Davos, January 19, AZERTAC

President of the Republic of Azerbaijan Ilham Aliyev has attended the interactive session "The Silk Road Effect" as part of the World Economic Forum in Davos.

President Ilham Aliyev addressed the session and responded to questions.

Speakers at the event also included Georgian Prime Minister Giorgi Kvirikasvili, President of Mongolia Tsakhiagiin Elbegdorj and representatives of other countries.

The moderator of the session asked the participants about how political and infrastructure investments into a modern Silk Road are affecting economic growth and harmonization across Asia and Europe.

President Ilham Aliyev: Definitely when we are talking about the Silk Road we should have a broader picture about this initiative. We will not be successful only by investing in transportation infrastructure, if we don't have a reliable political relationship in the region. Azerbaijan invested directly in the reconstruction of our segment of the Silk Road, and also supported the project politically by launching initiatives that lead to regional cooperation. When we are talking about regional cooperation it's very broad because it covers political, economic, cultural and other sectors. Therefore, our intention always was to initiate the projects and to participate in them, which will bring benefits to countries, to peoples, which will increase predictability, stability in the region and create equal opportunities for all the people to live in our region. Therefore, Azerbaijan has always played a very active role in the reconstruction of our segment of the Silk Road and hopefully this year together with our partners in Georgia and Turkey we will complete a very important part of the Silk Road – connection between Baku, Tbilisi and Kars – in three countries, which will allow us to enjoy the benefits of this project for many years to come. This project will shorten the route from China to Europe from existing 30-35 days to 14 days. This will be the shortest route, but of course, not the cheapest. Now we are working together with our partners in order to unify the tariffs so that we can make this route also very attractive from a commercial point of view. And so far the development in this direction has been going on very successfully and as soon as this project is complete, we will enjoy the big movement of cargo. At the same time we are investing in sea port infrastructure. We are now building the biggest sea port in the Caspian, which will be handling more than 25 million tons of cargo every year, and, of course, as you correctly mentioned, this route crosses also the Caspian Sea. Therefore, there should be enough transportation infrastructure, ports, vessels, tankers in order to provide sustainable development of this project.

The moderator then asked about the role of China and economic diplomacy in the realization of the Silk Road project.

President Ilham Aliyev: I can tell you that we have already started the preparatory work and today's situation shows that we did a right thing because now we are very close to the completion of this missing segment and at the same time it is correlated with the Chinese vision for "one bridge, one road". We have good contacts with China. Actually Silk Road already is working and testing. Last year we had the first container testing train starting from China across Central Asia, Caspian, Azerbaijan, Georgia and Europe. Therefore, we are now looking into how to make this road very attractive for suppliers. And at the same time this project, as I said before, was not only about investments and the transportation infrastructure, though it's vital. It also will create interdependence. And interdependence strengthens the friendship. We are lucky that all the countries, which are now situated on the Silk Road, have good working relations with each other. But this interdependence will strengthen that further. This will provide a very unique form of cooperation of different countries with different political agenda, different culture, religion, history. I think this is the new model of the world. We in Azerbaijan invest a lot in issues related to intercultural dialogue. For instance, last year was announced a year of multiculturalism in Azerbaijan, and this year is announced a year of Islamic Solidarity. We are one of the few countries, which is a member of the Council of Europe and the Organization of Islamic Cooperation. We are situated just between Europe and Asia, so this geographical location, our historical heritage, and our political agenda helps a lot in order to bring this project together. Of course, we will support any other potential initiatives related to that. We are now working on a bilateral level with partner countries in order to attract more cargo in this direction. And not only those countries, which are situated directly on the Silk Road, but those that are situated close to that road can use this opportunity.

By the way, Azerbaijan is also working on another project, which is called North-South and will connect India, Iran, Azerbaijan, Russia, Northern Europe and the Middle East. So our segment of this project is already complete. Hopefully within coming two years this will open another transportation route, which will be also integrated into the Silk Road.

The moderator then asked the Azerbaijani President to share his vision for a digital connectivity for the Silk Road project.

President Ilham Aliyev: We are working on that. Actually, ICT sector is one of the priorities for Azerbaijan and we are investing in developing this sector. More than 75 per cent of our population are internet users. We have a state-financed program to bring broadband internet to every village. Of course, we are also working on issues related to cyber security. We have not yet been a target of attacks. But the more a country develops, the more it is at risk.

