Baku, January 10, AZERTAC
President of the Republic of Azerbaijan Ilham Aliyev has chaired the meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development of 2016 and objectives for the future.
The head of state made an opening speech at the event.
Opening speech of President of Azerbaijan Ilham Aliyev
- Today we will discuss the results of 2016 and talk about the work to be done this year.
While analyzing 2016, we should certainly take into account the processes occurring in the region and the world. In 2016, the threats, risks and dangers in the world and in our region increased, bloody conflicts and wars continued, and new hotbeds of conflict emerged. In other words, stability in our region was disrupted and the situation related to economic development become more complicated. In 2016, dangerous processes were observed in various parts of the planet. The migration crisis in Europe exacerbated further and the processes taking place in the CIS were of great concern. As I have already noted, unfortunately, the bloody clashes, wars and acts of terror in our region and in the Middle East caused a great blow to stability in the region.
As for our country, Azerbaijan continued to develop in 2016. Security in our country is provided and the Azerbaijani people live in peace and tranquility. The source of stability in our country is the will and the choice of our people. Today, our country is one of the countries noted for stability on a global scale. Of course, the work we are doing can’t be viewed in isolation from the global context. If we pay attention to the dangerous processes taking place in the world and the region, we can see yet again that Azerbaijan remains committed to its chosen path of independence and development. We have sought and will endeavor to continue to defend our country and people from possible risks and ensure our independence. History and the events happening around us suggest that the path we have chosen is the only true one. This is a path of independence, a path of stability and development.
In 2016, we resolved practically all the tasks on our agenda. As you know, Azerbaijan, as is the case with other oil-rich countries, suffered the repercussions of the falling oil prices. But if we look at the steps taken by all oil-exporting countries, we can see that Azerbaijan is among the countries that have successfully overcome this crisis. There are a number of other oil-rich countries which, like us, managed to successfully overcome this situation. Oil prices have fallen three- to fourfold. This means that oil, which is our main source of income, has brought us three to four times less profit. Of course, we had to find a way out of this crisis, and I think we did find it. Despite all the difficulties and losses, we have managed to maintain economic stability and get out of this difficult situation with dignity. In 2016, our country also took very important steps related to economic development. I want to note once again that the main condition for the development of any country is security, stability and civil accord. We have that. Security is protected. I want to say once again that stability, unity and civil concord based on the will of the nation further strengthened in 2016. The entire Azerbaijani people are rallied around a common goal: to achieve further development of the country and further strengthen our independence.
In 2016, we marked the 25th anniversary of the restoration of our independence and celebrated this wonderful holiday with good results and successes.
In 2016, important steps were taken in the field of economy. Year 2016 will go down in history as a year of deep economic reforms. The resolutions and laws adopted this year, as well as the orders I signed have further deepened economic reforms and allowed us the opportunity to expand non-oil sector growth in the future. The decisions made are already bearing fruit. I am sure that this year and in the following years, the results manifest themselves even more clearly.
Although the gross domestic product has decreased, which was mainly caused by the three- to fourfold decline in oil prices, the resulting reduction in investment and public spending, other important indicators are quite reassuring. In particular, non-oil industrial production in the country increased by 5 per cent last year. This means that the policy we have pursued over many years is yielding results. Industrialization, non-oil sector and private enterprise development have contributed to this great performance. I believe that the increase of our non-oil industry by 5 per cent in a year of crisis is a very good figure.
Another important indicator is the development of agriculture. The development of any country is largely preconditioned by industry and agriculture. As a result of operational measures taken, we have achieved the development of agriculture, which has increased by 2.6 per cent in Azerbaijan.
These two figures suggest that we have succeeded in overcoming these difficult conditions of crisis. The work already done and to be done this year will further strengthen this trend. The economy will grow steadily. We will develop the non-oil sector, ensure the creation of jobs, and I am sure we will meet all the objectives I have identified.
Although our revenues have dropped three to four times, the wonderful investment climate available in Azerbaijan has allowed us to attract foreign investments in the amount of $8 billion to the country. This is also an excellent indicator, because the world is experiencing an economic crisis today. There are financial difficulties, and it is extremely difficult to attract investment from abroad under such circumstances. We have achieved that. A total of $8 billion of foreign investment was channeled into the economy of our country. Domestic investment totaled $3.7 billion. This figure is lower than in previous years, which is understandable. The reasons are well known. Thus, investment in the amount of $11.7 billion was made in the country's economy last year. I want to say again that this is a great indicator. In absolute terms, this figure is also very high. If we calculate this in per capita terms, we can see that we are probably in one of the leading positions in the world.
In 2016, one of the main objectives was to preserve our foreign exchange reserves, in particular, the resources of the Oil Fund. We managed to achieve that. Today I want to draw the attention of our people to the processes taking place in the world again. We can say that foreign exchange earnings of all oil-rich countries have significantly declined. Oil funds, sovereign funds, other funds, retirement funds – they are called differently – the funds accumulating in such funds have fallen sharply. In Azerbaijan, we can say that we have managed to preserve the revenues of the Oil Fund. Oil Fund revenues have decreased by only 4 per cent, because we have taken steps to diversify our foreign exchange reserves. Our currency is kept in dollars, euros and British pounds. As a result of the strengthening of the dollar and the decline of the euro and pound, the foreign exchange reserves of our Oil Fund have decreased by 4 per cent in dollar terms. If it hadn’t been for the difference in the exchange rate, even this minor decline wouldn’t have occurred. The resources of the State Oil Fund of Azerbaijan today amount to $33 billion dollars. We have preserved that, we will preserve that, and I am sure that these funds will be even increased this year.
