Closing 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 2019-202303 february 2020, 12:00
In the second part of the conference, four panels will be organized to discuss the issues that cover all areas, including economic, agricultural, infrastructure, banking, loans and others. Both local executive authorities and entrepreneurs together with representatives of the central executive bodies will discuss these issues and existing problems. Of course, discussion will also revolve around the work to be done this year. It is necessary to make sure so that all the issues provided for in the program are resolved. Certain issues arose in 2020, quite recently, and resources are required to resolve them. The State Investment Program has been approved. It is quite extensive. At the same time, there are some reserves because issues emerge during the year that also need to be resolved.
And now I would like to dwell on the key upcoming issues and projects, so that the program and the development of our country as a whole are ensured this year as well. First of all, I would like to start with infrastructure projects, despite the fact that great success has been achieved in this area and most of the issues have been resolved. However, life does not stop. The needs, population and the industrial potential of our country are growing, new enterprises are being commissioned. Therefore, the implementation of infrastructure projects should continue to be ensured.
In my opening remarks, I provided some data regarding the production of electricity. I want to add that an important event took place in January this year. Two major foreign investors signed a protocol of intent with Azerbaijan on the production of renewable energy. This is actually called an executive agreement, and more detailed work will be carried out on these contracts over the course of the year, for several months. I am sure that relevant contracts will be signed by the end of this year. This issue is very important because it is renewable energy that will be produced exclusively with foreign investment. Of course, as I noted in my opening remarks, if our credit rating were not high and if Azerbaijan were not among top 20 most reforming countries in terms of the business environment, foreign investors would not invest here.
When meeting with the executives of these major companies, I was also convinced that the key reason behind this decision was, first of all, the stability and calm prevailing in our country and investors’ faith in the long-term development of Azerbaijan. These are very large projects. Two power plants will be built – wind and solar. Their total generating capacity is at 440 megawatts – very large stations. About $400 million of foreign investments are envisaged. Therefore, I am sure that other investors will also show interest after this. I can say that we received proposals from nine leading companies in the world for the implementation of this project. Work is already under way on an individual basis and with companies that, if I may say so, have remained on the sidelines. New proposals are being prepared for them. I am sure that the share of renewable energy in our total generating capacity will and should gradually increase.
In parallel, “AzerEnergy” will begin the construction of a large new power station with a generating capacity of about 350-400 megawatts. There is a need for this because, as I have already noted, our export opportunities are expanding and domestic needs will gradually grow. So domestic consumption must be always taken into account. We now have about 1,000 megawatts of generating capacity that is not used in the country. A significant part of that is exported.
“AzerEnergy” should also begin the construction of a new wind farm. A station with a capacity of 50 megawatts was commissioned recently. The generating capacity of the second station is 84 megawatts. And this is another manifestation of renewable energy in Azerbaijan. Several countries of the world, especially those not rich in natural resources, are implementing similar projects now. Our policy is this: despite the fact that we have both oil and gas, we must use renewable energy in order to ensure their economical use and exports, especially since we have ample sun and wind.
At the same time, construction and restoration work will be carried out at the other three blocks of the Mingachevir Thermal Power Plant. Five blocks have already been repaired, which means an additional about 400 megawatts of generating capacity. Therefore, in the next two to three years we will significantly increase our energy capacity. At the same time, of course, issues of installing transformers, launching new substations and updating power lines are also on the agenda.
As for gasification, as I have already noted, although we have reached 96 percent, the state investment program provides for the allocation of 130 million manats from the state budget of the State Oil Company of Azerbaijan for gasification. Using these funds, many villages that are not receiving gas today will have gas supply.
Several important projects related to the construction of roads are being implemented. One of them is the expansion of the Ganja-Georgian border highway to four lanes. Work is under way and, I am sure will be completed. A new four-lane road from Sumgayit to the border with Russia is under construction. I believe that it will also be commissioned by the end of the year. The construction of the Astara-Iranian border highway is also on the agenda. Currently, the highway runs south in a completely new direction, but it passes through the city of Astara. Therefore, it creates inconvenience for people and reduces the cargo handling capacity. In this regard, there are plans to build a new highway from the territory of the district to the border with Iran bypassing the city of Astara, including the construction of an automobile bridge. This project should also be completed before the end of this year.
