Opening speech by Ilham Aliyev at the Cabinet meeting on results of first quarter of 2018 and future tasks
30 april 2019, 11:45
In January this year, when discussing the results of 2018, I expressed my confidence that 2019 would be successful for our country. After last year’s presidential election, we entered a new stage of reforms. In the run-up to the presidential election, reforms were announced and very serious steps were taken to implement them in a focused manner. Preparatory work was carried out. The social and economic results achieved in the first quarter of this year show that we are on the right path and there is no alternative to reforms. In recent years, reforms have been carried out at various stages, and our country developed as a result of that. In the past 15 years, there has been no other country in the world that would develop like Azerbaijan in economic terms. Large infrastructure projects have been implemented in our country, people's well-being has improved, and a solid foundation has been created for a further development of the Republic.
As you know, the first decree I signed after the presidential election was connected with the social protection of martyr families. This was a very serious decree. As a result of its implementation, more than 12,000 martyr families will receive funds from the state in the amount of 11,000 manats. The process of payment has already begun. Of course, we have to work very hard to continue the reforms. We must always seek to develop. The world is changing, the situation is changing, and we face new challenges. Therefore, we must always look forward to develop our country and make our development sustainable and long-term.
The positive changes that have occurred in the economy of Azerbaijan since the beginning of the year have enhanced our potential. They are highly appreciated by the population and create conditions for us to obtain additional financial resources. In the first quarter, budget revenues have increased significantly – by more than 200 million manats. More than 150 million manats of this comes from tax and over 50 million manats from customs spheres. It is encouraging that tax authorities have managed to collect more tax from the non-oil sector – 136 million manats. This is a good example of reforms. Entrepreneurs also know that they must pay taxes to the state in full. As a result of transparency and a new approach, we received major additional funds in the first quarter. Of course, this allowed us the opportunity to channel these funds primarily into the social sphere.
In recent years, we have taken serious steps in social and infrastructure areas and improved the well-being of our people. I am sure that the growth of budget revenues will be observed throughout the year. This is suggested by current reforms and the new approaches being applied. Thus, we will have additional financial resources.
The policy pursued in the economic and social spheres is also manifesting itself in figures. Thus, in the first quarter of the year, our gross domestic product increased by 3 percent. This is the highest figure in the last few years, and I am confident that by the end of the year this figure will increase further, because this is enabled by the work under way. Industrial production has increased by 4.4 percent. This is also a good indicator. But even better is the indicator for industrial production in the non-oil sector – it grew by 15.6 percent. This is the result of the work being done, and the growth of industrial production, especially in the non-oil sector, is a good example of our policy. Agriculture has increased by 3.6 percent and population incomes by 5.5 percent. Inflation is low – at 2.1 percent. $2.8 billion has been invested in the country's economy. Of these, $2 billion has been invested in the non-oil sector. We see a positive trend here as well. Our main goal, our main task is to develop the non-oil sector. Attracting investment, of course, is very important for any country, including us. Whereas in previous years there was more investment in the oil and gas sector, now we see this in the non-oil sector, which is also the result of the work being done. The business landscape in Azerbaijan is improving, favorable conditions for investment are being created, the state properly protects both local and foreign investments. Thus, by attracting domestic and foreign investment, we are developing our country. Of course, the main role in investment prospects in Azerbaijan is played by our reforms. As you know, in its Doing Business report, the World Bank ranks Azerbaijan in 25th place in the world. During the year, we advanced 32 steps and became one of the world’s top 10 most reformist countries. Of course, foreign investors, as well as local entrepreneurs, see and know this. So I am sure that the process of investment in Azerbaijan will be continued.
Thus, the key economic and social indicators are positive, there is a positive dynamic. Additional revenues allow us the opportunity to be proactive in addressing social issues and do even more work. As you know, at the beginning of the year, a very large social package was submitted and a corresponding decree was signed. We started the preparation of this process last year, and at the inauguration ceremony after the presidential election, I essentially gave instructions related to the work ahead and outlined the contours of the new approach. Additional financial resources allow us the opportunity to further strengthen the social sphere. The minimum wage and the minimum pension have been increased by about 40 percent, social benefits have doubled on average, the allowance paid to internally displaced persons have been increased by 50 percent, student scholarships, benefits provided to martyr families and those disabled in the Karabakh war have been increased as well. At what expense? Of course, at the expense of reforms! Because we work more efficiently, we provide transparency and we improve the business environment. This enables us to address these issues.
