29 january 2018, 10:00
Closing speech by Ilham Aliyev at the conference dedicated to results of fourth year implementation of the State Program on socio-economic development in 2014-2018
As I have already noted, the third state program is being completed this year. I will give instructions regarding the work to be done this year. All of these instructions must be fulfilled by the end of the year. The work to be done this year is, as always, associated primarily with infrastructure projects and includes the following.
Before the end of this year, gasification should be brought to 95 per cent. This is a very high indicator. I believe that we are in one of the leading places on a global scale for this indicator. Considering our terrain, we can once again see how difficult this work is. Therefore, the current level of gasification, 93 per cent, is a good indicator. However, we have to remember that there are still many villages that have yet to receive gas. Funds in the amount of about 100 million manats are to be allocated to the State Oil Company of Azerbaijan this year for that. The State Oil Company of Azerbaijan should carry out this work in a short period of time, and gasification should reach 95 per cent. After that, next year, we will see what need to be done in connection with the construction of gas lines to remote mountain villages.
As I mentioned in my opening remarks, Azerbaijan fully provides for its energy security today and contributes to the energy security of other countries. We do not have any problems with electricity now. A new large power plant should be launched this year. This station has been under construction for several years. The opening of “Shimal-2” power plant is scheduled for this year. The generation capacity of the station is 400 megawatts. This is a very large station which will provide us with additional potential and, first of all, increase our export capabilities, of course. After all, problems with electricity in the country have been resolved and we will have additional export opportunities. At the same time, fairly large investment projects will be implemented in the regions this year, involving the construction of new substations, power lines, replacement of power lines and transformers, i.e. reconstruction and upgrade of the electricity infrastructure.
Work related to drinking water and sanitation projects will be continued. The drinking water and sanitation problem of at least three cities will be completely resolved this year. There are plans to complete work and projects in Mingachevir, Gabala and Agdash. In parallel, drinking water and sanitation projects will be implemented in 20 more cities. During the year we will be able to see if there are other projects that may also be completed this year. As I mentioned in my opening speech, 67 per cent our population is uninterruptedly provided with water, including 81 per cent in Baku and 43 per cent in the regions. To address this issue, there are also plans to build modern water treatment plants in the villages located along the rivers. Similar projects were also implemented in previous years, and hundreds of thousands of villagers living along the rivers benefited from these opportunities. The implementation of these projects is scheduled for this year as well. At least 300 sub-artesian wells are to be drilled. Our people use them both in their everyday life and in agriculture.
On land reclamation. This year, there are plans to supply water to at least 100,000 hectares of non-irrigated lands. Thus, in 2017-2018 we will organize water supply of more than 200,000 hectares. Several important projects related to canals will be implemented. The State Investment Program provides sufficient funds. All projects envisaged in the State Investment Program on this issue should be implemented by the end of the year. To improve land reclamation measures and contribute to rational use of water, pivot irrigation systems should be extensively used. To this end, the production of pivot installations is being established in our country in order to prevent the outflow of funds and provide ourselves with these installations. These systems must definitely be used in farms, especially in large agricultural estates, because this significantly increases the yield and enables rational use of water.
This year we will build 2,300 kilometers of highways – trunk, inter-city and rural roads. Last year, as part of a project conventionally named "40 roads", we built and restored roads to more than 500 villages. It is necessary to build roads in at least 600 villages. Sufficient funds are envisaged for that. At the same time, we will tackle the construction of a new main road this year. The construction of a new road from Sumgayit to the border with Russia is also planned. The following measures are envisaged in connection with the construction of social facilities this year.
The construction of new central district hospitals should be completed in six cities – Gazakh, Gobustan, Shamkir, Guba, Naftalan and Goranboy, At the same time, the construction of central district hospitals will be continued in Fizuli district and in the city of Gabala, so that they could be put into operation in 2019. I should also note that modern diagnostic centers were commissioned both in Fizuli and Gabala Districts earlier. In other words, there are opportunities for receiving qualified medical service there now, but new hospitals will also be built.
Last year, more than 5 million people underwent free medical examination. As far as I know, this is the only such example in the world, and it is done by us. Of course, our people should take advantage of these wonderful opportunities this year too, and they are already doing that. In previous years, during the opening of central district hospitals, I always urged our people to take advantage of this. There are fully equipped modern hospitals in all our regions now, and I am glad that our citizens can take advantage of these opportunities to receive high-quality medical services.
On education. A total of 137 schools of a modular type will be built this year. More than 100 schools in the villages will be gasified and hundreds of schools will undergo renovation. In Baku, 12 schools will be overhauled. Thus, we will resolve the problem of construction and renovation of schools in the city of Baku. Of course, new schools will be built in all regions and districts and the existing schools will be renovated in the coming years. However, the goal is to implement the entire program associated with the repair of schools in emergency condition this year. I believe that it is possible.