In addition, there are plans to restore and expand the Shamakhi-Ismayilli-Gabala road. It passes through a landslide zone, so it was impossible to restore it for many years. Only on the basis of new technologies and as a result of work on the determination of a new direction are there plans to expand this road and improve its quality.
The construction of new roads in the suburban settlements of Baku will be of particular importance this year. Last year, we started to do this work on a larger scale. Of course, roads in some settlements are in terrible condition, and this is unacceptable. We are building beautiful roads to the most remote mountain villages, but here, in the suburbs of Baku, roads are in poor condition. Therefore, appropriate instructions have been issued. More attention was paid to this area last year. It will be a priority among road construction programs this year.
In general, there are plans to build a thousand kilometers of roads this year. A thousand kilometers were also planned last year. But, as I said, 1,300 kilometers were eventually built. It is not ruled out that the length of the roads that will be built this year will also exceed the plan.
Regarding the restoration and construction of railways. There are plans to increase the speed of the Ganja-Georgian border railway. The construction of the Baku-Ganja railway has been fully completed. While visiting Ganja, I promised that this would be achieved. And it happened. Today, one can travel from Baku to Ganja on a very comfortable high-speed train. And now it is necessary to complete the restoration of this railway to the border. Also on the agenda is the reconstruction of the Baku-Yalama railway, which is an integral part of the North-South transport corridor. Along with this, there are plans to lay a railway line from Khudat to Shahdag. The Shahdag ski resort is known today not only in the CIS, but also throughout the world. After the commissioning of its second phase, interest further increased. Therefore, a railway line must definitely be built to this resort. This will bring comfort to those living in the district, foreign visitors and residents of Baku. A relevant order has already been issued and funds have been allocated.
Work is under way on the reconstruction of the Alat-Astara railway, changing its route and distancing it from the coast. Funds are also envisaged this year. Among intercity railways, there are plans to launch the Laki-Gabala railway this year. As I said in my opening remarks, the suburban railway to Baku settlements is to be extended.
In connection with drinking water projects, I should note that the implementation of drinking water and sewage projects has not started in only five cities of our country to date. In all other cities, this work has either been completed or is under way. Therefore, it is necessary to take into account the problem of drinking water in these five cities. The implementation of these projects should be started this year. I am sure that there will not be a single city in our country left without round-the-clock supply of drinking water that meets the standards of the World Health Organization in the near future. At the same time, we must also ensure the drilling of more than 400 sub-artesian wells for irrigation this year. The number of such wells is increasing every year, there is a need for that, and we will do it. This is provided for in the state investment program.
The focus is always on improving the environmental situation. Very important measures are being taken in this direction. The Ministry of Ecology and Natural Resources has built modular treatment plants in many villages along the rivers. However, according to information coming from some places, several such installations have failed. Therefore, first of all, it is necessary to conduct monitoring related to the operation of these facilities, analyze and report to me what state they are in. Secondly, proposals on their operation should be submitted. Unfortunately, these installations are left to the mercy of fate now. Local executive bodies and municipalities should actually deal with the operation of these facilities. In many places this is not the case. The Ministry of Ecology and Natural Resources has built these facilities and completed its work, as it were. Therefore, it is necessary to conduct monitoring, build such facilities in new villages if necessary and determine the specific agency responsible for their operation.
The process of planting trees will be continued. Last year, 650,000 trees were planted in one day in connection with the 650th anniversary of the birth of Nasimi. The number of trees planted in recent years may have exceeded 10-20 million. This is a very positive fact. In particular, this process has and should gain momentum in regions where nature is not very rich in trees. At the same time, the process of cleaning up contaminated areas and land reclamation continues. This work is and will be carried out on the Absheron Peninsula. The process of cleaning up the existing lakes should be expanded. So far, we have cleaned only a part of Lake Beyukshor. This is also a very large project. Cleaning up the other part, as well as other lakes, is on the agenda today.
