Details added (first version posted at 16:36 on Oct.23).
BAKU, Azerbaijan, Oct. 23
President of the Republic of Azerbaijan Ilham Aliyev has received Mikayil Jabbarov in connection with his appointment to a new post - the Minister of Economy.
President Ilham Aliyev said:
- I have decided to appoint you the Minister of Economy. You have worked in various positions, including as Deputy Minister of Economy, worked as Minister of Education and Minister of Taxes. I should specifically mention your activities as Minister of Taxes. As a result of the reforms carried out in the tax system, transparency has been ensured and uniform rules are applied to businesses.
Taxes play a stimulating role for entrepreneurship in Azerbaijan, and the results are evident. This year, the Ministry of Taxes has collected more than 350 million manats above the plan, and this, of course, is a manifestation of transparency. Of course, these funds have allowed the opportunity to implement a very extensive and serious social package this year. I can say that there has not yet been an analogue to this social initiative. Four million two hundred thousand people have benefited from this social initiative, the minimum wage has been almost doubled and the minimum pension has been raised by more than 70 percent. In terms of the purchasing power of the minimum pension, we are in first place in the CIS and in terms of the average pension we are in third place. In other words, this is indeed a major social initiative. Of course, if we hadn’t had financial opportunities, we could not have done it.
Given all this, I am appointing you as Minister of Economy. This is a very responsible position. Of course, the development of the Azerbaijani economy by means of the non-oil sector is now our top priority.
Great leader Heydar Aliyev once said that a country with a powerful economy is capable of doing a lot. This is absolutely true, and our economic independence today lies at the heart of our political independence. I have repeatedly noted this in my speeches. If our economy depended on external circles, we would not be able to pursue a successful political course. The central principle of our political independence, including our fundamental position in foreign policy, is economic independence. Since the very beginning of my activity as President, I have tried to achieve economic independence and given relevant instructions. Today, Azerbaijan does not depend on anyone, on any country, both economically and politically, and pursues a principled independent policy that protects the interests of the Azerbaijani people. In order to protect the interests of the Azerbaijani people and state interests at all international platforms, we, of course, must have economic opportunities.
Closely monitoring the developments unfolding in the world now, we can see that countries that are economically dependent on other countries or international financial institutions cannot conduct an independent policy. They turn into a kind of hostages, an instrument for large states. In some cases, the governments of these countries are pressured to take actions against the interests of their peoples, their national interests, and they cannot withstand such pressure. We have also come under pressure. At all times during my presidency, we have been faced with pressure. But we were able to withstand it, to put up resistance, to speak our word, and no pressure or threats can affect our policy. Why? First of all, we rely on popular support. Recent opinion polls testify to the high popular support for our government. I have already talked about this – we are in one of the leading places on a global scale in terms of confidence in the government according to the latest report of the Davos World Economic Forum. Therefore, economic independence remains our top priority. In order to achieve it in the coming years, we must make great effort.
The oil and gas sector accounts for the main part of our economy. This is natural. This picture is observed in practically all countries rich in oil and gas, and this is a fact. Sometimes this is presented as a negative factor. I cannot accept this as a negative factor because it was due to the development of the oil and gas sector that we implemented large-scale infrastructure projects, settled more than 300,000 thousand IDPs at the expense of the revenues from the oil and gas sector, strengthened our army and implemented major social projects. If we had no oil and gas or if we had not developed this sector, then how could we have developed? Who would have supported us? Would any country or international financial institution have helped us?
We remember those years well, I remember them very well. In the 1990s, we did not have money and were somewhat dependent on international financial institutions and large states. And they sometimes tried to dictate their will to us. Therefore, economic independence forms the main line of my policy. This gives us strength, confidence, our people live in security and we are implementing all the projects important for the country.
I would conditionally describe the current period as a post-oil era. Not because we are running out of oil. On the contrary, our resources are quite large, including gas reserves of 2.6 trillion cubic meters. New contracts have been signed, exploration is under way, our oil and gas sector will continue to play an important role in the life of the country. I am describing the current period as a post-oil and gas era because this sector needs to be pushed aside in our policies. We have done everything possible in this area – the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum oil and gas pipelines, the Southern Gas Corridor are historic projects. We did that! Both we and the future generations will see the benefits of these projects. However, we must build our economic development on the basis of the non-oil sector, and here, of course, the Ministry of Economy has the leading role to play. I am sure that as Minister of Economy you will fulfill these instructions.
