004. I remember that in some cases we were more dependent on loans from international financial institutions. We were advised and recommended that the government should not intervene, that the private sector should develop on its own and the state should stand aside. How can this be? This is our country. Whether public or private, it is an Azerbaijani company. How can we not help it?! Our support is important. The wonderful atmosphere in the political sphere and in Azerbaijan as a whole has strengthened this support.

The financial support, the provision of loans, as well as the preparation of business plans, in particular for small businesses, have already become part of the government agenda. The Ministry of Economic Development has prepared very explicit advisory plans. These plans are aligned to business opportunities. Anyone can build a business he can afford. In other words, we agree to that, as long as there is development. At the same time, business people are well aware how many benefits are provided. In agriculture, entrepreneurs are exempted from all taxes except for the land tax.
This decision was made in the 1990s to stimulate agricultural development. There is no need for stimulating agricultural development now, but the decision remains in force, we are not repealing it in order to help entrepreneurs.

Fertilizer and fuel are provided on concessional terms. Funds are provided for every hectare of cereal crops. We must and will do that. Entrepreneurs, for their part, should work to benefit themselves and the state. My requirement for business people is that they should work hard in their districts and areas of expertise and pay taxes on time. They shouldn’t have any arrears to the state. They should create jobs, expand their businesses, live better and become even richer. I think business people will agree with that.

Of course, when businesses join various social projects, this further improves my attitude to them. I can say that entrepreneurs have been showing responsibility in this area in recent years by implementing social projects, contributing to social measures in the districts, in particular the construction of schools. I support that. But I want to say again that entrepreneurs are not required to do this. This is a voluntary thing. If they do this, then thank them. If not, let them look at those who do and try to support this work ...

The government of Azerbaijan will continue to strive for a comprehensive development of the country. We have thought-out programs and policies. The second state program will last until 2013. I am sure that the program adopted in 2009 will be over-fulfilled. Thus, by the end of 2013, key infrastructure issues in our country must and will be resolved. The major infrastructure projects that are ongoing and are nearing completion have created such confidence. Of course, I think we have to work hard in the next two years to implement the state program ahead of schedule and on a large scale, and to ensure successful development of the country.

Major investment is made in Azerbaijan. This is a very positive phenomenon. We welcome foreign investment. Our successful economic development began with foreign investment. The signing of the “Contract of the Century” brought Azerbaijan international recognition, but initially foreign companies were very reluctant to invest in the non-oil sector. It was impossible to make them do that. But we have channeled our oil revenue into the non-oil sector, so the government assumed the investment burden. While most of the investment in the oil and gas sector has thus far come from abroad - although this balance is changing now, in the non-oil sector the main burden rests with the Azerbaijani state. Last year, our country received over $20 billion in investment, of which $13 billion was domestic. The public investment program for this year is also very large. The state alone is expected to invest 7 billion manats in the country's economy this year. Of this, 5.7 billion manats will be invested as part of the investment program, i.e. from the state budget, while 1.3 billion manats through government-guaranteed loans. This is a very large amount which will enable us to maintain a high rate of economic development in 2012, in particular in the non-oil sector, and to do even more work. I hope that about as much will be invested by the private sector this year.

Such opportunities are available. Such opportunities are brought about by the ongoing and starting projects. I believe that this year's investment in the economy should be at least $20 billion. Thus, thanks to this investment, we will secure all-round development of our country even faster. The implementation of the program and, in essence, the development of our country will be even more successful.

I want to repeat that overall I see no problems in the economic sphere. We managed to ensure successful development even in the years of the global financial recession – in 2008-2009. The people of Azerbaijan practically did not feel the impact of the crisis. It is now said that the second stage of the crisis is impending. But it is not felt in Azerbaijan either.

Why? Because we have a thought-out and clever policy. We are implementing our programs in proportion to our possibilities. We need Azerbaijan to develop in such a situation, in such circumstances, in calm conditions.

I have repeatedly said this and want to say again that our goal is to become a developed country. When I said this a few years ago, some may have treated it with doubt. Now I am sure everyone can see that this is possible. The political clout of our country is growing. We are acquiring a say in world affairs. The world community supports us. We have become a member of the UN Security Council.

Our capabilities in the region are expanding. There is a growing number of countries interested in cooperating with us.

