EVENTFUL SIX MONTHS

The stable growth of macroeconomic indicators, the increase in the number of businesses, the significant rise in the influx of tourists into the country and the improving social status of the population are a few of the events that marked the first half of 2012 in Azerbaijan. The achievements of the past six months and the targets for the next six months were discussed at a meeting of the Cabinet of Ministers chaired by President Ilham Aliyev.

In principle, the situation in almost all macroeconomic indicators at the beginning of July 2012 can be considered satisfactory. For example, the gross domestic product grew by 1.5 per cent and the non-oil economy - by as much as 11.3 per cent. The head of state pointed out in his speech that even though the dynamics of the growth in GDP falls short of earlier periods, with the growth in the country's economy, each percentage is even more important. "Every percentage of the economy is almost $ 700 million, and the 1.5-per-cent growth in our economy shows that the country has produced goods worth $ 1 billion more than last year," Aliyev said. The reason for the small increase is that there is some decline in oil production in the country, which forms a large part of our economy. For the same reason, there was a 3-per-cent decline in industrial production.

As for the second component - the non-oil economy, the situation here is very good, and the development of the non-oil industry is at 8.3 per cent, which is the result of the implementation of the industrialization programme in recent years.

Also, the volume of investment in the economy increased by 30 per cent compared with last year. If we work at this pace until the end of the year, investments will reach almost 18 and perhaps, $ 19 billion. For a country with not such a large population as Azerbaijan, it is a great figure. Given that at least $ 10 billion are invested each year, all infrastructural and social issues facing the country will be resolved in the coming years, Aliyev said.

In general, the president evaluates the macroeconomic situation in the country as positive and stable: inflation is only 2.2 per cent while the population's monetary income grew by 14.2 per cent. That is to say the difference between inflation and the population's monetary income is 12 per cent, which is quite a positive indicator.

"In six months, agriculture grew by 10.4 per cent. I think that this is also a record figure for the last few years. We expected this figure and knew that it would be achieved as attention to the development of agriculture, investment and reforms increases productivity. The new sowing areas, which have been and will be put into circulation in the coming years, will give an even greater impetus to the development of agriculture, of course," the president said. It is also important that the process of creating large farms has got under way. The first 5,000 hectares are already being prepared, which will be the beginning of the process in reality. All this will eventually help achieve the main goal - 100-per-cent self-sufficiency in basic food products in the country.

However, it should be recognized that the most attractive sector of the Azerbaijani economy in the first six month was, of course, tourism. The Eurovision Song Contest held in Baku gave a powerful impetus to its development. "In nine months, which is probably a record indicator worldwide, we built such a great sports and concert palace as the Crystal Hall. The Flag Square was being expanded anyway, and we just accelerated the work and created all conditions. From an organizational point of view, this was the best competition. I believe that the Eurovision contest held in Baku can serve as a model for other cities," Ilham Aliyev said.

Minister of Culture and Tourism Abulfaz Qarayev added that just last year, Azerbaijan was visited by more than two million foreigners for the first time, i.e. 2,239,000, which is a 14-per-cent increase compared to 2010. There are 508 hotels in the country, and the number of people put up in them increased by 16.3 per cent compared to 2010, and more than 50 per cent of them are foreign citizens. In any case, 45 hotels are under construction in the country and there are 178 travel agencies.

The beginning of the execution of the decree of the Azerbaijani president "On the issue of personal one-time payments to depositors of the former Savings Bank of the USSR, who are citizens of Azerbaijan", for which 300 million manats were allocated from the president's reserve fund, can rightly be considered another significant social and economic event in the first six months. According to the Minister of Finance Samir Sarifov, from 1 June to 10 July this year, of the 315,000 appeals from depositors received by Kapital Bank, which is the legal successor to the USSR Savings Bank, positive decisions were taken on 192,000 appeals and 86 million manats were paid to 156,000 depositors.

The minister noted that in order to consider possible controversial issues, a special interdepartmental commission has been set up.

According to the president, the most effective, fairest and most reasonable option for people in the post-Soviet area has been used precisely in Azerbaijan. Both in terms of time - because all the compensation will be paid in two years - and in terms of the amount paid. "If we compare the Soviet rouble not with the manat, but with the dollar, the compensation is paid with a coefficient of approximately 1 to 5 and 1 to 6. This is the highest rate in the former Soviet Union," the president stressed.

In general, it proved possible to perform the specified amount of activities and work thanks to the good financial situation of Azerbaijan, whose foreign exchange reserves have already reached $ 44 billion with a low level of public debt (7 per cent of GDP). Perhaps, it will grow to a certain extent by the end of the year, as loans taken in previous years are still coming. But the president gave an instruction not to exceed 10 per cent to avoid problems with repayment facing many developed countries today. Thus, the country is not only steadily countering the wave of the crisis, but is also taking action against its impact in future years.