Ilham Aliyev chaired a meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first six months of 2013 and future objectives
18 july 2013, 16:10
A meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first six months of 2013 and future objectives has been held under the chairmanship of President Ilham Aliyev.
The head of state made opening speech at the meeting.
Opening speech of President Ilham Aliyev
- Today's meeting of the Cabinet of Ministers will discuss the results of six months. Six months of the year have been very positive. The indicators are very positive. Over the six months Azerbaijan has developed rapidly and all the objectives have been met. These indicators give reason to say that this positive trend will be maintained until the end of the year. Our key economic indicators are at a high level. I believe that this year's economic growth in Azerbaijan can also serve as an example to the rest of the world. The gross domestic product grew by 5 per cent, but the most encouraging fact is that our non-oil sector grew by almost 11 per cent. This is the result of the work done in Azerbaijan in recent years and of the sound economic reforms. I can say that these figures are at the highest level on a global scale. Today, our main goal is to develop the non-oil sector, and I believe that very significant progress has been achieved in this direction.
I believe that we will achieve the goal we set some time ago of doubling our non-oil sector over the next 10 years. The growth of the non-oil sector, of course, is very gratifying. At the same time, it is a testament to the dynamic development of the country’s economy. The country's economy is developing in a diversified manner, and I believe that this development will manifest itself even more prominently in the coming years. The projects being implemented today and awaiting their implementation in the coming years will lead to the creation of a strong non-oil sector. Of course, our non-oil economy, which is growing at a rate of 11 per cent, gives a great impetus to everything. The main branch of our economy, of course, is the oil sector. But lately, the bulk of the gross domestic product is generated in the non-oil sector, which is the logical result of the reforms.
Agriculture has also increased by about 5 per cent. This is a good growth. I believe that this growth should be even higher in the coming years. To do this, we are taking additional measures now. The investment situation is encouraging. Investment of $12.6 billion was made in the national economy in the first half of the year. Most of it has been domestic investment worth nearly $7 billion, while $5 billion has been foreign investment. This is also a very important issue, because Azerbaijan has been an attractive country for foreign investors for many years, which is confirmed by $5 billion in foreign investment in the first six months. Foreign investment is important for any country. Even though we now have vast material resources ourselves, the confidence of foreign investors in Azerbaijan and foreign investment reflect the overall development of the country. Of course, a serious message is sent to international financial institutions that the economic situation in Azerbaijan is very positive. At the same time, domestic investment has been exceeding foreign investment in recent years. This was also our goal. This goal was set several years ago, and we have now achieved it.
It is true that domestic investment is made up more of public spending but the private sector is gradually expanding its investment opportunities. I have no doubt that there will come a time when most of the domestic investment in the Azerbaijani economy will be made by private companies. To do this, of course, private entities should work harder and gain strength. The government, for its part, provides them with the necessary support. The major energy projects expected in Azerbaijan will give an impetus to the development of the private sector because the ambitious projects planned in Azerbaijan’s oil and gas sector are measured by tens of billions of dollars.
I think that the vast majority of these orders should be implemented in Azerbaijan. Azerbaijan already has a strong industrial capacity. This will create additional opportunities for local companies, and they will effectively use them.
I believe that the investment of $12.6 billion is a great indicator. If we can maintain this pace, the level of investment will reach nearly $25 billion by the end of the year. At the beginning of the year I set the task that at least as much as last year should be invested in Azerbaijan this year. Over $20 billion was invested last year but we can already see that this year’s investment will be greater. The investment being made – every manat, dollar or euro – serves the country's economy, promotes the creation of jobs and increases the economic power of Azerbaijan. Any country, including Azerbaijan, is interested in investment. Even though Azerbaijan has begun to invest in the economies of other countries itself, these are the benefits of modern Azerbaijan, especially in the time of the financial and economic crisis that has engulfed the world, Europe in particular, in the past few years. The money invested in the economies of foreign countries suggests that we have great opportunities. We feel very confident. Of course, our economic opportunities and political steps are interconnected, and the more investment we make in foreign markets in the future, the greater our political clout in the region and the world. This is natural, and we are following this course. I can say that only developed countries of the world invest heavily in the economies of other countries. Azerbaijan is a developing country. There will come a time when we will meet all of the criteria of developed countries.
