Opening speech by Ilham Aliyev at the republican conference of non-oil exporters
17 april 2017, 09:45
The first national meeting of non-oil exporters is being held in Yevlakh District today. This meeting is of great importance. I am confident that our non-oil exports will increase after this. There are grounds to say this, because serious reforms have been carried out in Azerbaijan in recent years, state programs on socioeconomic development of the regions have been adopted, and major state support has been and is still being provided to entrepreneurs. Thus, we have managed to achieve an increase in non-oil exports. The first meeting is being held in Yevlakh District.
In recent years, many important steps have been taken to accelerate the socioeconomic development of Yevlakh District. Both economic and social projects have been implemented. As part of my current trip, we marked the opening of several important facilities. Two road projects have been commissioned. The reconstruction of the Varvara hydro power station has been decided on. It was at a standstill for years, and the capacity of this station is 18 megawatts now. In addition, we have celebrated the opening of a modern fish farm in Yevlakh. This is also a large enterprise. Major investments have been made. At the same time, the enterprise has a huge export potential.
In fact, the main focus of our activities is on meeting the domestic demand through domestic production and increasing the export potential. We are doing that. I meet with entrepreneurs several times a year. Over the past 13-14 years, meetings have been held with hundreds of entrepreneurs. I personally took part in the opening of many enterprises in the field of entrepreneurial activity. Entrepreneurs are well aware that the government provides them with great support, including political.
The attitude towards entrepreneurs is changing for the better today. Of course, the social responsibility of entrepreneurs is one of the issues on the agenda. I have repeatedly expressed my thoughts about that. This is also necessary for entrepreneurs, so that society could appreciate their work even higher. At the same time, entrepreneurs should make effort not only in the interests of business, but also to meet the challenges, including the social tasks facing the country as a whole. I am confident that as material opportunities grow, they will pay more attention to this issue and allocate more funds.
As for the state policy, I would like to say once again: the development of entrepreneurship is one of our priorities. As I have already noted, political support is provided for the development of entrepreneurship. At the same time, state bodies provide extensive methodological support. Such excellent regional development centers are being set up. This is the second such center. I personally took part in the opening of the first center in Khachmaz District. The Aran Regional Development Center in Yevlakh District has also been built and handed over to entrepreneurs. This is further evidence of the government support for the development of entrepreneurship.
In recent years, the state has provided entrepreneurs with very concessional loans in excess of 2 billion manats through the National Fund for Entrepreneurial Support. The projects being implemented at the expense of these loans, as well as the funds invested by entrepreneurs, provide grounds to say that we are increasing our non-oil exports. Without these loans, many projects could not have been implemented. There could be no talk not only of increasing the export potential today, but also of meeting domestic demand in general. Therefore, the state policy, the political, moral and financial support provided to entrepreneurs, the serious reforms aimed at the development of entrepreneurship, and the privileges granted to them are the main factors giving an impetus to the development of the non-oil sector in Azerbaijan today.
Of course, when speaking about the development of entrepreneurship, we must point to regional development programs. The first program was adopted in early February 2004. The adoption of this program was part of my pre-election program in 2003. At the time, I said that if the people trusted me, the development of the regions would become one of the top priorities on my agenda. And so it happened. The first program of regional development was adopted and implemented in 2004, the second in 2009 and the third in 2014. I should also note that the first and second programs were over-fulfilled. All the objectives of these programs were met. At present, we are implementing the third regional development program. I am sure this program will be successfully implemented too.
What have we achieved by implementing these programs? First of all, modern infrastructure was created in the regions. If we had not invested in infrastructure projects, there could be no talk of development. We started doing this when the country was not receiving major oil revenues yet. Oil revenues began to flow into Azerbaijan after the commissioning of the Baku-Tbilisi-Ceyhan oil pipeline in 2006, but we adopted the first regional development program and started to implement it in 2004. This shows that our success is underpinned not only by our financial situation. At the same time, our prudent policies, firm will and properly planned consistent activities contributed to the implementation of regional development programs. In general, by pursuing a consistent policy in all other spheres we are strengthening our country.
