Opening speech by Ilham Aliyev at the conference dedicated to results of first year implementation of the State Program on socio-economic development of regions in 2019-2023 03 february 2020, 11:3503 february 2020, 11:45
Today we will discuss the results of the first year of the implementation of the fourth state program on the socioe-conomic development of the regions of Azerbaijan. We will also talk about the work to be done this year. The program was adopted a year ago. The fourth program is a logical continuation of previously adopted programs. A lot was done within the framework of the first three programs but much still remains to be done. I believe that the key infrastructure goals facing the country will be met within the framework of the fourth program and thus better opportunities for the further development of our country will emerge.
Last year, all necessary steps were taken to implement the program. I can say that the program has been exceeded. All the issues provided for in it have been resolved. However, there are certain delays in some issues. Therefore, special attention must be paid to these issues. I believe that all the measures to be implemented under the program this year will be implemented.
In general, our country developed successfully last year. Azerbaijan followed the path of development and stability. But the developments unfolding in the world are of concern to us, of course. There are new hotbeds of conflict and new zones of tension in the world. Existing problems are not being addressed. On the contrary, they are topped with new ones. We can say that there are certain tensions everywhere in the world – in Europe, Africa, Asia, Latin America, in our region, in post-Soviet republics. In some cases, it takes on more severe forms. However, Azerbaijan has been on the path of stability for many years. The stability prevailing in our country is underpinned by the will of the Azerbaijani people. Our policy is supported by the people. It is a policy that is measured by concrete deeds. Our policy is based on specific deeds, on real development, not words but actions, and each given word is reflected in life. Therefore, the confidence shown to us by the people is at a high level, and this is the main condition for stability and calm.
I believe that good results were achieved in the economic sphere last year. Today, Azerbaijan is on the path of economic development and serious reforms that are highly valued in society. These reforms are improving the standard of living for our people, accelerate economic development of our country and play a very important part in resolving the unpleasant problems of the country. Fundamental economic and political reforms are usually fraught with major problems. In other words, sometimes or rather in many cases, these reforms negatively affect people's way of life. In Azerbaijan, reforms are carried out in a consistent manner. It is a sound policy. We have simply entered a new phase of reform. Therefore, the reforms carried out both in the economic and political spheres serve the interests of our people and state. At the same time, very serious structural and personnel reforms have been carried out.
All this shows again that the main goal of our economy is to strengthen the state, ensure a better life for our people and create stability. We are achieving all these goals. This is once again confirmed by last year's economic and social achievements. Our economy grew by 2.2 percent. I think this is a good result. Oil prices are stable, but oil production in Azerbaijan has somewhat dropped. I believe that the 2.2-percent increase in the gross domestic product is a good result, especially when we consider that growth in the non-oil sector is 3.5 percent. Industrial production has increased by 1.5 percent. The reason for this is precisely oil production. However, the non-oil sector, which is our top priority, has grown by more than 14 percent. A special role, of course, was played by the launch of giant industrial enterprises commissioned last year, as well as the development of small and medium enterprises and the improving business environment. The improvement of the business environment is also acknowledged by the World Bank. According to the Doing Business report, Azerbaijan was ranked among top 20 most reforming countries last year. Of course, all businesses are seeing and feeling this. Tax and customs administration and state support for businesses make themselves felt in the non-oil industry too, of course.
Thus, our non-oil industry, which has grown by more than 14 percent, means creation of jobs. I should note that 98,000 jobs were created last year. I have repeatedly said this before and I want to say it again: this process should become permanent because the population of Azerbaijan is growing fast, so the economy, economic development, including job creation, should always be ahead of demographic development. Therefore, we must always pay special attention to this issue. However, it is true that the creation of every job requires major funds both from the state and the private sector. Because job creation doesn't happen out of nowhere, it requires infrastructure, conditions and opportunities. Of course, the private sector as the main sector creating jobs speaks its word, as it should.