Our material resources and foreign exchange reserves are growing. Our foreign exchange reserves exceed $48 billion. This is a great indicator as it gives us the strength and confidence. At the same time, although very large investment projects are implemented in Azerbaijan, we are increasing our foreign exchange reserves by the year. I am glad that in the six months of this year our foreign exchange reserves have not reduced, did not even stand still but grew. And if things go on like this, they will grow even more by the end of the year. In terms of this indicator - if we consider the absolute figures and the volume of foreign exchange reserves per capita - Azerbaijan is one of the leading countries in the world. This is also part of the progress made in recent years.
The rapid development of Azerbaijan has been a reality in recent years. The international community is already seeing and appreciating that. The world's leading financial institutions approve the reforms ongoing in Azerbaijan. The reforms under way in Azerbaijan should serve as an example for many countries, and I can say that the experience of Azerbaijan is studied in many countries.
We are going our own way. We are addressing the problems of economic and social development together. Azerbaijan’s fundamental economic reforms are complemented by a strong social policy. Otherwise, people’s incomes would not grow. Sometimes drastic economic reforms are too costly for people. People suffer from them. We are seeing that the steps aimed at reviving the economy and finding a way out of the economic crisis in many countries are taken at the expense of the people. Jobs are axed, wages slashed, working hours extended and retirement age increased. In other words, some governments want to heal their economic situation at the expense of the people. Our economic reforms were radical in nature because we have been on the path of transition from a planned to a market economy. These reforms are complemented and supported by a strong social policy. It is therefore no coincidence that the incomes of the Azerbaijani population grew even in the crisis years.
The rate of the manat is stable in Azerbaijan. This, first of all, has a tremendous social significance because people’s deposits are protected by the state. With regard to this issue, I can say that the per capita incomes grew by more than 7 per cent over six months. Inflation was only 2 per cent. This, I think, is also a great indicator.
As for social issues, salaries have been raised in the six months. Today, the average salary in Azerbaijan is at the level of $520. The average pension is $200. In the coming years, these figures will increase further. Pensions and salaries will be increased this quarter.
A similar policy will be pursued in the coming years. I want to reiterate that economic reforms must be supported by a very strong social policy. I believe that the successes of our country in this area are exemplary.
All the issues identified in the regional development program are being addressed. Regular trips to the regions enable me to get acquainted with the situation on the spot and give appropriate instructions. I can say that all our regions and districts are undergoing serious development and revitalization. The mood is great everywhere.
Creative and landscaping work is widespread. Districts and villages are improving and large industrial enterprises being put in place. Unemployment is practically over with. In general, at the beginning of this year the unemployment rate was slightly above 5 per cent. I believe that by the end of the year this figure will be even lower. It is also true that an unemployment rate of 5 per cent is a desired figure for any country. In some developed countries, this figure reaches 10, 15 and 25 per cent. Naturally, this leads to profound social problems. The elimination of unemployment was one of the main tasks we set 10 years ago. Over the past 10 years we have created 1,180,000 jobs and a further 55,000 jobs in six months of this year, including 45,000 permanent ones. So this process is ongoing, and it is natural because our initiatives related to economic policies, including the policy of industrialization carried out in Azerbaijan, certainly lead to the creation of new jobs.
The second state program on regional development will be completed this year. This program has been exceeded. At the same time, we are implementing the state program on the socioeconomic development of Baku and its suburban settlements. Extensive work is carried out in the settlements around Baku under this program.
The work continues. The program should be completed by the end of this year. Of course, we will pay constant attention to this issue in the following years too.
I can say that Azerbaijan hosted a number of prestigious international events last quarter. As a result, Azerbaijan and Baku have become important political, economic and cultural centers in the world. There have been quite a few of such events. It would take too long to list them. I simply wanted to highlight some momentous events. First of all, Azerbaijan has hosted the Davos forum for the first time. And this should be regarded as a sign of great importance attached to the country.
The Davos Forum is forum number one in the world. It is not only an economic forum, although it is called the Davos Economic Forum. It is a political and economic forum. The fact that this forum was held in Azerbaijan was, of course, tremendous responsibility. I am glad that this forum was held at the highest level.
In general, I can say that over the past few years Azerbaijan has actively participated in the Davos forum and has been at the center of attention. The development momentum and Azerbaijan’s achievements are widely covered at the Davos forum.
