Azernews.Az

By Jamila Babayeva

Azerbaijan's economy was successfully developed in the first half of the year and the country reached all its objectives during this time.

President Ilham Aliyev made the remarks in his opening speech at a meeting of the Cabinet of Ministers dedicated to the results of socioeconomic development in the first half of 2014 and objectives of the future.

President Aliyev went on to say that underlying Azerbaijan's success is a sound policy which leads to stability.

"The ongoing reforms in the economic sphere are highly important. The sustainable development of Azerbaijan was made possible thanks to these reforms. You remember that some people used to link our success solely to the oil sector. It was speculated that Azerbaijan's oil is the sole reason behind its developments. Of course, oil had played a key role in recent years. But thanks to our successful policies, our dependence on oil has reduced significantly and most of our gross domestic product fall on in the non-oil sector," he said.

The president underlined that the development is the result of some appropriate policies.

"Also, the results of our reforms are also evident in the ratings of various organizations .The world's leading rating agencies have been upgrading our credit ratings. Today we have no problem attracting credit resources from external financial markets. On the contrary, we are somewhat cautious about this issue, as we believe that we should use internal capabilities more. The Davos World Economic Forum, the world's economic forum number one, has praised the competitiveness of Azerbaijan's economy and ranked us 39th in the world. I think this highly indicates our strength as a young independent country," he added.

The president said the successful development of the country was made possible by various factors.

"There is a wonderful investment environment in our country. Domestic and foreign investors treat Azerbaijan with confidence. The internal stability, the unity among the people and the government and the general optimism in society about the future certainly give an impetus to our dynamic economic development," he noted.

"In the first half of the year, our economic indicators were very positive - the economy had grown by 2.1 percent. Perhaps this may seem not so high compared to previous periods. But against the backdrop of the economic hardship in the world, I think this is a very good indicator. The most gratifying thing is - and I mention this with a sense of joy - our non-oil sector has been growing in recent years, and the growth here has been at a rate of 7 percent. Of course, this is also the result of the factors I mentioned, because if we hadn't channeled the oil capital into human capital and infrastructure projects, our non-oil sector could not grow so much. If we come across a recession, we could depend only on the oil factor. The funds being allocated and the reforms to be implemented in the coming years will strengthen the non-oil sector."

President Aliyev further said that the inflation in Azerbaijan is only in single digits, it is at 1.6 percent.

The president further said developments are observed in agriculture. "Growth in agriculture has amounted to almost 6 per cent. I do hope that as a result of the ongoing reforms in the coming years we will achieve even greater growth. The financial situation in our country is very stable. I have repeatedly said that our economic and financial situation is one of the main contributors to our independence," he noted.

He said Azerbaijan has ample financial resources. "We have created these resources ourselves and no-one has ever helped us. We have achieved this thanks to the talent of the Azerbaijani people and thought-out policies. I believe that in terms of foreign exchange reserves per capita, Azerbaijan has a leading place in the world. Our foreign exchange reserves exceed 54 billion. And this gives us a confidence and provide us with an opportunity to continue the implementation of large-scale infrastructure and social projects," he added.

President Aliyev also emphasized that Azerbaijan is spending these funds very sparingly and investing them in the most important areas. "At the same time, we should not allow a growth of investment by the state, as it may cause undesired phenomena and accelerate inflation. In fact, there is no need for that. I think that if we continue to develop at this pace in the coming years, that would be enough," he said.

The president emphasized that the economic and financial crisis which engulfed the world has not affected the population and economy of Azerbaijan.

"We are a country with major financial resources. I want to say again that we are increasing our financial resources every year and will continue to do so in future. The rational use of these resources, of course, brings us additional revenue, and today we are diversifying our portfolio - both in terms of industries and the geography of investments being made abroad," said.

President Aliyev further said the steady growth of the population urges the government to be more active. "Also, it suggests that the creation of new jobs should be an ongoing process. We can't just say that we have already created a million permanent jobs, so let's stop paying attention to this issue. No, this should be an ongoing process. Agriculture, high technology and other industries need to develop rapidly, so that we could continue providing our citizens with jobs in the future," he underscored.

"Therefore, I believe, this is time to prepare an elaborate concept in this regard. So far this has been happening rather spontaneously. But our population will continue to grow. The higher the population growth, the higher this percentage will be in subsequent years. It is one thing when a population of 8 million people increases by one or two per cent, and it is quite another when this occurs to a population of 10 million.

"But now we need to pay more attention to employment issues. As a result of the third regional development program, all of our basic infrastructure and social issues should be resolved by 2018. I am sure that it will be the case."

