Closing speech by Ilham Aliyev at the meeting of the Cabinet of Ministers of the Republic of Azerbaijan dedicated to the results of socioeconomic development of Azerbaijan in the first nine months of 2013 and objectives for the future

- The figures mentioned at the meeting today are further evidence of a very successful economic development of Azerbaijan. The solution of social issues in our country also serves the well-being of our people. The economic reforms, of course, improve the social situation. And that is the way it should be. What sets us apart is that economic and social issues are addressed together in Azerbaijan.

Our policy is centered on citizens of Azerbaijan. The improved well-being of Azerbaijani citizens requires strong economic fundamentals, and we are creating them. We are developing the country's economy. All our initiatives, the initiatives concerning investments, programs associated with the creation of new industrial estates, pursue one and the same goal: for citizens of Azerbaijan to live better.

I am very glad that tremendous work has been done in this area in recent years. We must do our best to maintain this positive momentum. I believe that we will achieve that. The work done so far suggests that we will successfully continue our development in the future.

With regard to the issues related to the socioeconomic development this year, with less than three months left for the end of the year I am convinced that all our programs will be fulfilled with a surplus. We will successfully complete 2013.

The state investment program must be fully implemented by the end of the year. I am sure that there will not be any problems with that because our investment portfolio is fairly broad. As I said in my opening remarks, in nine months we have made investment in the amount of $17.7 billion. And this process continues. We must make sure that there are no delays in the implementation of the state investment program.

Salaries, pensions and social benefits have been increased this year. The deposits left over from the Soviet era have been fully repaid. Despite this, inflation is at 2.3 per cent. This is a manifestation of a successful macroeconomic policy carried out in Azerbaijan. We must try to keep inflation at this level until the end of the year. Azerbaijan is one of the leading countries of the world in terms of inflation. The success of our thought-out policy in this area is important because we are implementing very large social and infrastructure projects.

The crisis that has engulfed some countries at the present time is leading to job losses. The infrastructure projects have practically been stopped. Investment has significantly reduced. Under such circumstances, it is certainly easier to keep inflation at an acceptable level. But Azerbaijan is also carrying out social programs, implementing projects of social infrastructure, increasing wages, pensions and social benefits. We are investing in large-scale infrastructure. We keep inflation at 2.3 per cent. This is a truly great achievement.

Macroeconomic stability should always be in the spotlight in the coming years. We should not allow for artificial price hikes. I think that control over prices on the consumer market in Azerbaijan is exercised at the best level. This process should be permanent. Of course, control, private enterprise development and responsibility of entrepreneurs are of great importance. By preserving macroeconomic stability we can successfully continue our economic development in the future.

This year we will complete the second program on the development of regions. The adoption of these programs has played a crucial role in improving the situation in the regions. The creation of jobs, the establishment of new enterprises, the implementation of regional infrastructure projects, including the social infrastructure, has contributed to the solution of a number of important issues. Jobs have been created in the districts. The regions have been revived. The trend of migration from the regions into cities, especially Baku, has slightly decreased. Of course, all-round development of our country has been ensured, because the majority of our population lives in regions of Azerbaijan. The creation of normal conditions in the regions remains our priority. The realization of two state programs, I think, has been the most important step in this regard.

Next year we need to adopt the third state program. The program also needs to be precise and specific. It should reflect all relevant issues for every single village. We already know very well what problems there are in a particular region, district and village. Given the fact that our financial and economic power will continue to grow, the solution to these problems will also be possible. The political will, as always, is there. Over the next five years, we have to resolve all of the social and economic issues in the regions. I am confident that we will achieve this.

We are successfully implementing infrastructure projects, water projects. In many districts and cities, drinking water and sanitation projects have already been completed. These projects are implemented in other districts as well. Gasification, power lines, rural roads, irrigation issues – we have actually revitalized the regions. Today, the situation in the regions is very positive.

At the same time, as you know, the state program on the socioeconomic development of suburban settlements of Baku is under way. It is a short-term program covering two years. At the end of this year it is coming to an end. I can say that very much has been done in the suburban settlements of Baku in the course of two years. But there is still much to do.

Next year we will probably continue this program because the construction of schools and drinking water lines must go on.