According to the calculations of the Davos forum, Azerbaijan is ranked in 46th place in the world in terms of economic competitiveness. I believe that this is the most serious assessment worthy of the greatest attention because this is the assessment of the world’s top forum. The fact that the forum was held in Azerbaijan was our great success. Especially when we consider that the topic of the forum was associated with the processes and the economic and political situation in the Caucasus and Central Asia. So this shows again that Azerbaijan is not only a geographic, but also a political, economic and cultural center.
Last quarter Azerbaijan hosted a meeting of the Club of Madrid as well. This is also a representative international organization. It is an entity that brings together highly respected politicians and public figures. This forum was also held at a very high level. Baku has also hosted a US-Azerbaijani conference. I believe that this was also a very significant event, because the conference was attended by more than 300 senators, congressmen, public figures and political scientists of federal and state levels. Very important issues were discussed here.
At the same time, Baku hosted the Second World Forum on Intercultural Dialogue last quarter, which also contributed to the emergence of Azerbaijan as a humanitarian center, i.e. a center of inter-religious and intercultural dialogue. It was the second forum, which gives reason to say that it will be traditional. Azerbaijan holds such events on a regular basis.
The World Humanitarian Forum, the Forum on Intercultural Dialogue, other events and summits of the leaders of world religions have been held in Azerbaijan. In other words, our country has become a political, economic and humanitarian center.
This is a reality we have created by our policy and by our steps. Today, Azerbaijan is a country enjoying great respect in the world. Of course, this makes us very happy. This has been our goal. Of course, I have repeatedly said this and have pursued this policy over the past 10 years so that, first of all, our efforts are focused on the country’s development and we achieve great success on this path.
The Azerbaijani economy is the fastest growing economy in the world. Azerbaijan is the most dynamic country in the world. This is a reality acknowledged by all the structures involved in the region. At the same time, the international authority of our country is very important as well. We have earned this reputation, and our membership in the UN Security Council is an indication of how high it is. This is an assessment given to Azerbaijan by the international community. At the same time, the representative international events held in Azerbaijan further enhance our international reputation. So I believe that very significant steps were taken in this direction last quarter and, in general, over the last six months.
At the same time, as always, our steps related to foreign policy were successful too. I think that several important events took place last quarter. Of course, my visits to foreign countries, the visits by foreign heads of state to Azerbaijan and the development of bilateral relations are of great importance. At the same time, our cooperation with international organizations also deserves a lot of attention. We remember the activities of the Organization of Islamic Cooperation conducted in Azerbaijan last quarter. A donor conference to assist Palestine has been held in Azerbaijan. The fact that the donor conference was held in Baku demonstrates our intentions and policies. In general, Azerbaijan is stepping up its activity within the Organization of Islamic Cooperation. As you know, issues of Islamic solidarity have always been at the center of attention.
Today, I want to say that we still have to work hard. Every Muslim country has to work hard for us to strengthen this unity. We are concerned about some of the developments unfolding in the world, polarization and discriminatory trends. For its part, Azerbaijan is committed and will strive to ensure that intercultural relations are based on a sound foundation, and the activities mentioned earlier are a clear proof of that. We are striving, demonstrating our experience and our achievements. We show that it is possible.
Last quarter I paid a visit to the European Union. I believe that this visit was also very important even though it was my fifth visit to the European Commission as President. In the last 10 years I have visited it five times. So these visits are already an indication that our relations are at a high level. But this visit was also very important, especially when we consider that some European institutions have been waging a dirty campaign against Azerbaijan over the past year. I can say that this campaign never stopped. Over the last 10 years this campaign has gained momentum and then subsided. But as a trend and as a direction, we have observed it all the time. But last year the campaign acquired very ugly proportions. Suffice it to say that the European Parliament has passed three anti-Azerbaijani resolutions over the past year. It is true that the same people have been involved in the adoption of these resolutions. The European Parliament consists of 750 deputies and the adoption of these resolutions included 20, 30 and 40 people. Of course, their opinion does not reflect the opinion of the European Parliament. However, using some procedural gaps, they have succeeded in adopting such resolutions.