So such are our key economic indicators. If we add to this the investments made in our country, the picture will be even more beautiful. Last year, $13.5 billion was invested in our country. Azerbaijan is a very attractive place for both foreign and local investors. A part of these investments was made by the state. And this is natural because public investment still plays an important role in economic growth, especially if we consider that a lot remains to be done in connection with infrastructure projects. Therefore, state, local and foreign companies have invested $13.5 billion in our country. I think this is a very good result.
The macroeconomic situation is quite stable. Inflation was only at 2.5 percent, while population incomes grew by 7.4 percent. So population incomes, as always, exceed the inflation. Our foreign exchange reserves increased by $6.4 billion. I can say that this is a record figure in recent years. Although our budget has reached a record high, we have increased our foreign exchange reserves again. It should always be the case. Even in the most difficult crisis years for us, when the price of oil on world markets fell fourfold, we managed to increase our foreign exchange reserves. However, last year's growth of $6.4 billion is a reflection of our sound policies, of course. We are saving our money. We invest public funds only in projects of strategic importance. At the same time, we are receiving major funds from the management of our foreign exchange reserves. Many factors manifest themselves here because Azerbaijan enjoys great respect on a global scale, both politically and in the economic sphere, in terms of business development. My recent 14th participation in the Davos World Economic Forum, the negotiations held within the framework of the forum and the events I attended once again show that Azerbaijan is treated with great interest and sympathy. More than 20 meetings were held. I can say that all the meetings took place on the initiative of the opposite side. So I am saying this because there is indeed a lot of interest in the development of our country. The number of companies interested in working in Azerbaijan is growing. As you know, the companies participating in the Davos Forum are the biggest companies on a global scale. In other words, many criteria need to be met to enter the forum, and one of them is capitalization, of course.
Thus, the investment of major funds and the growth of our foreign exchange reserves once again indicate that we are on the right track and will continue to follow this course. Taking into account January, our foreign exchange reserves have already reached $52 billion. Over the past month alone, they have increased by $1 billion. This is our strategic reserve, which ensures our economic and, to a large extent, political independence. Today, Azerbaijan is one of a handful of countries in the world pursuing an absolutely independent policy. In order to pursue an independent policy, many factors are necessary – territory, potential, gross domestic product, military power, etc. We know what countries of the world are powerhouses. Of course, in terms of its size and geographical territory, Azerbaijan cannot compete with large countries and doesn't have such intentions. But, despite this, we have enough opportunities to pursue an independent policy. The main one is the support of the people, the support and trust our policy enjoys. Of course, economic indicators, our activities in the political arena enhance our strength and Azerbaijan becomes and will become stronger every year.
Our exports have also increased, in particular, in the non-oil sector. Our foreign trade has increased. In a word, all issues related to the economy have been resolved.
At the same time, major initiatives were put forward in the social sphere last year. More precisely, these programs were prepared in the second half of 2018 and began to be executed at the beginning of 2019. Large funds were provided for martyr families. In general, the social and material situation of 4.2 million people was improved because the huge social package reached out to 4.2 million people. The minimum wage has doubled and the minimum pension has grown by more than 70 percent. Currently, Azerbaijan ranks first in the CIS in terms of the purchasing power of the minimum pension. Some benefits were increased by 50 percent, some were doubled, scholarships were raised, one-off financial assistance was provided to the families of martyrs. In addition, monthly benefits for families of martyrs and internally displaced persons were increased. So all these are issues requiring major funds and cost several billion manats. But we are doing that. First of all, because our policy is centered on the citizens of Azerbaijan. And secondly, we have opportunities to do this. If there was a desire but no opportunities, how could we have done this? By mobilizing our economic strength, we have secured today's reality, and this is why we can do it. I can say that there is no other country in our immediate surroundings that would take up such a social initiative. If there is, do let me know. There isn't! We are doing this and believe that it is right. The people of Azerbaijan should live better every year. Our growing economic power should first of all be aimed at improving the well-being of the people, and we are doing this. Therefore, the work done in the social sphere once again reflects our policy, demonstrates our strength, and this sphere will continue to be in the spotlight.