A lot of work has been done in this direction in recent years. Residents and visitors to Baku feel that air quality has improved significantly. Due to what? Due to the fact that we have eliminated many sources of air pollution. One of them was the Bibiheybat area, which represented a site of environmental disaster. There is a park there now, there are sports facilities, alleys have been created, the boulevard has been extended to this zone. Secondly, air and the environment were largely polluted by the Black City. At present, there is a White City in its place. This is also a large urban development project. In the near future, as a result of the relocation of the oil refinery from this territory, the length of the boulevard will be increased and the environmental situation in this area will become even better. Of course, it is possible to say that the Balakhani dump was poisoning the air because it was impossible to extinguish the household waste burning there. At present, there is a large incineration plant and a segregation landfill there. This territory has become an ecologically clean area.
In other words, we are doing everything for the environmental situation in Baku to improve and not cause any harm to people’s health. At the same time, Sumgayit, where the environmental situation was once difficult, is an environmentally clean city now. When visiting there, I tell the people of Sumgayit that air in Sumgayit is cleaner than in Baku. But the air in Baku has also become significantly cleaner. Our focus is mainly on large cities, in particular the Absheron Peninsula and those where industrial enterprises are located. In other places of Azerbaijan, nature is inviolable, we must protect it. Nature must be protected in all our regions because it is our asset. Sometimes trees are cut down and buildings are erected in their place. This should not be allowed! Relevant instructions have been issued. The protection of nature should become the cause of every citizen because this is our country, our life.
This year, the state investment program envisages the allocation of funds for the restoration of historical monuments. We must pay attention to this as well. All our main historical monuments have been restored and preserved. But there are many historical monuments in Azerbaijan, and each of them is dear to us. Therefore, the restoration of historical monuments to their original state and in some cases their preservation is of particular importance. Maximum attention should be paid to these issues.
The transport system of Baku is improving. It operates more efficiently both in the public and private sectors now. I would like to note the private sector in particular, because they also see that the buses imported by the state meet the highest standards. The buses they use have long fallen into disrepair. Therefore, responsible entrepreneurs quickly began to engage in this business. I am sure that both private entities and the public sector will be active in this in the future. However, unlike Sumgayit, the situation in other cities leaves much to be desired. City transport is in terrible condition. Buses do not meet any criteria. Therefore, I instructed both local executive bodies and the Ministry of Transport, Communications and High Technologies to provide me with detailed information on the state of the existing bus fleet. We must resolve this issue as well. Transport should be good in all our cities. The roads are good, transportation should be good, so that people could comfortably reach their destination, place of work.
Important steps will be taken this year in relation to social infrastructure. Dozens of schools and medical facilities will be built and renovated. The opening of two Olympic sports centers is planned on. Five “ASAN xidmət” centers will be commissioned this year, and thus their number will reach 21. But, of course, this process continues. I must inform you that five centers will be commissioned this year, the opening of six more is on the agenda. Two of them will be built in Baku, so the number of centers in Baku will reach seven, because people are queuing up in some centers. One will be built in Ganja. It will be the second center in Ganja. One will be built in Sumgayit, and it will also be a second one. One will be built in Lankaran and one in Salyan. This program should be completed no later than the end of 2021, perhaps even earlier. So the number of “ASAN xidmət” centers will reach 27.
The establishment of “DOST” centers will receive a further impetus. Two centers were commissioned last year. In general, there are plans to create more than 30 “DOST” centers.
Another social project is related to apartments that will be built for martyr families. Last year, apartments were provided to 934 martyr families. This year I asked to increase this figure, so the state will provide at least 1,500 martyr families with beautiful houses and apartments.
With regard to the living conditions of internally displaced persons, this will be another record year in this matter. This year we plan to provide apartments and houses to 7,000 IDP families. Last year, this figure was 5,000. So about 30,000-40,000 IDPs will be provided with new homes.