Olympic sport centers should be built in four cities. Two of them will be commissioned this year and two more next year.
The construction of new buildings and houses for internally displaced persons will be continued. Great attention is being paid to this issue. To date, 265,000 IDPs have been provided with new houses and apartments. Last year, we succeeded in restoring the village of Jojug Marjanli. This is a historic event. In addition, a large settlement for 1,170 families has been built in the village of Shikharkh and for 150 families in Jojug Marjanli. These projects are of particular importance because they have been realized on once occupied lands which have been freed by our army. The implementation of these projects also shows that Azerbaijan will restore its territorial integrity, and new cities, towns, villages, schools, residential buildings and the entire infrastructure will be built on the devastated territories. Using the example of Jojug Marjanli and Shikharkh, we demonstrate the will of our country and people. We are showing once again that the Azerbaijani people will never put up with this occupation and that Azerbaijani IDPs are ready to return to their native lands. Today, the economic and military potential of our country is no secret to anyone, and our top priority is to settle the Armenian-Azerbaijani Nagorno-Karabakh conflict fairly, in accordance with the norms of international law and within the territorial integrity of our country. This issue must be resolved only within the framework of the territorial integrity of our country. This year, 20,000 IDPs will be provided with new homes. Last year, we accommodated 12,000 IDPs. This year, new houses will be provided to 4,000 families, or at least 20,000 people. Thus, the number of IDPs provided with homes, apartments and good conditions will reach about 290,000. However, this is a minimum program, and if there are opportunities during the year, we will increase this number.
In my opening remarks, I expressed my thoughts regarding to the creation of jobs. This should become an ongoing process. Population requires constant creation of new jobs. I think that a record result was achieved in this direction last year – 177,000 permanent jobs were created. Work in this direction will, of course, be continued this year as well. Our plans and investment in regions and cities actually facilitate the creation of jobs. The launch of major construction and infrastructure projects and the commissioning of industrial facilities create conditions for the creation of jobs.
This year, we will carry out the self-employment program in even larger volumes. It is possible to say that we started the implementation of this program last year. Initial results are positive. This year, as a result of the steps taken and reforms, there will be fairly large funds – more than 30 million manats. And 6,000, perhaps even 7,000 families will be covered by the self-employment program. This is a great project, a great initiative – both economically and psychologically because the people still living in harsh conditions and receiving social assistance from the state will be able to earn money, feed their families with conscientious work and build their own lives. The state, for its part, will provide support, the necessary equipment and facilities free of charge, so that they can start their business. If we create such conditions for 6,000-7,000 families every year, then no-one will be in need of social assistance.
This year, we will also witness the rapid development of the "Simplified support for family business" (ABAD) project. ABAD centers are already being created. I am generally aware of these conditions and opportunities. This is also an excellent initiative which allows farmers and family farms the opportunity to deliver their products to local and foreign markets in a modern way. The state takes upon itself all the obligations, the whole burden again. Farmers and families are provided with containers and method guidelines. Conditions are created for them to improve their lives. To date, farmers using these opportunities manufacture good products. They produce honey, jam, meat, dairy products and souvenirs. Now the number of tourists coming to our country is on the increase, and every tourist is interested in buying a souvenir. Unfortunately, for the time being the souvenirs sold in our city, i.e. reflecting our city, are produced abroad. This was a major drawback, a huge gap. We should try to produce these souvenirs in Azerbaijan, and ABAD is making a contribution to that. In general, I want to urge entrepreneurs to pay more attention to this area because there will be even more tourists and there will be even greater demand for souvenirs.
In connection with ABAD, I should note that the state, of course, has assumed this function. But I believe that large business companies should be more active in this area. Turning to both public and private companies, I want to encourage them to do this work. In general, I have repeatedly expressed my views on the issue of social responsibility of business. The state creates these conditions for business people, provides both political and financial support. We have granted more than 2 billion manats in low-interest loans. Farmers are provided with so many benefits. The state gives them fuel, fertilizer, subsidies and equipment. Farmers are exempt from tax except for the land tax. Our country has been doing so much to improve the business environment and carry out reforms! International organizations are also acknowledging that. In response, major businesses should realize their social responsibility, which is not only about engaging in some kind of charity. Social responsibility is also about supporting small businesses, family businesses. Therefore, I am instructing the Presidential Administration and relevant ministries – the Ministry of Economy, the Ministry of Agriculture and other relevant agencies – to prepare proposals on this issue. Maybe they should meet with major business companies and involve them in the program to support family businesses. This will be fair. Large companies, especially those which receive major funds thanks to state support and public policies, should support small businesses too.
