THE MAIN ACHIEVEMENT

The implementation of any plans and objectives, including in the economy, depends on their starting point - the results of economic processes in the past year determine the development of events in the current year. Traditionally, in Azerbaijan the final line under the statistics for the year is drawn at a cabinet meeting chaired by President Ilham Aliyev. Judging by the figures that were announced, although the past year turned out to be difficult for the country because of the fall in oil production, as head of state concluded, "all social and economic objectives facing the country were still successfully met, and thus, in 2011 the successful development of our country continued".

Records against the background of the recession

The 10.5-per-cent fall in oil production in the country compared to 2010, of course, could not but affect major economic indicators. Suffice it to note that the decline in the industrial sector amounted to 5 per cent, while the gross domestic product grew by only 0.1 per cent.

However, the fact that sooner or later Azerbaijan will have to face a drop in the production of "black gold" is quite expected. Many experts had even predicted that the country would face very negative consequences in this regard - a sharp economic decline, "Dutch Disease", etc. But, nevertheless, in 2011 Azerbaijan saw a growth, albeit small. And most importantly, this figure was achieved largely through the development of the non-oil sector - it grew almost in direct proportion to the decline in oil production - by 9.4 per cent.

Thus, the government's efforts to expand non-oil production (its growth in 2011 was 11.1 per cent) and the programmes adopted for specific tasks for specific sectors of the economy yielded practical results. Today against the background of the recession in the oil industry, we can say with confidence that the main task facing the government was fulfilled and the economy was diversified. As the president noted, "given that the enterprises, which we founded in previous years, will be commissioned this and next year, we will see that there are excellent opportunities to develop non-oil industries in the future".

The sustainable growth in our economy led to the fact that in 2011, our country achieved a record level of investment. For example, 17.6 billion dollars were invested in 2010. And in 2011, the volume of investment reached 20 billion dollars for the first time - 13 billion were domestic investments and 7 billion foreign. As noted by Ilham Aliyev, "this balance, that is the weight ratio, is positive. Foreign investors continue to invest in Azerbaijan. And local investors, local businessmen and the Azerbaijani government are doing all that is needed for the comprehensive and diversified development of our country."

Another record indicator of last year was the increase in foreign currency reserves, which reached 40 billion dollars for the first time. The increase in this rate continues almost on a daily basis, including through revenues from the management of these reserves. Under the new concept for the management of foreign currency reserves, this process will become even more diversified and secure from global processes.

Another very positive indicator of last year is that inflation was kept at one level - 7.9 per cent against the 19.6-per-cent growth in the population's money income. Given the negative crisis situation in the US and Europe, which are major trading partners of Azerbaijan, one can imagine how difficult it was for the government to keep the consumer price index from excessive growth. "We raise salaries, wages and pensions. Our major investment projects lead to higher prices anyway. How come an investment of 20 billion dollars did not affect inflation? The fact that we keep inflation at 7.9 per cent is already a big achievement," the president said.

In other words, in general, Azerbaijan continues to maintain its position as "an island of stability" on the very volatile economic map of the world.

Social sustainability

We must say that it was the stable economic growth that ensured the socially-oriented development of the country, i.e. first of all, the above-mentioned increase in salaries and pensions. For example, funds allocated from the state budget for the social expenses increased by 16.5 per cent, including expenses on social protection and social security - by 33.2 per cent.

As a result, about 900,000 people got an almost 40-per-cent rise in pensions, and now their average size in Azerbaijan is about 180-190 dollars, while the average salary is close to 460 dollars. This is despite the fact that in 2011, wages in state-funded education, health, culture, sports, science and other fields increased by an average of 10 per cent. "I can say that in the CIS, it is a great indicator. People's welfare is increasing, and the number of families receiving social aid is 120,000. On average, each household gets a monthly allowance of 106 manats," the president said.

Thus, all these indicators affected the poverty line, which increased three-fold and grew from 35.8 in 2003 to 106.9 manats in 2011. And the poverty rate for this period decreased from 44.7 to 7.6 per cent in 2011. As can be seen, along with the steady increase in the annual poverty line, the number of poor people decreased dramatically. According to Minister of Economic Development Sahin Mustafayev, the implementation of measures envisaged by the state poverty reduction and sustainable development programme covering 2011-2015 will play an important role in the further reduction of poverty.

Increasing employment plays an important role in this. For example, 94,000 new jobs were created last year, and 73,000 of them are permanent, while the unemployment rate fell to 5.4 per cent. Since the beginning of the programme against unemployment, i.e. since 2003, more than 1 million new jobs have been created. "These figures are both positive and encouraging," Ilham Aliyev said in conclusion.

There is no doubt that the figures will continue to vary in the same positive way - 2011 will be remembered as a year that turned Azerbaijan into a major gas producing state and gas exporter. In one year, two large gas fields - Abseron and Umid - were discovered at once, and the total amount of gas reserves there reaches nearly 700 billion cubic metres. In addition, issues of transit, on which quite hard work was carried out for several years, were finally resolved last year. All this, of course, opens up new opportunities for the economy in attracting additional investment worth tens of billions of dollars, which will result in the creation of new jobs and the development of local companies. "Now we ourselves are making any significant products in the oil and gas industry - pipes and other products. This means that Azerbaijani companies will be increasingly involved in carrying out orders, and they will pay more taxes into our budget and create more jobs. Of course, this chain reaction will have a positive impact on every sphere," the president said.

In other words, the gas potential will help the country to compensate for the negative effects of the decline in oil production. Although, we should note once again, even against the background of regression in fuel production, the economic indicators can be confidently called successful. It is not without reason, as Minister of Economic Development Sahin Mustafayev noted, that Azerbaijan's success in 2011 was appreciated by influential international organizations. Thus, at a time when the ratings of developed countries are falling, Standard & Poor's increased the long-term independent credit rating of Azerbaijan by one notch - to" BBB-" - in December last year, while the rating outlook remained "sustainable". Positive assessments of the Azerbaijani economy were also given by Fitch Ratings and Moody's. According to the report "Global Competitiveness Index", Azerbaijan's economy ranked 55th among 142 countries and 1st in the CIS in terms of competitiveness.

Thus, by the end of 2011 the economy formed a fairly stable starting point for progressive developments in the coming year. And this is the most important economic achievement.