There is also one project, which is called TASIM. This is a communication line, which actually goes the same corridor as the Silk Road. Actually the construction of these corridors is interconnected. For instance, we were talking now about energy resources. Energy resources of Azerbaijan played an important role in the restoration of the Silk Road because when we launched this idea in front of our partner countries the biggest problem was lack of financing. We reached out to several financial institutions, but they were not so enthusiastic. So what we did. We used the money we earned from energy resources and started to invest and provided financial assistance to our partners. And if you look at the energy corridor that today connects Azerbaijan, Georgia and Turkey, which consists of oil and gas pipelines, you will see that Silk Road is the same corridor. If not for those energy projects, probably we would not have started the construction of the railroad connection. Therefore, all these corridors are connected.

Today we already created a new corridor for export of electric energy from Azerbaijan and from Georgia to Turkey. We connected our electric lines. So one brings another one. We are now exporting electricity, exporting gas, exporting oil, building the railroad and, of course, will continue to invest in providing digital support for these projects. As it was correctly mentioned it will increase efficiency and bring more benefits.

Representative of the University of Hong Kong Peter Watson`s question was about the use of labor force in global projects and the movement of people through the Silk Road.

President Ilham Aliyev: As far as our country is concerned we have very positive demographic dynamics. Our population has grown more than two million people since the restoration of independence in 1991. Therefore, we don't have this problem of inviting foreign labor force. But with respect to the question about movement of the people I think that will also be very good for our countries. These projects will also play an important role in increasing the number of tourists, and I think the countries should also have form of cooperation in order to attract more tourists. Maybe they should think about some joint touristic destinations program visiting several countries. Just recently Azerbaijan launched a new project of electronic visa system. Now everyone in the world, who wants to visit Azerbaijan, can get an electronic visa within three days just not leaving his house or office, and come to visit the country. So all these issues are inter-connected. As I said before, the Silk Road will unite not only companies, countries, but peoples. And that will make our region more stable.

Executive Director of Greenpeace International Jennifer Morgan asked the participants to highlight environmental issues.

President Ilham Aliyev: We have always treated the issues relating to environment with big concern and big attention. I can remind you of the time when we were constructing the major oil pipeline from Azerbaijan through Georgia to Turkish Mediterranean. At that time environmental NGOs were very actively involved in monitoring the situation. And a lot of measures have been taken in order to protect environment for birds and animals. So everything was done on the highest possible level.

Azerbaijan as a country, which suffered from an ecological disaster, now invests a lot in clean energy. We invest in hydro energy, in solar, in wind energy at the same time, petroleum operations in Azerbaijan, especially in our sector of the Caspian Sea, are being done in full compliance with international standards. Azerbaijan, Baku is the place where the first oil in the world was produced in 1847. At that time, and also through the most part of the 20th century ecological issues were not a priority. Therefore, when we became independent we found ourselves in very difficult situation of pollution, especially in Absheron peninsula, Caspian Sea. We had to spend hundreds of millions of dollars and still continue doing so to clean those territories. Of course, we have been very careful with respect to environmental protection. Of course, we can achieve these targets only in close cooperation because we share the same sky, we share the same air, we drink the same water. Therefore, I think, close monitoring of the leading environmental NGOs is important.

The moderator`s last question was about what is needed in order to attract private sector capital to implement projects.

President Ilham Aliyev: In Azerbaijan, all the major transportation infrastructure projects were financed by the state budget and the State Oil Fund because the private sector, first of all, did not have sufficient money to invest, and secondly, this was strategic investment, long term investment. They would generate wealth and return investments for many years. Therefore, whether it is a railroad infrastructure, Caspian shipping, airlines, highways, Silk Road, everything is done by the state-provided money. But this creates an opportunity for the private sector.

I mentioned the construction of the new sea port in Baku. We already have several thousands of hectares of land as a free zone, just next door to that sea port. And all the private companies, local and foreign, are invited to participate and to start manufacture. At the same time, we create infrastructure to establish special industrial zones in different parts of Azerbaijan, and the private sector already comes as investor. When they have water, gas, electricity, roads, railroads, after that they come. So we tried to create better conditions for the private sector and not to put a financial burden, which is too difficult for them, but to stimulate the private sector by creating infrastructure.