As a matter of fact, this is not worth even talking about because no-one pays attention to such resolutions in Azerbaijan and they can’t affect our work. But we have to note this as a trend, of course. The Presidential Administration and the Milli Majlis are providing tangible responses to that. I do not want to talk much about that. I simply want to say that anti-Azerbaijani and pro-Armenian forces that can’t come to terms with the successful development of Azerbaijan have stepped up their activities against Azerbaijan over the past year. And that is probably natural because the successful development of our country, especially its development in the years of crisis, independent policies and specific stance on every international issue, has not impressed everyone. At the same time, the stability, the wonderful atmosphere and the great mood prevailing in Azerbaijan surely don’t please those gripped by the crisis now. So my latest visit to the European Union had a special importance, especially if we consider that there are anti-Azerbaijani forces in the Council of Europe too. However, they are a minority. Azerbaijan’s active work in recent years and its growing international reputation have certainly led to the fact that many international organizations have developed complete information about Azerbaijan. But there are still prejudiced people, the deputies who do not perceive the successes of Azerbaijan and systematically try to deal a blow to Azerbaijan.
The latest attempt was made in the Council of Europe in January of this year. During the discussion of a report on the so-called "political prisoners" an absolute majority of members of the Parliamentary Assembly of the Council of Europe said "No!" to this dirty initiative and rejected this notorious report. The deputies of the Parliamentary Assembly of the Council of Europe have defended the truth and justice and lifted up their voice against double standards. The emergence of this notorious report was only a sign of double standards. We see the trend of Islamophobia gaining ground in some countries. Unfortunately, this trend is on the rise, the situation is going in a negative direction. I keep raising this issue at various meetings because we are worried.
We have been cooperating with European structures for many years. We have been a member of the Council of Europe for more than 10 years. We are effectively cooperating with the European Union. But these trends do exist. Therefore, we need to determine today the forms of this cooperation in the future.
We see the overall picture is positive, of course, and the phenomena I mentioned are quite individual. But there are such trends and we have to see and talk about them. So my latest visit to the European Union had a special significance. We had to clarify many issues. We had to clarify how we will work together in the future. What will be the format of our cooperation? How will the interests of Azerbaijan be secured? I believe that my visit to the European Union and the sincere meetings with the head of the European Union were very positive. I am very pleased with the visit.
We have cleared up many issues, and I think that perfect grounds for further cooperation have been created.
After all, every country integrating into any structure must know why it is integrating. Blindfold integration is impossible. I have always said this and I want to say it again today that Azerbaijan is a self-sufficient country from any point of view. In political terms, it is completely independent and pursues an independent foreign policy. In economic terms, it is also completely independent. It is rich in terms of energy. So our integration steps in the coming years should be prudent. Why are we doing this? What is the purpose? We can and do live without that too. We live at our own expense. Therefore, the negotiations I conducted with the European Union, I want to say again, have had positive results. I believe that both sides have very serious views on further cooperation in the coming years. I believe that in the coming years the relations between Azerbaijan and the European Union will develop and acquire strategic nature. At least that is our desire. But let me repeat that these ties must be based on mutual interest and mutual respect.
I can say that very serious, perhaps even historic events related to our energy policy took place last quarter. The route of the Southern Gas Corridor has been selected. This is a historic event. It is as important for us as the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas pipeline. As you know, the world's attention was focused on Azerbaijan. I am sure that the decisions made in Azerbaijan will introduce major changes to the future energy map of the region. The choice of the route of the Southern Gas Corridor and the common position of the "Shah Deniz" consortium on this issue should be regarded as a very positive development. This project will allow us the opportunity to fully realize our gas potential and, as I noted earlier, investments worth tens of billions of dollars will be made in the Azerbaijani economy.
We keep the initiative in our hands. Our initiatives in the energy sector play a crucial role. Our initiatives are aimed at cooperation. Today, it is impossible to address issues of energy security without Azerbaijan. This is also a reality which I think everyone should know. The decisions made in Azerbaijan prove crucial. The decisions made in Azerbaijan are an indispensable contribution to energy security. The decisions made in Azerbaijan will say a final word on the matter in the future too. This is the reality. I think that everyone should know that. Of course, this further enhances the importance of our country and reaffirms the importance of our policy for the region and the continent. This is our advantage. But, as I have always said, this advantage did not fall out of the sky.
We have created it ourselves – by selfless work, deliberate policies and bold steps. Today it is impossible to separate energy issues from political ones. If we hadn’t had the political strength and strong will, and if it hadn’t taken bold steps, all this would be impossible today. And everyone should know that.