Other social projects include the introduction of paid public jobs. This issue was put forward on my initiative when unemployment in our country increased slightly. The reason was that oil prices dropped fourfold, and we were forced to cut down on investment. In my opening remarks, I already said that we managed to increase foreign exchange reserves even in the most difficult years for us. However, we reduced investment, so those who were expected to participate in these projects were left without work. Therefore, on my instruction, paid public jobs were created. But, unfortunately, violations were committed in this area in the regions and those who committed them were punished. If these shameful facts are repeated, no-one will escape punishment because it is absolutely disgraceful to embezzle the money intended for job creation for the poor. Therefore, strict control is in place. I am sure that such cases will not recur. But still there must be strict control. The Ministry of Labor and Social Protection of the Population has been tasked with registering all jobs and exercising strict control. The situation with unemployment last year improved significantly again. But the population is growing. We must take this into account. Therefore, this year about 40,000 jobs will also be created by the state.
Another important program is the one on self-employment. We launched it a few years ago, and there is a great need for that. This shows that it was the right step, and we are now expanding this program. The need is for about 40,000-50,000. Last year, we involved 7,000-8,000 people in the program. At least 10,000 people will be involved this year. The necessary funds, equipment and livestock will be provided. On our initiative, we are implementing this program together with the World Bank. So the funds for these 10,000 jobs that will be created are also provided by the World Bank. We need their experience and expertise more than the funding, because the World Bank has implemented such projects in many countries of the world. Therefore, both expertise and additional financial resources will be attracted. I would also like to appeal to private banks operating in Azerbaijan to join this program too, so that it gets wider. As I have already noted, there is a great interest and the needs are growing.
The recovery process in the banking sector is ongoing and should be continued. We have provided banks with tremendous support. All deposits are insured and we have extended this process. I believe and am absolutely sure that the crisis period is already in the past. However, in order t enhance public confidence in banks, the state is taking on this issue again. Azerbaijan is one of a handful of countries where all bank deposits are insured by the state. This is a great support given to banks, a privilege provided to them. At the same time, this increases their responsibility. If banks, private banks come up with some sort of surprise, they will only have themselves to blame. As part of the new powers granted to the Central Bank, stronger control is needed to ensure that the healing process is completed successfully.
As the economy grows and the economic situation improves, the discount rate also decreases. It has decreased this year as well, amounting to just over 7 percent. Of course, private banks should also lower their interest rates, because the Central Bank has already made a decision and discount rates were reduced last year and this year. This process continues.
In general, private banks should give an impetus to our economic development. They should not be engaged in making money only. They should be aware of their responsibility. The state provided them with the opportunity to operate, issued a license. If there are problems with these banks, the license will be canceled. Licenses of many banks have recently been revoked. They will be deprived of these opportunities. Therefore, they must be responsible. There should be no surprises. They should give preference to business loans. I said this at a meeting on the results of last year. The same trend is observed evident. Preference is being given to consumer loans. Of course, this is very easy. They provide a consumer loan and then receive interest. But bank loans are needed for the country's economy, for the real sector, for job creation. Therefore, I am asking the Central Bank and relevant ministries again, including the Cabinet of Ministers, to take this under control and regularly inform me about the percentage of business loans and consumer loans. Monitoring should be permanent.
I want to touch upon one more issue. The property offered in districts and rural areas is often not accepted by banks as collateral. They want mortgaged property in Baku. This must be stopped. No discrimination should be allowed here. Therefore, relevant agencies need to seriously address this issue.
The state has envisaged sufficiently large funds for the development of entrepreneurship this year. This is already happening at the expense of repaid loans. About 200 million manats of loans will be provided on preferential terms. I can say that more than 2 billion manats in loans were provided to entrepreneurs on preferential terms in recent years. However, it is necessary to tighten control over these loans, as well as review business projects, because analysis shows that quite a lot of money is spent to create each job. In previous years, preference was mainly given to large projects, which was natural because I think that the creation of these agricultural estates and other large industrial enterprises was necessary. But today, in the portfolio of preferential loans, preference should be given to small and medium-sized enterprises. We are well aware that the gross domestic product in developed countries is largely formed by small and medium-sized enterprises. We should follow this path as well, especially when we consider that the oil and gas industry is leading driver of our economy. Therefore, preference in low-interest business loans should be given to small and medium-sized enterprises this year.
