Diversification of economy is Azerbaijan's main objective and I think we achieved good success there, the country's president, Ilham Aliyev said addressing the 'Strategic Outlook: Eurasia' panel at the World Economic Forum in Davos on January 23.
"When we experienced a dramatic drop of oil prices, I said that for Azerbaijan, the post-oil period has already started, and we should forget about oil and gas," said the president.
Of course we should implement the current projects, but as far as source of major income [is concerned], we should look at technology, innovation, industry, entrepreneurship and agriculture, he said.
"Therefore we introduced very serious reforms, which have already brought good results," said the president, adding that the non-oil sector of Azerbaijan's economy grew by 3 percent last year and non-oil industry - almost 4 percent.
"So, I should say that the process of diversification is already here, and we have no plans to slow down," he said. "Now the price of oil is going up, but it will just increase our reserves."
"We managed to optimize our expenses, and last year, still the [oil] price was low, but we earned $4.5 billion more," said the president. "That means that even with the low price, we will be on the safe side."
"Our budget of this year is based on the $45 per barrel. Therefore, whatever is more than that - will go to the sovereign fund. But at the same time, we should understand that oil and gas will continue to be the main part of our economy, though today the non-oil sector is about 70 percent of our GDP," the president said.
"Our target is to diversify our export, to increase the level of non-oil products in our export portfolio," Ilham Aliyev said.
As far as energy projects are concerned, once again, they are important for Azerbaijan, and for the region, the president said, adding that the projects initiated by Azerbaijan change the energy map of the region.
"The first pipeline we built to Georgia's port of Supsa, connected Caspian and Black seas, then the second pipeline for crude oil from Baku-Tbilisi-Jeyhan connected Caspian and Mediterranean [seas]. Then on the same route we built the gas pipeline. Therefore we already have diversified export routes for our hydrocarbons, and at the same time providing substantial energy security of our partners, including those in Europe," he said.
Some countries of the European Union get the biggest part of their oil supply from Azerbaijan, and after we successfully complete the Southern Gas Corridor project in the 2-3 years time, they will also get access to our natural gas, said Ilham Aliyev.
The same can be said about the Baku-Tbilisi-Kars transportation project, the president noted, adding that it changed the transportation map of the region.
"It is now the shortest route from China to Europe, which will take about two weeks, instead of 30-35 days," said Ilham Aliyev.
"So this is the new map of transportation, new map of diversification, and Azerbaijan, being a landlock country, managed to transform into a regional transportation hub," he noted.
"So future will not be in oil and gas, it will come to an end one day, future is in innovation, efficiency, good governance, management, transportation, transparency and state support to entrepreneurship," he said.
Ilham Aliyev went on to say that several years ago one of Azerbaijan's main objectives was to reduce poverty and unemployment, and it was done successfully.
"The level of poverty in Azerbaijan is 5.4 percent, and the level of unemployment is 5 percent," the president said.
"In the last fifteen years, our population grew by 1.5 million people, therefore creating jobs for us is a permanent process. Last year we created 177,000 permanent jobs, and this demonstrates our policy. Also, oil and gas they do not create many jobs. In order to keep the unemployment rate low, we need to look at education, management, agriculture, tourism, services," Ilham Aliyev noted.
"Therefore, our population is ready for reforms, and our reforms were very positively received by the people," he said. "They were not painful, because when you do radical reforms, at the first stage, it is painful for the population. So we introduced a very substantial social package to those who still need that state support. Therefore this was a smooth process, and basically in the coming years we just need to continue what we started two years ago - our very deep and comprehensive reforms policy."
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