Our economy must be sustainable. I am not satisfied with the current rate of economic growth. True, there are objective reasons for that. Currently, oil production has somewhat declined, and this has resulted in a certain slowdown in the gross domestic product. However, in nine months the gross domestic product grew by 2.5 percent and in the non-oil sector by 3.5 percent. I think that this is a good indicator, but it does not suit us. True, agriculture has increased by more than 7 percent and the non-oil industry by 15 percent. These are very positive facts. However, we must achieve sustainability of this development. To achieve this, very serious reforms must be continued.
There is no alternative to reform. At the inauguration ceremony, I expressed my thoughts on the new economic model. The main contours of it were defined at that time. The reforms carried out ever since, including personnel reforms, pursue this very goal. Personnel reforms are necessary, they are inevitable. As I said earlier, in the 21st century we will not be able to achieve success with old thinking. Of course, new, competent, knowledgeable and modern personnel should first of all be attached to their homeland, be free of any external influence, be patriots and make effort for the development of the homeland.
These are the key tasks. I can say that the reforms are producing good results. In nine months of this year, more than 100,000 employment agreements have been registered. What does this mean? These 100,000 people worked in the shadow economy. They were paid in envelopes. In some cases, the low salary they officially received did not reflect reality. This jeopardizes our economy. In addition, these people will retire in the future. How will they receive pension? Therefore, I am urging our citizens, including those working on hire, not to get involved in such practices. If an entrepreneur pays you 500 manats for example, of which 250 manats officially, do not agree to this because you will not receive a pension tomorrow. There will be a problem of social insurance. Now we are moving to compulsory health insurance. There will also be problems. Of course, it is necessary to strengthen control there. I believe that with the registration of more than 100,000 jobs, we have taken them, and indeed these entrepreneurs, out of the shadow. Eighty percent of these jobs are registered in the non-oil sector. So far, it is possible to say that at least tens of thousands of people still work in the shadow economy in one way or another.
Therefore, this area requires very serious attention and very serious steps. I am sure that the Ministry of Economy will cope with this task. In general, our economic development should proceed at the expense of the non-oil sector. A lot of work has been done in recent years to achieve this, industrial estates with a special tax regime have been created. Agricultural estates have been established, and productivity there is also higher. However, we should resolve all these issues first of all through the prism of business development. We are very well aware that the key role in the gross domestic product of in developed countries is played by small and medium-sized businesses. This is still not the case with us. We, too, should try to create conditions for every talented person who has a vocation and an interest in business to be able to do this, be free from pressure and government interference. We should remove these dirty hands from entrepreneurs. In some cases, government officials, leaders and representatives of local executive authorities do not provide opportunities, especially in the regions. If someone opens a small business, they start sucking people’s blood like leeches. The most stringent measures will be taken against such people. Law enforcement agencies have already received very serious instructions from me, and you as minister should try to prevent such phenomena. If you observe this, inform me immediately. The most serious sanctions and measures will be taken against such unqualified officials. We must give entrepreneurs breathing space, so that they could work calmly. There can be no payments other than taxes.
At the same time, unfair competition also poses a big problem for us. Government officials who have their own business interests condone this. Using their capabilities, they squeeze out competitors, sometimes slander them. They create conditions for the competition to either sell their business or leave. This cannot be allowed either – without fearing anyone. I know that there have been attempts to exert pressure on you as minister, especially as minister of taxes, so that their businesses remain untouched. I know that you stood up to that quite firmly. I always supported this and always supported you. I said that no matter what, all work should be carried out at the highest level. No-one can have any benefits. There is one benefit: to pay taxes, to serve the Motherland with dignity and not to allow violations.
Therefore, you have major tasks. The sustainable development of the country's economy is currently our top priority. As I said, this will allow us the opportunity to allocate more funds to the social sphere.
Minister Mikayil Jabbarov: Dear Mr. President, thank you very much. First of all, thank you for your confidence. I am fully aware of my responsibility. The successes we have so far achieved under your leadership are the result of your support, the hard work of my colleagues, while the existing shortcomings are my responsibility.
Your assessment of our activities is the highest honor for me. Under your leadership, together with relevant ministries and state institutions and based on the principles enshrined by you, we will work to ensure sustainable economic development of our country. I promise that I will make every effort to achieve these goals.
I consider the continuous increase in the competitiveness of our economy, the continuous strengthening of our economic independence and the development of the economy to be my main task. I am sure that the development of the economy is the only way to increase the incomes and opportunities of the state and citizens. Dear Mr. President, it is a great honor for me to be part of the government of such a political leader as you. I want to once again express my deep gratitude to you for your high confidence.
President Ilham Aliyev: Thank you! I wish you every success. I am sure that the results will be good.