Closing speech by Ilham Aliyev at the meeting of Cabinet meeting on results of first quarter of 2017 and future tasks
10 april 2017, 12:00
Thus, 2017 starts quite well for us. There are good results. We must try to maintain this dynamic during the year and successfully complete 2017.
One of the important issues, of course, is macroeconomic stability. We must strengthen macroeconomic stability. We should not allow artificial price hikes. Consumer prices should always be in the spotlight. They should be under control. In general, I think that from the point of view of macroeconomic stability, 2017 will be more successful in comparison to previous years. There are grounds to say this. A prudent and very flexible policy should be conducted in this direction.
The execution of the state budget is going well. Both customs and tax authorities have exceeded the quarterly plan. This is good. At the same time, budget expenditure must be fulfilled by 100 per cent. In previous years, the funds envisaged as investment were not utilized in full in some cases. This year, both the adopted monetary program and the balance between expenses and incomes should be fully provided. The investment program for this year should be quite effective. Sufficient funds are allocated for the country’s most important projects, and things are going well in the first quarter. The investment program must be fully implemented.
I have already mentioned that we have a good financial situation. This year, we have increased our foreign exchange reserves by $1 billion dollars in three months. Our foreign reserves are more than five times higher than the external debt. I think that such a picture is quite rare in the world. In this respect, Azerbaijan, of course, is different. In many developed countries, the foreign debt exceeds the gross domestic product. Their foreign exchange reserves cannot repay even 20 per cent of the external debt. Our external debt makes up 20 per cent of the gross domestic product, which is a very low indicator. Our foreign exchange reserves are more than five times higher than the external debt. I believe that various rating agencies should take these factors into account. At the same time, as I noted in the opening speech, the economic performance in the first quarter of the year is also one of the most beautiful results.
This year there is a revival in the construction sector. This is natural because the work done last year and the decisions made are already manifesting themselves. I was informed that more than 300 new multi-storey buildings are under construction in Baku now. This in itself is an excellent indicator. Thousands of jobs are created here. Last year, we lost most of the jobs in the construction sector. This year they are being restored. The decisions made, the public investment and, of course, the revival of the private sector have brought about to a new situation. Last year, the foundation of a large town was laid through the State Agency for Housing Construction, and construction work is under way. The second project is to be implemented now. The first stage of the phase of the "White City" project has been completed. Dozens of buildings will be built in the next five years. Entrepreneurs demolish buildings in various places in Baku that are no longer usable. People living there are either paid compensation or funds to rent alternative housing space. Multi-storey houses with beautiful architecture are already being built instead of these obsolete buildings that were in a poor condition.
The first such pilot project was implemented in the Sabunchu district. I personally took part in the opening of a new building. I saw that people are very happy about this because they moved into new apartments and got rid of the buildings in an emergency condition. At the same time, I issued an order that the apartments in the new buildings should be larger. People are provided with renovated apartments which are 10 and in some cases 20 or 30 per cent bigger than before. Of course, people are very happy about this. This is also beneficial to entrepreneurs, because instead of a three- or four-storey buildings they build multi-storey blocks. They receive income, the construction sector develops, the production of building materials increases and jobs are created. This process has already become widespread. According to the latest information I have, the number of projects implemented in this way in the city of Baku has already reached 75. This process continues. I urge local executive bodies and entrepreneurs again to organize this work properly. Entrepreneurs should take the initiative, while local executive bodies, in turn, should create conditions and help them. We will thus achieve several goals here. I have already mentioned that jobs will be created, the construction sector will develop, the security and well-being of our people will be provided and our city will improve.
Another important project is connected with micro-districts. A project associated with the first micro-district has already been prepared. I am sure that it will be realized soon. New modern houses will be built in a beautiful architectural style on the site of obsolete buildings. I have given a special instruction to set up public places and kindergartens on the first floor of new buildings, in particular, the buildings erected on the site of demolished ones. Thus, the first floors of each of the 75 buildings constructed in this way will house a kindergarten. This will have a positive effect on the solution of the problem of kindergartens in Baku. Thus, we will resolve the problem of kindergartens in the next three to four years. There is a great need for this now. The population and the number of children are growing. At the same time, jobs are being created. Many families today have both parents working. Therefore, we will experience a great need for kindergartens. It is also necessary to allocate special places for the construction of kindergartens. But the best option is to have kindergartens in new buildings. Persons issuing building permits and local executive bodies should recommend that to entrepreneurs.
