Baku, January 30, AZERTAC
A conference dedicated to the results of third year implementation of "The State Program on socio-economic development of the regions of the Republic of Azerbaijan in 2014-2018" has been held.
President of the Republic of Azerbaijan Ilham Aliyev attended the conference.
The head of state made an opening speech at the conference.
Opening speech of President of the Republic of Azerbaijan Ilham Aliyev
- Today, we will discuss the execution of the State program on the socioeconomic development of the regions of Azerbaijan and talk about the work to be done this year.
Despite all the objective difficulties, Azerbaijan's economy continued to develop in 2016 and all of the major objectives were met. The key economic indicators are positive. Agriculture grew by 2.6 per cent and the non-oil industry of our country by 5 per cent. Despite the fact that oil prices fell three- to fourfold in the world, the work we had done in previous years and the deep reforms we carried out last year resulted in this development.
Of course, the economic and financial crisis ongoing in the world has had a negative impact on our work. However, I believe that in comparison with other countries, Azerbaijan managed to come out of this difficult situation with minimal losses. More than 100,000 permanent jobs were created last year. This process has continued since 2004 to the present day.
We have managed to preserve the currency reserves of the Oil Fund. I think that this is also a very significant event because the vast majority of oil-rich countries have spent a part of their foreign exchange reserves. We have tried to keep our foreign exchange reserves and managed to do so, as we will still need them today and tomorrow. In general, it is a factor that strengthens our economic opportunities and our economic independence.
I can say that the work we did in 2016 is also receiving praise from influential international economic organizations of the world. Among them, the Davos World Economic Forum, the world's largest nongovernmental economic structure uniting world leaders and the political and economic elite of the planet, has once again given a positive opinion in its report on Azerbaijan. Azerbaijan has advanced by a further three steps and is now in 37th place globally in terms of competitiveness. According to another indicator, the rate of development among developing countries – these calculations cover about 80 developing countries – Azerbaijan shares the first and second positions. That is the assessment the leading international economic structures are giving to our work.
Of course, we are working not for the sake of rankings, but when such opinions are expressed, it pleases us even more, of course. At the same time, it is some kind of a signal to all financial institutions around the world. Therefore, it hasn’t been a problem for a long time for Azerbaijan to get a credit for any project. In fact, our current policy is not to be too much inclined towards borrowing foreign loans. We should try to continue doing all the work using our own resources because an increase of the foreign debt is not a positive development. We are keeping this figure at a very good level – at about 20 per cent. This is a higher figure compared to previous years. The reason for that is the devaluation of the manat. Prior to that, our foreign debt did not exceed 10 per cent. It is still at an acceptable level today. But we should try not to increase it, but rather reduce it. In order to reduce the external debt, we need to be very careful in borrowing foreign loans. We can seek foreign loans only for projects of strategic importance for our country.
In short, I believe that the overall economic development in 2016should be assessed positively. In particular, the work carried out in the regions has also maintained its momentum. A lot of work was done in the regions last year.
The implementation of state programs on the socioeconomic development of the regions changed their appearance. Today's conference is 14th of this nature. For the past 14 years, we have been giving assessment to the work done, identifying gaps and outlining action plans for the future at the beginning of the year. This year too, remaining faithful to this tradition, we are holding this conference again. Heads of central and local executive authorities and representatives of leading business organizations are present here. The event will be continued after the first part of the conference. I am sure that these debates and discussions will help us develop an opinion on the additional work to be completed this year.
In fact, when preparing regional development programs, we received feedback from the regions. The third state program we are discussing today was adopted in 2014. It was also drawn up on the basis of proposals received from the field and taking into account the strategic direction of our country. The goal of the programs is to resolve all the existing problems and social issues. Our programs are very specific. We set very specific objectives, and I can say that both the first and second programs were successfully exceeded. I am sure that the same fate awaits the third program.
The adoption of the first program in 2004 was a historic event because the steps taken towards the development of our regions, diversification of the economy and projects related to infrastructure have created today's realities. If we hadn’t adopted the program on my initiative at the time, we would not have achieved today's success in the regions, of course. All our regions and all cities have prospered and become prettier. Baku, our major cities such as Ganja and Sumgayit are pleasing to the eye and are an example to the world. All our cities have been landscaped and redeveloped. Major infrastructure projects have been implemented. This has enabled Azerbaijan to develop dynamically today. This has enabled businesses to use these opportunities with great efficiency.
The first phase of our program was more associated with infrastructure projects. This was natural because we had not yet fully provided for our energy security in 2004. Our main oil pipeline, Baku-Tbilisi-Ceyhan, was still under construction at the time. In those years, we were receiving electricity and gas from abroad. Such dependence, of course, did not allow us the opportunity to develop the way we wanted. In other words, our development was hampered by external factors. Will we be able to receive enough energy and gas from abroad and at what price?! Therefore, the first objective was to ensure energy independence. We achieved that in a short time. Since 2004, a total 26 power plants have been built in our country. The total capacity of these plants is 2400 megawatts. Imagine how we would live and develop now if we hadn’t done that!
