Opening speech by Ilham Aliyev at the meeting of Cabinet of Ministers dedicated to results of socioeconomic development of 2017 and objectives for future

10 january 2018, 11:45

Today's meeting of the Cabinet of Ministers will focus on the results of 2017. We will also talk about our plans for this year.

In 2017, our country developed rapidly and successfully. The results achieved in all spheres of life have made a great contribution to the overall development of our country. The Azerbaijani people lived in the conditions of stability and security in 2017. There are growing risks and threats in different parts of the world today. Bloody conflicts and confrontations are widespread. In other words, risks in the world are growing and, apparently, these trends are set to continue. Faced with such a picture, the world community naturally feels concerned. In Azerbaijan, stability, security and normal life are ensured. I believe that against the backdrop of the complex geopolitical situation existing in the world today, the results we have achieved in this field deserve a high assessment.

No country can develop in the absence of stability. This is an axiom. We have repeatedly observed this in recent history. If stability is disrupted, development stops, the country's economy slides into recession and investment is stopped. In other words, stability is the most important condition for the development of any country. The Azerbaijani people, their will and our policy are the source of stability in Azerbaijan. Our policy is based on national interests, which are above everything for us. Security, stability, economic and social development of our country, its growing role in the international arena are guarantors of stability.

I am sure that these positive trends will be further strengthened in Azerbaijan in 2018. The key precondition for our success is the unity of the people and the government, which is evident today. Our successful policy today is underpinned by the support of our people. The strengthening of these positive trends will certainly contribute to the long-term and sustainable development of our country.

In 2017, great successes were achieved in the economic sphere. I have already said this and I want to say it again: 2017 was a year of profound economic reforms. At the beginning of the year, I proclaimed the thesis that 2017 should become a year of deep economic reforms. And so it happened, which is confirmed and acknowledged by influential international financial organizations and authoritative institutions. Both the World Bank and the European Bank for Reconstruction and Development have given high assessments to the processes taking place in Azerbaijan. At the same time, according to the calculations of the Davos World Economic Forum, the Azerbaijani economy has advanced by two steps in terms of competitiveness in 2017 and settled in 35th place globally. This is a very good indicator, which shows, first of all, that we developed even in a rather challenging year in economic terms. On the other hand, to reach 35th place in the world is a very good result indeed, a major victory. For many years now, we have maintained and strengthened the leading position in the CIS. I believe that the rating of the Davos forum is the highest evaluation of our economic reforms by the international economic community. And there are grounds for that, because the work on creation and development we have carried out in the country in recent years has led to such results.

The country's economy grew in 2017, and this is a very positive indicator. The gross domestic product has increased, albeit not significantly. It is particularly gratifying that our non-oil sector has grown – the growth rate constitutes 2.5 per cent. The non-oil sector of our industry has increased by 3.6 per cent and agriculture by 4.1 per cent. Our foreign exchange reserves have also increased. Many important infrastructure and social projects were implemented in our country last year. These projects require tremendous resources. Despite this, our foreign exchange reserves increased by 4.5 billion dollars in 2017 and currently constitute about 42 billion dollars. Considering the population of our country, I believe that Azerbaijan occupies one of the leading places in the world for the volume of foreign exchange reserves per capita.

The country's economy has received investment in the amount of 14.6 billion dollars. This is also an excellent indicator. It shows that both local and foreign investors are interested in investing in our country. At the same time, this is a manifestation of the stability I have noted, because in the current financial and economic situation in the world many investors believe that investing in foreign countries is not very acceptable. Foreign investments are made only in stable countries, countries with a great future. Therefore, I think that the attraction of investments worth about 15 billion during the year is a great achievement.

Our export potential is growing. In 2017, exports increased by 19 per cent and non-oil exports by 24 per cent. This is the result of the work done. Our population is growing. It increases by at least 100,000 people every year. Consumption is growing and the number of tourists is increasing. Last year, the number of tourists was higher than in 2016 by almost 500,000 people. Naturally, this leads to increased consumption. Despite this, our non-oil exports, including the exports of food, are growing fast. The growth of non-oil exports by 24 per cent during the year is the result of the work done.