Of course, the easiest way to overcome a crisis is to spend foreign exchange reserves, and we are seeing that in some places. But we are thinking about the future. We are building a long-term strategy. We have kept and saved our foreign exchange reserves for years, channeled them into infrastructure and social projects the country needs, and we are still keeping and should further increase them.
The work we are doing is valued highly by leading and influential international economic and financial institutions of the world. This is also very important because it is one thing when we say this ourselves and it is completely different when this is noted by international organizations. The Doing Business report of the World Bank ranks Azerbaijan in 65th place. This is a good indicator. Of course, we should try to climb to a higher level. But in the current environment, taking into account all the factors I have mentioned, I think this is a fairly high indicator. According to the calculations of the leading international economic forum of the world, the Davos World Economic Forum, Azerbaijan's economy has moved three steps up in terms of competitiveness on a global scale and climbed from 40th to 37th place. I think this is a record figure. We are still first in the CIS and have preserved this superiority. Such are the reports of leading international economic entities.
However, there are various non-governmental organizations – we all know where they are financed from – which aim to tarnish and blacken us and cast a shadow over our work. The anti-Azerbaijani campaigns they have been engaged in for years do not yield any fruit. It is not worth even paying attention to their ratings. In addition, some local representatives who call themselves outstanding economists make statements and provide different estimates. They share completely absurd ideas. We have a saying: "Someone is not capable of dividing oats between two donkeys but wants to edify us”. So we should not pay attention to all this. The main thing is our successful development, the assessments of leading international economic entities and our realities. And the reality is that we managed to come out of the crisis with dignity in 2016, more than 100,000 permanent jobs were opened in our country, and the development of agriculture and the non-oil industry allows us to be optimistic about the future. We will also talk about the work to be done. We have fairly ambitious plans, and as a result of their implementation the country's economy will accelerate its momentum.
In 2016, social issues were also resolved. Social policy has always been one of our top priorities. In 2016, wages increased by 7 per cent and pensions by 8 per cent. We should increase them further. I believe that there will be a positive dynamics in this area in 2017. We have taken very important steps in connection with targeted social assistance. In other words, the state has always and will always provide assistance to those living in poverty. The size of this assistance is increasing and should continue to be increased. At the same time, very important steps were taken in 2016 in the sphere of social justice, particularly in connection with tariffs for public utilities. Again, the government always extends a helping hand to those who living in poverty and will always do so. We are conducting serious institutional reforms to protect the interests of the middle class. We are taking steps associated with the creation of jobs. The rich should not expect subsidies and help from the state. Therefore, the differentiation of utility tariffs is based on the principle of social justice, and I believe that we can be proud of the successes we achieved in addressing social issues in 2016. Our revenues are falling, while people’s wages are rising. Social infrastructure projects have been implemented. We have refurbished 485 and constructed 29 schools, built or renovated 41 hospitals. We allocate sufficient funds for these projects, which demonstrates our social policy again.
Last year, further steps were taken to address the problems of internally displaced persons and build new settlements for them. This process will be continued in the current year as well. This issue is always in the spotlight. We are doing and will do everything possible to improve the plight of internally displaced persons.
In 2016, successful work was carried out in the field of public services. The number of “ASAN xidmət” centers has reached 11. In recent years, there have been 13 million applications, and public approval rating is close to 100 per cent. This has been some kind of a revolution in the field of public services, public relations as a whole, and has become a brand of Azerbaijan. Some countries have already started to borrow our experience. Last year, “ASAN xidmət” expanded its functions. Initiatives such as “ASAN Kommunal”, “ASAN Qatar” and “ASAN Viza” have been put forward. It should also be noted that as a result of the launch of “ASAN Viza”, the number of visitors to our country will increase further. In 2016, we managed to create a turning point in this direction. In general, the flow of tourists is associated with the economic situation in the world. If the situation is good, more people travel to foreign countries as tourists. But today, the whole world and practically all regions of the world are experiencing an economic crisis. Despite this, the number of tourists visiting our country in 2016 increased by 11 per cent. I am sure that this figure will increase further this year.
Last year, 35 hotels were built in our country, 25 are under construction. In general, there are more than 500 hotels in Azerbaijan. But demand is growing and domestic tourism is developing. I am very glad that our citizens prefer to rest in Azerbaijan. We have wonderful natural conditions, great facilities, excellent hotels and recreation areas. Today, tourists from all over the world come to Azerbaijan. And this brings the country's economy large profits. In the future, we will receive billions of dollars from tourism, which will provide great support for our economic situation.
Last year, our international relations expanded further. For many years, Azerbaijan has been known internationally as a very reliable and worthy partner. In particular, in the circumstances of a deepening crisis, wars and instability in the world in recent years, our example certainly attracts great attention. We are treated with more sympathy.
Azerbaijan has a very positive international image. International organizations heed our word. Our influence is growing. We will expand our international relations this year too. Last year, about 20 heads of state and government paid official and working visits to our country. This is also an indicator. We have worked hard in international organizations. The Organization of Islamic Cooperation in its summit set up a contact group in connection with the Armenian-Azerbaijani Nagorno-Karabakh conflict and the aggression unleashed by Armenia against Azerbaijan in April. This group is already beginning to operate. It is a huge success for us. In recent years, as a result of our activity, the Non-Aligned Movement adopted resolutions related to the settlement of the Nagorno-Karabakh conflict within the framework of Azerbaijan’s territorial integrity.