President Aliyev went on say that the program on the development of Baku and its suburban settlements is under way. "This program is designed for a shorter period and should be completed by 2016. I believe that everything in this area is proceeding according to schedule and there are no problems. Social issues were the focus of our attention in the first six months. The average salary has been raised and now constitutes 440 manats or $560," he noted. "I am sure that it will be even higher. Social infrastructure projects are being implemented. More than 80 schools and over 40 medical institutions are being renovated or built. So this issue is also being addressed with the funds allocated to the social sphere."

The president added that major reforms are carried out in the area of social protection.

"Transparency in this area is ensured. This goes down well with the public. I am confident that the reforms will become even more profound. The reforms should be deeper in terms of transparency. The leading countries of the world have accumulated a lot of experiences in this field. We, of course, are studying and applying these experiences. The situation in the social sphere in Azerbaijan should not lag behind leading countries of the world. I believe that we have all the possibilities to achieve that," he said.

"In the first six months, we have, of course, paid special attention to military matters, President Aliyev said."The process of army building is underway, the reforms in the army are deepening and the disciplines are enhancing. Combat capability of our army is at a high level and increases every day. The exercises conducted on Army Day are issues of great importance both in practical terms and in terms of demonstrating our strength. In a recent meeting with the ambassadors, I talked in detail about this and about foreign policy in general. I do not want to repeat them. I just want to say again that the territorial integrity is the basic norm and principle of international law. The Nagorno-Karabakh conflict can be settled only on the basis of this principle," he underscored.

The president said over the course of these six months, serious steps have been taken in the oil and gas sector, in particular in connection with the Southern Gas Corridor. "Preliminary tenders have been announced. We can say that the implementation of the TANAP project has already begun. Preparations for the construction are well underway. I believe that we will implement this major project on time. The initiator of the Southern Gas Corridor is Azerbaijan," he noted. "This project will hugely benefit Azerbaijan, its neighbors and European countries. Azerbaijan has demonstrated leadership qualities in this issue too. These three projects - "Shah Deniz-2", TANAP and TAP - will redraw the energy map of Europe, turn Azerbaijan into a very important economic and energy partner and, most importantly, secure the well-being of the Azerbaijani people in economic and financial terms. As a result of this project, we will be receiving great benefits from gas exports for at least a hundred years to come and Azerbaijan's role in the world will increase further."

President Aliyev further said that today Azerbaijan is playing a very important role in the world. "With each passing day our credibility, importance and influence are increasing. We have achieved all these goals ourselves. Today, energy policy is an integral part of our overall policy, an issue of national security not only for us but also for all countries. Some tensions are observed in the region and Europe in recent months showed again that no country can feel comfortable or pursue an independent policy without energy security," he underlined.

"We have long contributed to regions' energy security and are now playing a role in the energy security of other countries. This is a positive role. Our partners appreciate that. Azerbaijan has never used its energy resources for other purposes. Our philosophy and approach to this issue is based on this fact that energy resources should expand cooperation and strengthen unity. By pursuing this policy, we certainly achieve our national interests. Today, our interests are realized both in the region and in the world."

The president said that in the coming years, due to the implementation of the TANAP project, tens of thousands of new jobs will be created in Azerbaijan. "Azerbaijani companies will participate in these projects. Azerbaijani companies won the bidding on the contracts signed recently - both directly and together with foreign companies. Azerbaijani companies have been entrusted to implement contracts worth several billion dollars. This shows that the state pays great attention to the private sectors," he added.

"As a result of the first major projects, our companies were practically able to stand up and accumulate capital and experiences. Then they started to invest in Azerbaijan. I also recommended them to press ahead with their projects. At the same time, we created a safe environment for investment. Of course, it is necessary to invest in other countries too, and we as a state are doing that. But it is better to give the local companies to invest in the projects," the president said. "The return on investments is higher and the investments are also protected by the state. Therefore, as a result of the implementation of TANAP and "Shah Deniz-2" projects, our companies engaged in the construction, services and energy sectors should be prepared to take part. They should participate in the bidding and make good proposals to win. Thus, they will pay more taxes and create more jobs. In short, our energy policy should serve the development of the economy in this way. We should not only channel the revenue into infrastructure projects. This will be the case, of course. As a result of these projects, we will obtain large revenues which will be spent on the development of economic and social issues. As a result of the contracts, the creation of jobs will be sped up through the activities of local companies and the creation of new industries," he said.

The president noted that the work done in the first six months is commendable, and the Azerbaijani people and the works being done are the guarantors of stability.

"The well-being of the Azerbaijani people and the justice that has set in, including the social justice and the fight against negative phenomena reinforce these positive trends," he concluded.