I should also note that the electrical capacity we have created over the past 13-14 years is about equal to the capacity created in all previous years. Whereas today we have 35 power plants, 26 of them were built within the framework of this program. At that time, gasification in Azerbaijan was at the level of 51 per cent. There was almost natural gas in the regions. Today, the level of gasification in Azerbaijan has increased to 92 per cent.
Since 2004, we have built about 11,000 kilometers of roads. This applies to both highways and inter-city and rural roads. This road infrastructure creates comfort for people. At the same time, it is an important factor for economic development. Where there are no roads, there will be no investment, jobs and development. Therefore, a lot of attention has been paid to the road infrastructure. In addition, a fairly large labor force is involved in road construction. Thus, we have provided these people with employment. A modern road infrastructure has been created and this process continues. We will talk about the work to be done this year. The goal has been set to bring all our roads to a high level regardless of their status – highways, inter-city or rural.
Large-scale land reclamation measures have been taken to encourage agricultural development. We have improved the reclamation of hundreds of thousands of hectares of land and included new irrigated areas into the turnover. Four water reservoirs have been built. Among them, I want to emphasize the largest waters reservoirs of Takhtakorpu and Shamkirchay. Tovuzchay and Goytapa water reservoirs have been constructed. These issues also require major funds, but they are essential because, unfortunately, our water resources are generated outside the country. Therefore, we must make rational use of water and create opportunities, infrastructure and reservoirs in the country in order to have reserves and expand acreage. This area also required huge investment. I think that much of the work in this area has been completed. I will express my thoughts about the upcoming work a little later.
I can say that we implemented major infrastructure projects after the first program. I am very glad that we did it in a short time. I have always tried to do this without wasting any time, because this is necessary for the development of the country and for our future. This infrastructure will serve our people and state for decades to come. This has greatly strengthened our country and made it possible for investors to be able to invest in any sphere. Investment is made only where there is basic infrastructure already. If an investor interested in working finds out that there is no light, gas or water, he will never invest. No investor will want to invest in infrastructure projects. This is the responsibility of the state. We have done that for local and foreign investors.
With regard to the activities of domestic businesses, I can say that a strong and active national entrepreneurial class has emerged in Azerbaijan over these years Azerbaijan. Of course, the government has also provided its support for this area too. I am always in contact with entrepreneurs. We hold meetings, address problems, they are always provided with political and material support, as I well understand that no business can be built without the initial capital. In addition, no businessman or entrepreneur would want to invest in risky places and countries. Therefore, I believe that factors such as security, stability, a great public atmosphere, state and material support of businesses have contributed to the formation of a national class of entrepreneurs.
In recent years, since 2004 to the present time, Azerbaijani entrepreneurs have been granted low-interest loans amounting to about 2 billion manats. These loans have provided great support for the development of the national economy. I must also say that all the preferential loans to be issued by the National Entrepreneurship Development Fund this year will be provided at the expense of the loans issued and repaid in previous years. So the state, as they say, has relieved itself of this burden. That was the goal. Every year we allocated large funds: 200 million, in some cases even 250 million manats which helped us do the work, create jobs and ample business opportunities. The time has come when the state no longer allocates money from the budget. We are doing it with the loans that were repaid earlier.
I think that this, too, was a kind of novelty. I do not know of any other country where the state would provide assistance to business entities in this way. I should also note that many countries are using our experience today and citing us as an example. Therefore, we are successfully implementing infrastructure projects within the framework of a single program. Along with that, we are improving the business environment, paying attention to businesses and, of course, creating the social infrastructure.
I have repeatedly said this and I want to reiterate it today that the goal of our policy is to strengthen the country, enhance our independence and achieve sustainable development. Of course, our goal is to create a better life for the people of Azerbaijan. So we are doing it all for our people to live better. Therefore, the solution of social issues is part of all our programs. Our goal is to increase wages, pensions, social benefits, targeted social assistance, and to create social infrastructure.
As for the social infrastructure, I should note that in recent years, starting from 2004, we have built or renovated more than 3,000 schools. We have built or renovated more than 600 medical institutions. In the districts alone we have built more than 40 Olympic centers, more than 20 museums and over 10 theaters. So the focus has always been on the entire social infrastructure bloc. This process continues. The state investment program for this year also includes fairly large funds for the social infrastructure.
Over these years, we have taken significant steps to diversify the country’s economy. We have created a space industry in Azerbaijan. We have two satellites. This is also an innovation, technology and business. Of course, this is how we treat these issues. If the development of modern technologies, personnel training and the space industry are organized correctly, it is a source of great revenue. We are moving along this path, and I am sure that all of the funds we have invested to produce these satellites and put them into orbit will pay off, because their business opportunities are already quite broad.
Over these years, we have implemented major projects providing for the strategic interests of our country. In The Baku-Tbilisi-Ceyhan oil pipeline was commissioned in 2006 and the Baku-Tbilisi-Erzurum gas pipeline in 2007. Our country and region can’t be imagined without these projects today. Not only do these projects strengthen our country, they also bring benefit to our people. Why did we implement all these infrastructure projects? These projects also benefit all countries of the region, deepen the regional cooperation, strengthen stability in the region and, of course, show Azerbaijan’s leadership in this field. We are implementing projects some people see as a myth without any problems and obstacles and despite the fact that there were many forces trying to create problems for us and prevent these projects. It did not work, because we had shown strong political will and managed to achieve our strategic objectives by judicious and prudent policies.
