Speeches and İnterviews

  • Updated 01.03.2013 12:50
  • Created 30.01.2013 11:44

2012: Year of macroeconomic stability and sustainable development


"Today, Azerbaijan is a strong economy and we have a bright future".
Ilham Aliyev
The President of the Republic of Azerbaijan


The year of 2012 engraved in the modern history of Azerbaijan as a successful period, with large-scale works done on the comprehensive development of the country, and great achievements. As stated in the meeting of the Cabinet of Ministers on the results of socioeconomic development in 2012 and objectives for 2013 chaired by the Head of State, further strengthening the positive image of our country in the international arena, the acceleration of economic development sustainability and diversification, establishment of new enterprises, the creation of thousands of jobs, achievements gained in health, education and other areas, further increase of the living standards are the characteristic features of the previous year.
Sustainable development and the growth of the economy of Azerbaijan accompanied by further strengthening of our state, an increase of social welfare is a major achievement of last decade. The success achieved in previous years continued in 2012, macroeconomic stability was preserved last year; economic diversification, development of non-oil sector and the regions was accelerated, effective management of currency reserves in order to protect the stability of the national currency, increased state support for entrepreneurship, the business environment improved. All of these are a logical result of the economic policy laid by the national leader and currently carried out with great confidence by the President of the Republic of Azerbaijan Mr. Ilham Aliyev.
We observe prosperity in all spheres and this is confirmed by all statistical indicators. Growth of gross domestic product in Azerbaijan in 2012 was entirely provided by the non-oil sector and was at 2.2 percent, and the volume of GDP on per capita was 5884.5 manat or 7490.5 US dollars. The growth of the non-oil economy was at 9.7 percent in 2012. Its share in GDP rose to 52.7 percent. The average annual inflation rate was 1.1 percent; the country's strategic currency reserves exceeded 46 billion U.S.$. Last year revenues of the state budget increased by 10.1% and amounted to 17.3 billion manat, while expenses increased by 10.8 percent and totaled 17.1 billion manat, and the state budget was executed by surplus.
In recent years, sustainable development of our country, fulfillment of major regional and international projects, the implementation of various infrastructure projects created favorable conditions for investment into the economy of the country and made our country more attractive to investors. During 2012 investments in the Azerbaijani economy amounted to 22.1 billion manats ($28 billion), 13.3 billion manats ($16 billion) of which fell to domestic investment and 8.8 billion manats ($11 billion) accounted for foreign investment. In general, during the years of independence, more than $ 140 billion investment was channeled to the country's economy. The rapid development of the economy of Azerbaijan paved the way for increase of financial resources of the country, and this, in turn, created favorable conditions for investment in foreign countries. It is no coincidence that now Azerbaijan is recognized as an investor country. At present, public and private companies of Azerbaijan have successfully participated in the projects of petro-chemical, gas, roads and other projects in foreign countries, and progress is observed in the dynamics of investments abroad.
Over 11 months of 2012 Azerbaijan's foreign trade turnover with 154 countries totaled $39.5 billion. The foreign trade balance was positive and amounted to $22.6 billion. Non-oil exports grew 11.2 percent. So, as a result of prescient and flexible policy of head of state, the economy of the country demonstrated the endurance for adverse external economic impacts and the durability of the economic growth was ensured in 2012, too.
The successful continuation of industrialization policy ensured the dynamic development of non-oil industry. Last year the Azerbaijani non-oil industry grew by 7.8 percent, as well as processing industry by 5.4%. Roughly, 100 industrial enterprises, including heavy machine building plants in Sumgait Technologies Park, the Ganja aluminum plant, cement plants in Nakhchivan and Garadagh, plants for sorting and incineration of solid waste were commissioned in 2012. Currently, the construction of over 90 industrial enterprises is continued. The facility is the biggest municipal solid waste incineration plant in the Eastern Europe and CIS. The plant was built by French CNIM Company. The plant capacity is 500,000 t/per year. The plant will generate 231,500 megawatt of electricity from incineration of household waste.
Balakhani Industrial, Sumgayit Chemical Industrial, and Sumgayit High Technologies Parks established pursuant to the certain orders of the President of the Republic of Azerbaijan, are of particular importance in terms of increasing new competitive and export-oriented production, opening jobs, involving foreign investments, by using cutting-edge technologies. Last December, the head of state laid down the foundations of Balakhani Industrial Park, and at present, necessary organisational works are carried out, along with the preparation of normative-legal basis, and other related measures.