I want to mention another important event of the last quarter – the military parade held in Azerbaijan. This parade demonstrated the power of the Azerbaijani army. The weaponry, ammunition and equipment demonstrated during the parade are the latest models and the most powerful hardware. The helicopters, tanks, armored vehicles, artillery units, air defense installations, other hardware have shown again that the Azerbaijan has one of the strongest armies in the world. At the same time, the military parade was a report on the work done in the field of army building in recent years. Of course, I am aware that the Azerbaijani people watched this parade with great interest and a sense of pride from the fact that we have such strong capabilities and such a strong army. At the same time, the parade has caused great concern in Armenia. I know that the hysteria, panic and fear they have experienced after the parade have not let up until now. And this is natural because the enemy saw firsthand the power of Azerbaijan and learned once again that we are ready for any scenario. With the aid of the acquired machinery we can destroy any enemy. As I said at the parade, we can speak to the enemy in any language. Along with all the political and diplomatic efforts, our military power will play a key role in resolving the Nagorno-Karabakh issue.
We will continue to build up our military strength and to buy the most modern equipment. As you know, there are no problems with the acquisition of this equipment. We buy equipment from different countries and at the same time produce it in Azerbaijan. A growing number of countries want to cooperate with us in the military sphere. The media have been providing figures that Azerbaijan has purchased weaponry worth $1 billion from some countries and $1.6 billion from others. I can say that these figures do not reflect reality. In fact, our military and technical cooperation is measured by much bigger figures.
We simply do not reveal the figures. We only comment on the information which appears in foreign media from time to time. But we can disclose the entire information because our state budget is transparent and all our costs are open.
I think that the Armenian people should not be afraid of that. The Armenian people should be afraid of their own leaders. They should be wary of their activities. They should be afraid of the bloodthirsty, insatiable and criminal government mired in corruption that has plunged them into the current situation. As a result of the activities of this government, about 100,000 Armenians leave the country forever. If it goes on like this, in five to six years there will be less than one million people there. And the blame for this falls squarely on the leadership of Armenia because its predatory and occupying policies, its bloodthirsty and voracious nature have brought Armenia to this catastrophe. We are confidently going forward. We are a strong state. Our strength will gradually increase. For this strength to grow further, we have to work even harder.
Closing speech by President Ilham Aliyev
- I would like to note once again that the work done in the first six months of this year gives grounds to say that we will maintain these high rates and meet all the objectives set at the beginning of the year. We need to maintain the high growth rate and implement all the projects in a timely manner. This year, a very large state investment program is implemented. I am confident that the state investment program will be fully implemented by the end of this year. This, in turn, will create a better foundation for future years, because all the issues provided for in the state investment program will be resolved.
There is extensive building work under way in our country. Some of it has been mentioned in the speeches today.
Azerbaijan is a big construction site. The city of Baku and other regions are improving and built up. At the same time, we are implementing major industrial and infrastructure projects. As a result of the implementation of the state investment program, we are consistently resolving all of these issues. We follow the program and expand our investment opportunities by the year.
As I have said, $12.6 billion was invested in the first six months, and among this volume, of course, an important place is occupied by state investment projects. We have to make sure that this rate is maintained in the coming years too. Although a lot has been done, there is still a lot to do. Some infrastructure projects have either been completed or are close to completion. But we will pay particular attention to investment projects next year as well. Taking this into account, as well as the expected increase in wages and pensions, we need to constantly pay attention to macroeconomic stability. It is encouraging that the inflation rate has been very low since the beginning of the year. As I pointed out in my opening speech, the inflation is only 2 per cent. At the beginning of the year we set the task of keeping the inflation in single digits. And we see that we are achieving this. I am confident that inflation will be at an acceptable level until the end of the year. But to do this we must work very hard.
Government spending and budget expenditure are growing every year in Azerbaijan. We heard these figures today. Also increasing are the consolidated budget, investment projects, welfare payments, salaries, pensions, etc. We have repaid the vast majority of the deposits left over from Soviet times. Against this background the fact that inflation is kept at a low level is, of course, a great achievement, and I appreciate that. Keeping inflation low primarily carries a social sense. This shows the attitude of the state towards its citizens again.
By the end of this year the second state program will be completed. The first program adopted in 2004 was exceeded. Then the second state program covering 2009-2013 was adopted. Several months remain for its completion. And we can say today that this program will be exceeded too. We have to make sure that the program is fully implemented by the end of the year.
