AZERBAIJAN'S OFFENSIVE AND ARMENIA'S LAST CHANCE

The government of Azerbaijan has announced the results of the country's socioeconomic development in the first half of 2010. At a cabinet meeting chaired by President Ilham Aliyev, it became known that the Azerbaijani economy continues to maintain positive momentum despite the fact that the situation in the global economy has not completely stabilized. According to the president, economic growth in Azerbaijan was 3.7 per cent in six months of this year. This is high enough, considering that the base of economic development in the previous year was very high.

If in the first years of reform economic growth in Azerbaijan depended on the situation in the oil and gas sector, today it is linked to multi-faceted development. The oil sector grew by 2.4 per cent in six months and the non-oil sector by 15.3 per cent. Aliyev stressed the need to strengthen this trend in the future in order to minimize dependence on the oil factor.

The population's incomes are growing, outpacing inflation. The population's cash incomes increased by 9 per cent in the first half-year, while inflation was 4.9 per cent. Today, the average monthly salary in Azerbaijan is about 400 dollars, while the average pension is 130 dollars. These indicators also rose in the first half of this year. The government thus intends to continue to raise pensions and minimum wages.

An important factor in maintaining the country's self-sufficiency and sustainability to external risks is currency reserves, which have increased from 20 to 24.7 billion dollars since the beginning of the year. The growth in foreign exchange reserves affects the government's confidence in carrying out reforms. To verify this, it is enough to draw attention to the structure of investment in the Azerbaijani economy in the first half-year. Overall, 3.8 billion dollars were invested in the country's economy in six months, of which 3 billion are domestic investments and money spent on the implementation of government programmes, as well as investments by Azerbaijani companies. The structure of investments in Azerbaijan's economy shows that the country does not depend on foreign investment. That is exactly one of the factors that helped the country to emerge from the global crisis with minimum losses.

Positive indicators in the context of the global crisis show that Azerbaijan has ensured sustainable development of its economy in the foreseeable future. Given the growth in world demand for energy, the government expects no problems with the implementation of its long-term development strategy. But Baku's main problem continues to be the occupation of Azerbaijani territories by Armenia, and the growing economic opportunities of Azerbaijan will definitely affect the resolution of the problem.

Suffice it to say that recently, Azerbaijan's state budget was corrected and upgraded to 15 billion dollars. It is planned to allocate an additional 500 million dollars for military spending. Thus, Azerbaijan's military expenses are 2.15 billion today, which is more than the entire state budget of Armenia.

Despite Armenia's attempts to ignore this factor, the imbalance of economic opportunities will sooner or later force Armenia to recognize the price of isolation and abandon its groundless claims to its neighbours. It must be noted that Armenia is the only country in the South Caucasus to make territorial claims to almost all its neighbours.

Azerbaijan's position in this issue is strengthening and finding more and more understanding and support from the international community. It is no accident that, speaking at the opening of the central headquarters of the Azerbaijani community of the Nagornyy Karabakh region in Baku, Aliyev stressed that the situation surrounding the settlement of the conflict is developing in a positive direction for Azerbaijan.

He noted that the last 5 or 6 years have created a format of talks called the "Prague process". "Today we have come to the logical end of this process or its critical phase. In December, updated proposals were presented on the basis of the Madrid principles. One party - Azerbaijan - has accepted these proposals in principle. The other party either rejects them or is biding its time," the president said, stressing that if Armenia does not respond to the updated Madrid principles in the affirmative, the continuation of negotiations in this format will be meaningless. This means that the peace process will lose its relevance. Aliyev described the "Prague process" as the last chance: "It's the last chance for Armenia to voluntarily leave the occupied lands and thus ensure its future and security and no longer live in fear."