The ways of resolving the Nagorno-Karabakh conflict are well known. Our position remains unchanged. The territorial integrity of our country must be restored. All occupying forces must withdraw from our lands. Four UN Security Council resolutions must be implemented. The status quo is unacceptable and must be changed. Last year, the OSCE also expressed a serious position on the issue – the status quo is unacceptable. This is an axiom – it must be changed. Changing the status quo means a withdrawal of occupying forces from our lands. These are the ways to resolve the conflict. There is no other option. Azerbaijan will never agree to the creation of a second self-styled Armenian state on its land. Azerbaijan will never put up with this situation. The sooner the occupying regime and the Armenian authorities realize that, the better for them.
In April 2016, the state of Azerbaijan and the Azerbaijani army inflicted severe blows to the invaders. In response to yet another Armenian military provocation, the Azerbaijani army launched a counter-offensive and liberated thousands of hectares of lands from occupiers. This is our glorious and historic victory, which demonstrates the strength of our state, our people and our army. This shows once again that we are capable of resolving the problem by military means at any time. The invaders were evicted from thousands of hectares of our lands. Currently, a cleaning operation is under way there. Cleaning work in all senses. Today, the Azerbaijani army controls tens of thousands of hectares of land. There is no trace of occupiers on these territories now. We will take the necessary measures in these regions to ensure that our citizens return there, and this process has already begun.
The April battles are a glorious history, a great victory for us. We are proud of our soldiers. During these battles, the Azerbaijani people demonstrated their unity once again. Therefore, I believe that 2016 was very important in terms of the settlement of this conflict, because the opposite side, Armenia, was in a panic and asked the mediators to facilitate an early end to the fighting and expressed its readiness to return to the negotiating table. The people of Azerbaijan are well aware that they addressed various international organizations, including the Collective Security Treaty Organization even though the Collective Security Treaty Organization has no relation to this issue. The persons who led the Collective Security Treaty Organization until now made a big political mistake by expressing a pro-Armenian position and voicing unacceptable thoughts. We are well aware of their fate today. So the April battles are a brilliant victory for us. They have demonstrated the power of the Azerbaijani state again. At the same time, they showed once again that we will never put up with this situation. We will give an adequate response to all provocations. At the same time, we have completely dispelled the myth Armenia had been creating for years. Without receiving the weapons, money and other assistance from outside, they can’t cope with us even for a week. They recognize that themselves. We have long been aware of that.
As always, we take a constructive approach. Justice is on our side, as are the norms of international law. Our position is reinforced by history. Our military power, the economic potential and political authority are also on our side. So we will resolve the issue the way we want. Our desire is to restore the territorial integrity of our country and to raise the flag of Azerbaijan in all occupied lands. This is our goal, and we are moving towards it. The April fights are a very important historic step in this direction.
There were other important events last year as well. We have taken further steps to improve our energy policy. The implementation of the Southern Gas Corridor project was successfully continued. Although our oil revenues have dropped three to four times, we have received loans from abroad. At the same time, using our internal funds, we have taken all the necessary steps relating to the implementation of the Southern Gas Corridor and Shah Deniz-2 projects. I can say that as far as the Shah Deniz-2 project is concerned –Shah Deniz-2 is one of the largest gas condensate fields on a global scale today – 90 per cent of the work has already been completed and will be finished next year. A significant part of the TANAP project has been implemented and work is under way on other segments of the Southern Gas Corridor. Last year, we hosted the second meeting of the Advisory Council of the Southern Gas Corridor in Baku. All countries participating in this session, the European Commission, the United States and all members of the Southern Gas Corridor pointed to Azerbaijan’s leadership in a statement. We are the leaders, the initiators, the driving force behind this project. We are implementing this project together with all our friends, partner countries and international organizations.
Important developments occurred in the transport sector last year. In particular, serious steps were taken in the area of the North-South corridor. In the spring of last year, I issued the instruction to build our railroad to the border with Iran before the end of the year, and we have already achieved that. In approximately seven to eight months, we built the remaining part. In addition, we have built a bridge across the Astarachay River and put it into operation. So Azerbaijan completed its task in relation to the North-South corridor in just eight months. We have now put forward additional initiatives related to the commissioning of this major project in order to expedite the process. It is necessary for us, for the neighboring countries and for the whole world. As a result of this project, the cargoes coming from India and Pakistan will pass through the territory of Azerbaijan and head for Iran, Russia, Northern Europe and back. This will contribute to greater traffic. Millions tons of cargo will pass through our territory. Thousands of jobs will be created. As a result of this project, we will also break through the railway blockade of Nakhchivan. Nakhchivan will be linked to Azerbaijan by railway through the territory of Iran. So this is a historic project we are implementing together with neighboring and friendly countries.
In 2016, our athletes also delighted us with a great victory. In the Rio Olympic Games, we won a historic victory. We won 18 medals, finishing in 14th place globally, in seventh place in Europe, second only to Russia among former Soviet republics and first in the Muslim world. I think that these indicators demonstrate it all. This is yet another big win for us.
