Ilham Aliyev met with the business people of the Aran and Upper Karabakh regions

A meeting with business people working in the Aran and Upper Karabakh regions has been held in Beylagan.

The meeting was joined by President of the Republic of Azerbaijan Ilham Aliyev.

First, the President of Azerbaijan reviewed the stands describing a project to establish private pilot grain farms in Agjabadi and Beylagan Districts and information on soft loans provided by the National Fund on Entrepreneurship Support of the Ministry of Economic Development.

Minister of Economic Development Shahin Mustafayev spoke on the economic potential, parameters, social and infrastructure projects, manufacturing and processing enterprises of the Aran economic region, the dynamics of soft loans provided by the National Fund on Entrepreneurship Support, new jobs, and projects based on modern technology. It was noted that to date, the Fund has provided soft loans amounting to over 910 million manats to more than 14,600 entrepreneurs. These loans are to create more than 103,000 jobs. 63 per cent of the loans were provided to the agricultural sector, 33 per cent to industry and 4 per cent to tourism.

It was noted that the Fund had granted loans amounting to 460 million manats to finance 236 projects based on the use of modern technology. The creation through soft loans of small and medium-sized non-oil businesses producing export-oriented competitive products will help meet the demand for various food and other products. It is also important for enhancing the country’s export potential.

Shahin Mustafayev also spoke about the work being done on the President’s instruction to establish private pilot grain farms.

Then, President Ilham Aliyev with entrepreneurs.

The head of state made opening remarks at the meeting.

Opening remarks of President of Azerbaijan Ilham Aliyev

- My meetings with businessmen both in Baku and in the regions are of regular nature. This meeting is held with entrepreneurs of the region. I am sure the issues to be discussed will help improve the business environment in the region and we will achieve what we want.

In recent years, Azerbaijani regions have seen extensive creative work. Two state programs have been adopted. Covering 2004-2008 and 2009-2013 periods, these state programs have been implemented successfully. Major investment has been made and this process continues. Since 2004, more than $90 billion has been invested. In the first nine months of the year alone this amount reached $16 billion. This is a very big number. If we consider that about as much was invested annually over the recent years, one can easily imagine how important this issue is.

I believe that the state program on the socioeconomic development of districts has been the main driving force of the country’s comprehensive development in recent years. When the program was adopted, we identified the objectives covering different areas. But we can say briefly that the main goal was to diversify the economy and reduce the dependence on the oil and gas factor. I believe that we have achieved these goals, there is creative work, landscaping, infrastructure development in all our regions. The gap between regions and cities, i.e. the capital, is narrowing. These excellent results are observed both in everyday life and in statistics.

Over 900 million manats was allocated through the National Fund on Entrepreneurship Support. This year alone this amount is 200 million manats. Next year it will be 300 million manats. It is one of the biggest contributions to the development of regions. Each project serves economic diversification.

Each project means investment in the real sector of the economy. The essence of this investment is that it is made in line with the state policy. On the other hand, new and very sound relations are emerging between the state and the private sector because practically all the projects carried out through the National Fund on Entrepreneurship Support are realized using both public and private funds. The soft loans and the private funds of business people strengthen this partnership.

I believe that our experience is valuable and successful on a global scale. It shows unity between the state and the private sector. I have repeatedly said this and want to repeat that the country's further development will depend on the successful development of entrepreneurship. Of course, we have vast energy resources and we use them effectively. I can say again that Azerbaijan has the most effective method and approach worldwide. Our experience is studied. Our energy cooperation with foreign partners is exemplary. Because, on the one hand, we protect foreign investment at the required level and, on the other, we safeguard our national interests. The experience gained in this field is, of course, applied to other areas. Major foreign investment made in Azerbaijan in recent years has significantly improved our business environment.

The companies involved in the contracts that have been realized through foreign investment have grown stronger, gained their own funds and provided financial support for the development of our non-oil sector. So it is an important issue that will remain relevant in the future. At the same time, non-oil sector development is our priority. This is the goal of the state programs on the socioeconomic development of districts. I can say that this year’s statistics demonstrate again that we have achieved a great success in this area.

In nine months, our non-oil sector grew by more than 10 per cent, while the non-oil industry by more than 7 per cent. Thus, the process of economic diversification is ongoing.