And today, on the basis of this corridor, we are implementing a new global project – the Southern Gas Corridor. The project is also being implemented successfully. I can say quite honestly that if Azerbaijan had not shown leadership in the implementation of this project again, it would never have been realized. I personally attended nearly 10 international conferences and activities related to this project. During these events, of course, I expressed our position and put forward proposals. In other words, I specifically indicated what needs to be done, not just formally. We decided that we would implement ourselves along with friendly and neighboring countries, and we are doing that. After that, we were joined by those who were conducting these workshops and conferences, which, of course, is quite acceptable. We welcome that. The broader the format of cooperation, the better for us. But I want to say again that the Southern Gas Corridor is being implemented today only thanks to the leadership of Azerbaijan. This can be confirmed by anyone who is familiar with this work. It is no coincidence that the leadership and active role of Azerbaijan in this regard were acknowledged in the final document of the Southern Gas Corridor Advisory Council held in Baku in February last year.
The project, of course, will ensure our long-term interests. The implementation of this project will significantly enhance our financial capabilities. At the same time, Azerbaijan will become an even more important country in terms of regional cooperation and energy security.
In other words, it would be difficult to list all the work we have done in recent years. I am simply highlighting the key moments, because it is our history. Without that we would not be talking about our plans for the future. Azerbaijan is one of the countries that have used oil very rationally and intelligently. I remember some analysts saying in the late 1990s and early 2000s that oil would not bring happiness to Azerbaijan and that it would bring us problems. However, we managed to maximize the use of our natural wealth. We have strengthened the country, created a strong state and have been living as an independent nation for 25 years. We have built cities and created a great life for ourselves. Even more ambitious work will be done in the future. All this work, of course, is a centered on the people of Azerbaijan. Without the people's support, we could not have done this work. Therefore, all our successes are underpinned by the people of Azerbaijan. The support of the people and our public, of course, gives us strength and inspiration.
I should also say that we have done all this work in difficult conditions. You are well aware that campaigns of slander and insults are regularly conducted against us. None of them are affecting us because we know where they come from, who is behind them and what their objectives are. Therefore, we are going our own way and life puts everything in its place. Those who organized these dirty campaigns against us have already been swept away from the political arena. The world already knows Azerbaijan better. The world can see that we are an independent and dignified state. The people of Azerbaijan are a proud people who will never allow anyone to dictate anything to us. We have always maintained our dignity. We must resolve all necessary issues in order to continue to lead our country forward with confidence. A special place among them, of course, belongs to the regional development program. I am sure that all the issues outlined in the program until 2018 will be resolved and additional issues will be included in it.
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Other speakers at the event included Minister of Economy Shahin Mustafayev, Minister of Agriculture Heydar Asadov, head of Azerbaijan Fruit and Vegetable Producers and Exporters Association Bashir Guliyev, chairman of Hazelnut Producers and Exporters Association Ismayil Orujov, chairman of Wine Exporters' and Producers' Association Elchin Madatov, head of Azerbaijan Tourism Association Nahid Baghirov and head of Fish meal manufacturing plant Zaur Salmanov.
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The head of state made a closing speech at the conference.
Closing speech of President of the Republic of Azerbaijan Ilham Aliyev
- I am confident that the suggestions made in these speeches will be analyzed by government authorities. All of these issues will be resolved at today's and subsequent meetings, which will open up opportunities for our exports and domestic production.
I want to give instructions related to the work to be done this year. First, there are issues relating to infrastructure projects. "AzerIshyg" should take additional measures to improve the electricity infrastructure in all our regions, lay new lines and provide all the regions with uninterrupted power supply. It is necessary to install new substations and transformers. This process is already under way, but it should go even faster, because we now have a fairly large generation capacity. We are already exporting electricity. This being the case, our electricity infrastructure and the domestic economy should be at a high level so that there are no interruptions and other problems.
This year, "AzeriGas" should supply gas to at least 80 villages. Gas lines must be installed. As I have said, our gasification rate is 92 per cent. By the end of the year this figure should reach 94 per cent. Gasification of 80 villages is the minimum program – the more, the better.
"AzerAvtoYol" is implementing projects related to inter-city roads and highways this year. In addition, 40 rural road projects should be implemented. The implementation of these projects will improve the road system of hundreds of villages and, of course, create comfort for people. It will also have a major positive impact on economic development. Rural road projects were successfully implemented last year too. This process will be continued this year. I am sure that there will be no rural road left without renovation in the near future.
Another issue related to transport is the continued construction of the Alat International Trade Seaport. The first stage of the project should be completed this year. Sufficient funds are envisaged in the State Investment Program for that. The realization of other transportation projects is also under way. Azerbaijan has fulfilled its responsibilities related to the Baku-Tbilisi-Kars and the North-South projects. These projects will be completed as a result of the work to be carried out in our neighboring partner countries.
