Baku, October 8 (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 in nine months of 2014 and objectives for the future.

Opening speech of President of the Republic of Azerbaijan Ilham Aliyev
- Today we will discuss the socioeconomic results of the third quarter and the first nine months of the year. Important steps were taken in the direction of steady development of our country in the third quarter. Overall, since the beginning of the year and to the present day the Azerbaijani economy has successfully developed. I remember saying during the discussion of the results of last year that 2014 would also be a successful year for Azerbaijan. The results of nine months already indicate that this year will indeed be remembered as a successful year. And this is natural because the reforms carried out in recent years and the initiatives we have put forward facilitate the dynamic development of our country.
The economic indicators of the first nine months are also very positive. Our economy is growing and expanding. I should note that the financial and economic crisis is still ongoing in Europe, while Azerbaijan is registering economic development every year. In the first nine months of this year, the gross domestic product grew by 2.5 per cent. Considering the present situation in the world, we can say that this is a very positive indicator. Most importantly – and we note this with satisfaction every time – our non-oil sector has grown by 6 per cent. The non-oil sector growth, of course, is the result of our policy. The main issue for us is the development of the non-oil sector. Things in the oil and gas sector are going well. After some time I will express my views about that, but the non-oil sector is our main goal.
The non-oil industry has grown by 6 per cent. This is also a very positive indicator. Inflation is very low – only at 1.5 per cent. Population's incomes have increased by 5.4 per cent. Thus, as in previous years, incomes exceed inflation, and this has a direct positive impact on people's living standards. I am sure that inflation will remain low for the rest of the year. We must try to ensure that this figure remains low next year too. This should be emphasized because our budget is growing. This year too our budget costs are fairly large. Wages and pensions are increasing – they have risen in the first nine months too. Despite this, inflation is low, which demonstrates the stability of the macroeconomic situation.
Major investments are made. A total of $19 billion has been invested since the beginning of the year. Of this, $11 billion is domestic investment. This is also a picture observed in recent years. Investment is growing and is dominated by domestic investment. However, most of the domestic investment is public, which is natural. Public funds should be allocated for infrastructure projects, including the implementation of projects of social infrastructure. But private investment is also made in Azerbaijan. There is a very positive investment environment in Azerbaijan, local and foreign investors have confidence in our country and believe in its future. Therefore, very large investments are made in Azerbaijan.
I can say that there is tough competition in most of the world to attract foreign investments. The economic development of each country is determined by investments. The situation observed in the Eurozone today shows, as suggested by experts and scholars, that if there are no investments, it will be very difficult to get out of this crisis. In Azerbaijan, the situation in this area is very positive. In nine months, $19 billion has been invested. By the end of the year this figure will further increase, so our development will go even faster.
Investments are made in different areas: the development of industry, agriculture, tourism and, of course, the oil and gas industry. And this is natural. After all, our economy is diversified. That is exactly why our economic growth continues even though the oil prices are sharply falling now. But thanks to the non-oil sector, our country will continue to develop, which will make our growth sustainable. So our main goal is to minimize our dependence on the oil factor and develop Azerbaijan by means of the non-oil sector in the future.
We have sufficient foreign exchange reserves. Since the beginning of the year our financial resources have increased by $3.6 billion. In general, our foreign exchange reserves exceed $53 billion, which is also a very high figure on a global scale. In per capita terms, I believe that our foreign exchange reserves are at the highest level on a global scale.
Of course, by saving our oil revenues in a transparent manner and channeling them into the development of our country, including the implementation of social projects, we provide for our dynamic development. At the same time, our reserves are growing and will continue to grow. I have set this goal: we should make sure that our financial reserves grow from year to year. This, of course, also creates additional opportunities for foreign investors, enhances confidence and, at the same time, creates further opportunities for obtaining low-interest loans from global financial markets. In fact, this is not really necessary. It simply gives us more confidence. I have repeatedly said that in previous years our main goal was to achieve economic independence. And we have achieved it. We are completely independent in economic terms. We do not depend on anyone, which allows us the opportunity to pursue an independent policy in the political sphere, including foreign policy.
