Speech by Ilham Aliyev at the meeting economic area under the President of Azerbaijan
15 october 2019, 20:45
The socioeconomic indicators for the first nine months of the year are positive. Economic growth has been secured. It is gratifying that economic growth in the non-oil sector exceeds 3 percent. This suggests that diversification measures are bearing fruit. Of course, we would like this growth to be higher. I believe that there are enough opportunities and potential to achieve this. We simply need to use this potential with maximum efficiency.
High performance in the non-oil industry has been achieved again. Thus, our non-oil industry has increased by more than 15 percent. This indicates that the reforms carried out in recent years, especially the measures to develop the non-oil sector, are yielding results. I can say that our non-oil industry growth of more than 15 percent can be considered a record indicator on a global scale.
Along with this, as you know, major investments have been made in agriculture in recent years. Agricultural development has been identified as a priority area. At the same time, in previous years I was somewhat surprised that with such a volume of investments, such support and the provision of subsidies and low-interest loans, growth in agriculture was only at 2-3 percent. At the present time, serious advances are being observed in this sector as well. Thus, agriculture grew by more than 7 percent in nine months.
Other economic indicators are also very positive. Our external public debt is at a very low level – it accounts for only 17 percent of the gross domestic product. According to this indicator, we are in ninth place in the world. I should also note that some countries registering better results than ours are the countries that do not receive any external loans at all. Therefore, their high place does not reflect the objective picture. Thus, we are in a leading position in terms of the low level of the external debt on a global scale. I want to say again that I set this task for the government: we must reduce external public debt every year, and this is provided for in the budget for next year.
The inflation rate is very low – a little more than 2 percent. It should be noted that a very serious and large-scale social package was implemented this year – the financial situation of more than 4.2 million people was improved, pensions, salaries and benefits were increased. In other words, billions of manats were spent on these purposes, and these funds were socially oriented. Despite this, the inflation rate is very low. This is a very good indicator. Incomes of the population significantly exceed inflation again.
Azerbaijan today ranks first in the CIS in terms of the purchasing power of the minimum pension. In terms of the average monthly pension we are in third place. Of course, we should not be pleased with that, but I should mention this for the sake of comparison. Everything is relative. We have the determination to increase the minimum wage and the minimum pension in the future, and the opportunities must be consistent with this. In order to achieve this, full transparency must be ensured in the entire financial and economic sector. Currently, we have sufficient reserves, and the government has been tasked with identifying all these reserves so that budget revenues increase and budget expenditures are goal-oriented and transparent.
A few days ago, Ali Asadov was appointed Prime Minister by my executive order. Ali Asadov was my aide for many years. I am sure that he will fulfill my instructions as Prime Minister. The main goal is to speed up economic growth and continue reforms.
In my inauguration speech after last year’s presidential election, I set the goals practically for all key areas. That speech performance was of the nature of a program. After that, we embarked on hands-on work and deepened the reforms. The reforms carried out in the tax and customs sectors, the measures related to transparency have yielded results. In nine months, customs and tax authorities transferred more than 700 million manats into the budget above the plan. This shows once again how large our reserves are. Many companies are still not pay taxes in full. They do double-entry bookkeeping. Some companies do not register employees. True, tens of thousands of jobs have been formalized in recent times, and thus they were transferred from the dark zone to the white one. But this must be widespread. Many private companies still do not fully pay taxes and do double-entry bookkeeping.
Tax and other law enforcement agencies should take the most stringent measures against this type of "entrepreneurs". And entrepreneurs should know that they are required to pay taxes. They can’t be required to make any other payments. I set this task for all agencies: we need maximum transparency and accuracy. It is necessary to put an end to bribery and corruption. But entrepreneurs must pay state taxes in full. It is with these taxes that we implement social projects, settle IDPs and strengthen our army. Therefore, tax evaders should be held criminally liable.
We often hear that our standards and criteria should comply with European standards. We should apply the same punishment to tax evaders as European countries. Therefore, tax evasion should entail very serious consequences. I am instructing all relevant agencies.