The main priority areas are industrial production and agriculture. There are good results in both directions. As I have already noted, the non-oil industry grew by 2 per cent and agriculture by 3.5 per cent. Currently, industrial zones are being created in the regions. At the end of this year, first plants will be commissioned in the Mingachevir industrial park. Things are going well in the Sumgayit Technological Park, the Chemical Industry Park, the Pirallahi and Balakhani industrial parks, the Neftchala industrial district. So this process is already under way. A few years ago, I ordered that an industrial zone should be built in each district. We are already seeing this. All districts should take an active part in this work.
I want to draw the attention of entrepreneurs to a major project. It is the SOCAR Polymer plant, which is being established at the Sumgayit chemical industry park. It is a huge industrial enterprise where hundreds of millions of dollars are being invested. It will produce fine products, which, of course, will be used in the country and also exported. But I should note that a very serious industrial site can be created on the basis of these raw materials. We are currently importing all the finished plastic products from abroad. But after the commissioning of SOCAR Polymer, there are good opportunities for the production of finished products in Azerbaijan. It will be a very profitable sphere for business. Therefore, I am urging our state agencies to better explain this to business people – factories can be established on the basis of many types of finished products of SOCAR Polymer. This means new jobs. At the same time, it will bring additional income to entrepreneurs, while our export products will be delivered to foreign markets at higher prices. Otherwise, SOCAR Polymer products will be sold abroad only as raw materials. Of course, this is also good, but I am sure that my advice will be taken into consideration.
During the discussion of the results of the third year in the implementation of the State Program on the Socioeconomic Development of the Districts in January this year, I spoke in great detail about the forthcoming work in the field of agriculture. All orders and instructions were given. I do not want to repeat them. I just want to note a few points. This year, in order to facilitate the development of agriculture, irrigation of new land plots of 150,000 hectares is envisaged. Funds have been allocated and these projects should be under control so that we reach this figure within a year. I believe that this will be a revolutionary transformation. This, of course, is one of the factors, perhaps even the first factor that will increase agricultural production. The volume of agricultural production must grow. We must fully meet the domestic demand. We need to increase the volume of exports, increase the yields and apply the latest technologies. It is necessary to keep accurate records of land. Work in this direction is ongoing and instructions are given. It is necessary to conduct an accurate analysis of lands using modern methods. We must have detailed information on the quality of land. We need to borrow the practice of countries that have accumulated extensive experience in this field and apply it in order to know what crops should be grown areas in what region. In other words, we should continue to approach this not spontaneously, but on an individual basis. Depending on this, subsidies should also be assessed. I have already given the appropriate instructions and we must consider this. At present, the procedure for granting subsidies is being improved. However, I believe that in the future we should adopt a more serious approach to the policy of regionalization. We need to know how much should be allocated in subsidies for the regions to cultivate produce, so that we could make more efficient use of our natural resources.
This year there are plans to put into operation two plants – the factories for pivot irrigation systems and pesticides. We must do that this year. A nitrogen fertilizer plant should be put into operation next year. We expect that in about a year. Thus, not only will we provide ourselves with nitrogen fertilizer, but we will also have opportunities for export.