A positive role is played by the loans and rigorous state control over project implementation. The business plans for different projects prepared by the Ministry of Economic Development certainly facilitate the work of entrepreneurs. Because in order to do business, initial capital is not enough. A thoughtful and tested business plan based on the international experience is also necessary. Our state helps entrepreneurs in this area. We provide both soft loans and advice on a successful implementation of various projects, identify areas that need to be developed. At the same time, the government support for entrepreneurs and the support of the President certainly inspire them, create a new and beautiful environment for them.

I would also like to mention that in order to facilitate for work of regional entrepreneurs, local executive authorities are regularly instructed to support their activities, strengthen and create the necessary conditions for them. Because, I repeat, the future economic development is directly related to the development of entrepreneurship.

We are preparing new programs for the coming years. This is natural, because life goes on. I can say that as a result of the successful implementation of two state programs covering 2004-2013, major infrastructure projects in the regions will be completed. Most of the projects have already been completed. The problems that existed in various fields previously are no longer there. These problems have now been resolved. At one time electricity was a major concern. This problem is now fixed.

So there are good conditions for entrepreneurs, for creating new businesses.

We are dealing with the problem of roads. Major overhaul of all main roads is either under way or is already over. Intercity roads are being repaired. We have tackled the construction of rural roads. In the coming years, this process will be continued.

Gasification, a lack of agricultural machinery were the biggest issues that hampered business people. The establishment of such public companies as “Agroleasing” and “Agroservice” was an important step in this direction. For its part, the state buys equipment and leases it to business people. So the state has assumed this problem. Besides, the businesses engaged in agriculture are exempt from all taxes except for the land tax. They duly receive subsidies for fuel and fertilizer, soft loans.

Government support, the implementation of infrastructure projects create these excellent conditions. Entrepreneurs, in turn, should make effective use of these opportunities. Their business activities should expand. It is necessary first of all for themselves. At the same time, it is necessary for the state, the people, because 1,100,000 new jobs were created in our country as a result of the state programs on the socioeconomic development of districts in recent years. The vast majority of them are in the regions.

So a very big step was taken to eliminate unemployment. Today, the unemployment rate in Azerbaijan is 5.3 per cent. It is one of the lowest in the world. In some developed countries, it reaches 25 per cent. I can say that our policies aimed at eliminating such a major problem as unemployment, creation of better conditions for the people, job creation have been a success. The elimination of unemployment contributes directly to poverty reduction. In this area too we have made historic progress. In less than 10 years, the level of poverty has dropped five times to just over 7 per cent. I am sure that as a result of the measures planned we will eliminate this great problem completely. Everyone who wants to work should have a job. In the future, job creation will only be possible through the development of entrepreneurship, because all the structural reforms in government are practically over. And vacancy announcements in the public sector can’t be large-scale, there is no need for that. So jobs will be mainly created in the private sector.

We should consider that the demographic situation in Azerbaijan is very positive. Unlike some other countries, our population is growing, which is very positive. It needs to grow even faster. This, in turn, suggests that the process of job creation must be continued in the future. Again, the government will make effort in this direction. In the future, we will take all necessary measures for entrepreneurs. As I noted earlier, the provision of loans worth 300 million manats through the National Fund on Entrepreneurship Support next year is a record figure. Such an amount has never been allocated before. I think that we must maintain this course in the next few years to be able to provide entrepreneurs with new loans in four to five years due to the return of the loans.

Private enterprise development is ongoing both in the regions and cities. A lot is done to strengthen the industrial potential of our country, we have major plans. And these plans are already being put into practice.

The creation of new industrial parks, new stimulus measures are ongoing. New incentives are envisaged to further strengthen the successful and rapid development of the country’s industry in the near future. The public will be informed about these issues in the near future. In short, I want to say that private enterprise development is and will be part of our state policy.

Entrepreneurs in Azerbaijan enjoy conditions that are unrivaled. State support, financial support, technical and intellectual support is provided. Entrepreneurs, I want to say again, simply need to effectively use it.

The main issue related to agriculture and facing us and entrepreneurs is complete food security using internal resources. I set this goal a few years ago. At that time, the self-sufficiency ratio was very low. But we always set ambitious goals, because it is impossible to succeed otherwise.

A few years ago the task was set: we must ensure our food security using internal resources. I can say that we have covered a long and successful journey in this field. We can say that the main food products are made in Azerbaijan by 100 per cent now.