Of course, we have fully completed all the tasks we were facing in a short time. The entire necessary infrastructure is available. In addition, as a result of the operation of the Baku Shipyard built a few years ago, we are upgrading our fleet. At the same time, we can provide not only ourselves but also the Caspian littoral countries with modern vessels.
The "AzerSu" OJSC was tasked with fully implementing drinking water and sewage projects in all our cities over a few years, so that our population could have a round-the-clock supply of drinking water consistent with World Health Organization standards. We are heading towards that. Drinking water projects are realized in many of our cities every year. Currently, uninterrupted water supply has reached 80 per cent in Baku. This indicator is at about 65 per cent in the country. It needs to be raised. When we started to implement this program, uninterrupted supply of water was at about 25-30 per cent. So a lot has been done and work should be continued this year.
In parallel, we are building water treatment plants of modular type in the villages located along rivers. Currently, these opportunities are already available to 300,000-400,000 people. This years, water treatment installations should be constructed in at least 50 villages.
There is a lot to be done in the area of land reclamation. The development of this sector serves both our food security and export potential. This year, water supply should be provided to about 150,000-160,000 hectares of land. This is a very large figure. We must achieve that. The possibilities are there. Appropriate instructions have been issued. As a result of these projects, our export potential should be significantly increased. We are now working on what products should be grown on the newly irrigated lands. We should first provide for our domestic needs and then create a strong export potential.
Specific work is already under way in connection with these projects. I should note that it is under control. I want to bring to your attention the minimum amount of work to be done, so that this is known to everyone. There should be strict state and public oversight of this work. We have reviewed these issues on the basis of proposals coming from local executive authorities, and are allocating resources. This is also reflected in the State Investment Program. Now I will now list what work should be done by executive authorities of districts so that our state bodies and the people in the districts could control that. If there is a delay or work is not done completely, they should immediately report that.
Thus, it has been requested from Agdam District that 30 artesian wells should be drilled there and funds allocated. As a result, water will be supplied to an area of more than 1,000 hectares. In Agdash District, water will be provided to 15,800 hectares, in Fizuli District to 3,000 hectares, in Hajigabul District to 4,800 hectares, in Imishli District to 3,000 hectares, in Kurdamir District to 10,650 hectares, in Neftchala District to 8,000 hectares, in Salyan District to 5,000 hectares, in Shamkir District to 8,000 hectares and in Ujar District to 2,100 hectares of land. All the figures I have listed should be provided, because they have been initiated from the districts seats. The state has allocated funds according to the figures provided. Therefore, there is a need for strict control and inspection. These projects will be implemented only through executive authorities.
The Open Joint Stock Company "Irrigation and Water Management" should implement the following projects: the construction of the Upper Mil canal to irrigate 2,700 hectares of farmland. The construction of the Neftchala main canal will provide irrigation to 4,300 hectares of farmland. The construction of a canal will improve water supply to farmlands in the villages of Sarkhanbayli, Moranli, Balagashimkhanli and Alilambayli of Sabirabad District. This will provide irrigation to an additional 2,000 hectares of land. The construction of a new branch of the Araz river will provide water to an area of about 40,000 hectares. The irrigation work to be done on the territory of Goranboy and Samukh Districts will provide water to 4,500 hectares. Thanks to the reconstruction and development of the Samur-Absheron irrigation system, the Takhtakorpu water reservoir is under construction and branches are now being extended from it. This will provide water to 20,000 hectares in Khizi, Siyazan and Shabran Districts.
The third organization is the "AzerSu" Open Joint Stock Company, which is implementing two projects in this direction. In Hajigabul and Shamakhi Districts, 10,000 hectares of land will be provided with water. In Zardab District, 10,000 hectares of land will also be irrigated. Thus, if we add all these figures, a total of 160,000 hectares of new farmland will be created. All this has already been approved and funding is envisaged. I am sharing these figures for the public to know it. This work should be strictly controlled. I should also note that we are entrusting some of the irrigation work to executive authorities for the first time and they should realize this responsibility. All of this work should be done at the proper level.
Of course, we should apply modern technologies in connection with irrigation. Azerbaijan is already importing pivot irrigation systems. We are allocating major funds for that. I believe that the time has come to start production of pivot irrigation systems in Azerbaijan. Business entities should get involved in this. This is necessary for them. At the same time, they will be bought by the state. There will be no problem with marketing. And the currency, of course, will not go elsewhere.
All programs associated with the solution of social issues will be implemented. In 2017, important steps need to be taken related to compulsory health insurance. In Mingachevir and Yevlakh Districts, we have already started a pilot project. Let's see how this project goes. In any case, developed countries have long used the system of compulsory health insurance. We are also moving towards modernity. We must apply the best practices in all areas. The experience of developed countries is positive, of course. We are starting the implementation of this project as a test and pilot project, and 2017 should be an important year in this regard.
There are already specific instructions related to social infrastructure projects. This year, the Ministry of Education should carry out repairs and construction in about 130 schools. The Mayor’s Office of Baku should complete repairs in Baku schools this year and in 2018. This program has been under way for several years now.