As for the implementation of large projects, as I have already noted, agricultural estates occupy a special place among them. The creation of agricultural estates is associated with food security. Today, in the example of agricultural estates, we see that productivity is higher because new technologies are applied, equipment is imported, state support is provided. For example, last year the average yield in grain production was quite high –32 quintals per hectare. This is huge progress. But in large farms it is 50 quintals, in some places 60 quintals. This suggests that the creation of agricultural estates was a very right decision. However, I am told that the creation of agricultural estates is being delayed in some places or work is not going on there at all. Therefore, I am asking the Ministry of Economy and the Ministry of Agriculture to deal with this issue. The plan was to create more than 50 agricultural estates. Let them sort it out, analyze and let me know if these places were simply taken over by entrepreneurs and are not being used. If so, they should be returned and transferred to a working entrepreneur.
Entrepreneurs are provided with a great deal of comprehensive support. First, the support of the President. I have repeatedly said that the future of the Azerbaijani economy depends on the development of entrepreneurship. On the other hand, all infrastructure projects have been implemented. Just imagine that if there were no light or roads in the districts, what entrepreneur would ever work there? If there were no gas, what greenhouse would operate? Therefore, all of this has been done by the state – roads, electricity, gas, water. In addition, low-interest loans – as I have said, more than 2 billion manats were allocated at low interest rates. Subsidies are provided to farmers, they are exempt from taxes with the exception of land tax, which is insignificant. The creation of industrial estates, industrial parks and infrastructure by the state. An incentive mechanism has been put in place and other stimulating factors have been applied. So great opportunities have been created for entrepreneurs. Therefore, we require entrepreneurs to be conscientious, work honestly, not commit violations and not evade taxes. Let them pay taxes in full. Besides taxes, they shouldn’t pay a single manat to anyone, no agency, no-one. After all, bribery has two sides: the taker and the giver.
I want to tell potential bribe givers: stop it! If someone groundlessly requires something from you, immediately inform the Presidential Administration, the Cabinet of Ministers and central executive authorities. This is completely unacceptable because quite often it is bureaucratic arbitrariness that inhibits the development of entrepreneurship. Seeing that work is about to start somewhere, officials sometimes immediately rush there, demand their share or try to snatch something. This must be stopped. Therefore, entrepreneurs must fully pay taxes. Because their taxes mean the life of our country, our people. Of course, the reforms carried out by tax authorities also provide great assistance to entrepreneurs because entrepreneurs know what the rules are. And they are very simple. It is necessary to build your work in accordance with law, conclude labor contracts and not exploit workers. I am told that workers are sometimes forced to work above the prescribed time. We have an eight-hour working day. No-one should work more than that. But in order to save more money, they are forced to work for 10, 12 or more hours. This must end and the Cabinet of Ministers must exercise control over that. It is necessary to hold a special meeting to discuss these issues. If such facts are committed, the entrepreneurs will be punished. I urge employees not to work without an employment contract. I know that sometimes you are forced to do so. But you should also know that without an employment contract you will not be able to receive a pension and medical insurance tomorrow. Therefore, entrepreneurs must pay tax, comply with all legal requirements and be responsible. Well-to-do entrepreneurs must be aware of their social responsibility, of course. At the same time, they should not commit unreasonable staff cuts because each redundancy leaves a whole family without a livelihood. This cannot be done. Please note that the state is increasing the number of recipients of targeted social assistance. Despite the fact that poverty is at 4.8 percent, poor people in Azerbaijan do not wander around the streets, as in some cities. Look at the cities of developed countries. There are thousands of homeless people living in the capitals of the largest countries. They sleep either in boxes, on benches or in make-shift tents they set up for themselves. We see it on TV. Do we have this too? No! Why? Because the state takes care of its citizens. Although the number of unemployed and poor people in Azerbaijan is getting smaller, I have instructed to increase the number of recipients of targeted social assistance. To do this, new