As for the imported products, i.e. those we still rely on imports for, I am sure that this dependence will also be eliminated in the near future, especially in the area of crop production. As you know, the first projects to create large farms are being implemented in this region. Major granaries have started to operate in Agjabadi and Beylagan Districts.

We have high hopes for these projects because these are pilot projects. Although these are big projects covering 5,000 hectares, it is only our first experience. I believe that the success of this experience will certainly lead to new steps in this direction. I am sure that our experience will be successful. We will see the first results of this experiment next year. Yield should increase significantly, it might be twice the average yield. Also, the introduction of new crop areas will also play a role in ensuring food security.

As a result of the implementation of the state policy, new business opportunities are created. These opportunities are created by the state, by the state policy. The state will mobilize all its efforts on the chosen areas. The creation of large farms requires machinery, irrigation, fertilizer, concessional loans. The state has assumed all this. So I want to repeat that the conditions created for entrepreneurs in Azerbaijan can’t be seen elsewhere. The entrepreneurs should use and appreciate them. At the same time, entrepreneurs should have a sense of social responsibility.

I am very pleased that our entrepreneurs are involved in various social projects in the regions. Some build schools, others repair them, others are engaged in charity. I welcome this. I believe that the benefits provided to entrepreneurs by the state and the financial support will make them more active in these matters. And today we will talk about different projects in the region.

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Closing remarks by President Ilham Aliyev

- During a recent Cabinet meeting we discussed the results of the socioeconomic development of our country in nine months. I want to repeat that these are wonderful and encouraging results, which essentially and fully reflect the work we have done.

Because all statistical indicators are backed up by our work and sound policies. It is no coincidence that in recent years, especially in the last two years, the non-oil sector began to develop more rapidly. It is no coincidence, it is perfectly natural. Non-oil sector development required some time. When adopting the first regional program in 2004, we took into account these realities and knew that it would take time for our intentions to transform into concrete projects. We worked very hard, and the sound economic reforms are already producing excellent results.

We are successfully resolving food security issues although Azerbaijan had never been able to provide itself with main food products. In Soviet times, there was a single economic complex and Azerbaijan imported main food items from other republics.

We exported grapes, cotton, fruits, vegetables. But meat, butter, milk, poultry, wheat – all these goods were imported from other republics. The current situation shows that we are either self-sufficient in basic food products or are very close to this goal. Issues related to meat have been resolved. We provide ourselves with meat by nearly 100 per cent. In the future, thanks to the development of livestock breeding, we will have export opportunities.

We have to think broadly about exports. While increasing our traditional exports, we also think about future exports of the goods that were imported in the past. Relevant instructions have been given. It has been said here that we will be self-sufficient in poultry in the coming years. This has also been possible by our judicious policy. When analyzing statistical data, we saw that we can’t provide ourselves with poultry even by 50 per cent. To this end, loans were channeled into this area of private enterprise. The ongoing and future projects will create this opportunity. So we will fully provide ourselves with poultry.

We had never been self-sufficient with milk and dairy products. Today, we provide ourselves by about 70 per cent. But I am sure that in a year or two we will reach a level of 100 per cent.

As you know, Azerbaijan has imported breeding stock for a few years. This too was an initiative of the state. This was necessary. We have been importing breeding stock for several years, so it will be great support for the development of dairy production and livestock breeding. I am very pleased that entrepreneurs have joined the initiative of the state. Large farms, livestock farms are already under construction in a number of places, in a number of districts, at the expense of entrepreneurs, and this process is widespread. At the same time, while analyzing agricultural development a few years ago, we saw that we don’t have sufficient storage facilities. Not just modern facilities, but in general – no facilities at all.

So we decided to build cold stores and resolved this problem in a short time. This is both great support for private enterprise development and an important means of regulating prices. So I can say that we eliminated the main problems in two years. But given the growing agricultural production, the construction of cold stores must be continued of course. Also ongoing is the construction of granaries, and taking into account the growing production of grain and wheat, we will, of course, consider allocating additional funds for this sector in the next few years.

So we use are effectively using the economic opportunities we have created ourselves. Funds are primarily allocated for economic diversification. At the same time, we also allocate funds for social issues. Salaries and pensions are raised every year. The payment of compensations for the deposits remaining from the Soviet era has begun and these deposits will be returned with the highest interest rate in the CIS and in the shortest period of time.