Our main point of support and the source of our strength is our economic independence. I can say that the reforms under way in Azerbaijan and the sound economic policies are also praised by the world’s most authoritative economic institutions. The Davos World Economic Forum ranks Azerbaijan in 38th place in the world in terms of competitiveness. We have advanced another step. It is a historic achievement to be in 38th place in the world for this indicator. In other words, we are among the world’s 40 most competitive countries. This is a historic achievement, which gives us more confidence. We already know that Azerbaijan is on the right track. Azerbaijan is developing steadily. But the assessment of influential and reputed financial and economic institutions is very important, of course.
During the first nine months all infrastructure projects were successfully implemented, and this process continues. The state program on the socioeconomic development of the regions has been successfully implemented. More than 100,000 jobs were created, of which 80,000 are permanent. Since the beginning of the program, from 2004 to the present day, 1.3 million jobs have been created. This has sharply reduced unemployment, which now stands at 5 per cent. In some developed countries unemployment is at 25-30 per cent, and even 50 per cent among young people. But in Azerbaijan the problems associated with unemployment are being resolved, and here, of course, a great role is played by such factors as public investment, the perfect investment landscape and the improving business environment. At the same time, a major role is also played by the implementation of the third state program on the socioeconomic development of the regions. The oil factor still accounts for a large share of our economy. Despite the fact that the share of the non-oil sector in our gross domestic product already exceeds 55 per cent, most of our export potential is linked to oil and gas. We are also well aware that it is impossible to create a large number of jobs in the oil and gas sector. Therefore, our main goal has been the non-oil sector. The creation of jobs in this sector, of course, has led to a reduction of unemployment.
Social programs are being implemented. Wages, pensions and the average salary have been increased over nine months. Social projects are implemented – schools, hospitals, Olympic centers, cultural institutions. This area has also been given a lot of attention, and our investment portfolio envisages fairly large funds for social projects.
Important steps were taken to improve the living standards of displaced persons. This year too we allocated major funds to provide the IDPs with new homes. This process is ongoing and will, of course, be continued next year too. In short, the all-round development of our country will also enable us to determine our future plans. These plans are known and clear to the public. There is a program "Concept 2020" related to the future development of Azerbaijan. Of course, the implementation of these projects and infrastructure initiatives will allow us the opportunity to continue the dynamic development.
The program on the development of Baku and its suburban settlements is also under way. As part of this program, dozens of schools have been built and renovated, the number of kindergartens is increasing and their provision is improving.
Infrastructure projects are being implemented in suburban settlements of Baku. First of all, I mean water and sewage projects. Rural roads are also built. So I believe that this too was a very timely program. The state programs on the socioeconomic development of the regions and of Baku with its suburban settlements are being implemented in parallel, and I am sure that this will help us to complete the major infrastructure projects over the next two to three years. Of course, this will have a positive impact on our future development because major investment projects are already in the past. This will enable us to allocate budget funds into new realms and spend even more on the promotion of business, improving the business environment and private sector development. So far, a large part of public spending, of course, is focused on infrastructure projects. Water reservoirs, highways, railways, as well as the projects of drinking water and sanitation, the Oguz-Gabala-Baku water line – these are ambitious infrastructure projects that require a lot of money. This includes the shipyard, the new international sea port, etc. All of these projects have already been implemented or are in their final stages. Therefore, in subsequent years we should direct budget expenditures primarily to projects that provide further sustainable development.
This is our conceptual approach. Infrastructure projects have to be implemented to create these conditions. The business development reforms have played a positive role. Businesses were and are provided with both political and financial support. This has facilitated the dynamic development of the country, and today the positive experience of Azerbaijan is studied by other countries. The director of the UN Development Program who participated in the Fourth Baku International Forum also said that Azerbaijan’s experience in poverty reduction was very important and could serve as an example for other countries. Poverty reduction is directly related to our economic and social policies. I have repeatedly talked about it, this is our policy, but we shouldn’t deal with economic reforms only. We must pay great attention to the social sphere because major economic reforms in many cases lead to social problems. But in Azerbaijan we are seeing just the opposite. We have implemented major social projects. We have repaid people’s Soviet-era bank deposits in the shortest possible time and with the highest interest rate in the CIS. Wages and pensions are steadily increasing. I want to say once again that this is our approach, and it opens up new opportunities before the country.