It is possible to say that all major infrastructure projects have been implemented in Azerbaijan from 2004 to the present. We used to import electricity, but we have already started to export it. About 30 power plants have been built and put into operation. This is the first condition for development. Without the energy capacity it is impossible to create any enterprise. On the other hand, our infrastructure projects are of social nature, because it is the duty of every state to provide its citizens with sustainable energy. We have achieved that. We remember the previous years too well – there were blackouts even in Baku. It is possible to say that we have achieved uninterrupted power supply. Work is still ongoing, energy infrastructure is being updated, substations built, power lines laid, and electricity pylons updated. However, we can say that we have done most of the work.
Gasification in Azerbaijan has reached 92 per cent. I remember that one of the issues people raised during my first trips to the regions as a President was gasification. At that time, there was no gas supply not only to the villages, but even to district centers. In fact, the city of Baku was not provided with natural gas by 100 per cent either. We can say that we have resolved this issue as well. The level of gasification of up to 92 per cent is a great achievement for any country. But we should not be content with this. We will achieve an even higher level in the coming years.
After the adoption of the first program, roads more than 11,000 kilometers in length were laid. Roads linking us with all neighboring countries have either been put into operation or are close to this. The construction of rural roads has assumed large proportions. We put into operation two road projects in Yevlakh District yesterday. We can say that the main rural roads in Yevlakh District are already in a normal state. New road projects connecting hundreds of villages will be implemented this year. This is both social and economic issue. It brings people comfort. At the same time, roads are of great importance for the timely delivery of crops to markets. In addition, where there are no roads, there is no investment and no development. These were the main directions of the program.
Let’s move on to the creation of social infrastructure. More than 3,000 schools and over 600 hospitals have been built or renovated. Major land reclamation projects have been implemented. I can say that two of them, the Takhtakorpu and Shamkirchay water reservoir projects, are of historic importance. Major state funds have been invested in these projects. The operation of these reservoirs will continue to provide great support for agriculture in the future. Other land reclamation projects have been implemented as well. This process continues. I think that the most serious steps will be taken in this direction this year. I have already mentioned that new irrigated land of about 150,000 hectares will be made available to farmers this year. The fact that we have received so much irrigated land in just one year is a historic achievement.
In other words, the implementation of regional development programs has produced excellent results. Thousands of new enterprises have been created. A total of 1,700,000 jobs have been created, including 1,300,000 permanent ones.
Our regions have improved and the cities have become prettier. When you come to any district today, you see beauty and comfort. We have done all this. This has been possible thanks to our policies. This shows once again that we have chosen the right path, and the implementation of these initiatives has created an entirely different situation.
We can say with confidence today that Azerbaijan has managed to diversify its economic potential. Currently, the non-oil sector provides about 65 per cent of our economy. We can’t say this about exports yet. A significant part of our exports is still connected with oil and gas. This is probably natural for the current stage because we are building up our oil and gas potential. But one of the tasks we are facing to achieve diversification in exports as well. We must achieve this in exports, just as we have done with the gross domestic product.
The indicators of this year are also very reassuring. I have already talked about this and I want to say again: the indicators for three months of this year are very encouraging. This shows once again that the decisions we made in 2016 and the reforms launched have given excellent results in a short period of time. Over the three months of this year, the non-oil sector of our economy increased by 2.4 per cent. This is a very good indicator. Our non-oil industry grew by 2 and agriculture by 3.5 per cent%. Over three months, more than 80,000 jobs were created. The turnover has increased by 15 per cent and exports by almost 50 per cent, while imports have decreased by 17 per cent. Exports of agricultural products have increased by 44 per cent. Our surplus exceeds $1 billion. In three months, we have earned $1 billion. Our foreign exchange reserves are growing. This positive dynamics suggests that we will achieve even better results over the year because the pace and reforms that have assumed major proportions, including the support of our policy by entrepreneurs, which is manifested by their deeds and investments, suggest that 2017 will be very successful. At the same time, by moving to a new economic model, we will now develop our economy only through reforms, innovations, technologies and the non-oil sector.