Imports have grown by only 1 per cent. And this is natural, because, first of all, Azerbaijan meets the domestic demand with domestic production in an even greater volume. On the other hand, the purchasing power of our people has increased. Therefore, the fact that imports remain stable is a very high result, I think. The positive balance of our trade is 6.2 billion dollars. Economists are well aware that this is an excellent indicator. I am sure that this year and in subsequent years our balance will always be positive. I believe that the difference will be even greater. This is one of the most important factors for improving our macroeconomic situation and maintaining the stability of the manat.

In short, the key economic indicators are very positive. I think any country can be proud of such results. We are proud to have completed 2017 with such excellent performance.

The development of our regions was always in the spotlight. I visited more than 30 districts last year. During these visits, new enterprises were opened and the foundation of new enterprises was laid. At the same time, I was updated on the situation in the regions. I travel to the regions every year and visited almost half of our districts last year. Of course, this is very important for me because I review the situation on the spot and give appropriate instructions. I know that this is also very important for the people living in the regions. Of course, it is very important for strengthening discipline, as I have repeatedly visited every district of Azerbaijan and keep these instructions on the radar.

In 2017, we created 221,000 jobs, including 177,000 permanent ones. This is a very good indicator. I believe that this is a record figure for the number of jobs created in recent years. I should also note that 47,000 jobs were closed last year. This is also a natural process. At the same time, we should seriously analyze why 47,000 jobs were closed. At the same time, the creation of 177,000 permanent jobs and the closure of 47,000 jobs also provides a positive balance and creates ample opportunities for keeping the level of unemployment in the country at a low level. I should note that at the end of 2017, unemployment in Azerbaijan was at the level of 5 per cent and poverty at 5.4 per cent. I believe that this is one of the best results on a global scale.

Last year, we allocated major funds for the implementation of infrastructure projects. Very important steps were taken in this direction. Power supply has improved and new substations were put into operation in many regions. Our rapidly growing industrial and agricultural potential requires that the development of electricity supply is always in the spotlight.

Gasification in the regions is progressing fast. Last year, 93 per cent of our country was provided with gas. This year, our state budget provides for additional funds for gasification. This figure will increase even more.

As a result of the measures taken, the irrigation of more than 100,000 hectares of lands has been started. This is a very high figure. Of course, this will be a great help for the development of agriculture and the exports of agricultural produce.

In 2017, a total of 1,300 kilometers of highways were built. This is also a very good figure. New s have been built to more than 500 villages. At the beginning of the year, we stated our plans to implement a project conventionally called 40 rural roads, but the scope of each project is very wide. During the year, we allocated additional funds for the creation of the road infrastructure, so beautiful roads have been built to more than 500 villages.

Drinking water projects are being successfully implemented. The problem of drinking water was resolved in many cities last year. In general, we can say that we have come close to meeting our goal of completing the key infrastructure projects.

Very serious steps have been taken in connection with the social infrastructure – 133 new schools have been built, 14 schools have been overhauled and nearly 500 schools have been refurbished. Thirty medical institutions have been built and overhauled. Two Olympic sports centers have been put into operation.

The number of families receiving targeted social assistance is 116,000. It covers more than 400,000 people. On average, each family receives social assistance in the amount of 150 manats. This is also a manifestation of our social policy. At the same time – as I said at previous meetings – we should try to provide those in difficult situation with jobs, create conditions for these people, including the opportunities available through the self-employment program, so that the number of those in need of social assistance is reduced.

Of course, social infrastructure projects are of great importance and reflect the direction of our policy. Even in economically difficult years we do our best to resolve social problems and do a lot for that. The work due to be done in this area this year is expected to resolve the vast majority of issues related to social infrastructure.