The country's economy has become one of the most competitive economies worldwide. I remember the early years of our oil strategy, when some western analysts and observers claimed that Azerbaijan would be an oil-dependent country, that we would be affected by the Dutch disease, i.e. the economy would be lop-sided. I am very glad this talk is gone. Our sound economic policies have already disclosed the opportunities of Azerbaijan to the world. According to the Davos Economic Forum, one of the most influential economic structures worldwide, Azerbaijan is in 46th place in the world and first in the CIS for economic competitiveness. This is the result of real economic reform.

Economic diversification is not just a good intention, is a reality. We have specific, well-conceived concept, strategy and specific projects for the coming years. The emerging large industrial centers, industrial companies, technology parks will significantly expand Azerbaijan’s industrial potential within a few years. In the coming years, our economy has to grow at the expense of the non-oil sector.

I repeat that these conditions have been created due to our sound economic policies. Our foreign debt is about 7-8 per cent of the GDP. In countries that are currently in crisis, this figure stands at 120-150 per cent. In developed countries which were not badly affected by the crisis, this figure is 70-80 per cent. Ours is 7-8 per cent. Why? Because we didn’t take unnecessary debts, we did not borrow, as they say, in order to keep populist promises. We do everything in a discreet manner, so that future generations don’t have to repay these debts. Actually, I think we must further reduce our foreign debt in the near future, although most of it is made up of the funds of international financial institutions. These are long-term loans provided at low interest rates.

So we don’t have to return them as soon as possible. Yet, I believe that our foreign debt has to reduce further in the coming years, so that we eliminate the problem completely.

All our statistics are at the highest level. Although the oil price dropped sharply several years ago, in the years of crisis, our population did not feel that. We did not look for objective excuses to reduce the rate of the manat, did not allow anyone to artificially inflate prices. Why? Because at the heart of our policy are citizens of Azerbaijan. Underlying our policy on economic reform and diversification is the human factor. Therefore, when analyzing the situation, we always analyze the outcomes of social and economic development. These two concepts are inseparable. But a strong social policy requires a strong economy.

We have a strong economy. Its key feature and advantage is that our economy doesn’t depend on anyone. We are not indebted to any foreign structure, as they say. We pursue our own policies, including political and economic.

Again, our foreign debt is so low that we don’t have to think about it. We are significantly expanding our economic opportunities. I want to stress at this meeting with businessmen of the region that we need a few years to achieve the main goal – to fully ensure food security and strengthen our export potential in the future. We have to develop a strategy in this regard. I am sure that production of basic foodstuffs will create a great export potential in a few years.

We have to access export markets more broadly. To discover, explore and access new markets, so that the absence or limited nature of exports don’t hinder our agricultural development.

Because if we have no exports and the domestic market is fully secured, then the development of agriculture may come to a halt. So we must take all the measures in advance to develop agriculture and make it widespread. I also note that I expect even more rapid development of agriculture as a result of the measures we took several years ago, this year, now and in the coming years. I see that. In nine months of this year, agriculture grew by more than 6 per cent. As a result of these measures and the projects entrepreneurs spoke about here, agricultural development will accelerate. Again, we conduct a thought-out policy in this area. It means economic development, social security, fight against unemployment and poverty, economic diversification, and strengthening of the country’s potential. The strength of any country is determined by its economic foundations. Without the economic support, if an economy is not self-reliant, the country can never pursue an independent policy. The basis of our independent policy is formed, of course, by the Azerbaijani people and our self-sufficiency. We rely on our own strength, talent and hard work of the Azerbaijani people. The stronger our economy, the bolder and more successful our political steps will be.

I am sure that regional business people understand our goals and will fulfill state instructions.

By fulfilling these instructions, they will, above all, enhance their own material capabilities and make effort to create new jobs, new excellent conditions for the people living in the region. As for the state policy, I want to repeat that public policy in this regard is very clear and unambiguous. There is no alternative to entrepreneurship. The market economy is fully established in Azerbaijan, 83 per cent of our economy is formed in the private sector. So these indicators show how correct our public policy is. I am sure that public policy on the one hand and patriotism, responsibility and business efficiency of entrepreneurs on the other will secure the successful development of our country. I wish all the regional entrepreneurs every success and new wonderful projects. Thank you.

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Then a picture was taken.