criteria must be applied so that there are no poor people in our country. If an entrepreneur wants to earn 5 manats more, he fires a person. This is unacceptable. If there are such facts, do let me know and we will talk to these entrepreneurs the way they deserve. Therefore, there should be responsibility to the state, people and law. This includes the fight against the shadow economy which will continue to be carried out. There are also two sides to it. A government official turning a blind eye to it and an entrepreneur doing it. This conspiracy must be completely destroyed, and it is being destroyed. Today, the state does not turn a blind eye to this. Entrepreneur must fully withdraw their businesses from the shadows. The state, our central executive bodies, demonstrating a special understanding, are gradually implementing this process, because those who do this have worked this way for decades, both in Soviet times and in the period of independence, and are used to it. This must be stopped. There should be no shadow economy – that’s all, it is very simple. True, it exists everywhere, in every country. Here it has reached an unacceptable level. To be honest, when I was presented with this analysis, I was horrified. So this is being stopped. How did tax and customs authorities collect more than 1 billion manats over the forecast last year? Previously, this money disappeared in someone’s pockets and the people of Azerbaijan were deprived of it. Having ensured this transparency, we were able to implement the social initiative I mentioned. Every single gapik of this money was spent on salaries, pensions, scholarships and benefits. This being the case, can we turn a blind eye to the shadow economy? Absolutely not! I repeat that the shadow economy must end and state bodies have established a transition period because it would be wrong to take extremely tough measures immediately. People need to get used to it gradually. But we cannot drag out this period of concessions indefinitely. Therefore, the entire economy should come out of the shadows and all entrepreneurs must pay taxes this year. If someone still tries to work according to the old rules or rely on someone after my words, let them know this: this will not work. There will be no concessions for anyone. Everyone should know this. Everyone is equal. There is not a single untouchable entrepreneur, not a single untouchable official. Everyone will receive their own assessment, reward and punishment for their deeds. You must know this.
I should also note that this positive process continues this year too. I haven’t been updated on the social and economic results of January yet. It takes some time. However, several figures have already been reported to me, including those related to the activities of tax and customs authorities in January. In particular, in January of this year, tax authorities collected 120 million manats and customs authorities 40 million manats in excess of the forecast. In other words, thanks to the fight against the shadow economy, 160 million manats were received in one month alone.
As I have already mentioned, preference in industrial production will be given to the non-oil sector. Last year, growth in this sector amounted to more than 14 percent and should be continued this year. I would like to touch upon a few questions here. I believe that the processing industry should be given priority. State bodies also need to pay more attention to this area. Low-interest loans should also be channeled in this area. Let entrepreneurs pay more attention to it themselves. We must do everything in a consistent manner. Of course, we procure and export our fruits and vegetables. Exports are growing, which is great. But processed goods are more expensive. We need to create a value chain. Therefore, I believe that special attention in agriculture should be given to the processing sector. I can cite a few examples. Today, viticulture is developing at a very high rate in Azerbaijan. Thousands of hectares of vineyards established in recent years are producing crops today. Last year alone, grape harvesting increased by 34,000 tons. This directly creates the wine-making industry and we are exporting our wines to many countries now. The same applies to tobacco growing. Thanks to the development of tobacco growing, a new cigarette factory has been set up in Sumgayit and the Baku cigarette factory has been reconstructed. We must fully provide and will provide for domestic needs. In previous years, the countries that did not procure tobacco used to sell cigarettes to us. This is nonsense. We have both tobacco and conditions. So this is a manifestation of the development of the processing sector. It also includes coconut production because a chain is also being created here – from coconut harvesters to the Sheki silk factory. There, too, hundreds of people are already provided with work. Thousands of people are provided with work in the villages. They receive large sums of money in 30-40 days and without doing much of the hard work.