Last year production of electricity grew by 6.8 percent; construction of power lines, installation of gas lines in residential areas and their capital repair was continued. In the alternative and renewable energy sector, Azguntex solar panels as well as Fuzuli and Gusar-1 hydropower stations were commissioned.
Agriculture is one of the leading fields of non-oil sector and the development of this sector is of particular importance in terms of food security and employment of the population. In 2012 5.8 percent growth was achieved in the agrarian field, food security was further enhanced. The state support measures for the agrarian sector, such as tax cuts, leasing services, issuing subsidies and preferential credits were continued, manufacturing and processing of the agricultural products based on the modern technologies were expanded, modern poultry, livestock complexes were created, agricultural infrastructure significantly improved. Last year 68 percent of loans issued by the National Fund for Entrepreneurship Support were allocated to the agrarian sector. Currently, the implementation of "the State Program on the development of the wine-growing in the Republic of Azerbaijan in 2012-2020" is under way.
The execution of the State Program on reliable food supply of population was carried on, poultry, livestock, grain, wine-growing farms, agricultural production, procurement, storage and processing facilities, agro services were established, water supply and ameliorative measures were taken, the domestic food production increased, consumer prices did not sharply changed in connection with the season, and stability was achieved in this sphere in 2012. In the two areas (Agjabedi and Beylagan) there were created large grain farms. This year high productivity will be achieved in this farm. Under this project the grain storage, livestock complex, vegetable oil factory and agro service are to be established. According to these projects, the internally displaced persons and local people are employed. The works in the course of the establishment of large private grain farms in other regions are carried out. Work is underway to establish such farms in other regions of the country.
In 2012 the growth was 5 percent in the transport sector. Within the transnational transport projects, realization of large-scale infrastructure projects of regional and local importance, as well as the construction of Baku-Tbilisi-Kars railway, the International Sea Trade Port, Shipbuilding Plant, new subways, the highways in Azerbaijani segment of TRASEKA and Northern-Southern international corridors were carried out Signing of Trans-Anatolian Natural Gas Pipeline Project (TANAP) agreements in Istanbul with participation of President of Azerbaijan Ilham Aliyev and Prime Minister of Turkey Recep Tayyip Erdogan is an important historical event. This project has an exclusive significance for supplying of natural gas to Turkey's domestic market and ensuring energy security of the European countries. It will make important contribution to the European energy security. The President of the Republic of Azerbaijan Mr. Ilham Aliyev noted at the conference dedicated to the results of the fourth year of the "State Program on the socioeconomic development of districts of the Republic of Azerbaijan in 2009-2013": "TANAP will be a very effective means of providing for economic and indeed other interests of Azerbaijan for decades".
Last year information and communication services increased by 15.9 percent, the latest mobile technology - 4G service is provided, within the frame of State Program on "Electron Government" the government agencies, including the Ministry of Economic Development expanded application of e-services. The establishment of the High Technology Park, being the first regional innovation zone in ICT field, will pave the way for increasing production of the scientific technologies significantly. Currently, 70 percent of Azerbaijan's population is internet users, 50 percent – broadband users. Azerbaijan has also maintained its leading position among the CIS countries by the number of Internet in "the Global Information Technology Report - 2012" of the World Economic Forum and it is 2 times more than the global average. According to the Networked Readiness Index Azerbaijan is settled on the 61st position in the report among 142 countries. Azerbaijan that ranked at 68th place on ICT development index is included into the group of the 10 most dynamic countries in the International Telecommunication Union report.
Political and macroeconomic stability, durable and sustainable economic development in Azerbaijan, the increase of the reputation of t he country in the world, as well as rich geographical landscape and culturalhistorical heritage paved the way for the development of the tourism sector. In this respect, the year 2012 was one of the important years for the development of tourism and the tourism sector increased by 18.8 percent. So, having a great potential for the development of tourism of our country, the work done for the development of tourism infrastructure in recent years, construction of "Shahdag" Winter-Summer Tourism Complex, commissioning modern hotels in Baku and the regions creates a solid foundation for the sustainable development of this sector.
Last year, within the framework of the targeted state programs a significant progress was achieved in diversification of the economy, the development of regions and districts of Baku, the creation of new production and processing facilities, expansion of existing production areas, increasing export production, improving the quality of employment.