Another important issue was related to problem loans. This issue was resolved in Azerbaijan at the highest level. As you know, several years ago, as a result of a sharp, almost four -fold drop in the oil price, oil-exporting countries were faced with great difficulties. National currencies in these countries, including Azerbaijan, depreciated. It was inevitable. But we managed to stabilize the situation in a short time. In 2016-2017, steps were taken to ensure economic and macroeconomic stability even though inflation in those years was high. However, we managed to stabilize the situation and created a basis for development. Naturally, as our economic and financial opportunities increased, we resolved this issue of concern to our citizens and did that at the highest level. Several countries have also taken certain steps on this issue – I do not want to draw any comparisons. But I can say that we in Azerbaijan have resolved it in the most large-scale and fair manner, satisfying our citizens. Why? Because our policies are centered on the people of Azerbaijan. We are doing everything possible for the well-being of our citizens. Thus, the issue which had been bothering hundreds of thousands of our people has been successfully resolved. That is, the payment of compensations has begun, and I am sure that it will be completed in a short time.
Another issue was related to the buildings that were constructed but were not officially sanctioned. Those living in apartment buildings were experiencing difficulties because there was no documentation for these buildings and there were certain drawbacks. Therefore, a decree was signed on this issue and a commission has now been set up. The process of documenting buildings and apartments has already begun. I recently instructed to speed up this work and eliminate shortcomings as soon as possible, so that this issue could also be resolved.
Thus, as a result of the work done, three million people benefited from the signed decrees in one form or another. The financial situation of these people has improved and the problems that worried them have been resolved. In the future, we will continue to take steps in this direction. I am sure that all our goals will be successfully met. There is full confidence in this. The country is developing successfully. There is stability in our country. The Azerbaijani people are the guarantor of this stability. Popular support for our policy gives us strength. Of course, we are confident and optimistic of the future because all the tasks facing the country are being fulfilled.
In January this year, the fourth state program on the socioeconomic development of the regions was adopted. This is also a very important event. The third program was successfully exceeded. As a result of the implementation of the first three programs, many important issues were resolved, including those in the area of social infrastructure. More than 3,200 schools have been built and renovated. Our school fund is close to 5,000. Many of them have been reconstructed, and this process continues. More than 640 medical institutions have been built and reconstructed. Today, it is possible to say that there are hospitals fitted with the most modern equipment in all our cities with the exception of a few cities where this work will also be done in the near future. Huge work has been done in the field of healthcare in the city of Baku, new hospitals and medical institutions have been set up.
Notice how much has been done in connection with infrastructure projects. Today, Azerbaijan is one of the leading countries in the world in terms of gasification – it has reached 95 percent. We have extended gas lines to the most remote mountain villages even though it is economically unprofitable. Given the low gas tariffs in Azerbaijan, we will never be able to cover these costs. I should also note that natural gas tariffs in Azerbaijan are among the lowest in the world – they are two to three times lower than in a number of neighboring countries. The lack of gas worried our people. There are currently about 3-4 percent of settlements where there is no gas. We will also do this work.
The investments in connection with electricity have allowed us the opportunity not only to provide ourselves but also to export it. There was a time when our country was shrouded in darkness. There was a time when they turned off the TV at midnight to reduce power consumption. We received electricity from abroad and had to provide for ourselves somehow. Today we export electricity. Internally, all this work has been done.
Road construction – 15,000 kilometers of roads have been built. This work is now carried out in all our regions, in all districts, including the city of Baku and its suburbs, every year. It brings comfort to people. At the same time, it is very important both for business and for farmers. It brings great benefits in all respects. Today I will mention only a part of the regional development program. It has really created a major turnaround, created major progress.
