Today we will talk about the results of last year and exchange views on the work to be done.
I can say that, in general, 2019 was a successful year for our country. All the goals we set ourselves at the beginning of the year have been successfully met and the country's sustainable development has been ensured. Thus, great strides have been made in political, economic and social spheres. Azerbaijan lived in stability. Stability is the main condition for the development of any country.
Throughout the year, we observed an increase in tensions in various places around the world. Bloody clashes, wars, public protests, police violence, flagrant violation of human rights, breach of democratic values – all this was observed practically throughout the world. Tensions are growing in Europe, Asia, Latin America, in post-Soviet countries, in our region, in the Middle East, in the world. Azerbaijan is developing as a stable place. The Azerbaijani people are the guarantor of stability in Azerbaijan. The will of the Azerbaijani people is the main guarantor of stability in Azerbaijan. Popular support and a high assessment of our policies inspire us even more and, at the same time, ensure stability in the political and economic spheres in our country. When stability is disrupted, crises and chaos occur in countries, which does them a great deal of harm. We saw this in our own history in the early 1990s. Stability in Azerbaijan was disrupted, the country was gripped by crisis and we suffered heavy losses. But Azerbaijan has been living in the conditions of stability for 26 years now. Over these years, our country has passed a very long development path. I can say that our country has passed a development path equal to a century and has now joined the ranks of strong countries on a global scale.
A summit of the Cooperation Council of Turkic-speaking states has been held in our country, and Azerbaijan has taken over chairmanship in this organization. Our country has also hosted a summit of the Non-Aligned Movement. Within the framework of this summit, by a unanimous decision of 120 member-countries, Azerbaijan assumed chairmanship in this second largest international institution after the UN. I want to emphasize this fact because certain countries that are members of the Non-Aligned Movement do not get along with each other, if I may say so. There are conflicts and disagreements between them. Despite this, all countries supported the candidacy of Azerbaijan. This once again shows the high level of respect and trust in us in the international arena.
The second summit of religious leaders of the world was also held in our country. Religious leaders of 70 countries arrived in Azerbaijan, got acquainted with our realities and praised the work our country has been doing in the interreligious and intercultural sphere.
A session of the UNESCO World Heritage Committee has been held in Azerbaijan. This is also a very reputable event on a global scale. As part of the session, the Palace of Sheki Khans and the central part of Sheki were included in the UNESCO World Heritage List. I believe that this is a very important event because Gobustan, Icherisheher and the Shirvanshahs Palace had been included in this authoritative list earlier. I believe that the inclusion of the Palace of Sheki Khans on this list is a fair decision and yet another great success of ours.
I would also like to draw your attention to another international event – the International Astronautical Congress held in Washington last year. This is the most prestigious event in the field of astronautics. The congress passed the decision to hold the International Congress of Astronautics in 2022 in Azerbaijan. This is also a very important event – both the congress itself and the fact that along with Baku, three other big cities participated in this competition - Rio de Janeiro, Singapore and Delhi. Azerbaijan won this difficult competition. In other words, this is a sign of the great attention being paid to our work and a manifestation of the confidence placed in Azerbaijan as a whole. I must also note that the International Congress of Astronautics was held in the Soviet Union only once – almost 50 years ago, in 1973 – and it was held in Baku. At that time, thanks to the efforts of Heydar Aliyev, it was Baku that was selected to host this congress. After almost 50 years, this congress will once again be held in Baku, the capital city of the already independent Azerbaijan, the city of Baku.
Many important events have occurred on the international plane. I am simply highlighting the main issues. The facts already noted clearly confirm that our international positions are strong enough and were further strengthened last year.
Our military potential has also strengthened. Last year, a large number of weapons, ammunition and military equipment were acquired and produced in Azerbaijan. It is no coincidence that the Azerbaijani army ranks 52nd in the world in terms of its military potential, material and technical infrastructure and combat readiness. The results achieved last year, including the construction and renovation of military camps and provision of new modern hardware, have further increased our military capabilities.