At last year's referendum, the people of Azerbaijan expressed their will once again. They voiced their great support of our policy. They have demonstrated once again that our policies are supported by the people. We knew about that. Opinion polls are conducted, public opinion is studied, and of course we were aware of the atmosphere in our country. But the referendum has demonstrated this to our people and the whole world. Representatives of international organizations observing the referendum did not reveal any violations. Exit-poll results coincided with official results. International organizations, in particular the Council of Europe, provided a very positively assessment of the referendum, confirming that in a subsequent decision in Strasbourg. The referendum was held in a transparent, fair and free manner. This is yet another step towards democracy, which is also evidence that the electoral process in Azerbaijan has significantly improved. In addition, I would like to note once again that this is tremendous support provided to us by the people, and it was provided in 2016, the most difficult year for the economy. I would like to express my gratitude to the Azerbaijani people for their support and note again that Azerbaijan will continue to develop confidently.
Last year was declared a Year of Multiculturalism in Azerbaijan. I think that this was a unique occasion in the world. I do not know if any other country had ever declared a Year of Multiculturalism. But this is not the point. The point is that our declaration of 2016 as a Year of Multiculturalism carried a huge meaning. It demonstrates our policies, the mood of the society, our current and future work. Azerbaijan is indeed a center of multiculturalism in the world. When we started to talk about that and to hold international events, migration crisis had not even started and discrimination in Europe and elsewhere was not so obvious. Last year it reached its climax. Last year we witnessed humiliating actions against migrants in some European countries and openly aggressive policies related to Islamophobia. Against this background, our declaration of 2016 as a Year of Multiculturalism and its successful completion demonstrates our policy, strength and intent once again.
Last year we hosted a series of important events. Among them, I want to highlight the Seventh Global Forum of the UN Alliance of Civilizations. Also successful were the traditional Baku International Humanitarian Forum and other events. I should also note the Pope's visit to Azerbaijan and the statements he made during the visit. This is the contribution of Azerbaijan to this cause. Not only do we deal and resolve ethnic and inter-religious relations in the country at the highest level, we are also setting an example around the world. This is how we need to develop. Multiculturalism should have no alternative. I believe that by showing this example, we are expanding influence opportunities in other places too.
Of course, many events took place in 2016. We could talk for hours about them and even about important events only. I have simply pointed out what I believe are important moments both in the order of analyzing them and as a future platform. We will continue to follow this path.
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Other speakers at the meeting included Azerbaijan's State Adviser on Multinational, Multicultural and Religious Affairs Kamal Abdullayev, Chief of the State Migration Service Firudin Nabiyev and chairman of the State Agency for Public Services and Social Innovations under the President of the Republic of Azerbaijan Inam Karimov.
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Closing speech of President Ilham Aliyev
- I am sure that our country will develop successfully in 2017. We will implement all social programs and take very important steps in terms of economic development.
While analyzing the economic performance of 2016, we can see that the main reason for the decline in the gross domestic product has been the drop in oil prices on world markets and the consequent reduction in public investment. The biggest decline was observed in the construction sector. As a result of the measures we took during the year, important steps were taken to revive the construction sector. Measures associated with the development of the construction sector will be taken in 2017 as well. So I am sure that the construction sector will develop in Azerbaijan this year.
There are plans to implement many projects. Among them, I want to emphasize the activities of the State Agency for Housing Construction. Last month, we launched the first project of the State Agency for Housing Construction in Yasamal district. I am sure that this project will be successfully implemented. As part of this project, we will create a new township. There are plans to build 29 high-rise residential buildings. We will build a school, a kindergarten, the infrastructure and roads. There are plans to build about 2,000 apartments which will be made available to people, especially the families with limited material possibilities, on favorable terms, on long-term loans.
At the same time, we have launched the process of demolition of old houses in Baku and the construction of modern buildings instead. Unfortunately, there are many outdated, unattractive and in some cases are even dangerous buildings in various parts of our city. The construction of new modern houses in their place has already begun. The first such project was implemented in Sabunchu district at the end of the year and a new beautiful building was commissioned. I personally attended the opening ceremony because I attach great importance to that and believe that this first project is quite symbolic. This is a move that gives start to great innovation. The fact that there are 60 apartment buildings and houses under construction and their paperwork is being prepared suggests that this process has gained momentum in our city. The idea is that the obsolete houses and buildings in emergency condition should be replaced by modern high-rise buildings. Those living in old apartments will temporarily rent a different apartment and will even be given money for rent. After the construction of new buildings, these people will become owners of more spacious apartments in new buildings, as was the case in Sabunchu district. Some people have received apartments twice as large as before. In addition, they will live in beautiful and renovated apartments.
This project, this initiative has a tremendous value because, first of all, we will eliminate the outdated houses. On the other hand, new buildings will be constructed instead of the old ones, so there is no need for new locations. I want to emphasize that from now on the allocation of vacant places in Baku and other cities will be subject to very strict control.
If entrepreneurs want to build houses, they need to obtain the consent of the people, resolve all their problems, pay compensation or the rent, and construct buildings in accordance with the urban plan and in compliance with all architectural regulations. This should be the approach. There needs to be strict control. Appropriate instructions have been given and decisions made.
Last month we celebrated the fifth anniversary of the White City project. In five years, we have created a city within a city. An environmentally friendly and modern project is being implemented in the once oil-polluted Black City area. A part of it has already been implemented. An additional 60 buildings will be constructed in the White City at the next stage.