The President Ilham Aliyev's regular visits to the regions, participation in inauguration and foundation laying ceremony of nearly 205 new enterprises, the relevant tasks and advices, decrees signed for the development of the regions, as well as the allocation of additional funds for social and economic development of Baku districts played an important role in maintaining balanced development of regions and further increasing standard of living of population. According to the "State Program on socio-economic development of regions of the Republic of Azerbaijan for 2009-2013 years", the projects on the establishment of the necessary infrastructure, including transportation, gas, energy, water, and land reclamation, education, health, culture, sports and other social projects were carried out.
In accordance with the orders of the President of the Republic of Azerbaijan on rural roads, last year, work started on 18 projects that will be completed in 2013. As a result, construction of 634 village roads and 42 bridges will be completed which connect 400 settlements consisting of 450 thousand people of 18 regions of the country. In addition, the rehabilitation of water supply and sanitation projects are being implemented in the centers of 61 cities and towns. Some of these projects will be completed in 2013. Development of human capital, ensuring the quality of medical services and other social sectors was the focus of the attention, during the year, 268 schools, 65 kindergartens, 40 health centers, 27 sports and 29 cultural and other social facilities were built or repaired. At present, repair and construction of more than 420 social facilities is underway. In general, over the past year more than 410 industrial, agricultural, service and commercial facilities were opened, and the construction of more than 400 enterprises are being continued.
As in previous years, Heydar Aliyev Foundation had a great importance in the implementation of the projects in the development of education, culture, healthcare and other social spheres. The scope of the project implemented under initiative of the President of Heydar Aliyev Foundation, UNESCO and ISESCO Goodwill Ambassador, MP Mehriban Aliyeva covers the social situation of tens of thousands of people. Today the activity of Heydar Aliyev Foundation is of special importance to the strengthening of economic and social power, the improvement of people's welfare.
The successful implementation of the "State Program on social-economic development of Baku city and its settlements in 2011-2013" accelerated the development of Baku's suburbs, and the quality of life of the population was further improved. The important works were done in the field of gas, water, energy supply; the heating system in residential buildings and social facilities was reconstructed; the roads between settlements were repaired, the roads were surfaced with asphalt. Within the framework of the program 134 schools, 74 kindergartens, 27 health facilities, 9 cultural and sport facilities were built and repaired, currently, tens of them are currently under construction and repair.
As in previous years, the development of entrepreneurship is one of the priorities of economic policy of Azerbaijan in 2012. Last year further expansion of entrepreneurial activity, increasing state support for private sector, protecting entrepreneurs' rights, elimination of unjustified interference in business was continued. So, the services rendered by the Ministry of Economic Development were electronized, as well as issuing licenses and certificates, online payment of service fees electronically was ensured.
Along with individual entrepreneurs, legal entities' electronic registration was carried out since last year. According to the amendments to the Tax Code, tax rates of income taxes of individual entrepreneurs were reduced, and application of tax incentives was intended to the industrial and technology parks.
Financial support of entrepreneurship was improved, the volume of loans increased. The National Fund for Entrepreneurship Support granted AZN 218 million preferential credits to over 2400 entrepreneurs in 2012. Almost 9100 new jobs are expected to be opened.
Last year the number of projects increased by 47.2 per cent, the amount of loans by 58 percent, the number of new jobs grew by 40.2 percent in compared to 2011. AZN 188 million preferential credits to 88 projects based on new technologies in 2012.
After the adoption of the "State Program on social-economic development of Baku city and its settlements in 2011-2013" 72 million preferential credits were allocated for financing 400 investment projects. Generally, over the past years 94 production, processing and infrastructure facilities that financed in preferential terms by the Fund began operating. 84 of these facilities are agrarian-industrial complexes, as well as 15 poultry, 7 livestock, 4 meat processing, 9 hothouses, the complex of procurement, storage and sale of agricultural products, 11 bakers, 7 grape-growing, 2 large grain-growing and 5 fruit-vegetable enterprises, ten of them are metal-ware facto.