In my opening remarks, I noted in connection with investment that investment this year is envisaged at least at the same level as last year. At the same time, investment in the regions, of course, is very important for the implementation of regional development programs. The state has played and will play its role there. If there wasn’t for state investment, then there could be no talk of any development in the regions. In my opening remarks, I touched quite thoroughly upon this issue. I said that as a result of the state investment policy, all infrastructure projects have been and are still being implemented in our regions. Now is the time when local executive bodies should be more active in these matters and attract investment.
Investment in the regions is mainly made by local business people these days. Of course, there is a climate factor here. Now for the cultivation of a particular product in a certain region should invest. At the same time, the situation in the regions, the existing atmosphere and the investment climate play a role. Therefore, local executive authorities should be more active in these matters. They should attract business people to the process of investment. However, when business people want to invest money, they are sometimes faced with certain conditions. True, there have been fewer such cases of late, but they are still there. Therefore, local executive bodies should attract investments. It is also true that there are remote and small districts. Such investment can’t catch up with investments in larger districts. We can’t perform an analysis on the basis of a single chart here. However, in each district, local executive bodies and their leaders should work hard to attract private investment and create conditions for entrepreneurs.
I want to note the districts that were in the lead in terms of investments last year – both for the total volume of investments made last year and for the total volume of investment projects. Thus, the following districts were in the top 10 in terms of investment last year: Salyan, Gabala, Gazakh, Lankaran, Absheron, Agstafa, Khachmaz, Ismayilli, Sumgayit and Ganja. The biggest investments last year were made in these districts. However, investment projects with the total value exceeding 100 million manats will be implemented in five districts. Among them, the first place belongs to Absheron District. The volume of investments is expected at the level of 250 million manats. In the second place is Sumgayit city with 186 million manats. Third comes Saatli District with 152 million manats, fourth Salyan Region with 126 million manats, fifth Gabala District with 116 million manats. In other words, a figure of more than 100 million manats, of course, is good for the regions. Slightly below 100 million, which I have to mention as well, is the city of Ganja, with investment expected at the level of 98 million manats. So these are very high figures and excellent indicators. The chart I have shows the amount of investment already made and expected to be made in all our districts. This will be thoroughly and seriously analyzed. But I must say that this process has already begun. State bodies, business people and local executive authorities should and do work together in this direction.
A number of important projects related to transport, rail transport in particular, will be implemented this year. As I have already noted, the Baku-Tbilisi-Kars railway has been launched and is already beginning to operate. Interest in it is fairly large. This issue is seriously discussed both within the framework of the Davos World Economic Forum and other forums. It is possible to say that this is a project occupying a special place among the world’s agenda of transport infrastructure projects. I am glad that analysts and experts specifically note and highlight the role of the Azerbaijani state in the implementation of this project. We must now try to take the necessary measures for the successful operation of the Baku-Tbilisi-Kars railway, and these measures will certainly be taken. Appropriate instructions have been issued given on the production of new wagons, tanks, ships and the acquisition of containers. The number of cargoes bound from Asia in the western direction is increasing on a daily basis. Thus, we have managed to achieve the implementation of the East-West transport corridor.
This year, work will be done on the reconstruction of the Baku-Boyuk Kasik railway. This road is in operation, of course, but we need to modernize it, so that its speed could be increased. We expect a large volume of cargoes to be sent along the Baku-Tbilisi-Kars road. Therefore, the speed of the trains should be high. This is also very important for our people. I am sure that if the speed is high, our people will prefer the train when traveling to the west, to cities of the western region. If we also consider that modern passenger trains are and will continue to be purchased, travel will become more comfortable.
As I have already noted, Azerbaijan has completed all the work connected with the North-South transport corridor on its territory. In the coming years, however, we need to gradually reconstruct this line on our territory too, because a large volume of cargoes is also expected in this direction. The existing railway infrastructure will not be able to process these goods. Therefore, the investment program for this year envisages modernization, reconstruction and repair of the Baku-Yalama and Baku-Astara railways. Funds have been allocated and the work should begin immediately. I believe that construction work will be carried out in the Baku-Yalama direction this year. Much of the design work for the Baku-Astara direction should be carried out this year because a part of this line runs along the coast. This causes inconvenience to our people and also limits the tourist opportunities of the southern zone. At the same time, it prevents transportation of the desired volume of goods. Therefore, we have included these two important projects in our investment program. Work should go even faster this year and next year.
I should note that there are also plans for the construction of a circular railway around Baku this year. This is also a very important project for improving the transport infrastructure of the city. I am sure that the people of Baku and suburban settlements will feel how much benefit this will bring.
