President Ilham Aliyev: 'Our nonoil industry is growing too'

"Our 10-year development plan which was defined in 2003 is completing this year.

The program of regional development was adopted in early 2004 and its second stage is to be finalized this year. I am sure that the settlement of all issues set in the program will be ensured by the end of the year".

The statement came from President Ilham Aliyev speaking at the session of the Cabinet of Ministers held under his chairmanship, the official website of president reports.

He said, overall, last year was very successful for the economy of the country. And this is not by accident since the achievements of the last year were laid in the previous period.

"Our thorough economic policy already produces wonderful effects, the dynamic is positive and the development is very significant. Indeed, in the beginning of 2012 we had no doubts related to the outcomes of the year. At the beginning of the last year I said that I am sure that 2012 will also be successful. And it was really so. All economic indicators are on a high level. The Gross Domestic Product has risen by 2.2%. Indeed, this is a very high level for the developed countries, especially in the years of crisis. Certainly, it was not quite acceptable for us because in the previous years our rates were higher. But given the fact that there was a drop in oil production last year and industrial production has dropped, generally, by 2.3% while the growth in GDP was 2.2% which is a very positive indicator.

The most encouraging is that we attained this growth through nonoil sector. Last year our nonoil sector grew by 9.7%. Thus, we managed to attain the task in diversification of country’s economy set last year.

Our nonoil industry is growing too. This also proves that over the past years the industrialization policy is being held in a right direction. Our nonoil industry has grown by almost 8%, agriculture by almost 6%. Macroeconomic situation is very positive. Inflation is on the level of only 1.1%. This is the lowest level over the past years. Meanwhile, the monetary incomes of the population have grown by 13.8%. That is the difference between inflation and monetary incomes makes over 10%. I think this is among the highest indicators on the global scale.

It is not an easy task to keep inflation on a high level. It has to be taken into account that very big social programs were implemented last year. Among them, was the initiative on providing the citizens with compensations for the deposits of the Soviet times. The state has already issues hundreds of millions of manats as compensation. This has become an additional load for the macroeconomic situation. Along with this the investment costs reached a record level. By official statistics, last year investments topped $22bn. Of them, domestic investments made a bit more than $13bn and foreign investments made $9bn. This is a very positive indicator. Primarily, this proves that it has been several years that domestic investments prevail in overall investment portfolio. On the other hand, investment of nearly $9bn proves that Azerbaijan is a very reliable partner, very attractive country for foreign investors.

The economic reforms in our country, the economic liberalization of our policy of integration with the world economy has led to foreign investment of nearly $9bn. Certainly, the ratings of international credit agencies play not a small role in this issue. Last year the leading credit rating agencies of the world have increased the credit ratings of Azerbaijan. This, I can say, a very rare event in the modern world since the ratings of some developed countries are decreasing while the credit ratings of Azerbaijan are growing and this is the result of the conducted economic reforms.

In general, our economy is highly assessed by other influential international structures. The WB reports put Azerbaijan on highest places for the business management indicators. According to the estimates of the Global Davos Economic forum, for its competitiveness Azerbaijani economy is on the 46th place in the world and the first in the CIS space. This is the result of the conducted work and we certainly see this positive dynamics in the everyday life. Our financial opportunities are growing. The budget of this year is also on the record level, and nearly AZN 20bn will be spent.

Last year we managed to raise our monetary reserves. Though we also had much spending. Currently, our general monetary reserves are on the level of $46bn. This is a very high figure. I believe that it is a very high figure on a global scale. In some cases the monetary reserves are compared to the gross domestic product of the country and I do believe that by this indicator we occupy one of the leading places. Our monetary reserves make 70% of the gross domestic product. That is the economic stability-naturally, the economic stability, built on a firm political stability-infrastructural projects, social programs and our activity in other spheres produced wonderful effects in 2012.

The program of regional development is fulfilled successfully. As I have noted, the first program was adopted in 2004 and the second program was adopted in 2009. The second program is already nearing completion. All tasks have been fulfilled. 117,000 new jobs were opened last year, including 93,000 permanent jobs. 1,200,000 new jobs have been opened since the start of the program which, in turn, promoted significant decrease in unemployment. Unemployment dropped further in 2012 and is now on the level of 5.2%. Poverty has to do with unemployment and it has also dropped from 7.6 to 6%. I believe that this is a wonderful indicator even for the developed countries.

As a result of the implementation of the work scheduled for 2013, the implementation of new infrastructural projects, social programs, I am sure that the poverty rate will further decrease and thus the task that we set 10 years ago – eradicate poverty in Azerbaijan-will be fulfilled.

Last year was very remarkable in industrialization. Huge work has been done both for the creation of large industrial enterprises and the development of small and middle entrepreneurship. The volume of loans to entrepreneurs is growing. This is a great contribution to real economy, as well as the manifestation of the policy of the Azerbaijani state related to entrepreneurship and private sector development.

We have successfully settled issues of food security. The 6% growth in agricultural production is certainly a result of the work. We will speak about it today and we have definite proposals for 2013 too".