Most schools in Baku have either been rebuilt or repaired. New school buildings have been constructed. There are still some non-renovated schools and we must put an end to that this year and next year. The Ministry of Youth and Sports should put Absheron and Agjabadi Olympic sports centers into operation this year. We need to continue work in other Olympic centers under construction now.
The construction of new residential buildings is envisaged through the State Committee for Refugees and IDPs. I should note that around 100 settlements have been built for the displaced in recent years. These buildings accommodate more than 200,000 displaced people. In general, more than 5 billion manats have been allocated in recent years to improve the standard of living and employment opportunities for the IDPs.
New buildings are to be constructed this year. Places have been allocated. In addition, there are plans to build new houses in existing settlements. Since the infrastructure is already available, there is no need to invest in additional infrastructure. At the same time, the instruction has been issued to begin the process of resettlement of IDPs from dormitories in Baku this year. Appropriate instructions have already been given and projects are being prepared. Additional funds will be allocated to improve the living conditions of our people living in these dormitories this year and beyond. I want to say again: all relevant instructions have been issued. Calculations and design work are currently under way. I do hope that construction work begins in the near future, perhaps within a month.
As you know, an executive order has been signed on the reconstruction of Jojug Marjanli village. This project is of great symbolic significance. This is a historic event. We are returning people to the village liberated from occupation. I am very glad that residents of Jojug Marjanli are very enthusiastic about this and look forward to going back. I am sure we will reconstruct Jojug Marjanli in a short period of time. We are now doing cleaning and mine clearance work there. Video footage from the village is already being shown on television.
This village was under occupation for several months. Then, the Horadiz operation was carried out under the leadership of great leader Heydar Aliyev. The invaders and enemies were driven out of the village. However, in just a few months they razed the village to the ground. Of course, it is necessary to carry out mine clearance work and then implement infrastructure projects there. I have issued the instruction to ask international organizations to send their representatives there to find out what Armenian vandalism is.
Armenian occupiers will not let international observers visit other occupied lands. Occasionally we can see the ruins of Agdam, Fizuli and other cities in the international media. Why? Because they will not allow anyone there! But Jojug Marjanli is clear evidence of Armenian atrocities and vandalism. Let them come and see the atrocities of those trying to introduce themselves as a civilized nation. Therefore, it is necessary to do this work there, document everything, conduct certification of Armenian atrocities, do video and photo shooting, count the number of destroyed buildings and the damage caused. In other words, we should approach this work comprehensively. As I have already noted, first of all, we need to create infrastructure, build roads, electricity, gas and water lines, definitely build a school, a kindergarten, a medical center and houses there. At the first stage, we will build 50 houses. I have issued the instruction to prepare a master plan of the village. I am sure 100 or 200 houses will be built there in the future. Of course, jobs should be created for the people living there. Measures will be taken to create farmland and jobs. Thus, after a long break, we will return our people to their native land.
Issues related to food security are always in the spotlight. I would like to cite a few figures. These figures reflect the work done. At the same time, they are significant in view of the forthcoming work. Thus, some of the figures showing the level of our self-sufficiency on basic food products are as follows: beef – we provide ourselves by 94 per cent and the external component is 5 per cent; lamb – by 99 per cent and the external component is only 2 per cent; milk and dairy products – we provide ourselves by 88 per cent, including 10 per cent of imported raw materials; commodity eggs – by 99 per cent and the external component here is 65 per cent; grain corn, soybeans, sunflower seeds and medicines – this area should be looked into by both government agencies and the private sector in order to determine what needs to be done to reduce the external component; vegetable oils – we provide ourselves by 48 per cent, with 80 per cent of this 48 per cent is raw materials coming from abroad. In essence, the production of vegetable oils and margarine serves job creation. This is the benefit. If the external component accounts for 80 per cent, it is impossible to describe it as local production. Therefore, we, including the businesses, should try to increase the production of vegetable oils. Production should be based on local raw materials.
Butter – the self-sufficiency rate is 76 per cent. There is a 10 per cent external component, which is due to packaging. Unfortunately, we still rely on imports in this area. Packaging is not too big of a problem. Especially when we consider that our market and population are growing, we should organize any containers and packaging opportunities in Azerbaijan. The National Fund on Entrepreneurial Support and the entrepreneurs themselves should take that into account.
Wheat – we provide ourselves by 53 per cent and the external component is 20 per cent. This is not enough. I am sure that as a result of the operation of new large farms we can provide ourselves with wheat at a higher level. Barley – we provide ourselves by 102 per cent, with corn by 71 per cent, with soybeans by only 4 per cent. We provide ourselves with fruit and berries by 122 per cent. But there is a list here. This issue will probably be discussed in greater detail in the second part of the conference. I do not want to list all of these fruits, but there are types we can’t provide ourselves with. This is unfortunate. In general, fruits and berries are the most important export products.
All kinds of vegetables - here, too, the overall figure is 96 per cent. I believe that this is not enough. For example, potatoes by 86 per cent, which has dropped a bit, tomatoes by 120 per cent, cucumbers by 105 per cent. Tea – we provide ourselves by 45 per cent, including the external component of 50 per cent. Salt – we provide ourselves by 100 per cent and the external component is only 5 per cent. This is a very good indicator. A few years ago, we relied on salt imports almost entirely.