The fight against corruption and bribery should become even more serious. I can say that we have good results in this area. I would like to reiterate what I said at the opening of a new office building of the Anti-Corruption Department under the Prosecutor-General. There should be no corruption in Azerbaijan. We need to eradicate this social evil. Corruption undermines the principles of social justice and hinders the successful development of society. Thanks to the efforts of society and public policy, we will fight corruption even more seriously. I am confident that Azerbaijan will be among leading countries in the world in this respect in the coming years.

The main condition for a successful fight against corruption is the political will, which is there. I believe that the decisions we have passed, the progress made in terms of the legislation, the adoption of new laws and the development of e-services, and the systemic measures have already contributed to a serious change in this area. The international organizations analyzing the corruption index have studied peoples’ attitude to the issue by conducting surveys in Azerbaijan. And they have found out that government policies on fighting corruption are supported and approved. I am sure that this will be the case in the future too. We have a very strong political will. There is also a very strong trend in society to fight corruption. We have to make sure that Azerbaijan, as I noted, reaches the level of advanced countries in this area.

The development of e-services in Azerbaijan and the world in recent years has been a great help to us, and we are applying the most progressive experience in Azerbaijan. The experience of developed countries is worthy of approval. We need to apply this experience in Azerbaijan. At the same time, we have put forward our own initiatives in this area. The establishment of “ASAN xidmət” centers, which have earned great sympathy in society in a short time, is a manifestation of our political will. At the same time, it shows how ready Azerbaijan is for innovation in this area. In the first nine months of the year more than 500,000 citizens have approached “ASAN xidmət” centers. In the coming years “ASAN xidmət” centers will be set up in every region. In the meantime, we are providing mobile services. But the investment program for the next year should provide for the establishment of at least one “ASAN xidmət” center in each region, so that we could systematically provide services to the regional population as well.

Of course, punitive measures, as in any country, should and do play a role. But I believe that the combination of these factors will help us in the fight against corruption because the successful development of Azerbaijan and the recognition of Azerbaijan in the world as a dynamic, evolving and modern country are a reality. Today, we are the example in many issues. And we need to be an example in the fight against corruption as well.

In the months left until the end of the year, we will take additional measures related to power generation. Today we have sufficient generating capacity. But in some districts transmission lines are in disrepair. When visiting the districts I always enquire about these issues. Sometimes they can’t withstand even a weak wind. As soon as the wind picks up, these lines are cuts off and power supply stops. So we have given the necessary instructions. Before the end of the year and particularly next year, the lines that are in the worst condition need to be updated. Work is now under way. We have sufficient generating capacity. But the power generation industry must also be at a high level. I am confident that this issue will soon be resolved.

I should say that in the last 10 years we have built 14 power plants in Azerbaijan. We are using both traditional sources of energy and, at the same time, alternative ones. The gasification level in Azerbaijan is approaching almost 90 per cent.

Over the past few years we have gasified all our cities. And this, I think, is a historic achievement because some of our districts and towns were not supplied with gas even in Soviet times. There were districts which never had gas supply.

And now there is no city without gas supply. Work on gasification has been organized in most villages. But there are still villages that do not receive gas. I regularly check on these issues. I am sure that most of our villages will be supplied with natural gas within a year or two at the latest.

Oil production has stabilized. This is a positive development. We must maintain oil production at a high level, so that it remains at this level for many years to come. Gas production in Azerbaijan is growing and will continue to grow. New wells are drilled using our own resources. At the same time, foreign partners are making serious investments. As I noted, Azerbaijani gas will play a role in Europe. Issues of European energy security will be addressed, inter alia, by means of the Azerbaijani gas. As a result of the implementation of the TANAP and TAP projects, Azerbaijan will assert itself as a major gas nation in the world.

We are addressing issues of industrialization. In my opening speech I mentioned that the foundation of a chemical industry park has been laid. This is a historic event. But now we have to make sure that this park becomes fully operational in a short time. The companies whose activities are of strategic importance to the national economy should become residents of the chemical industry park. As a result of their operation, our dependence on imports will be reduced. Their investment will be measured by large numbers. Thus, at the first stage we will ensure the operation of an allocated area in a short time and dozens of new enterprises will be established there. Thanks to the activities of this industrial estate and the Sumgayit industrial park set up earlier, we will have a very large industrial potential. As in any other area, we must reduce our dependence on imports in this field and access new markets with our own products. Of course, the products to be manufactured there can be exported to any country.