One of the most important components of state support of entrepreneurship in the new economy situation is to enlighten entrepreneurs, to educate them with the requisite knowledge, practical skills, and international experience and ensured with consulting services. In this regard, over 90 seminars and trainings were held in roughly 70 districts over 2012. 41 entrepreneurs and young managers attended the promotion courses in Germany. Such kind of events will be organized in 2013, too.
Azerbaijan Export & Investment Promotion Foundation (AZPROMO), Azerbaijan Investment Company and the National Fund for Entrepreneurship Support has been established for promoting investment, further supporting entrepreneurship. AZPROMO organized over 300 events (business forums, exhibitions, business meeting, etc.,) in our country and abroad in 2012.
During the last year, milk processing plant in Hovsan, "Holcim-Azerbaijan" new cement plant, and "Agstafa Agroservice" enterprise which are considered significant mechanisms in the development of private sector in the country, were put into operation with the participation of Azerbaijan Investment Company, and the company ended its mission in these projects by selling its shares to the other stakeholders, taking into account the successful operation of Sangachal Oil and Gas Terminal, and Salt Production Plant.
As a result of the monitorings carried out at consumer market for preventing sale of bad-quality and dangerous products for health and artificial price growth, the foodstuffs dangerous for human health were taken out from sale, the acts were taken against entrepreneurship subjects who broke the law, the relevant measures were held for enlightening entrepreneurs and consumers.
In order to collect information and analyze them the average market prices, dynamic and tendencies of change of the goods (57 kinds of foodstuffs, 26 kinds of vegetables and 49 kinds of building materials) which are used more by the population the monitoring was carried out regularly in Baku and regions, their results were analyzed.
Last year during different holidays the fairs were arranged in different places of Baku to increase choosing opportunities of consumers, to prevent artificial price growth, to meet increasing need of people by virtue of joint organizational activities of the relevant state bodies and entrepreneurs.
In order to enlighten the consumers the conferences and seminars were held in 12 regions and 7 high schools relevantly, thousands of booklets on consumer rights' protection were published and distributed to consumers, and the social advertisements were broadcasted on TV channels during last year.
The successes, durable economic development paved the way for further improvement of welfare of the citizens, the income of the population increased by 13.8 percent compared to 2011; the growth of income of the population exceeded inflation by 13.8 percentage points. The poverty was 6%, unemployment 5.2%, and 117 thousand new jobs were created. Poverty level decreased by 7.8 times during past 10 years.
During 11 months of 2012, the average monthly salary increased by 9.1 percent compared to the same period in 2011, reached 391.4 manat, and the bank deposits of population grew by 24.4 per cent. Lump-sum payment of "Soviet deposits" to Azerbaijani citizens – the depositors of the USSR Savings Bank is an integral part of the policy of the President of the Republic of Azerbaijan aimed at improving the social welfare of the population. The President of the Republic of Azerbaijan Ilham Aliyev determined the objectives in this field at the meeting of the Cabinet of Ministers on the results of socioeconomic development in 2012 and objectives for 2013: "As a result of the work planned for 2013 and the implementation of new infrastructure projects and social programs, I am sure that poverty will further reduce. Therefore, the task of completely eliminating poverty in Azerbaijan, which we set 10 years ago, will be fulfilled".
Azerbaijan's social and economic achievements are highly valued by the international organizations. Azerbaijan improved its position in "Doing business - 2013". Azerbaijan entered the group of 50 most competitive economies of the world and took the leading position among the CIS the last 4 years in the Global Competitiveness Report of the World Economic Forum. The particularly good results on some indictators reflected in the report were obtained. Thus, our country ranked 26th in labor market efficiency and 18th in macroeconomic stability.
It is a manifestation of the growing international reputation of Azerbaijan day by day, a number of international events were held in Azerbaijan during 2012. Last year Azerbaijan hosted the Baku International Humanitarian Forum, the Forum on International Internet Governance and other international sport competitions. Azerbaijan demonstrated its political stability and economic power to the world once again by organizing the "Eurovision-2012 Song Contest" at very high level in Baku.

The decision of the European Olympic Committee on holding the first European Games in Azerbaijan in 2015 is a result of the political-economic stability and high-level international image of the country, as well as great experience of Azerbaijan in organizing important international events and competitions.
The considered and prescient policy of the President of the Republic of Azerbaijan Ilham Aliyev based on the principles of "Powerful state, high welfare" will ensure the sustainable development of Azerbaijan in the future. There is no doubt that, as in previous years, the main lines of this policy will be further improvement of the quality of welfare of our citizens. All of these require a new approach to the future socio-economic development of the country. In this regard, "Azerbaijan 2020: look into the future" Concept of Development approved by head of state in order to determine the long-term development objectives and priorities is of particular importance. The targets determined in the concept shows once again that the implementation of large-scale events covering all aspects will ensure further sustainable development of the country, further strengthening its position in the world and improving the well-being of people, and year 2013, as the previous years, will be one of the most successful period of national development strategy carried out by the President of the Republic of Azerbaijan. "Azerbaijan economy maintained its rapid development last year, and I am sure that the work to be done this year will lead our country to even greater achievements" – as the head of state noted.
The national development concept founded by the nationwide leader Heydar Aliyev, is successfully improved by the President Ilham Aliyev, and resulted in the ideal "Azerbaijani model of development" accepted as a paragon project in the world community. According to the essence of this model, Azerbaijan has already entered the new phase of its social and economic development, and comprehensive renaissance strategy, period of wide range achievements. Azerbaijan, becoming a key factor in the international arena as a regional power center, is the first state to end transition period in the economic sphere among the post-soviet republics, and now it is going to be the first country to join the developed countries. When interpreting this target in the context of achievements obtained up to now, full confidence is established on its realization. Our achievements pave the way for our future successes.
Our achievemnets and future victories are clearly based on the wise and far-sighted activity of head of state and the national trust for this activity. We are sure that, the great confidence of our people for Heydar Aliyev's political course, the far-sighted policy of the Republic of Azerbaijan will further increase the political-economic power and its reputation in the international area, and in the coming years,under the leadership of our President our people will rejoice over the great victories and economic achievements.


Shahin Mustafayev
The minister of Economic Development

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