Thus, I have mentioned three projects. As part of these three projects, 150 high-rise residential buildings will be constructed in our city. Besides, work is currently under way on dozens of other construction sites. We will thus revive the construction sector. What will that give us? First of all, we will update the housing stock. On the other hand, the city will be cleaned from ramshackle and illegal structures often referred to as "arbitrary construction". The appearance of the city will further improve. The building materials sector will be revitalized. We have already created a large industrial sector. Many building materials are produced in Azerbaijan. I am talking about local materials. We have significantly reduced our dependence on imports. This will also serve the development of the construction materials sector. As a result of these projects alone, tens of thousands of jobs will be created. We know that thousands of jobs were cut last year, particularly in the construction sector. As I have already noted, the construction sector experienced a decline. Therefore, we are pursuing several goals: landscaping and amelioration of our city will go even faster. Baku is one of the most beautiful cities of the world today. This is acknowledged by everyone. I want every single part of Baku, every place and district to match the panorama of the city center, and we will achieve that.
There are plans to implement other construction projects. In particular, the first stage of the work involving clearing and resettlement of people from the area behind the Azerbaijan State Academic Drama Theatre has been completed. There will not be residential construction there. This area will be turned into a public space. A new road infrastructure will be created. The already approved project should be fully implemented in the course of this year.
We will present residents of the city with a large park. In addition, the most sophisticated and broad road infrastructure will be created. At the same time, the appearance of Tazapir Mosque, which is a historical and religious monument of ours, will be completely different. A large park will be established in front of Tazapir Mosque. Its surroundings will be landscaped. This will make access to the mosque easier. At the same time, our historical and religious monument will have an even more magnificent appearance from the distance.
The development of the construction sector should be provided in all our regions. In the regions and cities, there should be a process of construction of high-rise buildings and industrial zones. The state will certainly provide its support, and the private sector should be more active. At the same time, I am appealing to business people specifically: a lot of work will be done within the framework of the projects I have mentioned. Therefore, we should set up branches to produce construction materials we can’t provide ourselves with at this point. At present, our Ministry of Economy has all the data. We provide ourselves with many types of building materials. We import some. We should start the production of these goods in Azerbaijan in order to get rid of the dependence on imports and to enable the private sector and business people to earn a profit.
This year, we should ensure macroeconomic stability in Azerbaijan. Inflation should be in single digits. I believe that we can achieve this. Macroeconomic stability is one of the key conditions for the economic stability of any country.
In my opening remarks I already noted that despite a sharp drop in oil prices, we managed to preserve foreign exchange reserves, in particular the reserves of the Oil Fund. We must maintain foreign exchange reserves this year too. I am sure we will actually achieve their increase.
Last year, important measures were taken to bolster the banking sector, tighten control, enhance transparency, apply penalties and administrative measures. The greatest blow to our economy was caused by the banking sector. Therefore, serious steps will be taken this year to clean up, improve this sector and make it more transparent, so that it is consistent with international standards. A serious fight will continue to be waged against those violating the law.
I have already pointed out that although 2016 was a difficult year, our non-oil industrial production increased. This year, we should take serious steps associated with the development of industrial capacity. We already have several industrial estates. Among them, I want to highlight the activities of two estates in Sumgayit – the Technology Park and the Chemical Industry Park. The process of creating large enterprises is under way at the Sumgayit Chemical Industry Park. The volume of investment there exceeds one billion dollars. Last year, we laid the foundation of Mingachevir Industrial Park. I believe that construction work should start there next month. The Mingachevir Industrial Park, which is focused on the light industry, will first accommodate nine modern factories and create thousands of jobs.
Last year, a groundbreaking ceremony of a pharmaceutical enterprise was held in Pirallahi. A new industrial zone and a tourist infrastructure are being created on Pirallahi Island. I am sure that serious steps will be taken in this direction this year. We have taken very serious steps related to the development of the Neftchala industrial zone. Together with our Iranian partners, we have laid the foundation of a car factory there. There are plans to build several more plants. Good work is in progress at the Balakhani Industrial Park. In the town of Masalli, an area has been allotted for an industrial estate. Infrastructure work is currently under way there. I have repeatedly spoken about this and I want to repeat: every city should have a special industrial area, an industrial estate, an industrial area. This process has already begun. Local executive authorities, business people should carry out this work in other cities with the support of the state, of course.
Last year was successful for the development of agriculture. We managed to achieve growth. I think that this growth should be even faster this year. I want to note several key areas related to agriculture. I am very glad that we have been able to restore cotton production in Azerbaijan, as this sector experienced a decline for many years. The recovery process has already begun. We will return cotton growing its former glory. Although we were a bit late last year, we have achieved good results. If we compare it with 2015 when cotton was sown on an area of 18,000 hectares, we will see that in 2016 it was sown on 51,000 hectares. Whereas in 2015 we harvested 35,000 tons of cotton, last year the figure reached 90,000 tons. We have ambitious plans for this year. They will be reflected in the state investment program to be adopted in the near future. This year, we have to further expand cotton fields. Whereas last year cotton was planted on an area of 51,000 hectares, we should plan it at least on 120,000 hectares this year. This is a real figure. It may be slightly more or less, but we have to base their work around this figure. We have taken all necessary measures. Equipment was purchased last year and will be purchased this year. The necessary agronomic measures are being taken. Water is supplied to new acreage. The Presidential Administration, local executive bodies, the Ministry of Agriculture, the Ministry of Economy, reclamation and other structures have worked hard here. We expect even better results this year. Only within the framework of the project to be implemented this year, we plan to engage about 200,000 people. We have raised the subsidies and rates of those working in cotton fields. We will also provide employment. I should note that cotton-growing is currently being developed in 27 districts, and this year we expect to harvest about 200,000 tons of cotton and more.
