Ladies and gentlemen!

Here today, I have got acquainted with the exhibition of products made in Azerbaijan. Such exhibition is organized every year on the sidelines of this event. It gladdens me a lot. I am happy that Azerbaijan is already manufacturing high-quality goods, and exports them, including to the European Union markets. On the one hand, Azerbaijan is satisfying its own demands, on the other one, the country is increasing its export potential that is of great importance in terms diversification of the economy.

Four years ago today, on 11 February 2004, the “State Program of Socio-Economic Development of Regions of Azerbaijan” was adopted. I presented the first outline of the Program as early as 2003, on the eve of the presidential elections. It was important part of my economic program. It was drawn up and approved 3-4 months after the elections. The State program of socio-economic development of regions played a tremendous role in all-round development of the country’s economy in the past four years. The economy of Azerbaijan has increased by 96 percent for that period. We have managed to double our GDP for the past four years. High economic growth rates are expected in 2008 too. The per capita GDP in 2008 is expected to reach $4500 against $3700 in 2007. It shows that economy of Azerbaijan is growing very rapidly and that such progress has a positive impact on all spheres of our life.

Economic progress, certainly, promote improvement of people’s well-being. Currency value is growing in Azerbaijan. Today, it makes up $7.3 billion. This sum will most likely increase, at least, twice as much in 2008. The yearly increasing budget spending will allow us to cope with all the tasks the country set itself. Azerbaijan’s budget has increased 10-fold in the past four years. It is probably an indicator having no analogues. This year, our overall budget is $12 billion. Further supplements to the budget are not ruled out at a certain stage. In other words, the economy of Azerbaijan is growing successfully in all directions.

The main goal of the State program of socio-economic development of regions was to ensure intensive economic growth in regions, the positive orientation of the processes taking place there, improvement of people’s standard of living, services sector and infrastructure.

In 2003, we stated that 600,000 new jobs were needed to reduce poverty and unemployment in Azerbaijan in five years. Over the past four years alone, the number has already reached 650,000, of which 480,000 are permanent. It means jobs for people and strengthening local production capability. In turn, it promotes development of non-oil sector in Azerbaijan. The economy of Azerbaijan is fully built on free-market principles. This is what promotes development of private sector in the country. Azerbaijan has pursued right policy in this direction -- opening new jobs has, of course, contributed to strengthening of our country. I am sure this course will be continued. Although we planned to achieve that in five years, we have done it in four, and I am sure the problem of unemployment will be completely eliminated in Azerbaijan.

At the same time, the program of regional development has greatly contributed to poverty reduction. Azerbaijan’s economy in large depends on the oil and gas factor, that is natural because production of oil and gas has substantially increased over the past years. With growing price of oil, this segment of our economy is becoming weightier, anyway. However, it is impossible to create a lot of new jobs in this field. It is possible just in regions, in the non-oil sector. Reduction of poverty was directly linked to the performance of the State program of socio-economic development of regions. We are performing the program jointly with the World Bank, and have achieved great success in this area. Poverty in Azerbaijan has reduced from 49% to 16% in the past four years. On the one hand, is proves that economic policy in Azerbaijan is right. Broad economic possibilities, first of all, oil revenues, are distributed fairly in Azerbaijan. There’s no process of stratification in Azerbaijan like in some other oil-rich countries, although in free-market societies it manifests itself in one or other form. On the other hand, drastic decline in poverty indicates that natural resources, the whole economic potential of Azerbaijan and the policy being pursued by the state, aims to improve living standards of the neediest people.

To be honest, poverty reduction is of much more significance to me than economic indicators, because cause of these indicators is clear - it is both oil sector and, of course, the successful implementation of economic reforms.

Above all, we must think of people, we are living for the people. We must do everything possible for the people of Azerbaijan to live better, so that there would not be poor strata and jobless in Azerbaijan. And this process is already underway.