Unfortunately, this year has not seen any progress in the settlement of the Armenian-Azerbaijani Nagorno-Karabakh conflict. The main reason for that is the non-constructive and insincere stance of the Armenian side. Armenia is trying to delay the issue as much as possible and leave the status quo unchanged despite the fact that the presidents of the OSCE Minsk Group co-chair countries have repeatedly stated that the status quo is unacceptable and should be changed. Changing the status quo means the liberation of the occupied lands. But unfortunately, these statements are hung in the air and Armenia ignores them, while the sides that have made these statements do not take serious measures and the issue remains unresolved. We are trying and will continue to try to resolve this issue soon. Our principled position remains unchanged. This position is recognized by the international community. Azerbaijan's territorial integrity is recognized by the international community and the Armenian-Azerbaijani Nagorno-Karabakh conflict must be resolved only within the framework of Azerbaijan's territorial integrity. There is no other option. To resolve this conflict, the UN Security Council has adopted four resolutions. These are the main documents for resolving the issue. Other international organizations have also adopted relevant decisions and resolutions. So from a legal perspective our position is strong enough.
From an economic point of view, of course, it is impossible to compare Armenia with Azerbaijan. Azerbaijan is an affluent, growing and independent state. Of course, the balance of forces is changing and will continue to change in our favor. The gap between us will deepen even more. There are no preconditions for a successful development of Armenia because the country is experiencing a recession. The longer the Armenian criminal dictatorship rules the country, the sooner this country will completely lose its independence. Even now it is impossible to describe Armenia as an independent country.
Meanwhile, we are developing. We have ample opportunities both from economic and political points of view. Azerbaijan is successfully building and will continue to build its army. Our troops have given a fitting rebuff to the provocation of Armenian armed forces on the contact line in the third quarter. Dozens of occupiers were destroyed. They suffered a crushing blow. They simply tried to get a more favorable situation on the eve of the Sochi meeting. But their efforts failed and Armenian soldiers were eventually destroyed. And the main culprit for this is the criminal regime of Armenia.
I want to say once again that no force can affect our principled position. We will restore our territorial integrity. The key role in this is played by political, diplomatic, economic and military factors. I have repeatedly said this and I want to say again that a significant role is also played by the demographic factor. According to official Armenian statistics, the country's population has decreased by 80,000 people in the first nine months of this year alone. So 80,000 Armenian citizens have left the country for good. This trend will continue for the rest of the year, so the Armenian population will fall by more than 100,000 people. The population of Azerbaijan is growing and will continue grow. This, in turn, will play a fundamental role in conflict resolution and regional panorama as a whole. The exodus of Armenians from the country has several causes: corruption, dictatorship, limited business opportunities, unemployment and poverty. Of course, after the recent events on the frontline this exodus assumed an even greater scale. If Armenia resorts to provocations once again, it will get another worthy rebuff and see this provocation give an impetus to a new wave of exodus. In short, I want to say again that Azerbaijani society should rest assured that we will not back down from our position of principle. We are committed and will strive to ensure that the issue is resolved, and it will be resolved.
Last quarter saw a historic event for our country. The foundation of the Southern Gas Corridor was laid. A large ceremony was held. The implementation of this project is, of course, a historic event. It is no secret that the main role in this was played by Azerbaijan. It was our initiative, our resources. We will implement this project together with neighboring countries and partners. I am confident that in the near future the Southern Gas Corridor will be built, commissioned and ensure steady development of our country in the decades to come. Our political influence will increase and there will be new economic opportunities. During the construction of the pipeline, tens of thousands of citizens of Azerbaijan will be provided with jobs, while hundreds of Azerbaijani companies will participate as contractors. So this is a historic project bringing our country great revenues and political dividends. We are proud of the fact that Azerbaijan is implementing this historic project, that we are the leader state in it. This event will go down in history. At the end of the last century the "Contract of the Century" was signed. It was the contract of the 20th century. And this project is a project of the 21st century. I am confident that we will successfully implement this project.
I have outlined the main directions of the first nine months of this year. Of course, these months have seen very important events. If I start to talk about them here, it would take hours. I just want to point out that the results of nine months are positive. This work will be continued until the end of the year and we will successfully finish this year as well.