The problems of internally displaced persons are always in the focus of our attention. From this point of view, 2017 was also a remarkable year, as 2,300 families moved to new houses and apartments. Therefore, more than 12,000 IDPs were provided with new houses and apartments. The restoration of the village of Jojug Marjanli is a historic achievement. A beautiful settlement of 150 houses has been given a new life. The IDPs have returned and are still returning to this settlement, and this is a historic and significant event. Using the example of Jojug Marjanli, the Azerbaijani state has once again demonstrated that it will never put up with the fact of occupation of our lands. The Azerbaijani people will never accept this situation, and all our IDPs live with the same dream – the dream of returning to their native lands as soon as possible. The reconstruction of Jojug Marjanli in such a short time shows that we will carry out all repair and restoration work on the territories liberated from occupation in a short time. We will rebuild our cities and villages, and life will return to our cities and villages that are in a difficult situation today.

At the same time, a new settlement for 1,170 families was built in Shikharkh settlement in 2017. This is also a significant event – not only because a large settlement was created for the IDPs but also because Shikharkh settlement was once under occupation. This territory has been cleared and freed from Armenian invaders, and the establishment of a new large settlement there shows again that Nagorno-Karabakh is our ancestral land. This has always been the case, it is the case today and it will be the case tomorrow. The settlement of the Nagorno-Karabakh conflict is possible only within the framework of the territorial integrity of our country. There is no other option.

Our principled position is fair, is based on international law and has received tremendous international support. There have been several important events that reflect this. One of them is the fact that the world community did not recognize the illegal "referendum" held by the separatist regime in Nagorno-Karabakh. The neighboring and European countries, the European Union, international organizations have made unequivocal and serious statements that they do not recognize the "referendum". These statements show yet again that the whole world considers Nagorno-Karabakh an integral part of Azerbaijan, and this support is gradually growing.

As you know, in a Declaration adopted by the "Eastern Partnership" summit of the European Union at the end of the year, the European Union unequivocally supported the territorial integrity and the sovereignty of the member-countries of the Eastern Partnership. This was another blow to aggressive Armenia. This is a manifestation of justice and, at the same time, a demonstration that European institutions and global centers today demonstrate a more positive approach both in relation to the Armenia-Azerbaijan Nagorno-Karabakh conflict and in relation to the processes taking place in the world as a whole. The truth is that Europe itself is suffering from separatism and sees what separatism is today. We are faced with aggressive separatism. An act of genocide was committed against us. Our citizens were driven out of their native lands by force of arms. Of course, the fact that separatism is raising its head in the world, including Europe, is a signal to the international community that only one approach should be applied. We have always talked about this. I have repeatedly said that a single approach should be applied to all conflicts and to all manifestations of separatism. There should be no room for double standards. They must be rejected. We are already seeing that. I believe that these are important events for the settlement of the Armenia-Azerbaijan Nagorno-Karabakh conflict. Azerbaijan will not depart from its position of principle. The restoration of the territorial integrity of our country is the main issue for us.

At the same time, we are increasing our military strength. According to international ratings, the Azerbaijani army is ranked among the strongest armies on a world scale. We are doing whatever is necessary for our army. The material and technical infrastructure of the army is strengthening. The military bases, townships and military units are being rebuilt and overhauled. Eighty per cent of our military garrisons, bases and units already meet international standards. Repair work in the remaining military units that are in need of repair must be completed in the coming years. The necessary funds are and will continue to be allocated. In particular, the necessary funds are allocated for the purchase of modern weaponry. In contrast to poverty-stricken Armenia, we live at our own expense. This includes the fact that we are increasing military power at our own expense. Unlike Armenia, we do not go from door to door with an outstretched hand, do not beg for help and do not apply for loans. Therefore, the Azerbaijani public and the enemy should know that the Azerbaijani army will continue to strengthen and is ready to fulfill any task. Recent history confirms this.

In 2017, historic events took place in the field of energy. One of them was the extension until 2050 of the contract for the Azeri-Chirag-Gunashli field. This will allow us the opportunity to maintain our levels of production for many years – at least until 2050. This will make it possible for foreign investors to continue to invest heavily in the oil sector in Azerbaijan. We are talking about tens of billions of dollars. Of course, this investment will have a positive impact on all sectors of our economy. I mean the creation of new jobs and new local enterprises. Of course, maintaining oil production at a stable level will allow us the opportunity to plan our economic development and gradually reduce dependence on oil. In the last two years, we have largely achieved this.