Taking into account the development of the tourism sector, the construction of a railway to the city of Gabala should start this year. After all, Gabala is the second most popular tourist center of our country after Baku and is now turning into an international tourist center. We built an international airport in Gabala earlier. Today, this international airport operates flights to various countries. If we had not built it in good time, then Gabala would be unlikely to attract so many tourists now. In parallel to the construction of the Baku-Yalama road, our plans also include the construction of a railway to Gusar District. At the same time, new modern wagons and locomotives will be acquired. Thus, the railway infrastructure will be completely modernized.
The construction of the Alat commercial seaport should be completed this year. I have recently been there and enquired about the progress of work. In other words, there is little time left for the completion of this work. The largest commercial seaport on the Caspian Sea with a cargo handling capacity of 15 million tons will therefore start operating. There are plans to transport 100,000 containers. We will see: if the demand is greater, then I think we can expand the Alat port in a short time. All the possibilities for that are available. Our technical capacity is also quite large. This is also a historic project, because Azerbaijan is a country that does not have access to the world ocean. Usually such countries can’t play the role of a transportation center. Despite this and having no access to the open seas and oceans, we are turning into one of the transport centers not only of the region, but also of Eurasia, and the North-South and East-West transport corridors pass through the territory of Azerbaijan. These corridors connect dozens of countries with each other, create conditions for dozens of countries. Azerbaijan is the only country that is actively involved in and is a member of both projects. The implementation of such projects in land-locked conditions and in a country that does not have access to the open sea is our historic achievement.
Three “ASAN xidmət” centers should be opened in the cities of Mingachevir, Sheki and Imishli this year. Thus, the number of such centers will reach 15. The construction of another five centers is expected to start this year as well. Their opening is scheduled for next year. Thus, we will have 20 “ASAN xidmət” centers next year.
The second project of the State Agency for Housing Construction (SAHC) was launched in Hovsan last year. This work be continued, as tens of thousands of people will be provided with social housing there. The Yasamal project is being implemented. Already this year, some people will be provided with houses as part of the Yasamal project.
I think that due to the development of tourism there is a need for the construction of new hotels in the regions. Of course, this should be done by the private sector. Of course, the private sector is well aware of that. It knows where and when to invest. However, the figures create a fairly pleasant picture. Last year alone, the number of tourists coming to Azerbaijan increased by almost 500,000 people. I am sure that there will be a further increase this year too. Tourists also enjoy good roads and airports. We will now have high-speed trains, and they will use them as well. So even more tourists will be coming to the regions. Therefore, I believe that there are good business opportunities for building hotels in the regions, and the private sector should take that upon itself.
There will be some very important opening ceremonies related to industrial production this year. Among them, I would like to mention the enterprises of the Sumgayit chemical industry park. Four enterprises were opened in the park and the foundation was laid for another three at the end of last year. The number of residents in the Sumgayit chemical industry park has reached 15, while the amount of investment is 2.7 billion dollars. This project, this major initiative shows once again that we are conducting a correct policy. If we hadn’t cleaned this site from decayed and rotten iron, hadn’t implemented infrastructure projects on hundreds of hectares of land and hadn’t created these conditions, no-one would have invested a single manat there. Today, investments worth 2.7 billion dollars are being made there, and this is only a beginning. That is what an accurate goal and a correct policy of the state mean. We are creating conditions, providing assistance and investing money, so that subsequent investments could be made by the private sector and foreign companies. Therefore, I believe that the establishment of the Sumgayit chemical industry park is our great success. This year, there are also plans for the opening of the SOCAR Polymer and fertilizer plants. These two enterprises will not only fully meet the domestic demand, but will also have great export opportunities. The combined exports of these two plants will fetch hundreds of millions of dollars a year. At the same time, the SOCAR Polymer plant will give an impetus to the development of small and medium-sized enterprises, because products from its raw materials will be manufactured in Azerbaijan. Polymer is a product that plays a role in the creation of many household or industrial materials these days. Therefore, the private sector also needs to be attentive. The launch of the plant should give start to local industrial production.
Industrial zones, industrial estates and industrial parks are also being established in other cities. This year, we expect to open the first plants of the Mingachevir light industry park. The Neftchala industrial estate has already started to operate. I believe that the Masalli, Hajigabul and Sabirabad industrial estates can start operating this year. The State Investment Program has sufficient funds. The private sector is also ready for that and there are orders. Therefore, modern industrial potential will be created in each region and district.