Before the end of this year and afterwards, we must also increase our foreign investment. Today Azerbaijan is known in the world as an investor country. We act as donors to provide funds to foreign financial institutions. At the same time, we make sure that major funds are invested. Both our investment portfolio and the geography of our investment are expanding. Today, Azerbaijani investments are made in Turkey, Georgia, Russia, Ukraine, France, Great Britain, Romania, Greece and other countries in large volumes. The biggest investment, of course, will be made in Turkey. The Turkish economy will receive $17 billion in Azerbaijani investment, and Azerbaijan will become the biggest investor on this respect. Our investment portfolio should be allocated so that we could protect ourselves from risks to the maximum extent possible. At the same time, our bilateral relations with the countries we invest in must rise to an even higher level.

The world is currently engulfed by the financial and economic crisis even though it has been five years. It is still not known when it will end.

There is a great need for foreign investment in the world. In this area Azerbaijan pursues a very precise, thought-out and wise policy. Of course, first of all we invest and will continue to invest at home, and the state investment program for the next year will be quite broad. We are open to foreign investment aimed at the development of the areas we need, and this investment is being made. We are also investing in foreign countries. In other words, these processes do not substitute for each other, they are not in conflict. This is a manifestation of our economic policy. In the economic sphere, Azerbaijan carries out a very precise and thought-out policy.

Work will also be continued in the transport sector for the rest of the year. Currently, we are implementing two major transport projects. The construction of the Baku-Tbilisi-Kars railway is ongoing. I am hopefully that it will be completed in the near future. For certain reasons it has slowed down a bit. But now all the issues have been resolved and the project should be implemented in the near future. The second major project is the Alat sea port. This port is also scheduled for commissioning in 2015. It will be the largest commercial port in the Caspian Sea. Thus, Azerbaijan, as a transportation hub of the region, will expand its capabilities. Azerbaijan is already a regional logistical and transportation center. Over the past 10 years, seven airports have been built and renovated in Azerbaijan. The construction of a new passenger terminal of the Heydar Aliyev International Airport, a whole new infrastructure and runways is under way in Baku. This airport will be one of the most comfortable and beautiful airports in the world. We are renovating railways and building highways. Around 10,000 kilometers of roads have been built in the past 10 years.

Food security issues are also constantly in the spotlight. It has already been mentioned here that agriculture is developing. Large farms are set up where yield is twice above the average level. We will be engaged in the development of large farms in the coming years too. The commissioning of the Takhtakorpu water reservoir this year and the Shamkir reservoir next year will enable us to improve irrigation and include an additional 250,000 hectares of land in the circulation.

Of course, we already need to have specific proposals on what exactly should be done on the newly irrigated lands which will be included in the turnover. It is clear that farmers themselves decide what they will plant. But by providing government subsidies, state benefits and incentive mechanisms, we can guide farmers into the necessary directions in order to fully provide ourselves with main products. We are approaching this task and this goal. On some foods we have already reached 100 per cent and on others we are very close. Where there is still a dependence on imports, it must be completely eliminated.

In recent years, the demographic situation in Azerbaijan has also been very positive. The fact that we have a good demographic situation is one of the biggest advantages, one the most significant accomplishments. As we continue this positive momentum, Azerbaijan will strengthen further. Over the past 10 years the Azerbaijani economy grew 3.4 times.

No other country in the world has achieved a similar result in the last 10 years. This is our achievement. In the past 10 years, including the current year, investment in the amount of $150 billion has been made. So much investment is made only in stable countries. So much investment is made only in countries whose future is predictable.

Over the past 10 years, our foreign exchange reserves have increased almost 30 times. What does this mean? We are increasing our foreign exchange reserves, we are protecting them. We approach these issues with great sensitivity. This area is absolutely transparent. There is ample opportunity for public oversight in it. The revenues and expenditures of the State Oil Fund are published and discussed when there are transfers into the state budget. Foreign exchange reserves of the Central Bank are no secret either. This information is in the public domain. In other words, we have ensured complete transparency in this area, and I think that this is the way it should be. The citizens of Azerbaijan should be able to know what the financial situation of the country is and how the state and the government protect their resources. I can say that this wealth is protected in Azerbaijan at the highest level. We will continue increasing our foreign exchange reserves in the following years too.

Over the past 10 years our budget expenditure has increased almost 20 times. The budget growth of almost 20 times has allowed us the opportunity to do a great job. Over the past 10 years we have created more than 1,200,000 jobs, including 910,000 permanent jobs. In the end of the day, unemployment is expected to drop to 4.8 per cent by the end of the year. In 10 years poverty was reduced 10 times and is now less than 6 per cent.