In addition to investments, the extension of the Azeri-Chirag-Gunashli contract also brings us other important dividends. First of all, SOCAR's share increases from 11 to 25 per cent. 75 per cent of the profit oil will remain with the Azerbaijani side. I can say that this is an excellent result for a young and independent country achieved with foreign investors in the oil sector. The State Oil Company of Azerbaijan (SOCAR), together with other partners, will participate in the project as the operator. For extending the contract, even though foreign investors will invest tens of billions of dollars, an additional bonus of 3.6 billion dollars will be paid in equal instalments over the course of eight years. The first tranche will b provided this year. This, briefly, is the significance of the "Azeri-Chirag-Gunashli" project.

In addition, the successful implementation of the Southern Gas Corridor has been ensured. At the beginning of the year, a meeting of the Advisory Council of the Southern Gas Corridor was held in Azerbaijan for the third time. All the necessary issues were discussed, and the project was implemented during the year. According to the latest update, the implementation of the Shah Deniz-2 project has reached 99 per cent. It is practically over. The South Caucasus Pipeline connecting Azerbaijan with Georgia has been implemented by 93 per cent, while the implementation of the TANAP project is 90 per cent through. This already shows that the Southern Gas Corridor has been implemented. As for the TAP project, it is possible to say that work there is also progressing on schedule. As you know, Azerbaijan does not have a control stock in the TAP project. Our share there is 20 per cent, but we participate. I am told that the implementation of this project is at the level of 60-62 per cent.

These two important energy projects will continue to ensure the successful development of our country and allow us the opportunity to focus more on with the development of the non-oil sector. I believe that the opening of the Baku-Tbilisi-Kars railway was an important event not only for our country, but also for the region and the whole world. This road begins in Baku. It is no coincidence that the official opening ceremony was held in Azerbaijan. A 504-kilometer stretch of the 850-kilometer railway was built and restored on the territory of Azerbaijan. You know that Azerbaijan has undertaken the biggest financial burden in the implementation of this project. The implementation of this historic project will turn Azerbaijan into an international transport hub. In a short period of time, within just two months of the opening of the railway, we have received requests from many countries interested in joining the Baku-Tbilisi-Kars project. I have personally discussed this issue with several of my colleagues already. Relevant instructions have been issued to set up working groups with many countries and analyze the cargo potential of those interested in joining this line. Of course, we are ready to successfully cooperate with all partners within the framework of this project.

Important steps have been taken to implement the North-South transport corridor. Azerbaijan has fulfilled its mission, ensured the construction of a railway to the border with Iran and also built a railway bridge. Thus, Azerbaijan has taken all the necessary measures on this project on its territory and is ready to contribute to the overall implementation of the project.

Last year, the Games of Islamic Solidarity were held in Azerbaijan. Another success has been added to our political, diplomatic and economic achievements – the sport success. The Games were held at the highest level. Azerbaijan hosted the entire Muslim world and showed its hospitality. Our athletes delighted us as our national team finished in the first place. At the same time, these Games have been an important step towards strengthening Islamic solidarity. They have demonstrated the intentions and policies of our country.

As you know, 2017 was declared a Year of Islamic Solidarity in Azerbaijan. This decision shows again that we are attached to our historical and religious roots. Not only is Islamic solidarity ensured on the territory of the country – representatives of all religions in general live here like one family. We want these trends to become even stronger in our region and throughout the world. Many events held throughout the year both in Azerbaijan and abroad testify that the decision to declare 2017 a Year of Islamic Solidarity won great support and sympathy in the Muslim world. The last important event of the year was the international conference held in Baku at the end of December. The congratulatory messages from world leaders and the participation of high-ranking guests in this conference once again demonstrates that Azerbaijan is becoming an indispensable country in the world both in terms of organizing work related to Islamic solidarity and in terms of promoting multiculturalism.

Of course, there were many events during the year. If I start to talk about them, it will take hours. I have simply mentioned the key and the most important issues. I want to say again that 2017 was a successful year for our country. Our country has become even stronger and is optimistic about the future. I am confident that this year will also be successful.