We can also see serious drop in number of migrants from Azerbaijan. Or, rather, those who once left their homeland are now returning, because of growing possibilities and standards of living in Azerbaijan. So, prospects of our further progress are evident.

We are building a very solid economic foundation for the country. The years of hardship and crisis for Azerbaijan are past. Henceforth, we will go forward only. In order to achieve overall progress, the program of socio-economic development of regions must be continued without fail.

The term of the program ends in a year. A study shows that 98 percent of its provisions have been completely or partly performed. We can say the program has been performed for four years. Especially, given that it was considerably supplemented - I alone signed 13 orders providing supplements to the program. Of course, we can see that the program adopted in 2004 and reality is different. Taking the additional measures into account, one can make sure that the volume of the program has even increased requiring more funds to be implemented further.

The government and all local governing bodies have been ordered to prepare and submit next 5-year program. I have repeatedly told of it -- the program should deal with problems of every single village. We must do everything possible for all the problems concerning the people in Azerbaijan to be resolved in 2009-2013.

As you know, we are working in various directions. First of all, it is, of course, state policy, state investment programs, which are now being performed. The state investments will be nearly $3.5 billion this year. It is enough for implementation of main infrastructure projects. With Azerbaijan’s yearly growing financial possibilities, we will increase the amount of state investments in the coming years. It will give a powerful impetus to development of entrepreneurship in the country. Any infrastructure project promotes development of entrepreneurship. The state supports businessmen - I provide both political and economic support. Every year, the National Fund for Entrepreneurship Support allocates huge funds to this end. The volume of loans to be lent this year will be 95 million manats.

The progress achieved in regions, and the exhibition arranged here today prove that the loans work. The greater part of the businesses presented at the exhibition came into being exactly thanks to the loans, as it is impossible to start business without seed capital. So, the state takes on this role. First of all, businessmen should be provided with political support, they should see that society and executive bodies have a positive attitude towards them. Implementation of infrastructure projects such as construction of power transmission lines, water and gas pipelines and roads, creates favorable opportunities for development of entrepreneurship. At the same time, the government provides businessmen with loans on preferential terms. Besides, the recently established State investment company will also be actively involved in this business.

I repeatedly said, and want to repeat today that we need to build our economic potential on the base of the non-oil sector. We should strengthen this sector.

We are successfully implementing all our global projects -- oil and gas projects. Historical milestones have been achieved in this area over the past four years. The Baku-Tbilisi-Ceyhan oil and Baku-Tbilisi-Erzerum gas pipelines have been commissioned, and major Shahdeniz field has started producing gas. We have performed all the tasks we set ourselves with respect to the energy sector. I can say we’ve achieved it at a 100% level. We have ensured successful development of Azerbaijan for decades to come. We took practical measures to provide better life to the people of Azerbaijan. Wages and salaries have been raised several times for the past four years. The minimum wage has risen 6.7 times over these years. However, it cannot fully satisfy us, but the momentum is positive. Of course, we will continue to effectively use our great and powerful energy potential. To date, we have utilized it quite effectively. We ensured transparency of revenues. Azerbaijan`s joining the Extractive Industries Transparency Initiative was a right step, and we can see its real results. Oil revenues are transparently accumulated in the Oil Fund with the international audit being carried out. And the money is spent in a transparent manner.

Along with the budget package, the parliament also approves the transfers from the Oil Fund to the budget. The people of Azerbaijan take part in distribution of revenues through its representatives in the Milli Majlis. It must be exactly so. These assets, natural resources belong to the people, and it is exactly up to the people of Azerbaijan to decide on where to channel the money.

I am sure we will maintain this high momentum in the years to come. We will ensure development of Azerbaijan and make efforts to successfully continue global projects. Developments taking place in the regions are positive. Azerbaijan`s initiatives in the energy and transport sector bring benefits to our country and people, and contribute to development of friendly and neighboring nations.