Serious steps were taken last year related to sericulture. I would like to mention a few figures. Unfortunately, this sector was completely neglected. In previous years, much of the mulberry gardens was cut down and destroyed. We are restoring them now. A little more than 200 kilograms of cocoons were harvested in 2015 only in Sheki District. As a result of the measures taken in 2016, this figure reached 70 tons. This year, silkworm production should at least double to last year. Last year, we planted 1.7 million mulberry seedlings. There is huge interest in this sector in the regions. In 30-40 days, people earn good money. Currently silkworm breeding develops in 37 districts. Whereas in 2015 this was happening in only one district, at present this figure has reached 37 districts, and this geography should certainly be expanded. Thanks to these seedlings, we expect to produce 1,300 tons of silkworm in 2019. We should also ensure that the Sheki silkworm factory operates at full capacity.
Among agricultural produce, the biggest revenue is fetched by hazelnut production and the exports of persimmons. Therefore, we have paid very serious attention to these two areas. Hazelnut orchards were established on an area of 13,000 hectares last year. For comparison, let me say that the total area of our hazelnut orchards is about 30,000 hectares. So we have created more than a third of our orchards in a matter of one year, and this process continues. The goal is to establish hazelnut orchards on a further 40,000 hectares in the next few years. This process is under way. This has caused a great deal of interest among farmers and will be a good source of income. The government has taken on a major role here too, because all the necessary equipment, seedlings and technical actions will be provided by the state. The government buys that and makes available to farmers for free. Let me say again that the policy of the state is manifested quite well in this direction. We are also expanding the geography of hazelnut production. Currently, work is under way in this area in 13 districts.
Unfortunately, the almonds, which are an exported product fetching currency, are produced in very small quantities in Azerbaijan. We can’t even provide ourselves with that. Our almond orchards cover an area of only 1,000 hectares. A considerable part of them is in the Nakhchivan Autonomous Republic. However, the climate of the Absheron Peninsula, suburban settlements of Baku and other districts is quite favorable for growing almonds. Therefore, work should be carried out in this direction. Necessary measures have been taken, instructions issued, so this sector should also develop.
Olive growing. Unfortunately, we can’t provide ourselves with olives. New olive plantations will be established. We need to fully ensure collection. Sometimes olives remain on the trees or fall and spoil. Here, too, we need to adjust the entire work. Not only should we fully provide ourselves, we should also set up a large export potential.
Measures are being taken related to tobacco growing. We have already held talks related to the export of dried tobacco. Agreements have been reached. 3,500 tons of dried tobacco was harvested last year. Our goal is to triple this volume at the first stage. Azerbaijan should and can produce 10,000 tons of dried tobacco. In Soviet times, we produced 50,000-60,000 tons of dried tobacco. The area of its cultivation is also known – it is the same land. We simply need to help the farmers. We provide this assistance and then we have to ensure exports of tobacco. Serious steps are being taken to find new export markets. This sector also brings currency.
Work is under way on expanding pomegranate and persimmon orchards. I think we should work harder in connection with the viticulture. I have already issued appropriate instructions. The establishment of new vineyards, the efficient operation of wineries and quality improvement should create a single complex here.
I have enquired about statistics. Azerbaijan produces 20 million bottles of wine per year. Exports are very small. Our entrepreneurs get only 2-3 million dollars from wine exports. Therefore, we have taken significant steps to take Azerbaijani wines to world markets. We have participated in several international exhibitions and signed contracts. We conduct direct talks with friendly and partner countries, so that they allocated a quota for our wine in their markets and we could export it. Business people should also be more active here. It is in their best interest. But the current situation associated with winemaking should be seriously analyzed – by economic entities, the Ministry of Taxes and law enforcement agencies. A very strange picture transpires here. The annual production capacity of our wineries is 100 million bottles. Most of these plants were built in recent years. Major funds have been invested in them and modern equipment installed. How can it be possible for plants with a production capacity of 100 million bottles to produce only 20 million bottles of wine? Either the investor does not know the value of his money or the production is actually higher but it is accounted for. As the saying goes, there is illegal production. Therefore, we need to seriously examine this matter and, as I said, all relevant agencies should prepare a note for me. We need to restore order in this area. This is an area that can bring big profits. In the time of the great leader, in the 1970s, we picked 2 million tons of grapes. Farmers received a large income. Unfortunately, the Soviet leadership and the local leaders who want to please the Soviet leadership subsequently destroyed some of the vineyards. We are restoring them now. When restoring them, we must consider the entire chain. Otherwise we will set up vineyards but where will we then sell the products and process them? It is necessary to take these unified comprehensive measures. There should be clarity here.
We are also restoring tea-growing. We have now set up hundreds of hectares of tea plantations. There are new technologies related to tea-growing, which will facilitate the economic development of the southern zone. We must provide ourselves with quality tea and export Azerbaijani tea, because we mainly put tea in bags and export the tea we import from abroad. This is also good. In any case, it is better than imports. But we should try to ensure that our processing plants work on local products, and this applies not only to tea-growing. We must try to ensure that Azerbaijan’s exported products are produced from local raw materials. This is the goal.