As you know, the "AzerKhalcha" Production Association has recently been set up. The instruction was that in order to develop the art of carpet-weaving, attract the young generation to this work, establish industrial sites and generate export potential, we must take this sector seriously. We are already seeing that. I have personally attended the opening of several carpet factories, and there are plans to open 10 factories this year. Therefore, we will have 20 carpet factories before the end of this year. If we take into account the fact that each of these factories employs up to 150 workers and most of them are women, just look at the number of jobs and the powerful export potential we are creating, for women in particular. In general, the number of carpet factories should reach 30 at the first stage. This will probably be resolved in 2019. In order to reduce dependence on foreign raw materials, we laid the foundation of a spinning and dye-making factory in Sumgayit last year. Thus, we will provide ourselves with all the necessary facilities, yarn and dyes. The production of cotton and cocoons is also growing. Therefore, we are building up and will continue to build up carpet-weaving on the basis of local raw materials. I should also note that several stations to accept wool from farmers will be established in the regions this year. This, of course, will significantly facilitate carpet-weaving.
In connection with agricultural machinery, funds in the amount of 160 million manats are envisaged for this year. Last year, 10,000 units of equipment were brought into the country. This process will be continued this year too. Various equipment will be acquired – grain harvesters, cotton harvesters, tractors, trailers, other specialized equipment. Funds are also provided. Special equipment is required also for the relatively new agricultural produce. There is modern machinery and hardware for rice-growing, beet-growing and tea-growing today. They facilitate human labor and increase the yields. They should also be procured.
The volume of subsidies for the acquisition of fertilizer will be increased this year. This instruction has been issued and documents are being prepared now. The provision of fertilizer is one of the key contributors to high yields. We have a comprehensive approach to this issue. Irrigation, machinery, fertilizer and pesticides – we must arrange all this in a way that would increase the yields. As a result of commissioning of a pesticide factory last year, we are providing ourselves with this product now and the currency will no longer go abroad. As I have already mentioned, the production of pivot irrigation systems is beginning in our country.
Issues of food security are always in the spotlight. There has been progress in this direction in recent years, but we can’t be fully content with that. Therefore, we need to pay special attention to this issue. We have embarked on the development of a traditional but to some extent forgotten technical sector of agriculture, when a strong impetus was given to issues of food security. However, we still have to do a lot of work on this issue. For example, I want to bring some figures related to grain production to the attention of our people. In 2017, a total of 1,275,000 tons of wheat were imported. This is 20 per cent less than in 2016. It is a good indication that local production is growing. But you can also see how much work is still there. We should try to minimize our dependence on imports in terms of grain production. Good results have been achieved in the area of livestock breeding. However, for the time being we can’t fully provide ourselves with milk and dairy products. We can’t fully provide ourselves with butter and cheese yet. The production of meat and poultry is already approaching 100 per cent, the self-sufficiency level. Of course, the new farms, agricultural estates, poultry farms and dairy factories expected to open in the coming years will resolve this issue. For the time being, it is not the case even though great progress has been achieved in this area. It is necessary to prepare and adopt a state program on the development of livestock breeding. This year, we will purchase 10,000 head of pedigree livestock through state channels. Also, as a result of the work of the Center for Artificial Insemination recently opened in Goygol District, we will improve the thoroughbred composition of livestock using domestic opportunities.
Currently, there are plans to set up 43 agricultural estates in 28 districts. Some of them have already started to operate. Twenty-seven agricultural estates specialize in crop production and 16 in livestock breeding. I believe that thanks to these agricultural estates we will resolve the issues related to safety security. The given agricultural estates are expected to produce meat, poultry, milk, forages, wheat, barley and soybeans. A total of 183,000 hectares of land have been allocated to these agricultural estates. We expect very high yields there. For example, in grain production, the yields per hectare should not be less than 50 quintals. This will happen because the large farms established with state support provide yields of 45-50 quintals per hectare, sometimes even higher. Therefore, if we achieve this, the dependence on imports will be completely eliminated.
A food safety agency has recently been established. This is also a very serious issue. This specialized agency will monitor imported food products in order to prevent the importation of poor-quality or harmful products. It will also make sure that the agricultural and processed products for the domestic market and exported from Azerbaijan meet the highest standards and are good for people’s health. We are increasing our non-oil exports, and our products must be of high quality. It is possible to say now that most countries have very serious laboratory control. If a product falls short of the standards even by very little, no-one will buy it. Therefore, the food safety agency is being primarily established for a healthy diet of our population and for our exports.