As you know, construction of the Baku-Tbilisi-Kars railway opens up a new stage in development of transport sector. Azerbaijan will become a transit country. This project is of political, economic and regional importance. All our global projects were put into practice although it was not easy to do so as sometimes we were facing pitfalls. However, the resolute policy and the will of the Azerbaijani government and people, as well as Azerbaijani people`s support of our initiatives is what makes it a reality.

Of course, global issues extensively strengthen Azerbaijan’s positions in the world as well. They increase its influence and comprehensively strengthen the country. At the same time, this is the aim of our today`s forum - we need to analyze the events taking place in the non-energy sector, make decisions and speak about our future plans.

We have rich natural resources, which we began to export. At the same time, we must necessarily develop the non-energy sector: local production, production of import-replacing goods, putting into operation of new plants, factories, opening of new jobs, development of regions, continuation of infrastructure projects. At the same time, we have to solve social problems. There are 4500 schools in Azerbaijan. We have built 1200 schools for four years. This work will be continued. Tens of new hospitals, medical centers have been built. State investment program for 2008 envisages construction of new hospitals.

Indeed, we live in the conditions of the market economy. We know that in some cases reforms are going on with difficulties in transition countries, creating problems for people. Measures for transition to the market economy sometimes negatively affect people`s living standards. We pursue a strong social policy to prevent all these things and not to go through negative experience of other countries. Our budget is investment- and socially oriented. Annually, salaries, pensions are raised several times a year. Social objects are being constructed. Along with huge infrastructure projects, the state investment program envisages creation of social infrastructure. This is the path leading us to the happy future. Energy and non-oil programs are being successfully implemented. Over these years, many state programs covering all spheres of life have been adopted. All these programs are based on real possibilities. No program has been adopted just as a slogan. Each of them is based on the mechanisms of implementation, financial resources and powerful state policy. Only in this case we can achieve a success. All the projects started by us have been implemented, all our promises were fulfilled. There is no question we cannot solve. There is no promise we cannot fulfill. All promises are fulfilled in a timely manner. It creates a good atmosphere in the society.

Our society is stable. There is no discrepancy in the society concerning the issues facing Azerbaijan in terms of domestic, foreign, economic and social policies. We know where we are going to. We modernize our country, build a powerful state. Azerbaijan must become a modern and strong state. We have all possibilities for this, including economic and political possibilities, people’s intellectual potential, public policy as well as the will of the state and horizons of evident future. All this, in aggregate, fosters rapid growth of the country.

I can say with the sense of pride that the economy of Azerbaijan has been developing at a pace, which has no analogues in the world. No other country in the world has achieved GDP doubling, 10-fold increase in budget and 3-fold poverty reduction in the past four years.

It is not accidental that international financial institutions accurately evaluate economic growth in Azerbaijan. The world economic forum in Davos ranked Azerbaijan the 66th in its global competitiveness report. Azerbaijan takes 61st place in the Goldman Sachs`s report, ahead of all CIS countries. These are the reports of serious international organizations, they just show the reality. It makes us happy. What makes me really happy is that our policy is seen in real deeds. It manifests itself in improving people`s living standards, developing our cities, strengthening our country and increasing economic development in Azerbaijan.

Today, this forum is attended by heads of all local authorities, ministers, businessmen, foreign representatives. This event is the biggest in Azerbaijan. Annually, it discusses the work done over the past period, and plans for the future. Coordination of work of all bodies is quite important. We - ministries, state-run companies, local authorities, businessmen, activists and offices of international organizations in Azerbaijan - need to do this work together. From this point of view, the present conference is unique.

All the work done is satisfactory. Of course, Azerbaijan, as any country, has problems, which will be addressed here today. The goal of regional and other programs is to resolve them in order for fair society, a law-based state, social justice, political freedoms and democracy to be fully established in Azerbaijan. These are our outstanding tasks. We will speak about them and make practical decisions to perform them.

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