At the same time, important steps were taken last year to create social infrastructure – 84 schools and 60 medical facilities were built and renovated. This process is also ongoing. We have completed the repairs of most of the schools. But there are still schools in disrepair, and specific steps will be taken to repair them in the coming years.
We are seriously dealing with the implementation of infrastructure projects, in particular in the field of electricity. Serious progress has been made in this area as well. I can say that last year we managed to obtain an additional 800 megawatts of electricity. Of these, 400 megawatts are due to the new "Shimal-2" station and the other 400 megawatts are the result of the restoration of lost capacity. These capacities were once lost due to improper operation of the stations. But this work is now under way and a significant part of the 400 megawatts was obtained due to repairs and restoration at the Mingachevir thermal power plant. Of course, the lost power was also restored at other stations, which is how we received 400 megawatts. This process continues. This year, generating capacity will be restored approximately at the same level. Today we have become an electricity exporting country.
The process of gasification has been continued. Gas supply is available practically throughout the country. The level of gasification has reached 96 percent. This is one of the highest indicators on a global scale. A total of 1,300 kilometers of roads have been built with a plan of 1,000 kilometers. However, on the basis of the appeals I received during my visits to the districts over the year, as well as the letters people sent afterwards, we managed to build an additional 300 kilometers. In terms of the quality of roads, Azerbaijan today ranks 27th in the world, ahead of many developed countries. I am sure that we will go even further as a result of the forthcoming work.
Land reclamation measures also have an important place among infrastructure projects. Water is supplied to approximately 80,000 hectares. More than 300 sub-artesian wells have been drilled. This process will be continued this year.
These infrastructure projects were implemented through the state investment program. This once again shows that favorable grounds are being created for the sustainable development of our country. All this work, as well as the reforms carried out, have certainly given a powerful impetus to the development of agriculture. Agricultural production has reached a record high compared to recent years. That is, growth rate exceeds 7 percent, in particular, growth in crop production amounted to more than 10 percent. The exports of our agricultural produce are growing. Domestic needs are met by local products because all these issues are closely interrelated.
Major projects were also implemented in the transport sector last year. Among them, I want to specifically note the construction of a suburban railway line in Baku. We have restored the railway transport, which was once called the "electric train", at the most advanced level. We have delivered trains produced by the leading company. Railway stations have been built in suburban settlements, and this process will be continued. The main stage of construction of the suburban railway will be completed this year, i.e. the ring will close. Following this, there are plans to build railway to settlements where it is not available yet. At the same time, reconstruction work is under way on the railways connecting us with our neighbors in order to increase their speed. We have largely achieved this, in particular, in the western direction. Preparations are under way for work to be carried out in the northern and southern directions, and this process will go even faster this year.
Of course, noting the successes of the past year, we must definitely mention the TANAP project reaching the border with Europe. This is a historic event, a historic project. TANAP, which is the main part of the Southern Gas Corridor, has been practically commissioned in full. At a ceremony held on the Turkish-Greek border in November last year, we celebrated a complete commissioning of this project. Prior to that, we had celebrated TANAP reaching Turkey. This is a truly historic project. It determines the successful development and completion of the fourth segment of the Southern Gas Corridor – the TAP project. I am sure that this gigantic infrastructure project, the Southern Gas Corridor with a length of 3,500 kilometers and connecting several countries, will be fully commissioned this year. This will be our next historic victory.