Last year, significant steps were taken in the field of animal husbandry. New projects are under way now. From now on, we should develop animal husbandry only in closed conditions. This is more efficient and will enable us to make rational use of pastures, as they are used irrationally today. Their function should be changed. Work is under way wherever possible today. We need to engage these lands as well.
In short, issues related to agriculture require special attention. This is why I generally pay great attention to this sector because it means employment, development and exports. We need to diversify exports, especially due to agricultural produce. We must be realistic. Today, we can’t and will not be able to export technology. This takes time. We can’t export machinery at the desired level. We can’t even provide ourselves. We must pay attention to the real sector in which we can export something. Agriculture and processing industry have the greatest potential here, of course. We must effectively utilize our lands and diversify exports. I believe that thanks to the measures to be taken, we will be able to double the exports of agricultural produce. This will bring the country additional foreign currency and the rural population additional earnings.
Of course, all this work requires the infrastructure. Very important steps have been taken in this direction in recent years. I should also note that steps have been taken related to electricity. Gasification in Azerbaijan has reached 92 per cent. However, more than a thousand villages still have no yet. We need to know that. This process, the process of gasification of villages, is under way. It will be continued in coming years. In general, the level of gasification in our country has reached 92 per cent. I think this is a great indicator.
The construction of rural roads was carried out successfully last year. This year we plan to implement 40 projects. In other words, we will implement 40 projects, at least 40 projects of rural roads this year. Of course, the number of villages will be even higher, because each project links several villages. There will be at least 40 projects. The necessary funds will be allocated for this purpose. This means people’s comfort. At the same time, it is necessary for the development of agriculture.
The implementation of drinking water projects will be continued this year. In many of our cities, these projects have been completed.
Additional measures will be taken to strengthen our military capacity. Sufficient funds are envisaged in the budget. Military spend ranks first among our budget spending. And this is the way it should be. We live in a time of war. Despite the crisis and the fall of oil prices, we provide our army with modern weaponry, ammunition and equipment. Very important steps were taken last year. Our country imported the most modern weapons. This process will be continued in the current year. Today, the Azerbaijani army is among the strongest armies in the world both in terms of combat capability and equipment. We have the most modern weapons possessing high precision and destructive qualities. Some of them has been demonstrated, others no. They will be displayed at the right time and right place.
The creation of social infrastructure should be continued this year. I have already noted that more than 500 schools were built or renovated last year. Our goal is that there should be no schools in disrepair in Azerbaijan in 2017-2018. This is our goal. We divide these projects into two years – for this and next year. Funds are envisaged. The Ministry of Education has submitted new projects. In particular, we should build modular-type schools provided with all modern equipment in remote villages. They can soon be put into operation. The same applies to healthcare institutions. We have built or overhauled hospitals in almost all our cities. Where necessary, this work will be continued.
Environmental measures should be taken this year too. Polluted areas must be cleaned. It is necessary to establish modular type treatment plants. Such installations were built in hundreds of villages, and the process should be continued.
In the past few years, there has been an extensive tree planting campaign in the country. This work should be carried out in the current year too. But I think that from now on we should plant not so much ornamental as fruit trees. Therefore, in all our districts we will continue the process of planting trees according to climate. However, this should have a positive impact on the climate, the environment and the economy. Therefore, we should take appropriate measures to prepare seedlings. And where they are not available, we need to bring them from abroad and allocate funds for this.
I believe that 2017 will be even more successful in terms of tourism even though the number of tourists has increased by 11 per cent this year. I am sure that the measures taken this year will attract even more tourists. Of course, there are several factors here. First of all, there is no problem in entering our country now. All artificial obstacles have been eliminated, as has been reported here. Thanks to “ASAN Viza” and other services, tourists will be able to come to Azerbaijan easily. This will provide great support for the country's economy. Baku and the regions will experience a lot of excitement. Our tourist infrastructure should be ready for that. Entrepreneurs should consider this factor. It is necessary to pay more attention to the construction of two-star and three-star hotels. Where do tourists prefer to go? Where there is security, peace, a good attitude to foreigners, beautiful panorama, historical monuments, good service and good hotels! We have all this! We inherited some of them from the past and created others ourselves. Therefore, Azerbaijan is better known in the world. This is the goal of the international activities we are conducting. Every year we hold several prestigious international events. We organize global forums, humanitarian forums, forums on intercultural dialogue, economic forums, sports events, the European games, Eurovision, Formula 1 with an audience of 500 million people. There is no other such international event that would contribute to our tourism potential as much as Formula 1 does. The only other international event of this nature is Summer Olympic Games, but these Summer Olympic Games are held only once and require huge funds – billions of dollars. Formula 1 is held every year. The entire infrastructure is already there. The rate of tourism development, of course, should be maintained.
One of the speakers here touched upon plans related to “ASAN xidmət”. I should note that we will continue to expand the geography and scope of “ASAN xidmət” because the project has already proved effective. It is highly appreciated by the people. Therefore, transparency in all government agencies and the public sphere should be the same as in “ASAN xidmət”.