Other countries are now working to attract Azerbaijani investment. We are now accessing foreign markets with our investment and companies. I will talk about this later. We must support our companies not only in Azerbaijan but also abroad. Our State Oil Company has turned into an international energy company, a company with great authority and great business opportunities. The scope of SOCAR’s activities is expanding in Europe and other continents. Azerbaijan's share in the fuel balance of some countries has reached 20-30 per cent. We are successfully resolving energy security issues. Of course, this meeting is devoted to the development of the non-oil sector but we know too well that if one of us had made a mistake in the energy policy, we wouldn’t talk about today's successes.

Our energy policy is flawless. The foundation of our oil strategy was laid by the great leader in the early 1990s, and this strategy is ongoing. Of course, there are new issues and challenges now. Azerbaijan is becoming an exporter of both oil and gas. Perhaps it is more important for the world as an exporter of gas. We are ready for this responsibility. At home and together with our strategic partners, we are putting forward initiatives that will bring Azerbaijan only success. We have not backed down on anything, in fact, we have strengthened our positions and protected our interested.

Today, Azerbaijan’s gas resources are playing an important part in European energy security. In the coming years, our role will further increase. We know this. We also know that gas is not a renewable source of energy. Some countries providing Europe with gas are running out of it. European demand for gas will gradually grow. We also know by how much it will grow.

Considering a ban on nuclear energy introduced by some European countries in the aftermath of the terrible accident in Japan, the demand for gas will grow further. So the need for Azerbaijani gas will increase significantly.

Our energy policy is to create diversified export opportunities, and we have created them. We have four gas pipelines. At present Azerbaijani gas is transported to most neighboring countries. In the future, it will be transported to an even greater extent. Of course, as an owner and exporter of gas, we are defending our policies. Our policy complies with the interests of consumers.

We are working on major transnational projects. If these projects are implemented, we will ensure a long-term successful development of our country. It will be achieved even without them, but these projects will make Azerbaijan an even more powerful state. Azerbaijan will enjoy even greater authority. Our positions in the region and the world will become even more effective. I want this to happen. We are creating a strong state, a strong state based on a strong economy and a strong policy.

Our economic potential, the diversified economy, the oil and gas factor, transit opportunities we have created ourselves are great assets. I want to say again – we realize our own strength.

We simply don’t want to show it in some cases. But if necessary, we do. We are confident. I believe that a strong Azerbaijan is a very important factor for the region and the world. Because we have pursued a policy of good will. Our policy is one of cooperation. Our energy policy is also aimed not at enmity, but at friendship. In the energy sphere we often help our friends. First because they need help, second, because this is our philosophy and, third, friendly relations will secure our business interests to an ever greater extent. We are seeing that a growing number of countries want to work with Azerbaijan in the energy sector.

Azerbaijan, SOCAR are invited to participate in privatization projects. So we enjoy confidence and a good reputation.

We will continue to pursue independent policies in all directions. Azerbaijan has already gone beyond a regional plane and is now in a global plane. We already participate in G20 meetings. A recent meeting of G20 Foreign Ministers in Mexico was attended by our Foreign Minister. Only 10 non-member countries were invited and Azerbaijan was one of them. This is a reality.

To develop our country even faster – I want to come back to our main topic – we need to continue improving the business environment and create better conditions for entrepreneurship.

The state fulfills its obligations. At the same time, we are waging a serious struggle with the still existing negative phenomena. The fight against corruption and bribery does not stop for one day. This struggle is already producing good results and they will be even better. We must remove this evil, rid our country of it. We must turn Azerbaijan into an example in any field – political, economic, fight against corruption and bribery, and we will do that.

So I think this meeting will give a new impetus to the program. This meeting is attended by both entrepreneurs and heads of local executive authorities. This format has already become traditional. The discussions to take place today and decisions to be made afterwards will create new opportunities for implementing the state program in 2012.

Other speakers at the conference included the Minister of Economic Development, Shahin Mustafayev, the head of the Ganja City Executive Authority, Elmar Valiyev, the chairman of the board of the ATENA dairy and livestock complex, Elshad Rasulov, the head of the Agdash District Executive Authority, Rafig Niftaliyev, the deputy director of the AzMDF plant, Vugar Aliyev, the head of the Agsu District Executive Authority, Anvar Seidaliyev, the executive director of the “Nakhchivan” automobile plant, Polad Sadikhov, and the head of the Lerik Distrct Executive Authority, Rovshan Bagirov.

The conference spoke about the work done to implement the “State Program on the socioeconomic development of districts for 2009-2013” and future tasks.