Azerbaijan's foreign debt amounts to only 7.8 per cent. In recent years we have increased pensions and salaries several times: pensions almost 10 times and salaries about six times. Defense spending has risen more than 20 times.

In the last 10 years, in fact even in a shorter period of time, Azerbaijan has established a defense industry which had never existed in the country before. Over the last seven to eight years we have created dozens of military enterprises. At present, Azerbaijan produces military products of 750 denominations. The creation of local production means a significant reduction in dependence in this field. Today Azerbaijan can and does export arms.

Over the past 10 years, 2,708 schools and 500 health facilities have been built or renovated, 35 Olympic sports centers have been built, and their total number is approaching 40 now.

Over these years we have made historic achievements in our energy policy. In 2006, we commissioned the Baku-Tbilisi-Ceyhan oil pipeline and in 2007 the Baku-Tbilisi-Erzurum gas pipeline. If it hadn’t been for these pipelines, our economic and political situation could be completely different now. These are the projects that required a strong political will. These projects provide for the present-day and future development of Azerbaijan. We have been able to take the oil and gas resources of the Caspian Sea to the world market for the first time in history. We do not have a direct access to world markets. To obtain such an access, we had to build these pipelines. These pipelines were laid in a very complicated geopolitical situation, due to the hard work and courage, and thanks to the implementation of the great leader’s oil strategy. Over the past 10 years we have made great strides in implementing this strategy.

These projects alone have led to the implementation of new projects. If the Baku-Tbilisi-Ceyhan oil pipeline hadn’t been commissioned in 2006, this energy corridor would not be there today. If it hadn’t been for the energy corridor, no-one would want to invest in Azerbaijan’s gas fields. Thanks to the implementation of these two historic projects, we have been able to create a new energy corridor. And we have created it. Azerbaijan has created it together with its partners and friendly countries. But it was our initiative. The main financial burden, of course, fell on Azerbaijan.

In subsequent years, as a result of the effective operation of these pipelines, new projects emerged. Last year, Azerbaijan and Turkey signed a contract on the implementation of the TANAP project. This is also a historic project. The TANAP project is of historic significance. Less than a year afterwards agreement was reached on the Trans-Adriatic Pipeline, the TAP project. This is a project that aims to ensure that we access Europe with large volumes of gas. Afterwards, contracts for the "Shah Deniz-2" project were signed. Azerbaijan is building large rigs and platforms, although we did not have such opportunities before.

This in itself will bring foreign investment of tens of billions of dollars to Azerbaijan in the years to come. Now our private sector is more ready for this investment. In the early 1990s, contracts were concluded mainly with foreign companies. And now we have a strong technical capacity and professional companies. Most of the contracts will be implemented by Azerbaijani companies. Look how much our businesses will benefit, how much investment will me made in our economy. So the work done in the energy sector over the past 10 years is historic. No-one can deny that. It is our great achievement, a great success.

Along with this, we have ensured the development of other sectors. In these years, we entered the club of space-faring countries. Today, Azerbaijan has its own satellite. We have a satellite Azerspace-1, which is already serving the Azerbaijani people and state. This is also a historic achievement. The satellite is called Azerspace-1, which means that there will be Azerspace-2 and Azerspace-3, and this industry will develop in Azerbaijan.

Over these years we have managed to achieve the biggest success in foreign policy. Two years ago, with the support of 155 countries, we were elected a member of the UN Security Council. For two years, we acted with dignity and courage in the Security Council and expressed our position on every issue. I believe that the support provided to us in the UN has further increased. More and more countries recognize Azerbaijan as a reliable partner and a friendly country. At the present time, in October, we are chairing the UN Security Council. Azerbaijan, which has been living in real independence for only 20 years, has become a member of the world’s top organization, the Security Council, and currently chairs it. This makes every citizen of Azerbaijan feel proud. We are rightly proud of the fact that our country has been making such progress.

Over these years our cities have become developed and beautiful. Over these years, Baku has become one of the most beautiful cities in the world. Baku is one of the most comfortable and beautiful cities in the world indeed. Our capital is a reflection of the creative work, development and improvement ongoing in the country. It embodies the successful development of Azerbaijan.

It will take several hours, maybe even days, to describe the work done in 10 ten years. I have only highlighted the main achievements. There will be a presidential election after a few days. I am confident that the election will be conducted fairly and transparently. This election will fully reflect the will of the Azerbaijani people.

Thank you.