Our social policy is unambiguous. I have repeatedly said that our policy is centered on the people of Azerbaijan. I believe that Azerbaijan is an exemplary country on a global scale in terms of social protection. The minimum wage and pensions are increasing, while the self-employment program is gaining pace. This year, the program will cover more than 10,000 people. The number of people receiving targeted social assistance is growing. I set the task for the Minister of Labor and Social Protection: we must provide even more assistance to people of this category. At present, each family receives assistance exceeding 200 manats on average. The number of such families should be increased. This is the task we set.
Of course, our main goal is to deepen the reforms that pave the way for economic development. In general, reforms in the economic sphere are progressing well in Azerbaijan. Leading international organizations highly evaluate our activities in this area. My numerous meetings with leaders of the World Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, the European Investment Bank, the International Monetary Fund and other international financial institutions suggest that the reforms carried out in Azerbaijan are receiving good feedback.
The Doing Business report ranks Azerbaijan in 25th place in the world in terms of the business environment. According to the latest report, Azerbaijan is one of the top 20 most reforming countries again. The Davos World Economic Forum has recently published a new report, which demonstrates again that the reforms carried out in Azerbaijan are consistent in nature. I would like to inform the Azerbaijani public about some details of this report. As you know, there are many criteria related to competitiveness in it – the public and political situation, the fight against crime, the economic reforms, the social reforms, infrastructure and so on.
So Azerbaijan ranks 18th in the world in terms of the fight against organized crime. I can say that this report was prepared and published on the basis of the results of a study conducted among 141 countries of the world. Azerbaijan ranks 30th in terms of public confidence in the police. In the field of protection of property rights, we are in 37th place. Please note that in terms of the long-term strategy of the government, i.e. the state and its leadership, Azerbaijan is in 10th place on a global scale. In other words, this shows that a thought-out and long-term policy is being implemented in Azerbaijan at the highest level. In terms of the leadership's desire for change, i.e. for reform, we are in fifth place in the world. In terms of the transport infrastructure, we are in 31st place and in terms of the road infrastructure in 27th place. In the previous report, we were in 34th place, while in the current report we are in 27th place and first in the CIS. In terms of railways, we are in 34th and the efficiency of transport services in 12th places. According to the access to electricity factor, we are in second place in the world. The construction of such a large number of power plants, substations and power lines in recent years has brought us to second place in the world.
In terms of the digital capacity of the active population, we are in 19th place. This testifies to the talent of our people and their proximity to progressive trends. From the point of view of starting a business, we are in eighth place. These figures, of course, reflect reality, because the Davos World Economic Forum is one of the leading international financial institutions in the world and a very authoritative forum. As you know, the President of Azerbaijan regularly participates in the meetings of the forum.
All this, of course, is good feedback of our work. The best assessment is that of the Azerbaijani people. According to a recent survey, it is possible to say that the vast majority of the population unequivocally supports the leadership of Azerbaijan and our policies. Of course, this support gives us strength, increases our determination, and we aspire to reforms and implement them even more enthusiastically and with even greater opportunities. Despite this, of course, I want to say it again, there are still unused reserves, and we must identify them. We must try to ensure that all areas of life in Azerbaijan are transparent and meet the highest standards. Of course, in order to achieve this goal, it is necessary to carry out a merciless fight against corruption and bribery. I believe that at present we cannot be fully satisfied with this struggle. Because we know that facts of corruption have assumed large proportions not only in Azerbaijan, but also throughout the CIS. That is, it is a bitter legacy we have inherited from the past. But we must fight against negative phenomena – not only law enforcement agencies, but also all relevant agencies, including citizens. I have repeatedly spoken about the need for stepping up public oversight. If lawlessness occurs somewhere, in any region, anywhere in Baku, relevant authorities should identify this and hold those who have committed lawlessness responsible. People, in turn, should report and be more active in terms of public oversight, so that we carry out reforms and build up the power of our country.