Many other events happened last year. It is impossible to mention them all now. I believe that the questions and figures I have mentioned provide enough information about the processes taking place in our country, and these are our successes. We must talk about these successes, promote them, but at the same time we cannot be content with them. We must always step up our efforts around unresolved issues, and we are doing that. Therefore, the main goal of this traditional conference is to sum up the work done and give impetus to the work to be completed during the year. We have been following this path since 2004. The first program adopted in 2004 was a historic event. At that time, this program was an integral part of my election program. When I was first elected as president, I told citizens that if I was given confidence, I would seriously engage in regional development as well. Because I knew that the situation in the regions of Azerbaijan wasn't very good. There were, of course, natural reasons for that - the infrastructure was out of date, it was practically out of service, many enterprises had been shut down, agriculture was stagnant. Therefore, I believed that the regional development program would be a program that would give the main impulse. In addition, most of the population of Azerbaijan lives in the regions, districts, villages. It was necessary to improve their lives. Therefore, I want to say again: the adoption of this program was a historic event. Ever since that time, we have been annually discussing the implementation of this program. As I said, three programs have been adopted and implemented, and the fourth program is being implemented now.
I can say that from 2003 to the present, the economy of Azerbaijan has grown 3.4 times as a whole. This is a record high in the world. One can study the statistics, but I don't believe that there are similar growth rates elsewhere. Over these 16 years, industrial production has grown 2.7 times, agriculture has doubled, foreign trade turnover has increased 6.4 times, exports 7.6 times, including non-oil exports 5.2 times. Our foreign exchange reserves have grown 27 times. In 2003, foreign exchange reserves amounted to $1.8 billion, last year to $51 billion and now constitute $52 billion. This in itself is a high indicator. Poverty has declined from about 50 to 4.8 percent. This indicates that oil revenues were distributed reasonably and fairly. Using these revenues, we have resolved a significant part of the key infrastructure problems of our country, while also improving the well-being of our citizens. Over the past 16 years, the average wage has grown 11 times and the average pension eight times. More than 300,000 internally displaced people and 6,700 martyr families have received houses and apartments. In other words, these major social programs require a lot of money. Just imagine – we have built houses and apartments for 300,000 people. Over the years, we have built a city equal to Sumgayit or Ganja. This required political will, sound policies and opportunities.
As for infrastructure projects, 33 power plants with a generating capacity of 3,000 megawatts have been built over the years. If these stations hadn't been built, half of our country would be in darkness now. We would still be importing electricity and spending a lot of money on it. However, having built these stations and received 3,000 megawatts of generating capacity, we now export electricity. Last year, our country earned about $60-65 million from these exports.
In 2003, the level of gasification in Azerbaijan was 51 percent, while in the regions there was no gas at all. Currently, this figure has reached 96 percent. There is not a single district where there is no gas. There is no district where gas supply is below 70 percent. In the districts, it is at 100 and 95 percent. We have built 16,700 kilometers of roads. We have modern highways connecting us with all neighboring countries. Roads in hundreds and perhaps even in more than a thousand villages have been landscaped.
Land reclamation measures. Two large water reservoirs have been built – Takhtakorpu and Shamkirchay. If we didn't have them, there would be a shortage of water today in these districts. If the Takhtakorpu reservoir had not been built, it would hardly have been possible to provide the city of Baku with water last year because last year's drought may have never happened before. By ensuring the supply of water collected specifically from Takhtakorpu to Jeyranbatan, we achieved uninterrupted water supply to Baku. No-one in Baku even felt that there was such a severe drought.
We are doing all this for people to live better. Every major project is underpinned by a thought-out policy. To improve water supply in the villages, more than 1,500 artesian wells have been drilled over the years, and this process continues. Modular-type water treatment plants have been built in hundreds of villages. Therefore, infrastructure projects occupy a special place in the implementation of our program. By carrying out these projects in parallel with social initiatives, we have achieved today's realities.
Over the years, Azerbaijan has become a space-faring nation. We have three satellites. Sixteen years ago, we couldn't even dream about it perhaps. But today it is a reality. We have not only three satellites. In two years, Baku will host a top global event – the International Congress of Astronautics, almost 50 years on, because the only congress in the Soviet Union was held in Baku in 1973. And now, 49 years later, this event will be held in Baku again, this time Baku as the capital of an independent state of Azerbaijan.
