OFFICIAL NEWS
OPENING REMARKS BY PRESIDENT ILHAM ALIYEV
Over this period average wages rose 22%, and population’s incomes 21%. It shows the population’s active incomes have increased, and at a fast pace.
Macroeconomic indicators are the key factors to assess economic status of every country. Of course, the existing level of macroeconomic indicators has a considerable impact on the processes taking place in the country. Our goal is indeed that our successful economic development has an effect on every citizen and every family in Azerbaijan.
In general, if we take a look at economic development in other countries, we can see that Azerbaijan is a leading one in economic growth rate. Not only we say that, but also the world’s most influential financial structures confirm that. No any other country in the world has 22% economic growth in 9 months. This growth will be even faster in the years to come.
The next year budget has already been discussed; the budget expenditures will reach $4 billion against $2,2 billion in 2005, $1,5 billion in 2004, and $1 billion in 2003. It has grown 3-fold over the last three years. Where else did the things go so fast? Of course, on one hand it displays that the economic reforms started in Azerbaijan in 1990s are yielding fruit, on the other hand the continued economic reforms have led to the today’s real outcomes.
The budget spending rose approximately 70%. Of course, our budget’s growth will do contribute to every field of our economy, and help with tackling social problems. We pay great attention to this issue. As you are aware, there are still quite a few people living in poverty in Azerbaijan. But the number of the people living under such conditions yearly decreases. It fell from 49% to 40% in the beginning of the year. Most likely, this number will be even less by the end of the year. Yet, no poverty or unemployment should exist in such country as Azerbaijan. Implementation of the regional programs will provide that. Since the beginning of 2005, 133 thousand jobs have been open in the country, and the total number of jobs opened over the last two years is 311 thousand. This tells that if 311 workplaces have been opened in 2 years, then the program to open 600 ones in 5 years we once declared will be realized. Opening new jobs has both social significance and the great economic one. Opening of new workplace means opening of new factory, plant or any other enterprise. Industrial production in on the rise, more attention is paid to social problems; necessary measures have been taken for development of agrarian sector. The very important step was founding of the company Agroleasing. The Agroleasing is already delivering a large amount of agricultural equipment, and is going to deliver fertilizers. Along with the loans assigned to businessmen and farmers, this will ensure intensive development of the agrarian sector.
As we are aware, a great attention is being paid to development of entrepreneurship as Azerbaijan is the country following the principles of market economy. The greatest part of the gross domestic product in Azerbaijan is formed due to the activities of the private sector. The State and Government is doing all possible for enterprise development. On one hand, the amount of preferential loans increases – next year it is expected to reach $100 m, on the other hand, governmental and president’s personal support will certainly lighten their work. Cutting down on the unlawful checkups and other negative facts can also be observed.
Reinforcing of infrastructure is also an extremely important factor of economic. Great work is being done in Azerbaijan to this end. New motor roads, rural roads are being constructed; power supply has been considerably improved. I had it confirmed during my numerous visits to regions. Wherever I am I certainly show interest in these issues, and hear that no power supply problems have been in regions, villages since the beginning of the year. Our aim is avoid this problem in the winter season too. Important steps, urgent measures have been taken to this end. Installation of small power stations has already begun. Over 50 stations will be constructed by the end of the next year. Thus, along with other stations to be constructed, the need for electric power in Azerbaijan will be met.
Our own gas production in on the rise, at the same time the amount of associated gas from Chirag and Azeri fields is increased. Also rising is import; this problem should find its solution too. The main aim to found the Joint Stock Company Azeristiliktedjhizat was restore heating system in Baku and other large cities of Azerbaijan. We all know that the situation in this filed has been in a sorry plight for many years. In many places, the heating system was completely demolished, and in some cases, lodgers did cut the heating batteries off and threw them out. At present, we have all this being restored. The first funds have already been set aside. Still more funds will be allocated next year. The goal set is to reconstruct heating system in all the high-rise buildings in Baku. Then, it should be done in other cities.