The budget for next year is being prepared now. As you know, the budget is one of the key documents of any country. The new government is facing many tasks. When appointing Ali Asadov to this position, I gave him many responsibilities. I set the task of carrying out reforms, including personnel reforms. It is necessary to attract qualified young people with a modern outlook and knowledge of the modern economy. We live in the 21st century, so how can we go into the future with old thinking and old knowledge? How long can we go along this inert path, as they say, and rely on natural resources? True, reforms are under way, and the figures I have quoted are clear evidence of that. Any country can boast of such results but we know that we have ample resources. We also know that if a clean and qualified person who is attached to the Motherland is appointed to a state or private post, we immediately see transformation there. It was believed that we have areas where it is impossible to carry out reforms. One of them is the tax system. It was believed that such a disgraceful situation, as they say, should remain there forever and we cannot make any progress. However, everyone was convinced that we can rectify the situation through reforms. The budget has received funds amounting to hundreds of millions of manats. The same holds true for other areas.
Numerous violations were committed in the area of social protection. New minister Sahil Babayev has identified them and is carrying out very serious reforms. I must also say that some people who are in power today also oppose reforms. These reforms affect their personal interests. They are trying to interfere with our work in every way. They tarnish people with new thinking who strive for reforms, including through the media. The media have become a tool for internal struggle. It is unbearable. I do not want to go into too much detail but I have to say that it is unbearable when some members of the government are blackmailed by others. They are being denigrated. They cast a shadow on the reforms being carried out on behalf of the President. It is an unbearable situation. If someone believes that we should put up with this, they are wrong because there is no alternative to reform. Anyone who follows this path will work, of course. And those who oppose this and try to covertly hinder our work, then, of course, we can’t go any further with such people. So I want to say it again for the population to know and everyone to hear. Strong political will has been demonstrated. We want to see Azerbaijan a modern and rapidly developing country where transparency is in the first place, and we will achieve that. No-one can prevent us from doing this.
Instructions have been issued in relation to the budget for next year. The government has been working on it for a long time. Let me note that the budget for next year should be both socially and investment oriented. Next year we will implement serious social programs and take important measures to improve the living standards of the population. We must have sufficient funds to implement infrastructure projects. However, we must carefully consider the costs for next year, the government should submit proposals to fully ensure transparency. Soon, before the end of the year, these proposals will be examined. Thus, I am sure that we can do as much work with less cost. To achieve this, we first of all need transparency, state and public control. I am saying this to all government agencies, because they have developed a bad habit. At the end of each year when the budget is discussed, they start to send applications. Moreover, they provide inflated and baseless figures. You ask them, for example, where they got such figures regarding funds for the construction of a dam, roads, cables. Out of thin air. Then an investigation is carried out and it turns out that they inflated the numbers. What for? That is obvious! This must also end. Therefore, you cannot expect only the Ministry of Finance and the Ministry of Economics to do this. The government as a controller should analyze all these figures and establish real ones. Those submitting inflated figures should be held accountable. If our state bodies and companies provided inflated figures again this time, they will expose themselves. Of course, the government will consider all of their proposals. But if they provided inflated figures, they will be punished. Therefore, let them bother to work normally and give up the bad habits. So we will significantly save our costs, create room for increasing salaries, pensions and ensure transparency. Therefore, over the coming weeks, it is necessary to work hard on budget parameters for the next year. Today's meeting is dedicated to this issue as well. Therefore, I would like to listen to opinions and suggestions related to the budget for next year.
Speakers at the event included Azerbaijan's First Vice-President Mehriban Aliyeva, Prime Minister Ali Asadov, Assistant to Azerbaijan's President for Economic Policy and Industrial Issues Natig Amirov, Minister of Finance Samir Sharifov, Minister of Economy Shahin Mustafayev, Minister of Taxes Mikayil Jabbarov, Minister of Labour and Social Protection of Population Sahil Babayev, Chairman of the Board of the Central Bank of Azerbaijan Elman Rustamov, and Executive Director of State Oil Fund of Azerbaijan Shahmar Movsumov.