Cotton-growing directly preconditions the processing sector. Growth in cotton production is 46 percent. Last year, exports totaled $158 million. However, we can process 50 percent of the cotton in our country. What is necessary to do this? New spinning and textile factories, and finished goods factories. This chain is interconnected, so entrepreneurs should pay attention to this area and government bodies should point entrepreneurs in these directions. Thus, the development of the light industry will be ensured, jobs will be created, finished products will be produced and we will not import them. It is clear that all this is interconnected. Money will stay here in our country.
The same holds true for vegetable growing. The vegetable processing industry is at a very low level. We collect vegetables, consume and export them. This is good, but they have to be processed too. For example, last year our exports in vegetable growing amounted to $243 million. Of these, $190 million worth were the exports of tomatoes, which grew by 7 percent. But if there is a sufficient number of tomato paste factories, then we can sell it at a higher price. Moreover, these products are in demand in all markets. Entrepreneurs should pay attention to this. I regularly voice these figures, Azerbaijan’s self-sufficiency factor, so that local entrepreneurs could fill in these gaps. However, I see some passivity. Therefore, government agencies need to shake up entrepreneurs and take the initiative into their own hands. Especially when we consider that the state has created all the conditions, conducts all exhibitions and takes business people abroad. We have increased the exports of wine. Due to what? Due to the efforts of the state because it is through the state and at the expense of the state that people participate in international exhibitions where contracts are concluded. After all, the entrepreneur does not do this himself.
Unfortunately, we have major violations in the field of alcoholic beverages. The statistics were confusing. Why? Because entrepreneurs produce both vodka and wine! They write that they had produced such and such products in order to earn more. Of course, this is also being stopped and will be stopped. There should be transparency in every area, everyone should know this. Therefore, such tricks should stay in the past.
Fruit growing, for example. Fruits worth $240 million have been exported and an increase of 11 percent was registered. But among these fruits there are hazelnuts. Hazelnuts worth $125 million have been exported, an increase of 33 percent. Due to what? Thanks to the state again. At that time, I issued the instruction to set up hazelnut gardens. Hazelnut gardens in our country covered an area of 30,000 hectares. Now we have brought it to 80,000 hectares. Who did this? The state did! Why don’t business people plant them themselves? The state has done everything – both in connection with cocoons and in connection with cotton. How long will this last? Let entrepreneur do the same. Today they receive a lot of money from cotton and hazelnuts. Fine, them him become even richer. But let them take the initiative as well.
We will carry out this work anyway because our state needs it and entrepreneurs are also our citizens. An entrepreneur pays salaries to dozens, hundreds or maybe even thousands of employees. Therefore, what is the purpose of such associations and conferences?! Some of those present here are heads of the executive authorities, heads of central executive bodies and entrepreneurs. There should be an open discussion in the second part of this conference. Slogans or statements are unnecessary. We need a candid conversation, let the entrepreneurs say what problems there are and where the solutions lie. And let representative of the state say where there are violations and say in a friendly manner: “correct this, this is the last warning, if you can’t fix it, you will have only yourself to blame.” These are the issues that should be discussed here today. We need to make sure that starting from 2020 all these tricks, manipulations, falsifications and payments bypassing the cash desk remain in the past. The delivery of undeclared goods, the declaration of one product while the cargo consists of completely different products – state bodies know and knew about all this. Some simply turned a blind eye to that and conspired. This time is over. I am telling you: it's over. Therefore, everyone should work the way I said and that's all.
At the same time, also on our agenda is the production of finished products in the industrial sector. For example, the SOCAR Polymer plant was commissioned and we export polymers now. We export it to countries that produce finished products from it and then sell them to us. Therefore, we should create clusters here ourselves. If necessary, the state will provide support so that polymer products are manufactured in Azerbaijan and the money stays in our country. Therefore, it is necessary to pay attention to this issue too.