I believe that we have made great strides by adopting these programs. The programs precisely described all the work to be done. Of course, we have very specific programs related to the development of the country. I regularly express my views on these plans. But the fact that all of these plans and the entire work are reflected in a single program has certainly facilitated our work and at the same time stepped up control over its implementation. Therefore, I believe that the program should be fully implemented by the end of this year.
At the same time, the program on the development of Baku and its suburban settlements should be completed by the end of this year. It was a two-year program. Work was to be completed in the shortest possible time. Most of the work has been done. Creative work is ongoing in the suburban settlements of Baku, infrastructure projects are being implemented, the construction of schools and health facilities is under way, roads between and within settlements are under construction, and most of the program should to be completed by the end of the year.
In the coming months we will pay more attention to the construction of rural roads in the regions. We heard these figures today. Major funds were allocated for the construction of rural roads in recent years. These funds have provided hundreds of thousands of people living in the countryside with new opportunities. Roads mean life, development and comfort. The construction of rural roads is purely social in nature, and we must ensure that all rural roads are brought to normal condition in the coming years. I think that if this momentum is maintained, then we will achieve this. As you know, the construction of rural roads is financed from two sources - the state budget and the Contingency Fund of the President. This process will be continued until the end of the year.
On the whole, a lot has been done on the construction of roads. Most of the main roads have practically been built. The remaining work will be done in the next few years. We have completely renewed our road infrastructure. In recent years, all main roads have been revamped and comfortable roads built. These roads meet modern standards. Attention is paid to inter-city and rural roads. It shows the development of our country. At the same time, road construction has a special place among infrastructure projects. There can be no development, diversified development of the country and the development of tourism without roads. Of course, roads are built primarily for people’s comfort. This is the main goal, but there are also other goals. Therefore, issues relating to transport are resolved in a comprehensive manner.
The reconstruction of railways is ongoing, and this project will enable us to increase the speed of trains. This is very important for people’s comfort. At the same time, this is necessary for the active operation of international transport corridors passing through Azerbaijan. The Baku-Tbilisi-Kars railway is a strategic project. I am glad that Azerbaijan, as the initiator of the project, has assumed most of the work, and today the construction of the road continues. I believe that the Baku-Tbilisi-Kars railway will be commissioned on schedule. From an economic point of view, this project is of great importance. After that Azerbaijan will become a transit country. We are expanding our transit capacity. Today we have ample transit opportunities. And the commissioning of the Baku-Tbilisi-Kars railway will further expand these opportunities. We have a very favorable geographical location. But without the modern infrastructure this geographical location does not mean much.
Therefore, the investment made in the transport infrastructure and the North-South and East-West corridors passing through the territory of Azerbaijan will provide for the economic and political interests of our country in the future more effectively. The biggest seaport on the Caspian Sea is under construction in Azerbaijan. This was also our initiative and there was a great need for that. If we consider that the Baku-Tbilisi-Kars railway will be transporting at least 10 million tons of goods – i.e. this is our expectation, but the figure will increase further in the following years – then, of course, there is a great need for a modern seaport. At the same time, the new seaport under construction will enable us to move the seaport currently located in the center of Baku out of the city. And public places will be built there instead.
In general, the establishment of public places in Baku has gained momentum in recent years. New parks and alleys are set up, roads opened and public places established. I can say that for the number, size and beauty of public places Baku is in one of the leading places. The Seaside Boulevard has been expanded. Old buildings that are in a dilapidated condition are removed from the city center. Underground parking lots and above-ground parks are set up instead. Just look how many people are delighted and pleased with this comfort! At the same time, tens of thousands of people spend their leisure time in these new parks during the day.
This process shows once again that where there is a sound policy, there are results. Of course, all resettlements should be carried out within the framework of law. Citizens must be properly compensated. I want to note that the compensation being paid is almost twice the market value. We all know what prices there are in different parts of the city, and the compensation being paid is almost twice the market value. This, too, is a testament to the attitude of the Azerbaijani state to its citizens. We believe that all resettlements should be governed by these principles.