This year we have a lot of work associated with the creation of the Southern Gas Corridor. This year will be decisive. We have enough of our own funds to finance this gigantic project. International financial institutions also allocate financial resources for this project. Not because they have a very good attitude but because it is an effective project. International financial institutions are also looking for projects that bring money. The Southern Gas Corridor is one such project. This project is economically viable. At the same time, it will ensure the interests of many countries, first of all Azerbaijan, from the point of view of energy security. Therefore, if someone thinks that we will have problems with the implementation of this project, they are wrong. Why do I say that? I know that some political circles, in an effort to take advantage of the situation in connection with the fall in oil prices, they say, are saying today that Azerbaijan has less money, that Azerbaijan is in a difficult situation and has no money to finance the Southern Gas Corridor. So let's put pressure on Azerbaijan, put forward demands, secure our own interests and provide a loan to Azerbaijan with this condition. This picture was observed last year. Those were cheap and unworthy actions, so to speak.
First of all, no outside force can lure us to a project undesirable for us. This is first. The main thing for us is the interests of our state and nation. Second, no-one can dictate anything to us. Recent history has shown that all such efforts are in vain. Those who try to blackmail us in connection with this situation simply have no respect for themselves. They are losing what little credibility that was left. We will implement the Southern Gas Corridor and all other projects. Again, this project is necessary for us and for Europe. This project will provide energy security. Therefore, such cheap blackmail is completely irrelevant. However, I should also note that we are working not only with European but also with Asian financial institutions. And we are working even more efficiently are receiving money in an easier way. For example, the Asian Development Bank allocates heavily for this project, and in a short time. The Asia infrastructure bank, in which we are among cofounders, has also allocated large sums in a short time. This gas will go to Europe, not Asia, but we are receiving the funds from Asia. Therefore, if someone believes that we are in a difficult and desperate situation and they can be put forward unreasonable demands, this is a completely wrong approach. No-one can put forward any demands to us. If they are interested, let’s collaborate, if they don’t, we don’t need that either. We will implement the Southern Gas Corridor in a timely manner.
I would like to say a few words in connection with the substantive work that will be done in the field of transport. As you know, Azerbaijan’s role in connection with the construction of the Baku-Tbilisi-Kars railway has been completed. We have resolved all the issues. We hope that the project will be implemented this year. We have done best, invested, provided loans of more than 700 million. So we have done everything necessary and look forward to the completion of the project. Along with this, we have completed all the tasks in connection with the North-South project. We did everything we had promised. We have extended the railway to the border with Iran, built a bridge and took additional measures. We are ready to participate in financing the project this year and have stated about that. Currently there are talks on how Azerbaijan can mobilize its financial resources for the full implementation of the project. This year the construction of the first phase of the Alat international seaport should be completed. All infrastructure and construction works, including equipment, are included in the state investment program and will be implemented. Project contractors should also realize their responsibility. During the year, I had serious comments on the matter. Members of the government are aware of that. Some parties treat this issue very indifferently although the government allocated funds. These funds were not fully utilized in 2016. This is unacceptable. Therefore, if they do not realize their responsibility and treat the implementation of the state order indifferently, they should know that they will have no state orders in the future. Therefore, the first phase of the Alat international sea port must be provided with all the equipment and cranes by autumn of this year. Otherwise, they will only have themselves to blame.
We successfully held the "Year of multiculturalism". Azerbaijan has showed the world again that multiculturalism and its ideas live and must live on. There should be more countries such as Azerbaijan. Last year and in previous years, some pessimistic thoughts were expressed in connection with multiculturalism. Unfortunately, some world politicians have also used very dangerous expressions related to multiculturalism. I do hope that this area will also experience a turn for the better and the international community will become increasingly aware that there is no alternative to multiculturalism on the planet. Azerbaijan, for its part, will certainly continue its efforts in this direction.
This year Azerbaijan will host the Fourth Islamic Solidarity Games. This is also a very important international event. We will host solidarity games of the whole Muslim world. In 2015, Azerbaijan held the first European games. In other words, one country and one city are hosting European and Islamic Solidarity Games in a matter of two years. This is not only a sporting event. If someone believes that Islamic Solidarity Games are just a sporting event, they are wrong. This is a major political event, a major cultural event, an important social event. It showcases Azerbaijan yet again as an independent country committed to its values, Islamic values, as well as a modern state. It will serve as a response to those who conducting a smear campaign against Islam. They are trying to form an opinion about Islam, as if it was a backward civilization. Using their own capabilities, the media and public opinion, and through various nongovernmental organizations, they circulate the opinion that Islam poses a threat to the world. They identify Islam with terrorism, condone Islamophobia, divide peoples by religion and show disrespect for Muslim refugees. The leaders of some European Union member-states say “Stop Islam”. Some say that they are ready to accept migrants, but not Muslims. This is fascism. We are well aware and have not forgotten where fascism originated. Fascism did not appear in the Islamic world. Therefore, Islamic Solidarity Games are of great importance. By hosting these games, we will once again demonstrate our strength, capabilities and commitment to our religious values. We will try to unite the Islamic world. Those trying to divide us, sow discord in our midst and set us against each other should not achieve their goals.
Azerbaijan is a country enjoying great respect in the Islamic world. Look at the level of respect we enjoy with the leaders of the Organization of Islamic Cooperation. Muslim countries that sometimes do not get along too well with each other treat us with great respect. Why? Because we are conducting a sincere, correct, fair, principled and courageous policy! This is our policy.
Taking all this into consideration, I declare 2017 a "Year of Islamic solidarity" in Azerbaijan.
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