I am very happy that the two –year work yielded good results. More than 340 thousand workplaces have been opened, a number of new enterprises, factories and social objects have been established over this period in Azerbaijan. All this serves the people of Azerbaijan, making our country stronger. All these accomplishments are based on the program of serious economic reforms begun in mid 1990s.

The large-scale reforms initiated by the national leader of our people Heydar Aliyev, continue to yield fruits. At the same time, our successful oil strategy has made its great contribution to development of Azerbaijan. Now we have our financial situation improved. The ongoing large-scale improvement woks in the country are also based on the Heydar Aliyev’s oil strategy realized since mid 1990s. Azerbaijan already delivers its oil-gas potential to the world market. Two giant pipelines will be constructed this year to export our natural resources to the world markets. Azerbaijan leads the world in the economic growth rate. Over the last year, the Gross Domestic Product increased by more than 26%, industrial production by 33,5% and population’s incomes by 27%. Of course our budget is growing, and should do so. The 2006 budget is already $4 billion. It is approximately 70% more than that of 2005, and this creates new possibilities, new financial sources for us. We have to use this effectively. We have to direct all our efforts towards development of our people, our Motherland.

The Program of socio-economic development of regions was adopted two years ago. This Is very comprehensive document. It covers the work to be done in all the economic zones of the country, and priorities. But life does not stand still, new tasks, new problems appear. As you all are aware, in the framework of my regular visits to regions, zonal conferences take place, and as a follow-up to each of them, necessary plans of actions are prepared and Executive Orders are signed to promote development in those regions. In other word, serious changes have been made in the regional development Program. At the same time, the rapid rise in Azerbaijan’s economic potential, and ongoing construction boom, have increased our need for energy. To satisfy this need, new power plants will be constructed in various regions in 2006 that was not envisaged in the Program. In other word, there are a lot of problems we could not envisage two years ago. Now, however, they are being included in the Program and realized. Besides, a meeting dealing with development of villages and settlements around Baku has recently taken place, and relevant Executive Order and plan of actions will be signed very soon. The fact is that our regional development Program covered all regions, but Baku suburbs. We should do consider the 700-thousand population of the villages and settlements around Baku. This program also requires serious, huge financial resources. And we are able to afford it.

Successful economic policy being pursued in Azerbaijan, realization of our oil strategy, strengthening of financial discipline, and ensuring transparency, allow us to have our financial resources being rapidly increased. If we look over our budget revenues, we can see that our budget has grown from $500 million to $4 billion over two last years, and this is nor a limit. I have already charged the government and Finance Ministry with the job to define basic parameters for the next year budget. The next year budget should also grow drastically. It is possible, and must be ensured due to development of non-oil sector. We spend very efficiently the assets accumulated in the State Oil Fund. It is not difficult to spend them. But we must manage them carefully spending on solving the most important problems. In the first place, we should use other resources, and our budget should and will be drastically replenished with the non-oil sector and tax incomes.

Our budget should be growing every year until 2008. It will allow us to successfully realize our infrastructure projects, modernize our country, create new powerful economy and strengthen our industrial potential.

We have to use effectively the oil factor. There is a need to create a long-term industrial development program and powerful industrial complex. We had it in the past. We had it in the Soviet times. But most of those enterprises have become out of date, and do not meet contemporary requirements, and thereby creating the need for a modern industrial potential, and we will do that. I do not doubt. All conditions to realize it are available. First of all, the government has a deliberate economic development concept, program and political will to do so, and there is public solidarity on the matter. Socio-political situation in Azerbaijan is very favorable for implementation of both political and economic reforms. A class of entrepreneurs has already been created in Azerbaijan, and as you know, development of entrepreneurship is one of our most important priorities. The number of businessmen has significantly increased in Azerbaijan over the last two years. It is ensured by both the government’s care and assistance and practical measures. You are aware that to assist the entrepreneurs for their businesses to yield good results, preferential loans are subsidized from the state budget, with their amount increasing every year. This year it is about $100 million. These funds will be given to businessmen that will lead to opening new jobs, enterprises, plants etc. Simultaneously, solid infrastructure should be created for all-round development of regions, but it cannot be done by an entrepreneur. An entrepreneur cannot construct roads, power plants or airports. He is able to do that but it is not his direct responsibility. It is the responsibility of the government. For the time being, new airports, new roads and schools are being constructed in various regions of Azerbaijan. About 400 schools were built and repaired last year. We have started construction of hospitals. It has been a very backward filed for years. Beginning from 2005, foundation stones for medical and diagnostic centers to meet the modern standards were laid in various regions of Azerbaijan. In a year, well-equipped medical centers will be constructed in all regions of Azerbaijan. All these facts mean regional development. Here is our task.

Making our country stronger and richer, ensuring all-round development of Azerbaijan, better life and higher salaries and pensions for the people of country, strengthening Azerbaijan’s position in the region are the only goal all those plans are based on. Today’s conditions to achieve this are also very favorable. Azerbaijan is starting the use of its oil and gas potential. The last-months energy crisis demonstrated increased significance of Azerbaijan. We should take advantage of that. We should take advantage of our energy potential. At the same time, Azerbaijan is already a part of the transport corridor connecting Asia and other countries to Europe, i.e. we are already a transit country, and not only in terms of transportation, but also of delivery of energy carriers from Asia and other countries to Europe.

Development of agriculture, in fact, constitutes the basis of the regional development program, because overwhelming majority of population in regions lives in villages and is engaged in farming. We are trying to help this field too, and creation of the Joint Stock Company “Agro-Leasing” was a very important step forward. It has provided villages with agricultural equipment, and fertilizers. In other words, every condition is being created for farmers. They get loans, equipment, fertilizers for them to work better.

In a word, all the work done over the two years demonstrates that the general trend was chosen rightly, priorities were set rightly, and there a lot of positive facts as for implementation of the Program.

However, there are problems, shortcomings, as well, and we should timely discover and take relevant measures to eliminate them, all provisions in the Program until 2008 to be implemented.