Sugar and sugar products – the self-sufficiency ratio is 115 per cent. But foreign raw materials account for 73 per cent. An instruction has already been given and a new program prepared to reduce the amount of foreign raw materials. I will talk about that shortly. A program has been developed to sow and cultivate sugar beet and produce sugar from it.
Pasta – we provide ourselves by only 38 per cent and there are 95 per cent of foreign raw materials. Honey – by 97 percent.
On the one hand, these numbers certainly indicate that we have largely been able to provide for our food security in recent years. If we look at the Soviet period, we can see – of course, there was distribution at the time – that Azerbaijan used to grow grapes, cotton, flowers, fruits, vegetables, butter, meat, while flour imported from other republics. For the country as a whole, it was an acceptable option. But we now live as an independent state and should certainly try to ensure our food security. We are achieving that. As a result of the additional measures and, as I have already mentioned, due to newly irrigated lands of 150,000-160,000 hectares, not only will we be able to fill this gap, we will also have very large export opportunities.
I would like to mention a few figures related to various sectors of agriculture. Cotton growing is developing fast in Azerbaijan now cotton. Some figures have been voiced here. Last year, we picked about 90,000 tons of cotton from 51,000 hectares. This year cotton will be sown on an area of 100,000-120,000 hectares and we expect about 200,000 tons of cotton. Cotton growing is being developed in 27 districts.
This sector is closely linked to the industrial estate being established in Mingachevir. Some of the plants I attended the groundbreaking ceremony of in Mingachevir last year should be commissioned factories the end of this year. There will be about 10 factories there producing yarn and other goods. Cotton growing will directly serve the development of this industrial zone. We will thus get even more money from exports. This means new jobs, because the cotton industry will employ more than 100,000 and perhaps even 150,000 people.
As a result of the prompt measures taken in the area of sericulture, this sector has also received a big boost. Currently sericulture is being developed in 37 districts. The government addresses all the issues at its own expense, delivers seedlings and develops sericulture. A total of 70 tons of raw cocoons were harvested last year. This year we will harvest 120 tons of raw cocoon and a further 1,300 tons or perhaps even more in 2019. Sericulture is being developed in 37 districts.
Some figures associated with hazelnut growing have been voiced here. In just one year, hazelnut cultivation has been increased by almost 40 per cent at the expense of the state. Hazelnut is an agricultural product fetching the greatest amount of currency today. Our climate is conducive to the development of this sector. Hazelnut growing is being developed in 13 districts, and we need to increase the area under hazelnut gardens to 80,000 hectares. Whereas today such gardens cover an area of about 30,000-35,000 hectares, we should bring it to 80,000 hectares. We will thus receive twice as much income and our people will earn twice as much.
With regard to the sugar beet, I have said that we conducted an analysis and it has been determined that sugar beet will be planted on an area of about 30,000-40,000 hectares. The produce will then be sent to the sugar factory, which will significantly reduce its dependence on foreign raw materials – sugar cane. Thus, the currency will not go abroad because the acquisition of sugar cane requires major funds. Of course, this will hugely benefit agricultural development.
Instructions have already been issued on the establishment of fruit orchards – persimmon and pomegranate orchards. These areas bring the biggest income. There are plans to set up almond orchards in Absheron and the suburban settlements of Baku. Unfortunately, we can’t provide ourselves with this produce although this is a very valuable product both for the domestic market and for exports.
Additional measures are being taken to promote olive growing. New gardens will be established. We need to increase the exports of olives.
Appropriate instructions have also been issued in connection with tobacco growing. We need to triple the production of tobacco. Of course, in parallel with the identification of foreign markets, tobacco production should reach 10,000 tons. We should increase production in the country and, at the same time, gain access to foreign markets. We have already given appropriate instructions in this direction and contracts have been signed. This is also a very profitable sector.
We have outlined measures related to viticulture and winemaking. Of course, we can’t be content with the current level. Leaders of associations have made speeches here. Many of these associations were set up on our recommendation last year because we should conduct a centralized policy for each direction. The Winemakers Association should try, with the support of the state, to secure greater exports to foreign markets. It has been mentioned here that we are exporting wine worth a total of $3.5 million. Of course, for a country like Azerbaijan this is too little. We should increase it 10 and perhaps even 20 times, and there are possibilities for this because we are establishing new vineyards, there are enough grape processing factories and wineries which operate at full capacity. So we should conduct a very serious state policy here. Viticulture and winemaking are a very profitable sector, and we have already signed contracts. Negotiations are currently under way with friendly and partner countries, so that they could allocate room for Azerbaijani wines in their markets. This process began as early as last year and should gain momentum this year.
Let’s move on to the sowing of soybean. Every year we spend $50-60 million to buy soybeans but we can fully meet domestic needs in one to two years and the money will stay in the country. Soybeans are also an exportable product. If we extend the plantations of soybeans, we can successfully export them.