The process of building new roads is ongoing in Baku because there is a great need for that. If we hadn’t started the program, the municipal transport would be in a completely paralyzed state now. In the course of this year we are expected to import nearly 100,000 new vehicles. So if we do not expand the roads, relocate facilities and build new road junctions and tunnels, the city transport will come to a complete stop. We are well aware of the situation in some cities. Their transport is practically paralyzed. In the historical parts of Baku it is very difficult to do expansion work. It is not possible because there are historical buildings there. But where it is possible, we are building and will build new roads. There is no other option. This requires major resources. After all, the construction of roads is an issue which in itself requires large resources. Relocation, compensation and transfer of communications – we will do all of this work in a comprehensive manner.
As for social issues, I spoke about that in my opening remarks. In the coming months we expect to raise salaries and pensions. Other social measures will be taken as well. The construction of the social infrastructure in Baku and the regions is ongoing. I believe that we have achieved a lot in this area. Most of the loans envisaged for the development of entrepreneurship have been allocated. This year, these loans are envisaged in the amount of 250 million manats. Most of the loans are granted at the expense of previously issued and repaid loans. These loans are proving very efficient and contribute to the real economy. It is also a contribution to the development of entrepreneurship. So from now onwards entrepreneurs will receive concessional loans in the amount of at least 250 million manats every year, which will promote the development of the non-oil sector and entrepreneurship and create better conditions for meeting the objectives facing the country.
I have repeatedly expressed my thoughts about food security. This topic is constantly raised in meetings with entrepreneurs. I believe that we have taken very important steps in this direction in recent years and are already approaching complete self-sufficiency on some indicators. In previous years we achieved complete self-sufficiency on some other indicators. The state policy on private enterprise development, the coordination of all this work, the implementation of infrastructure projects and, of course, the development of the non-oil sector will enable us to completely ensure food security.
We still have lands that are not in circulation. These lands should and will be reclaimed. As mentioned, 5,000 hectares of lands have already been included in the turnover, and their yield is 54 quintals per hectare. This is double the average yield. In fact, we had expected these figures because all activities on these new and large farms are carried out at a high level. Agro-technical, land reclamation activities and provision of fertilizer – all of this work, of course, is carried out at the expense of state loans.
I think that we certainly need to expand this experience. We need about 40-50 large farms to fully meet the demand for grain. At the same time, we must apply this experience to smaller farms. This is the objective behind my latest decision on the purchase of agricultural machinery. I want to repeat that the establishment of "Agroleasing" enterprises has been a turning point in this area. If we hadn’t set up "Agroleasing", we would not have even a hundredth part of this machinery now. The farmers do not have the opportunity to acquire this machinery on their own. The government has played a role. In the coming years, further measures will be taken to purchase agricultural machinery, including harvesters. Additional funds may be allocated before the end of the year. Over the next three to four years, we should fully provide ourselves with the latest machinery because we will set up new large farms in the future. We are talking about tens of thousands of hectares of land. The existing farms should also have new equipment. Therefore, the Ministry of Agriculture should make proposals in this direction so that we could plan our work and know how many tractors and harvesters should be purchased and when and so that these issues are fully resolved.
Along with this, land reclamation activities are also an issue of great importance. This year we will commission the Takhtakorpu reservoir. It is an ambitious infrastructure project which has historic significance. It is one of the biggest projects to be implemented in the non-oil sector in the years of independence, perhaps even the biggest. This project is purely social in nature. The irrigated area will be significantly increased. At the same time, drinking water issues will be resolved.
The Valvalachay-Takhtakorpu water canal is now ready for opening, and the filling of the Takhtakorpu reservoir with water will soon begin. By the end of the year, this ambitious project, which also includes a power plant, will be completed.
Along with this, other land reclamation activities should be carried out. I believe that a special program on land reclamation may be adopted in the future, so that we could draw up a strategy and plans in the form of programs and consistently address these issues. We are already doing that. New canals are built, artesian wells drilled, and the Takhtakorpu and Shamkirchay reservoirs set up.
The Shamkirchay water reservoir will probably be put into operation next year. This will mean irrigation of tens of thousands of hectares of new lands. But at the same time there are other possibilities. We should make better use of small rivers. In other words, I believe that a precise and detailed program meeting international practices should be developed and introduced in this area.
All relevant instructions related to industrialization have been allocated. I simply want to note again that this area continues to be a priority. The process of creation of industrial parks is ongoing. In the coming months we will celebrate the opening of new enterprises in these parks. Azerbaijan’s industrial potential is growing and increasing. In the first quarter of this year, our non-oil industry grew by nearly 3 per cent. I am confident that this growth will be even larger in the coming years. The large industrial complexes currently under construction in Azerbaijan will create a powerful industrial potential of export orientation. These issues are at the center of attention. Baku, Sumgayit, Ganja and Mingachevir are our main industrial cities, and the construction of industrial estates there will be ensured in a planned manner.