The adoption of the fourth program is an important event. It will be implemented over five years. In the coming years, we will do the work we have not yet been able to accomplish so far, so that our country develops even more confidently and successfully.
This year, the opening of large industrial enterprises took place. The opening of two large factories – a carbamide plant and a high-density polyethylene plant – has significantly enhanced our industrial potential. Hundreds of jobs have been created at these plants. Those working there have received relevant training. They attended training courses in several countries. Most of the workers are young professionals. This is about new technologies, the development of the non-oil sector and an increase in our export potential. This once again shows that Azerbaijan is capable of doing a great job in the field of industrial production. Of course, industrial production in the coming years will be one of our priorities. I am sure that both local and foreign entrepreneurs will pay attention to these matters.
There are more and more companies interested in investing in Azerbaijan from abroad. Foreign entrepreneurs are turning to us. The opinion of the heads of major companies I met with during my recent visit to the People’s Republic of China is also very positive. They are also working on investment prospects in Azerbaijan and are showing a great interest in this.
Since the beginning of the year, we have hosted several prestigious international events in our country. Among them, I want to mention the Seventh Baku Global Forum. Today it is one of the most prestigious forums on a global scale. This forum was attended by over 500 guests from 50 countries. Among them were about 50 current and former heads of state and government. The forum is indeed one of the most prominent events on a global scale - both in terms of its intellectual potential and in terms of the issues discussed.
On our initiative, Baku has also hosted an OPEC+ meeting. As you know, Azerbaijan is not only a participant but also, if I may say so, one of the authors of this initiative. This is evidenced by the statement of the OPEC Secretary General during his visit to Baku. I have never talked about this myself. However, he officially noted that back in 2016, when speaking at the Davos World Economic Forum and answering a question during a panel meeting, I said that the most acceptable option for regulating the oil price was the joint activity of OPEC member countries and large countries that are not members of OPEC. They should come to an agreement so that the oil price remains stable. Production must be reduced and all sides must comply with this. Only in this case can the oil price increase. Whereas oil prices were at about $30 at that time, today they fluctuate around $70.
In other words, Azerbaijan contributes to this process too. On our invitation, a meeting of OPEC and non-OPEC member-countries was held in Baku. Usually this meeting is held at OPEC headquarters and in some cases in other countries, including Baku.
This year, a Meeting of the Southern Gas Corridor (SGC) Advisory Council was held in Azerbaijan according to tradition. This meeting also makes great sense because this annual event allows us the opportunity to review the work done and, most importantly, exchange views on the work ahead and draw up a plan for joint activities. Thus, we somewhat draw up a plan for a year ahead.
Other important events have been held. In short, Azerbaijan has been successfully developing in all spheres since the beginning of the year. Among social issues, of course, the problems of internally displaced persons have been in the spotlight. This year, 810 IDP families will move to a new modern settlement. This process will be continued. This is one of the top priority issues for us. We always pay attention to it.
As for the settlement of the Armenia-Azerbaijan Nagorno-Karabakh conflict, there is no change in our position. Our principled position is that this issue must be resolved within the territorial integrity of our country, on the basis of decisions and resolutions adopted by international organizations, in accordance with the Helsinki Final Act, resolutions of the UN Security Council. There is no other approach. The territorial integrity of Azerbaijan has never been and never will be the subject of negotiations. I should also note that the format of the negotiations remains unchanged. Even though there were certain attempts, they were stopped as a result of our activities. In addition, the statement made by the co-chairs of the Minsk Group on 9 March is targeted, unequivocal and once again shows that there are two parties to the conflict. Therefore, I believe that this topic has already been resolved. We will continue to stick to our position of principle, will continue to strengthen our country and army. Since the beginning of this year, a lot has been done in this direction, and this work will be continued.
Speakers at the meeting included Assistant to the President for Economic Policy and Industrial Issues Natig Amirov, Minister of Agriculture Inam Karimov, and Chairman of the Board of the State Agency for Mandatory Medical Insurance Zaur Aliyev.
President Ilham Aliyev then made a closing speech.