Serious reforms are under way in the field of agriculture. I am sure that growth will continue to be rapid. I must inform you that farmers were granted subsidies in the amount of 380 million manats last year. These subsidies are now being paid through the E-Agriculture Information System. This is a very progressive system. At the same time, the development of an agricultural insurance mechanism began. I am sure that this issue will also be resolved this year.
I would like to voice some figures in connection with growth in agriculture. So, the production of cocoons has increased by 25, cotton by 26, eggs by 9, sunflower by 43, potatoes by 12, vegetables by 12, melons by 11, fruits and berries by 9, green tea leaf by 7, grapes 20 percent. Exports have also significantly increased. I have already said this but I want to say it again that I view tourism as a type of exports, because foreign tourists spent 4.3 billion manats in Azerbaijan last year. So if this is considered a type of exports, tourism is the second biggest sector after oil. This is why I made sure that comprehensive measures were taken to develop tourism. In recent years, the number of tourists in Azerbaijan has increased and is still growing. I am sure that this will continue to be the case in the future. But everything is good in its season. For example, if we thought about it 10 years ago, this would probably be wrong. Because where tourists would have come? There are no roads, is electricity, no hotels. Where would they come? But everything is available today. There is modern transport infrastructure. As I said, Heydar Aliyev International Airport is a five-star airport. In addition, there are five international airports in places most popular with tourists. There are also beautiful hotels. There are hotels of all the world's leading brands in Azerbaijan. Why did they come here? Why didn’t they go to other countries? Because there is stability, trust, predictability, good investment environment and high credit ratings in our country. We have a good position in the Doing Business report. They see and look at reference data. Will the world's leading brand come and build a hotel here spontaneously? Of course not! The climate is wonderful, we have nine climatic zones, the hospitality of our people, historical monuments, cuisine and, of course, stability and security. Therefore, this work is carried out in the field of tourism. At a session of the UNESCO World Heritage Committee last year, the Sheki Khans Palace was included on the World Heritage List. This is yet another great success after Gobustan, Icherisheher, the Maiden’s Tower, the Palace of the Shirvanshahs. Where there are gaps, we must mobilize our tourism opportunities. For example, Yanardag was completely reconstructed last year, excellent conditions were created there, and it is possible to say that the vast majority of visitors to Baku travel there as well. We have mud volcanoes but there are no roads. Even if there were a road, it is impossible to find a place to drink a cup of tea. Therefore, I have asked our tourism agency to tackle this issue this year. Just as people go to Yanardag or Gobustan today, they will also go to the mud volcanoes because we are in first place in the world for the number of mud volcanoes.
Tangible steps are being taken to turn our historical places, historical villages into a tourist zone. An instruction has been issued on the development of winter tourism, the Shahdag ski complex. I should also note, as I was informed today, that in January of this year the number of tourists increased by 18 percent in comparison with January 2019. In fact, this happened in January, which is not very attractive for tourists. Last year the increase was 11 percent, a year before that 4, earlier 24 and before that 22 percent. Now there is an increase of 18 percent only in January. Therefore, I believe that whereas 3,170,000 tourists visited our country last year, there will be even more this year.
Of course, the latest event reflecting the importance and role of our country and attitude towards us has been the creation within the framework of the Davos World Economic Forum of a regional center in Baku for the Fourth Industrial Revolution between the Davos Forum and Azerbaijan. This is a very significant event because the Davos World Economic Forum is the number one forum in the world. There is nothing higher than that. It is number one both in political and economic spheres, and the election of Azerbaijan as a center in the South Caucasus and Central Asia is a major event, of course. The President of the Forum and I signed a protocol of intent, work will begin and Azerbaijan should become a leader in the Fourth Industrial Revolution. As the Davos Forum considers us a leader, we must become a leader. After all, it means further development. We must ensure scientific progress and development, guide our country into the future and modernize it. So I see this event as yet another success and another victory. I am sure that many more victories are still ahead of us.
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Statement by President of the Republic of Azerbaijan Ilham Aliyev
- Dear Gurbanguly Malikguliyevich,
Dear guests, ladies and gentlemen!
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