Along with this, the focus is constantly on increasing the production of export products. Of course, our first focus is on the domestic market. We must provide the domestic market with industrial products, building materials and food. This is the first issue. But when we consider the scale of the ongoing and future work, we can see that we shouldn’t limit ourselves to the domestic market. Our production will exceed the domestic demand many times. So I already give these instructions on a regular basis. I believe that there is very useful. We must look for ways to expand into new markets, especially now, when the global recession is still ongoing and the purchasing power in some countries has declined. The demand has also dropped. Therefore, it will not be so easy to enter new markets. First of all, we must produce competitive goods. At the same time, we should pursue a very active police to be able to access new markets, introduce ourselves and sell our products there.
The fight against corruption and bribery is producing excellent results. The country's population feels that. At the same time, it is noted by international organizations dealing with this issue. A recent survey by international organizations also shows that the population of Azerbaijan welcomes the steps being taken to combat corruption.
Nearly 70 per cent of the population believes that a very serious and effective fight is waged in Azerbaijan in this area. I can say that on a global scale this indicator is at about 20 per cent. In Azerbaijan it is 70 per cent. This is an indicator and the main result of the work we are doing. I am very happy that this fight is yielding results. I think that we need to be even more active. We need to narrow the field for corruption and bribery. I want to say again that penalties are and will be applied. At the same time, we are taking and will continue to take administrative measures and systemic steps. Among them, of course, a special place is occupied by "e-government" and electronic services. I would like to highlight the activities of the “ASAN xidmət” center. This service has earned great respect in a short time and is expanding its activities.
According to my instructions, the number of services provided there is increasing. In the future, we have to see how to apply the lessons learned there in a short time to other areas. We will do that because this is the path we have chosen. At the same time, of course, the responsibility of civil servants does and should play a role here. Every civil servant should fight corruption. Every government officer must take these principles as a basis. The rapid development of Azerbaijan is a reality. We have a bright future. Let me say again that Azerbaijan will join the ranks of developed countries. There is no doubt about that. Therefore, we have to get rid of all unpleasant phenomena and take Azerbaijan to one of the leading places in the world in this respect.
Among the infrastructure projects I want to emphasize those on water and sewage. These projects will continue to be implemented in the coming months and years. The realization of other infrastructure projects is nearing completion. All projects related to power supply are practically over. The latest major power plant with a capacity of 780 MW was recently put into operation in the city of Shirvan. We can say that the latest station meets the highest standards. The consumption of fuel there is at the required level and all specifications meet international standards.
The process of gasification is powering ahead. The task has been set of providing gas to 90 per cent of all our settlements by the end of the year. This work has now gained momentum in the regions. We must provide maximum gasification. Therefore, water and sewage projects are the main priority today. As you can see, we commission or lay the foundation of a water supply project almost every week and every month in different locations around the country. This process has already become widespread. Sufficient funds are provided in the state budget. Water and sewage lines are priority infrastructure projects today.
In connection with energy security I said in my opening remarks that the decisions made by Azerbaijan are of great international importance. The projects we have put forward enjoy tremendous international support. The TANAP project is supported by the international community and has become international. As a result of the implementation of the Southern Gas Corridor, Azerbaijan will be a very important and indispensable exporter of gas for at least 100 years. We do all this for the present day and the future of our country. Of course, energy projects will attract additional investment. According to preliminary calculations, "Shah Deniz-2" and other related projects will lead to the investment of nearly $40 billion in Azerbaijan. Of course, this investment will have a positive impact on other spheres close to the oil and gas sector, including the service sector.
Next year's budget has to be prepared in this quarter. Work on the budget is already under way. The budget, of course, must be both investment and socially oriented. An important place in the budget should be occupied by defense spending. At the same time, all infrastructure and social projects, as well as social benefits, will be taken into account.
At the same time, as I noted earlier, the second part of the program on regional development is to be completed at the end of this year. The new and third program will be adopted next year. Relevant agencies are working on drafting the new program. The next program will cover 2014-2018 and will enable us to further develop Azerbaijan and successfully resolve all the problems. Thank you!