The Azerbaijan’s successful oil strategy is also being implemented. The successful construction of the Baku-Tbilisi-Ceyhan oil pipeline bearing the name of its initiator Heydar Aliyev is our great achievement. This historical project, the work done over the last years has turned this legend into reality. In a few months, we will celebrate the commissioning of the Baku-Tbilisi-Ceyhan oil pipeline. Though the pipeline has not been put into operation, Azerbaijan already gets large oil revenues. To date, over $1 billion have been accumulated in the Oil Fund. The amount of our currency reserves is the same. The amount of the funds will rise in the years to come. It is very symbolic that the revenues from oil production and operation of the Baku-Tbilisi-Ceyhan pipeline are used to fund the construction of water pipeline. As you know, a new water pipeline will be laid from the Northwest region of the country to Baku. This question was widely discussed recently.
Preliminary works have already been started, and I hope the water problem will be completely solved in two years. This is the result of concrete deeds, the result of Heydar Aliyev’s oil strategy, and that of the ongoing all-sided development initiated by him in Azerbaijan. The oil pipeline, on one hand, will reinforce our economy, and on the other hand, it will contribute to solution of the social problems. I have already mentioned that solution of social questions is our most important task. Repeatedly rising minimum wage is the demonstration of our intentions. In October 1 the minimum wage reached 150 thousand manats. Yet, we cannot be completely satisfied with this as the 150 thousand manats is not the money people can duly live on. We know that. We are going to further consider the question of minimum wage rise. While doing so however, those of macroeconomic stability should certainly be taken into consideration. Drastic wage rise may lead to inflation; in fact, it has already led. Inflation in Azerbaijan had never exceeded 2-3%. It reached 15% in the last years. At present, we have it reduced to 12%. One of the main reasons for such a situation is rapid wage rise in Azerbaijan. We are and will be doing so as citizens of Azerbaijan should have normal living conditions. But all other factors should be taken into account. Students’ stipends have been raised 2,5 times; other social payments have been increased. A new pension system will be used beginning from 2006. This is very progressive system, but of course, this sphere also needs reforms.
Necessary steps are being taken to solve the problems of our citizens with hardest living conditions, the refugees and internally displaced persons. As you know, before the presidential elections I declared that no a single encampment should leave in Azerbaijan. Much work has been done to this end, and today, we will probably learn of it. Temporary provision of refugees and IDPs with normal conditions is our common task, our duty.
Army spending is growing with growing budget. Our country is at war, and this sphere requires more attention. This growth concerns some circles, in particular, foreign circles since in 2006 our military expenditures will make up $600 m against $170 in 2004 and $300 m in 2005. But we should deal with this issue in general context. If our budget doubles, all other spending should also double. If our budget reaches $5-6 billion then army spending and others will be increased proportionally. Nobody should be concerned of this. This is our sovereign right. We are strengthening our defense potential. We intend to achieve peaceful solution to the Armenia-Azerbaijan, Nagorno-Karabakh conflict that is confirmed by our policy.
The fact hat Azerbaijan has been committed to peace talks for over 10 years, held negotiations, indicates that we prefer peace talks. At the same time, strengthening of the army’s potential is also of paramount importance. We are and will be doing so in the future. Necessary negotiations are being held to settle the Armenia-Azerbaijan, Nagorno-Karabakh conflict. Unfortunately, the negotiations are still unsuccessful, but going on in a positive manner. Our stance remains the same: the Armenia-Azerbaijan, Nagorno-Karabakh conflict should find its solution only in the frameworks of the international law norms and territorial integrity of Azerbaijan. Other ways are out of question at all.
In other words, I would like to repeat that our politics in all fields yield fruit. Problems exist, quite a lot. We are aware of them, and tackling them. Today’s meeting is to allow us to have the information on the work done. We are also to discuss what steps we should take to eliminate the existing problems.