As for grain production, it is a strategic industry. However, it does not bring much income. If we compare to other agricultural products, this sphere may bring the lowest income, but it is strategic. Therefore, we provide assistance in order to set up large farms and agricultural estates, to increase productivity and improve quality. We should must achieve a higher indicator than the current 53 per cent to be able to reach self-sufficiency. This will reduce our reliance on imports because we are spending about $250-300 million to buy grain abroad. Grain production, of course, is linked with irrigation problems. This, too, will be resolved, productivity will be increased because we have provided sufficient machinery. A fertilizer plant is under construction in Azerbaijan, and I am sure it will be put into operation next year at the latest. Therefore, the currency will no longer go abroad for the purchase of fertilizers. It is also necessary to start the production of pesticides in Azerbaijan. We need to get started this year, so that not to purchase pesticides abroad.
In short, it is necessary to minimize the dependence on imports. This is necessary for security. Besides, we need to save our foreign exchange reserves.
In order to increase the production of milk and dairy products, we should develop animal husbandry, of course. According to the figures provided, if we import an additional 50,000 head of breeding cattle or achieve this as a result of the measures taken in the country, this problem will be resolved. We need to arrange the construction of new dairy plants. Livestock breeding must develop efficiently.
We have talked about farmlands here. Of course, we have to engage the pastures that are used irrationally, but this work should be carried out with great precision. This should not assume a spontaneous nature because we need pastures as well. We need to find out where pastures are underutilized according to the norm. Of course, every pasture and every place should be viewed individually. We can achieve the development of one sector and harm another. Therefore, the Ministry of Agriculture, local executive authorities and the Ministry of Economy should examine these issues carefully, because it is necessary to conduct a thoughtful and coordinated policy.
Unfortunately, preparation of wool is not organized at the proper level. I have enquired and found out that we have only one procurement centers. This is unacceptable, of course. We need to set up at least 10 procurement centers in various regions this year. Here, too, we should conduct centralized policies both for local production and for exports. We should use these opportunities. Of course, we need to take comprehensive measures here. There are issues related to procurement, types and the export potential. We should try to use any sphere in order to offset, to a certain extent, the decline in the currency received from oil at the expense of other sectors.
We also need to develop tea growing. We are expanding our tea plantations. At the same time, we should deliver the most advanced technologies to Azerbaijan. Productivity here is even higher. This means employment and a reduced reliance on imports.
We have excellent natural conditions for beekeeping. We have to some extent begun the exports of honey but we can do it in larger proportions.
All of this produce grown in Azerbaijan is natural and highly valued abroad. In order to access new markets, of course, it is necessary to conduct various promotions and presentations. This work is being done, but we have to give it a greater impetus. We should increase the number of agricultural estates at least to 10. At the present time, two agricultural estates are being set up, but there should be 10 of them. In this case, I am sure that the issues I have mentioned will be resolved.
Last year we adopted strategic road maps related to overall development of various sectors. They indicate everything. The adopted regional program also identifies the main objectives. We simply amend it every year and, of course, pay attention to the most important issues.
Let’s move on to industrial production. The process of creation of industrial zones is under way. Work in this area is already making progress. The foundation of industrial zones has been laid in Sumgayit and Mingachevir. A representative has spoken about the work under way in the Neftchala industrial zone. Work related to the establishment of industrial zones in Masalli and other districts is also under way.
I would also like to voice some figures regarding the level of self-sufficiency in building materials. Cement – we provide ourselves by 100 per cent. Several cement plants already operate in Azerbaijan. Previously, we used to depend on foreign supplies and imports. Cement plants already operate in Baku and the regions. So this sector is no longer dependent on imports. We provide ourselves with lime by 90 per cent, with gypsum by 235 per cent, with bricks by 100 per cent, with travertine marble by 46 per cent, with concrete blocks by 100 per cent, with gypsum plasterboards by 100 per cent, with metal structures by 32 per cent, with reinforced bars by 72 per cent, and with aluminum and aluminum products by 231 per cent. I think that these are quite reassuring figures, and it is necessary to see what further work should be done in this field.
However, due to the reduction in investment last year, less money was invested in the construction sector. But this is a temporary phenomenon. As a result of the measures taken, the construction sector will receive a strong impetus. The construction of the first settlement has already begun through the National Housing Agency. There are plans to build about 30 houses there. In the next one to two years, of 60 buildings will be constructed in the White City. The number of projects to be implemented in Baku by means of resettlement is about 60. Dozens of new buildings are under construction on an individual basis. So this will be of great support for the construction sector.
The Open Joint Stock Company "AzerKhalcha" has been established to develop the carpet-weaving art, create jobs and expand our export opportunities. The first branch of "AzerKhalcha" has already opened in Horadiz. I personally attended the opening. This year, the number of branches should be increased to 10. We should both preserve our traditional craft and create a carpet industry. The carpets woven by hand or with the use of machines should promote Azerbaijan in the world, and this should be a good source of income.