The decisions made last year, the laws, decrees and orders signed have created good opportunities for further diversification of the economy. In particular, the steps we have taken in connection with non-oil exports are already yielding excellent results. We have started applying the incentive system. I said this in previous years, because the incentive system justified has itself in several countries and led to a rapid growth in exports. We have studied the most advanced practices and begun to apply investment and export promotion systems in Azerbaijan. Both mechanisms are involved and have already been successfully implemented. Perhaps entrepreneurs did not immediately believe that the government would provide them with such benefits. Some of them were surprised by this. But now they see that if an entrepreneur produces exportable goods and delivers them to world markets, the state returns a certain percentage of its value to him. So this initiative gives a huge incentive. In economic terms, the entrepreneur receives an extra income. Also, I think that this is of moral value because the entrepreneur has more confidence, does his job with even greater faith and attracts investments to the country.
There is a mechanism for encouraging investments. In a short time, 130 documents on investment promotion have already been issued. Within the framework of this program, people will invest 1 billion 250 million manats in the economy of the country. Look how much money we have attracted for investment using the mechanism of their promotion. Entrepreneurs organize it themselves. The state, of course, provides support.
As I have already mentioned, preferential loans, methodological recommendations and infrastructure projects are bearing fruit. This year, we will begin the irrigation of 150,000 hectares for the first time. All this enhances our economic potential and enables entrepreneurs to invest funds, grow produce, and deliver it to foreign and domestic markets. So these two incentive initiatives deserve very high praise. Along with this, we created the Azexport portal last year. This is also a step taken by the state to facilitate the work of entrepreneurs. Today, Azexport has already proved itself on a global scale. Interest in this portal will gradually grow. At present, our main task is to ensure production of goods ordered from abroad. Today, we sometimes do not have enough products for exports. The creation of Azexport is a very positive event, and interest in it in the world will gradually increase.
Tangible steps are being taken to popularize the Made in Azerbaijan brand in the world. Today, this brand is already gaining recognition in the world. The exhibitions organized by the state and the participation of entrepreneurs in them are producing excellent results. I am told that contracts have already signed in several exhibitions. If we had not participated in these exhibitions, contracts would not have been signed. We realize that entrepreneurs should be provided with additional support.
I have already noted that loans are provided and farmers are exempt from all taxes except for the land tax. Equipment is purchased, fertilizer, fuel and subsidies are provided on preferential terms. All this has revived our non-oil sector. However, entrepreneurs should be provided with additional support so that they could supply their produce to foreign markets. This is necessary for them and for the state. This brings currency to our country. This is why we have begun to expand our participation in these exhibitions. Several export missions were sent to foreign countries. These missions also bring tremendous benefit. We have decided to create trading houses of Azerbaijan in several countries and are already close to achieving that. Of course, all the steps taken by the state create new opportunities for entrepreneurs.
Thus, from now on, on the basis of these excellent results, we must further improve our work and expand our activities. Of course, in order to increase non-oil exports, we must, first of all, meet the domestic demand with local products. We are approaching this. Every year we sum up our regional development programs. The following topic is always on our agenda: what products we provide ourselves with and to what extent. And every year we see positive dynamics. So far we have not been able to fully achieve that. Therefore, I believe that in the next three to four years we must try to fully provide ourselves with basic consumer goods. Thus, we will have additional opportunities for export.
I want to mention issue question: we must always develop because the country is developing dynamically and the population is growing. In developed countries, the population either remains stable or decreases. In our country, the population is increasing. We had a small population when the first regional program was adopted in 2004. Today, the population is approaching 10 million people. This, of course, is our great advantage. At the same time, it testifies to our rapid economic development. People have started to live even better, their well-being has improved and, naturally, the population is growing. At the same time, this positive trend involves new challenges. We must always increase production to fully meet the domestic demand and export competitive goods. Therefore, issues of meeting the domestic demand for local products are our primary goal in the coming years.
At the same time, we must gain access to new markets with the support of the state. We are doing and will continue to do this. We need to increase the volume of exportable goods. Food security is also a matter directly related to these two factors. We are close to fully ensuring our food security.
We will talk about the work that needs to be done in the coming years. The main objective of the current meeting is to ensure that we consistently carry out further activities. The instructions issued today should be and will be fulfilled, of course. As a result of their implementation, we will achieve even greater export potential. Of course, we can achieve this only with the help of entrepreneurs and with their hard work. The state, as always, will stand by entrepreneurs.