This year, we will dramatically increase the production and exports of vegetables. Greenhouses with an area of more than 400 hectares are being set up in our country. Some of them have already started to operate. This process has assumed large proportions. There is very tremendous interest and very large incomes. Entrepreneurs also benefit greatly from this. We have no problems with exports. We are accessing and will continue to access new export markets. But we should not forget that traditional export markets are the most profitable for us. Therefore, the process of establishing greenhouses is going very fast. Exports have significantly increased and will increase even more. At present, not only do we fully provide ourselves with vegetables, we have great export opportunities. Therefore, all the greenhouses to be set up on an area of more than 400 hectares will export products. Entrepreneurs should already start working with partners, invite them, show and explain the advantages of Azerbaijani products. The state, of course, also provides support for this area. State bodies are engaged in this work. The food safety agency should be seriously engaged in that. Entrepreneurs should be highly responsible too. They should grow quality products so that there are no problems with exports afterwards. The greenhouses to be created on 400 hectares are not designed for the domestic market. This is why production should correspond to the market. So my recommendation is that we should grow not just one product, but many types of products here.
The exports of tomatoes last year reached a record level. The country received 151 million dollars in currency. Here, too, there is a great demand and a great interest. But let me repeat that if all the greenhouses to be set up on 400 hectares grow tomatoes only, it will be difficult to find so many markets. Therefore, both state bodies and business people proper should do some marketing research. Let them study the markets to find out what they can sell and where, what products are in demand and what countries are increasing domestic production. We should always remember that if the countries that represent our traditional markets are stepping up domestic production of certain products, this may be a problem, for our exports. Therefore, it is necessary to conduct a very flexible policy here – of course, under the control and with the help of state bodies.
Fruit production is increasing and will continue to increase. The exports of persimmons last year were at the level of 90 million dollars. In 2016-2017, new persimmon orchards were established on an area of 800 hectares. Over the course of two years, pomegranate orchards were set up on 1800 hectares. Therefore, the production of persimmons and pomegranates will and should grow. Great attention is being paid to intensive gardening. Apple orchards are rapidly expanding, and this has also become an important sphere for exports.
The development of cotton growing is progressing at a record pace. If we compare 2015 and 2017, we can see that 35,000 tons of cotton were harvested in 2015 and 207,000 tons in 2017. The number of people engaged in cotton growing has reached 200,000. This means employment. These people bring money to their households every day, and they earn this money by conscientious work. Therefore, I want to say again that the development of cotton growing has a very large social aspect. Of course, it is a very profitable sector for exports. We should be very serious about cotton growing this year too. Although 207,000 tons of cotton were harvested last year, the yields are not at the proper level. This issue is being seriously analyzed now. In some areas the yields are high, in others not. At the present time, we are collecting information about the causes, so that we could increase the yields this year and achieve intensive development of cotton-growing. Of course, the key factors here are agrochemical maintenance, machinery, water, fertilizer, pesticides and the effective work of agronomists.
Silkworm breeding is also developing fast. Here, too, we can make some comparisons. Whereas in 2015 only 236 kilograms of cocoons were harvested, last year this figure reached 244 tons. This year, approximately 400 tons of cocoons should be harvested. Thus, the Sheki Silk Factory will work with even greater capacity and employ more people. I am sure that in one to two years the Sheki Silk Factory will reach full capacity, the same capacity as in the Soviet era.
The process of planting mulberry seedlings is well under way. The number of seedlings we have is 2.2 million. In 2016-2017, we planted 1.8 million seedlings. In 2018, there are plans to plant 3 million seedlings. This is our support for silkworm nurseries. Cocoon growing today is assuming large proportions. Families earn good money in a short time – of course, with the support of the state.
Hazelnut farming is developing rapidly. In 2016-2017, new hazelnut gardens were established on approximately 30,000 hectares. The total area of our hazelnut gardens is 67,000 hectares. So we have increased this area almost twice in just two years, but this is not the limit. The area of hazelnut gardens should reach 80,000 hectares. Of course, we should get a harvest twice and maybe even three times more than now. I should also note that the state has assumed the purchase of hazelnut seeds. The exports of hazelnuts are also growing. Last year, we exported hazelnuts worth 114 million dollars.
Tobacco growing is also growing at a fast pace. Only 3,500 tons of dry tobacco were harvested in 2016, while in 2017 the figure reached 5,200 tons. Over one year, production grew 1.5 times. Drying chambers will now be purchased, so that this product can be produced in our country. In December, the construction of a new cigarette factory was launched. I do hope that the cigarette factory will be put into operation this year, reducing our dependence on imports and generating export capacities.