Very positive results were achieved in the economic sphere last year. They testify to the fact that we are pursuing a sound policy. I believe that Azerbaijan successfully met all the goals in the economic sphere in 2019. It would be sufficient to look at the figures to see that 2019 was a successful year for our country in terms of economic development. The World Bank included Azerbaijan in the list of 20 most reforming countries. This is a great achievement, which testifies to the fact that the fundamental reforms our country has carried out are approved by leading international institutions. I can say that, in general, 2019 was a year of deep reforms – political, economic, social, as well as personnel and structural transformation. These reforms will enable our development to be even more successful in the future. This includes economic growth, which will increase even more.
I believe that the results achieved in the economic sphere last year are satisfactory. Thus, the gross domestic product grew by 2.2 percent. This is a good result, especially considering that this growth in the non-oil sector is 3.5 percent. Industrial production has increased by 1.5 percent, while in the non-oil sector industrial production grew by 14 percent. This is a manifestation of the work done in the field of industry in recent years. Industrial production in Azerbaijan has grown both at the expense of public funds and as a result of private sector activity. I am sure that this growth will continue to be sustainable.
Agriculture grew by about 7 percent. This growth was particularly high in crop production – more than 10 percent. This is also the result of the work done. Inflation amounted to only 2.6 percent and cash incomes of the population grew by 7.4 percent. This is evidence of the fact that monetary incomes of the population were ahead of inflation. Thus, real incomes of the population have increased. I believe that this is one of the key issues for any country. Our non-oil exports have increased by 14 percent. This is also a very good result. This growth was due to the attention paid to the activities of the private sector in recent years, the provision of low-interest loans, ongoing reforms related to subsidies and other measures.
Our foreign exchange reserves have increased by $6.4 billion to reach a record high of $51 billion. I should note that Azerbaijan holds first place in the CIS space in terms of foreign exchange reserves per capita. The foreign trade surplus is $6 billion, which is an excellent result. I can say that there is a negative balance in the foreign trade of the vast majority of the countries around the world, but it is positive in our country. This, of course, will contribute to both maintaining the manat rate at a stable level and lead to macroeconomic stability in general. So the results and figures achieved in the economic sphere once again confirm that our policy is carefully thought-out and aimed at the result.
As a result of the reforms carried out by tax and customs authorities, more than 1 billion manats entered the treasury in excess of the plan. This, in turn, allowed us the opportunity to initiate a very large social package for the population, and we did it. I believe that this is the largest social package in the history of modern Azerbaijan and the CIS so far. This is not our first initiative in this area. We remember that when repaying the deposits that were left over from the Soviet era and were in some way frozen, we also returned these deposits on the basis of the principle most acceptable to our citizens and with the most acceptable coefficient, thus becoming first in the CIS in this area as well. The social package implemented last year covered 4.2 million people and the material situation of our people improved. The minimum wage has been doubled, the minimum pension has been increased by 70 percent, some benefits by 50 percent, some have been doubled. In other words, we channeled the additional income received as a result of the reforms carried out last year primarily into the social sphere. I announced this at the beginning of last year and said that all the accumulated additional funds would be spent on the social sphere, which we did. As always, we keep our word. The positive developments taking place in the social sphere and the improving well-being of our citizens remain a priority for us.
Of course, as a result of the successful economic policy, a lot of work was done in relation to social infrastructure. Sixty medical institutions and 84 schools have been built and renovated. Fifty schools are of modular type. They have been built in small and remote villages. This shows that the processes taking place throughout our country stem from the overall development potential.
Infrastructure projects have been implemented. In the field of electricity, the “Shimal-2” power station has been commissioned. The capacity of this station is 400 megawatts. In parallel, as a result of the repair and restoration carried out at the Mingachevir Thermal Power Plant and other operating stations, we have restored about 400 megawatts of lost generating capacity. Thus, we received an additional 800 megawatts of generating capacity last year. Of course, this fully meets our needs. At the same time, we have great export opportunities. We currently have 1,000 megawatts of generating capacity in excess of our needs. If we take into account the measures taken to renew the electricity infrastructure, we can say that very serious work has been done in this direction.
Gas supply in our country has reached 96 percent. A total of 345 sub-artesian wells drilled will improve water supply of hundreds of villages. I must also say that more than 400 sub-artesian wells will be drilled this year. The list already includes the names of villages in all our districts and we will do this as part of the investment program during the year.