The work done in the field of tourism – some of the figures have been voiced here – is turning Azerbaijan into a very attractive country for international tourism. In particular, the steps taken in connection with visas have created a watershed in this area. Of course, Azerbaijan is a very attractive country for tourism. First of all, Azerbaijan has a rich cultural heritage. Our historical monuments and ancient culture attract tourists. On the other hand, Azerbaijan is a modern country with a developed tourism infrastructure – hotels and recreation areas. Since 2004, we have built more than 300 hotels. Hotels of the world’s leading hotel chains operate in Baku and Azerbaijan. Our exquisite cuisine, a great climate, patriotic and at the same time hospitable people, the stability and security in Azerbaijan – all of this attracts tourists. All of these factors have been resolved. The issue of visa facilitation has been resolved. We should simply build our work prudently and create a strong tourism industry in our country. Of course, we should also use the experience of countries that have made great strides in this area.
Work is under way at the international level today to access foreign markets. During meetings with my colleagues I always raise this question so that Azerbaijan could enhance its export capacity. We have reached the decision to establish Azerbaijani trading houses in several countries. Work is under way in this direction. This is important to promote our country. At the same time, it can expand our export opportunities. In the near future, there are plans to open trading houses.
The activity of this entity is still in its early stages. If the work is organized properly, which should be the case, this structure should make a huge difference. Thus, we pursue several goals. The produce is not lost and the farmers will sell their produce in the field and earn money. This may provide centralized delivery of products to the domestic market and for exports.
Two centers of “ASAN xidmət” are due to open this year – in Guba and Mingachevir. Such centers will also be built in two other cities – Imishli and Sheki. They will probably be opened in 2018.
I want to say this once again: all necessary measures are being taken to promote entrepreneurship. I touched upon this issue at the beginning of my speech. Farmers provided with great benefits. They are exempt from all taxes except for the land tax. Irrigation is carried out and infrastructure created. Fuel, fertilizer, subsidies and guidelines are provided on concessional terms. At the same time, the state imports hazelnut and mulberry saplings at its own expense. The government does a lot in connection with cotton growing, purchase equipment and provides irrigation. We are doing all this for people on the ground to use these data capabilities. All this is being done to improve their lives.
In addition, 42,000 public jobs will be opened this year. We took measures related to the creation of public jobs last year too, and they will be taken this year. These jobs are opened to prevent possible unemployment. This is public work. In the districts, there will be jobs related to repairs, construction and landscaping. Such jobs will also be created in state-owned companies. A total of 42,000 jobs will be opened in public services alone. Other measures will lead to the creation of tens of thousands of jobs, so the rate of unemployment in Azerbaijan will remain at a low level as always.
I want to mention one more issue related to exports. The portal azexport has recently been set up. It states all exportable products made in Azerbaijan. I am urging all the producers to include their products in the portal so that it is visible to the public. This is beneficial to them as it will increase their export potential.
I want to note again that while doing all this work, we pursue several goals, of course – diversify the economy, reduce dependence on imports, expand the export potential and increase exports of agricultural produce. I believe that we can double the exports of agricultural produce. This is a realistic goal and we should try to achieve it. Thus, our country will receive more currency, the manat will maintain its stability, the dependence on oil will be reduced, jobs will be created and entrepreneurship will develop.
That is the main concept of our development. At the same time, it should also be mentioned, as I have repeatedly said, that we live in a post-oil period. I am saying this in the sense that government agencies should no longer rely on the oil factor. This does not mean that we are about to run out of oil. No, our oil will continue to serve our people for decades to come. In two years, Azerbaijani gas will be delivered to world markets in even larger volumes and expand the coverage area. So this factor is always there and will always provide us strong support. But we need to work as if it were not there. This is the goal of this conference and our activities related to the development in general.
As a result, we are doing this for people to live better. A good life, however, is measured not only in material terms. A special place here, of course, belongs to the relations between civil servants and citizens. I have repeatedly expressed my thoughts about that and I want to say it again today so that everyone knows and makes the right conclusions. Civil servants live for the people, not vice versa. Civil servants are there to serve the people. They should serve, help citizens and avoid arrogance. They should not make illegal demands. They should behave modestly. They and their families should set an example. They should not engage in bribery and extortion. This is what civil servants should be like. When appointing a civil servant or a head of executive authority, I say to them: you should serve the people, the state and work in good faith. Unfortunately, some do not draw the right conclusions. They are and will be punished.
We are doing this work to ensure that development in Azerbaijan is comprehensive and rapid. Negative facts must be stopped. We have created “ASAN xidmət”, which has been operating for several years now. There have been no complaints about it, or at least I have not heard any. The approval rating is 98 per cent. There have been 13 million applications. Our population is less than 10 million people, but there have been 13 million applications. This is an innovation in the field of public services. What does it show? First, it shows our will and policy. Second, it shows that it is possible to work like that. If it is possible there, it is possible anywhere. Therefore, the between civil servants and citizens are very important for society and for development. It all depends on civil servants. They should work as I said. If they commit errors or violations in their work, they will be punished accordingly.
All the instructions I have given today must be fulfilled. Information related to these instructions should be submitted to the Presidential Administration on a regular basis. The Presidential Administration will take all necessary measures to implement them and exercise control, so that we could successfully complete 2017 as well. Thank you.