There are plans to set up new walnut gardens this year, and places have been identified. The private sector is very interested in this business. New walnut gardens will be established on an area of about 10,000 hectares. In a few years, this will also become an export item fetching a very large income. In 2016-2017, new almond gardens were established on our recommendation on 200 hectares. After analyzing the issue, I realized that almond gardens in Azerbaijan are available only on 1,000 hectares, of which about 900 hectares are in the Nakhchivan Autonomous Republic. There are excellent natural conditions for growing almonds in Absheron, in the suburbs of Baku, in Khizi, Siyazan and Shabran, so we gave this recommendation and made an appeal. Over the course of two years, almond gardens were set up on 200 hectares. Of course, this is a good indicator to start with, but it should be increased. Almond gardens should be established on thousands of hectares in our country. It is necessary to build a factory for processing almonds. There should be packaging as well. We should supply the domestic market and start exports in a short period of time.
The latest figures related to viticulture are as follows: in 2006, we harvested 136,000 tons of grapes. In 2017, this figure reached 152,000 tons. Now we should increase the production of wine. The existing wineries should operate at full capacity, which so far is not the case. Many wineries have been built, but one of them operates at 20, another at 50 and another at 30 per cent of their capacity. This is unacceptable. Therefore, in order to work at full capacity, entrepreneurs should take this issue responsibly. Wineries have been built, but are not being used to the full. This is very strange. This is why the state is expanding export opportunities in terms of wine production, we participate in all exhibitions, sign new contracts and help entrepreneurs. We should increase the exports of wine soon.
On olive growing. Over the past two years, new olive gardens have been planted on 300 hectares. New olive gardens will be set up on at least 3,000 hectares in the suburban settlements of Baku this year and in 2019. New factories for the production of olive oil will be established. Their production capacity will be 3,000-4,000 tons. Just look at how large our exports of olive oil will be. Our olives are of very high quality, they were simply used irrationally in previous years. True, we did have olive oil production, but we can’t provide ourselves yet. As a country with such natural conditions, we should and definitely will become a major exporter.
I want to draw the attention of entrepreneurs to another sphere. This is also a very promising sphere, which is gradually developing in Azerbaijan – beekeeping. We have excellent natural conditions for beekeeping. In the South Caucasus, we have special regions for the development of beekeeping. Beekeepers should and will receive state support now. Beekeepers should and will be paid subsidies for each bee community. So, every year the state will pay a subsidy in the amount of 10 manats for each beehive in order to further increase interest in this area and to turn honey into a product of major exports. Currently, honey production is carried out in ABAD containers. Of course, its packaging and quality should be at the highest level. I am told that Azerbaijani honey stands out for its quality on a global scale.
The work we are doing in connection with sugar beet is also bearing fruit. Some 15,000 people work in this sector now. More than 400,000 tons of sugar beet have been harvested from 14,000 hectares of land. All of this beet was sent to the Imishli sugar factory. The share of local raw materials in the sugar produced in Azerbaijan is growing. We need to strive for that because we sugar more at the expense of the sugar cane we imported from abroad. We should do this at the expense of sugar beet, and serious analysis should be carried out in the regions. Some of today's speeches contained thoughts related to yields. A very serious analysis should be carried out in connection with the sugar content of beets. Beets should be grown in the regions where sugar content and yields are higher.
Last year, we held meetings on tea growing, rice growing and citrus growing. We are paying a lot of attention to these spheres. First of all, we should meet the domestic demand and expand export opportunities. In connection with agriculture, I want to touch upon yet another issue. The work related to the e-agriculture information system should be carried out at a faster pace and be more efficient.
I would like to say a few words about imports and exports, so that both the public and entrepreneurs could understand which areas need more attention to meet the domestic demand and increase exports. So in the exports of food products, tomatoes are in first place with 94 million dollars in 2016 and 151 million dollars in 2017. Hazelnuts fetched 105 million dollars in 2016 and 114 million dollars in 2017. Persimmons brought 69 million dollars in 2016 and 91 million dollars in 2017. Apples earned 23 million dollars in 2016 and 31 million dollars in 2017. Potatoes fetched 16 million in 2016 and 26 million dollars in 2017. Cherries and sweet cherries are at the same level – 23 million dollars. There were almost no exports of onions in 2016, but in 2017, this fetched 15 million dollars. Vegetable oils earned us 10 million dollars in 2016 and 14.5 million dollars in 2017. In other words, these figures indicate positive dynamics and trends in exports. After the implementation of these projects, this dynamic will grow further.
Among non-food products, we have gold in the first place. Gold worth 76 million dollars was sold in 2016 and 140 million dollars in 2017. Aluminum exports in 2016 fetched 98 million and 117 million dollars in 2017. Exports of steel pipes in 2016 earned us 43 million and 39 million dollars in 2017 – this is the only item registering a decline. Cotton fiber fetched 6 million in 2016 and 33 million dollars in 2017. Cotton yarn worth 18 million dollars was exported in 2016 and slightly less, 16 million dollars, in 2017. Tobacco exports in 2016 amounted to 8 million dollars and 14 million dollars in 2017. Cement clinker exports in 2016 earned us 8 million dollars and 12 million dollars in 2017. The exports of reinforced bars in 2016 fetched 2 million dollars and 10 million dollars in 2017. So both in terms of food and non-food products, there is a positive momentum. This is an excellent indicator. It allows us the opportunity to significantly increase non-oil exports.