As for road construction, major projects will be implemented this year in relation to trunk, intercity, rural and intra-village roads. The construction of a new Baku-Sumgayit-Russian border, Ganja-Georgian border and Astara-Iranian border highways is planned on. Last year, 1,300 kilometers of roads were built. We planned on about a thousand kilometers, but due to additional income, 1,300 kilometers of roads were built during the year using the resources of the President’s Contingency Fund and the state budget.
Infrastructure projects are being implemented as part of the fourth state program on the socioeconomic development of the regions adopted at the beginning of last year. This is a five-year program. The previous three programs have been successfully completed. I am sure that there will be no problem with the implementation of the fourth program either. So I believe that after the completion of the program, all our infrastructure projects, including those related to the social infrastructure, will be implemented.
At the beginning of last year, a strong earthquake occurred in Shamakhi, Agsu and Ismayilli districts. Fortunately, there were no casualties. However, thousands of homes were affected. Visiting the region in the immediate aftermath of the earthquake, I promised that all houses would be rebuilt, repaired and restored before the onset of winter. As always, we have kept our word, all the main consequences of the earthquake have already been eliminated and thousands of houses have been built, repaired and restored. This shows again that people’s problems are in the spotlight.
I said this before and want to say it again: a lot of educational work should be carried out in Azerbaijan in relation to property insurance. People need to know that homes and property must be insured. Considering the big gaps in this area in Azerbaijan, the state took the entire financial burden upon itself. Of course, this required large amounts of money, but let me say again that people’s comfort, well-being and decent living conditions are our priority. But I believe that it is necessary to take very serious steps related to property insurance, including public awareness, this year and in subsequent years. Various activities should be carried out in relation to this issue, to inform people in detail about future steps. I am instructing the government to pay attention to this issue. This will also have a positive impact on the development of our country's insurance sector.
The TANAP gas pipeline was commissioned last year. I consider this a historic achievement because TANAP forms the main part of the Southern Gas Corridor. It was after the TANAP agreement signed in 2012 that the development of the Shah Deniz-2 gas condensate field was sanctioned. If TANAP had not been signed, the development of Shah Deniz-2 would not have begun and we couldn’t have obtained this additional volume of gas today. This could have created major problems. Therefore, the signing of the TANAP agreement, the early commissioning of this gas pipeline and the significant savings are a great historic achievement for us. The remaining fourth project of the South Gas Corridor is also being successfully implemented. The implementation level of the TAP project now exceeds 90 percent. I am sure that we will also celebrate the commissioning of the TAP project at the scheduled time this year.
I want to bring one more issue to your attention. It consists in the fact that all the work done, including our positions in the international arena, the establishment of friendly relations with many countries, the stability and tranquility prevailing in our country – all this has given a powerful impetus to the development of tourism. I have repeatedly said that the development of tourism is not limited only to historical monuments or some issues that attract attention and interest. In today's world, there is no region where there are no problems – in fact, very serious ones. As I have already noted, wars, confrontations, coups, public protests, police violence, violation of human rights – of course, the influx of tourists in countries experiencing all this is in decline.
The stability in Azerbaijan, the strengthening of our international positions and the international events held in our country serve the development of tourism. Last year, the flow of tourists reached a record high – 3,170,000 foreigners visited our country. According to the information provided to me, foreign tourists spent 1.260 billion manats in Azerbaijan through bank cards alone. In general, we must take into account the fact that tourists come mainly from neighboring countries and cash payments prevail there, just as they do here. Calculations show that foreign tourists spent as much as 4.3 billion manats in Azerbaijan. I speak in manats, but this is actually currency. This currency is also a kind of exports. This plays a very important role in our macroeconomic stability. Of course, we earn the main currency from the sale of oil and gas although growth of non-oil exports by 14 percent provides for an influx of currency from this sector as well. Tourism development will continue to be in the spotlight.
Thus, we could spend hours talking about the successes achieved in 2019. I have simply highlighted the issues I consider to be the main ones for citizens of Azerbaijan. I want to say again: we will follow this path of success in 2020. I am sure that 2020 will also be successful for our country.
And now let’s move on to discussions. Last year, we adopted the largest state budget in the history of Azerbaijan. The consolidated budget is close to 30 billion manats, approximately $17.6 billion. Of course, this requires stricter control over budget spending.