To the transport sector. Seven airports have been built, six of them are international. According to the Davos report, Azerbaijan ranks 11th in terms of air services. Heydar Aliyev International Airport is already known as a five-star. There are about 10 such airports in the world. One of them is Heydar Aliyev Airport.
The Baku-Tbilisi-Kars railway has been built. This is our historic victory. Not only because Armenia remains in an eternal impasse, although this is important, but because this road brings a lot of income today and, at the same time, expands our international cooperation. Currently, this railway transports goods from locations that were not provided for at the beginning of its construction. So the railway has become a very important infrastructure project for international cooperation, and Azerbaijan is the leading country here. We have played a special role in creating the East-West and North-South transport corridors. We are a country involved in both projects. The Alat international seaport is the largest port in the Caspian. A shipbuilding plant can produce tankers, cargo and any other vessels for us. Today, our money stays in Azerbaijan and does not go abroad. Currently, we produce tankers and cargo ships ourselves. I have mentioned only the main highlights of the work done over 16 years.
In the field of energy, in the oil and gas industry, the Baku-Tbilisi-Ceyhan oil pipeline was commissioned in 2006 and the Baku-Tbilisi-Erzurum gas pipeline in 2007. If they hadn't been built, who would have ever invested in the oil industry of Azerbaijan, especially in offshore oil production? No-one! Investments would be nil. What would we be doing? We would be buying oil abroad. We built these pipelines in a difficult geopolitical environment, with minimum risks. Then the Baku-Tbilisi-Kars railway was built. Because if those pipelines had not been built and that corridor had not been opened, there would never have been a railway corridor. And we would not have had money to build this railway. We could not have provided Georgia with a loan of about $800 million. Then the Southern Gas Corridor. It is also one of the largest infrastructure projects in Europe worth about $40 billion. It connects several countries. It is a giant project with a length of 3,500 kilometers and consisting of four segments. Political skill, diplomatic steps, our economic power, our relations with international banks and fruitful cooperation with countries along this path have all played a role here. There were so many difficulties in the implementation of this project. We would need to have a separate event just to talk about this. But we brought it to the end. And Azerbaijan initiated it. For several years now, meetings of the Advisory Council of the Southern Gas Corridor have been traditionally held in Azerbaijan. The next meeting of the Council will be held at the end of this month.
So everyone agrees that we, Azerbaijan, are the leading force, the initiator, the organizer of these projects, the country that has taken up the main financial burden, and we have done this. Each of these projects has historic significance. All these projects and the work done in general represent a great contribution to the Azerbaijani people. As I said at the beginning of my remarks, it is our policy and the steps taken that determine successful development and stability and form a positive mood in society. We did everything we promised. There is not a single unfulfilled promise. No-one can find anything of the kind. In 2003 and the following years, I did everything I promised. Therefore, people have great confidence in both our words and our deeds. I have always said that our words must be underpinned by our deeds, and it is the case today.
Of course, it is impossible and unnecessary to talk about all the work done over the past 16 years. I believe that I have highlighted the main points for you and the Azerbaijani public to know. And now let's move on to discussions.
Other speakers at the event included Minister of Economy Mikayil Jabbarov, head of Gabala District Executive Authority Sabuhi Abdullayev, director of "Mingachevir Tekstil" LLC in Mingachevir Industrial Park Mehman Huseynov, head of Ganja District Executive Authority Niyazi Bayramov, director of Nakhchivan Salt Prodiuction LLC Anar Asadullayev, head of Guba District Executive Authority Ziyaddin Aliyev, director of the Brightman Business Managment Consultants enterprise for the production of canned fruits and vegetables Afat Ahmadova, head of Astara District Executive Authority Gazanfar Aghayev, Executive Director of Aghstafa Agro Industrial Complex Anar Orujov and head of Kurdamir District Executive Authority Jeyhun Jafarov.
President Ilham Aliyev then made a closing speech at the conference.
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