Let me voice some figures related to imports. First of all, this is for entrepreneurs. They should know which positions are developing more dynamically and there are markets for these products. Therefore, there must be growth in that. Imported products are a direct recommendation to business people. It shows that we should work even harder for import substitution. So, 227 million dollars went abroad to buy wheat last year. Now a significant portion of wheat will be produced in Azerbaijan. Butter worth 50 million dollars was imported. It is necessary to ensure the construction of new dairies and create butter lines in the existing dairies. When granting loans to entrepreneurs, it is necessary to take this issue into account. Mineral and sparkling water – 48 million dollars go abroad. Although we have so many beautiful springs and groundwater, we produce water, but it is not enough. What to do? We must increase the capacity of existing water production enterprises. The state should provide support. Entrepreneurs need to be more active – there is a market for 48 million dollars within Azerbaijan. If we do this, then, of course, we will not import so much from abroad. Rice – 36 million dollars go abroad. At the present time, rice growing is developing fast. I think that we will reduce this figure.
There is an interesting situation with potatoes – we have sold potatoes worth 26 million dollars and bought worth 40 million dollars. The production of potatoes should be sufficient to rule out imports. We should be able to meet the domestic demand and export. It is necessary to conduct a very serious analysis of this issue.
Soy and products from it – 38 million dollars go abroad. At the present time, the sowing of soybeans is about to begin. I have been informed that the yields are not very high in some places. Of course, it is a bit difficult to analyze something after the first or second year. However, I believe that this area also has good potential for local production.
On non-food products. Medicines worth 211 million dollars. True, we will not be able to produce all of this in Azerbaijan, but several pharmaceutical factories are under construction now, and the dependence on imports will reduce to a certain extent.
On cigarettes. A total of 160 million dollars go abroad. People are poisoned on the one hand and money is wasted on the other. Therefore, it is necessary to seriously examine this issue. I am sure that the current law, of course, will provide a new recommendation to smokers, so that people could give up this harmful habit. You know that this is a disease, a misfortune, a very bad habit. It has no positive effects on people’s health. It brings only harm. And 160 million dollars go abroad. At present, we are building a cigarette factory to reduce our dependence on imports. But our dependence on imports could best be reduced by a decrease in the number of smokers in Azerbaijan.
Knitted goods – about 100 million dollars go abroad. We have factories and raw materials. Therefore, we must bridge this gap.
Soap and detergents – imports amount to 100 million dollars. It is necessary to establish the production of both detergents and soaps in Azerbaijan. It should not be too difficult. Therefore, we must definitely examine this issue.
Glass and products from it – about 80 million dollars go abroad. This issue will be resolved. A modern glass plant is under construction at the Sumgayit chemical industry park. It will manufacture the most beautiful and modern glass used in construction, so the need for imports will be eliminated. We have a glassware factory. It will operate new lines, so that we could provide ourselves with glassware used both in everyday life and in construction.
Fertilizer – imports amount to 55 million dollars. After the launch of the carbamide plant, this issue will also be resolved. In other words, more than a billion dollars go abroad only on the positions I have mentioned. This should not and will not happen. Therefore, the issues I have mentioned should be addressed both by state bodies and the private sector. This year, we must have to work hard on that. Thus, imports will decrease and exports increase.
I can say that, by and large, there are no problems with the development of our economy. Our financial situation is very stable and positive. International institutions are giving a high assessment to the reforms under way in Azerbaijan. The World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, and international rating agencies appreciate the reforms we are conducting. The Davos World Economic Forum has awarded Azerbaijan 35th place in the world in terms of competitiveness. To be 35th in the world and first in the CIS is a very good result. According to the inclusive development index, Azerbaijan is ranked third among developing countries. This list includes only about 80 countries. I should also note that we are first in the CIS for that. As for Armenia, it is in 45th place and is very happy about that. It celebrates that. We are in third place and are only behind developed countries. They are 30. The rating of developed countries includes 30 states, and about 80 countries are developing states. We are in third place among developing countries. Hence, according to the inclusive development index, we are 33rd in the world. In terms of competitiveness, we occupy the 35th place.
These figures clearly demonstrate everything. We are on the right track. We are pursuing the right policies. Our policy meets the interests of the people and strengthens our state. Thank you.
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