Baku, May 11, AZERTAC
President of the Republic of Azerbaijan Ilham Aliyev has today received a delegation of MEDEF, Movement of the Enterprises of France.
Welcoming the guests, President Ilham Aliyev said:
- I am very glad to see you. I hope that your visit to Azerbaijan has been interesting. Many companies you represent have been working in our country for many years. In other words, we are familiar with each other.
I remember the meetings held with the MEDEF in France, as well as in Baku. This is the fourth meeting, which is evidence of regular contacts between us. This is very good, because we have a joint and common interest in developing the cooperation between our countries in all fields, including the economic sphere. Of course, our relations are underpinned by political communication. We are very pleased that the relations between France and Azerbaijan have a good history. It is a history of active collaboration and partnership.
You probably know that President Hollande has visited our country twice and President Sarkozy once. I have paid several visits to France – state, official and working. There is a very active political dialogue and consultations between us, and these ties create conditions for a broader economic cooperation. We have accumulated extensive experience in various fields. In fact, this cooperation began with the oil and gas sector. The biggest French investments, of course, occurs on the oil and gas industry. Of course, given the priority of economic diversification, we would like to see more investment in other sectors. I am sure that after this visit we will have more projects which can be implemented. Our economic cooperation is already quite diverse and covers the areas of transport, air transport, public transport, metro, space, etc. French companies are helping us create a space industry.
We have put our first satellite into orbit. You are now preparing a second satellite. We look forward to launching cooperation in the agricultural sector. A number of small projects have already been started. This has great potential and is one of Azerbaijan’s top priorities in expanding export opportunities.
We have good cooperation in the humanitarian sphere and in the field of education. I hope you can visit the French Lyceum in Baku. This high school is a good example of our partnership. We are also working on the creation of a joint university. There is also a beautiful French Quarter being created within the White City. It is reminiscent of Paris. If you get a chance, go there, it is an interesting place, especially when you consider that this area used to be called the "Black City" because of the oil refining facilities built there a hundred years ago. The entire surrounding area was contaminated. Today, this project is called the "White City." It has a symbolic name. A large and even a huge part of the project envisages the creation of the Paris Quarter. Of course, the humanitarian sphere does not create any direct business activity. However, it plays a very important role in promoting friendly relations and creating mutual understanding and partnership.
I hope that in addition to cooperation in the fields of energy, transport, aerospace industry and other traditional areas I have already mentioned, we can focus now on the sectors that are a priority for Azerbaijan. In other words, we expect to reduce the dependence on oil prices, the oil and gas sector and establish a sustainable economy capable of providing a good standard of living for our people. We are working in this direction, carrying out economic reforms and reforms to increase employment opportunities in Azerbaijan. In recent years, our economic achievements are quite impressive, I think. We have resolved many social problems, reduced the poverty rate to 5 per cent. Unemployment is practically on the same level. There is a favorable investment environment in our country. Over the last 15 years, investment in excess of $200 billion has been made in Azerbaijan. Half of this investment is foreign. It is true that the bulk of foreign investment has been made in oil and gas sector. Today it is necessary to pay more attention to other areas of the economy. The situation with the oil price has certainly had a negative impact on our economy. This is mainly linked to the revenues obtained previously. And now when the oil price has fallen three to four times, our revenues have decreased three- to fourfold accordingly. We want to compensate for this by more robust reforms and greater attention to the non-oil sector. Currently, this sector accounts for about 70 per cent of the gross domestic product, and I believe that it is good evidence of diversification. We still have much work to do. Our plans for 2016 are associated with stabilization. This is already happening.
The financial situation is stable now. At the same time, budget revenues are at a good level. The 2017-2018 period will be one of very active development of the non-oil sector. State and private investments are already planned. The priority, of course, will be infrastructure projects. We also expect foreign investment in areas of interest to us. We must find a balance between the interests of investors and those of our country. Until now, I think we have coped quite well with this task. However, this year is one of a new economic situation. As I have repeatedly pointed out, we have entered a post-oil period. We can’t say that the petroleum era is over. We simply have to leave aside this factor and shape our economic strategy as if we did not have oil and gas.
Of course, the experience of developed countries not rich in energy resources, including France, is a good example. I am confident that dependence on oil and gas production in Azerbaijan will not be as noticeable in the coming years. In short, I want to thank you for visiting our country with such an impressive delegation once again. This is a good indicator of the interest of French companies in our country. We are also interested in working with French companies. I do hope that you will have very interesting meetings, as a result of which we will have new projects and contracts, and our cooperation will rise to a new level. Once again, welcome!
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French Ambassador in Azerbaijan Aurélia Bouchez and deputy Director General of Suez Marie-Ange Debon made speeches.
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President Ilham Aliyev said:
We are working to create a more attractive business environment in Azerbaijan, because our country was very poor after regaining independence in 1991. The situation was completely out of control. There was political crisis and civil war. Besides, there was Armenian aggression and the occupation of our lands – those were very difficult and tragic moments. We had to build a state. The economy experienced a recession. Inflation exceeded one thousand per cent. There was stagnation in industry. The country was isolated. No-one knew anything about Azerbaijan. In short, the only way forward was to declare the country open to foreign investment. It was the only way.
In 1994, our government signed a contract called the Contract of the Century, which discovered Azerbaijan to the world. This allowed us the opportunity to attract investment and stabilize the economy. Year 1996 was the first year when recession stopped. The country embarked on a period of economic growth in 1996. The most rapid growth was observed in the mid-2000s. This was mainly due to increased oil production and the prices on it. We spent the money to create a modern infrastructure, because we needed that. We create a social infrastructure. Over the past 10 years, we built more than 3,000 schools and over 500 hospitals in Azerbaijan. All these are social projects. Power plants were built. Over the past 10 years, we built more power generation facilities than in all previous years. Currently we export electricity. Gasification in our gas-rich country was just at 20 per cent. Now the figure is 90 per cent. Whereas we imported gas, we are exporting it now.
With regard to the road infrastructure, we have laid thousands and perhaps even more than ten thousand kilometers of roads. All this became the basis for development, reconstruction and the activities of local and foreign investment companies. Now is the time when we should pay unprecedented attention to the non-oil sector. We must make our country more attractive to foreign investors. Therefore, our accelerated and deep economic reforms pursue this goal.
What obstacles are foreign companies interested in investing in Azerbaijan faced with? What are the obstacles in the business environment? What are the customs regulations and taxes? What are the other obstacles to investment by foreign and local companies? We have made serious decisions in this regard. They are already proving effective. For example, we plan to limit the audits conducted by public institutions in the private sector. whereas in the first quarter of 2015 we had 20,000 audits, the figure dropped to just over 30 in the first quarter of 2016. Improving the business environment, transparency, the serious decisions made, the rating indicators in the “Doing Business” report of the World Bank ... According to the estimates of the Davos World Economic Forum, Azerbaijan's economy is ranked in 40th place in the world in terms of competitiveness. In short, some progress has been made. And now we have to do even more. Of course, the energy factor will continue to play an important role. Currently, we are implementing the Southern Gas Corridor project, which that requires huge funds. We should spend billions of our funds on its implementation. However, it is a long-term strategic project. At the same time, are important role is played by the projects that will create suitable conditions for business activity.