In general, work aimed at self-sufficiency in food products is progressing well. I announce these figures at conferences on socioeconomic development of the regions every year. I can say that our only weakness is grain-growing. Taking this into account, I instructed the Presidential Administration to hold an extended meeting, which has been held. All instructions have been given. After that, I signed a relevant order on the development of grain production and, first of all, analysis. Extensive information should be collected, statistics analyzed correctly and answers to many questions provided. How can it be possible that we allocate a million hectares of land for grain production and cannot provide ourselves with food wheat? The question sounds simple, but there are many things to consider. Therefore, an accurate analysis should be made: how much land we need for food wheat and grain-growing in general in order to provide ourselves with quality grain and, of course, reduce dependence on imports. According to my information, we allocate about 300 million manats for imports every year. Of course, it is necessary to conduct accounting, analysis, electronic and satellite control. We have a satellite. An accurate analysis of the fertility and productivity of the land should be carried out in a short time.
Another important issue relates to the export of goods produced in the non-oil sector. This is also a successfully developing direction now. Reforms have been carried out and institutional measures taken. We have set up the Azexport domain. The Azerbaijani brand is being promoted in the world today. We have been taking part in many exhibitions. Trade houses are being created in various countries. Trade and export missions are carried out. Appropriate orders have been issued and funds allocated. It is necessary to conduct advertising campaigns in foreign media to promote the "Made in Azerbaijan" brand.
In my opening speech, I noted that exports in the non-oil sector have increased by almost 10 per cent, but the potential is even greater. Therefore, we must gain access to new export markets. We need to access traditional export markets with a wider range of products. At the same time, new export markets should be sought. We need to create logistical centers. At present, an Azerbaijani logistical center has been established in Aktau, Kazakhstan. We see that this is of great benefit. In short, this sphere is of great importance for raising both domestic production and our foreign exchange earnings.
Naturally, during the year, as always, attention will be paid to infrastructure projects and their implementation. The focus is on electricity supply. New substations are under construction, especially in regions where this is necessary. These projects should be carried out in parallel with the development of agriculture, so that they serve the population, as well as the development of agriculture.
The level of gasification in Azerbaijan is 92 per cent. This year it will increase even more. Drinking water projects must be fully implemented in the amount of envisaged investments. At the same time, we are implementing 270 small projects this year to provide the rural population with clean drinking water. The construction of these treatment plants in 170 villages will be provided through the “Azersu” OJSC and in other 100 villages through the Ministry of Ecology and Natural Resources. A relevant order has been signed. It lists the names of all villages. I have issued a special instruction both the residents of these villages and the persons performing these works to know that this issue is under control. If the order simply stated that it was very necessary to resolve the water problem in 100 or 200 villages and allocate so much money for that, it would be very difficult to control it: whether water is supplied to 100 or 50 villages? The order states the names of all districts and villages, and I am asking the residents of these villages also to monitor. Let them become acquainted with this order. If their village is on this list but the work is not carried out, then they should immediately inform local executive bodies and the Presidential Administration. Of course, if there are shortcomings in this, the persons who committed them will be punished accordingly. I am saying this in order to strengthen public control. I have repeatedly said that in order to strengthen public control, the public must be informed. We provide this information. This year the provision of 270 villages with modular wastewater treatment plants should be completed. The funds have been allocated and there should also be control.
Projects of rural roads are being implemented. In the current year, projects will be implemented connecting hundreds of villages. New roads are being built in the city of Baku, on the territory called Sovetskaya. A large road infrastructure is being created. There are plans to put it into operation in the near future. In general, this part of our city will turn into a beautiful area. Currently, the work is ongoing. First of all, roads are laid. They will differ from the old roads for their beauty. Whereas the width of the old roads was 3-5 meters, the width of the new ones is 15-20 meters. So this project designed for the future will greatly improve traffic in Baku. In parallel with the construction of roads, the entire area will be landscaped. Parks and a new beautiful recreation area will be created. It has been impossible to implement the project in this area for decades, but we have achieved this. I am sure that people would be satisfied. I have issued instructions to pay the compensation in full. Of course, those who rest in these parks and using these roads will also be pleased.
Other roads are also built in Baku. I have issued instructions as to where to build new arteries, as they say. One of them is a street that is currently being built parallel to Yusif Safarov Street. This street will also attract a part of the city transport. It is of great importance. Work is under way on the construction and expansion of the road Bilgah-Sumgayit road. It will allow an alternative road to connect Sumgayit with Baku, in particular the Baku villages and the international airport. The road, laid at the level of the highest standards, should be put into operation this year.
Social infrastructure projects are being implemented. I am told that three modular-type schools have already been built instead of those in an emergency condition. Twelve more modular schools are to be built in the future. This and next year, there should not be a single school left in an emergency condition in Azerbaijan. The vast majority of schools in Baku have already been renovated, new schools have been built and if there is a need for repairs somewhere, these issues are also being addressed.
In the first quarter, 13 medical institutions were built or overhauled. This year we plan to commission two Olympic centers – the Absheron and Agjabadi Olympic centers. One of the social programs is a project on medical checkups of the population. This year's project will be completed next month. Five million people will undergo free medical examination. In previous years the focus was on advocacy work for people to undergo examination, but now we see that there is no need for this. The people see and know today that this is necessary for their own health. In recent years, we have set up modern medical facilities in all our districts. There are the most modern laboratories. The latest equipment is available, and it is possible to conduct any examination even in small areas now.
The focus is always on increasing employment in the regions. I have repeatedly said that we should always pay attention to this issue, because the population is growing and will continue to increase this year and beyond. A growing population will need new jobs in the future. The demographic situation in Azerbaijan is very good. The population is growing. This should encourage us to work even harder. Therefore, increasing the employment rate will always be on the agenda. We are addressing this issue. I have already mentioned that 70,000 permanent jobs have been created both in the public and private sectors. Together with seasonal work, it is 85,000 jobs. This is a large figure for three months, and we must continue this work. At the same time, the program of self-employment should be expanded. First steps have already been taken. These projects should be implemented by state bodies, local executive bodies and private businesses. Every family, i.e. a family still living in poverty, should be able to provide for itself, and we must create these opportunities. Of course, the government always shows attention and care for citizens living in a difficult situation. A program on targeted social assistance is being implemented. But we must gradually move on to the system of self-employment. It is more profitable and better for the citizens themselves.
They will have their own family budget. We simply need to help them. In rural areas, it is necessary to create conditions for them and provide with cattle and poultry. An important role here can be played by beekeeping and livestock farming, so that they could provide their own budget themselves. At the initial stage, of course, the government will help them. Therefore, the Cabinet of Ministers should pay special attention to the program of self-employment. I repeat that it is necessary for all relevant departments and agencies to pursue a unified policy. This work, of course, is carried out by the Ministry of Labor and Social Protection of the Population, but I believe that other ministries, the Ministry of Economy, the Ministry of Agriculture, local executive bodies and entrepreneurs, should also get involved in this. It is necessary to regularly tell me what work has been done in this direction.
This year, the process of granting soft loans related to the development of entrepreneurship will be continued. Soft loans worth 150 million manats will be provided. At the same time, I should note that, in accordance with our policy, a process has been taking place in recent years whereby 32 large-scale farms have been created in Azerbaijan. The area under cultivation in these farms is 44,000 hectares. A total of 33 agro-parks are being established on 142,000 hectares in 24 districts. The funds spent on the establishment of agro-park data are 1 billion manats. These 33 agro-parks and the 32 large farms created before this will have a very big impact on increasing the yields, meeting the domestic demand and increasing the export potential, especially if we consider that these agricultural parks and farms are built on the basis of modern technology.
We, both state bodies and local executive authorities, should work harder to attract foreign investments. Local executive authorities should also attract investment. They should attract both local and foreign entrepreneurs. There should be greater initiative from the ground.
I would like to note another issue: our budget organizations should fully pay for the cost of the electricity used.
This year, two “ASAN xidmət” centers should be opened in Guba and Mingachevir. This should happen before the end of the year. The funds are envisaged, and the construction of two centers is under way in the cities of Imishli and Shaki. Thus, these two centers should also be commissioned next year.
These are the main tasks we are facing. Let me repeat that the first quarter of the year is encouraging. It shows once again that our forecasts are being fulfilled and the policies are quite successful. We must do everything possible to maintain this positive momentum by the end of this year in order to further strengthen our country. Thank you.