THE HOMELAND BEGINS IN THE VILLAGE

"The state programme on the socio-economic development of regions", which was adopted four years ago, on 11 February 2004, can be rightly described as the main economic programme of President Ilham Aliyev. The president first presented this programme ahead of the presidential elections in 2003. The adoption of this document laid the foundations of a new stage in the development of our country and raised the development of regions to a level that meets one of the priority directions of state policy. On the basis of this programme, it was planned to implement the president's most important social promise - to create 600,000 new jobs.

For this reason, while addressing a conference on the fourth anniversary of the state programme, Ilham Aliyev summarized the results of his economic policy in his first term in office and outlined the work that still has to be done.

Task 1: To eliminate unemployment and poverty

During these four years, the Azerbaijani economy demonstrated an unprecedented pace of development throughout the period of the country's independence - Azerbaijan's gross domestic product (GDP) doubled in this period. According to the results of 2007, per capita GDP in Azerbaijan totaled 3,700 dollars, while in 2008 it is expected to reach 4,500 dollars.

The volume of the country's currency reserves stands at 7.3 billion dollars at the moment. Aliyev pointed out that, to all appearances, this figure is likely to double in 2008. In four years, Azerbaijan's budget increased tenfold, and the volume of the combined budget stands at 12 billion dollars this year.

At the same time, one of the priority objectives of the state programme, as we said above, is to solve social problems, i.e. to eliminate unemployment and poverty. In 2003, it was announced that it is necessary to create 600,000 new jobs in five years in order to eliminate poverty and unemployment in Azerbaijan. About 650,000 new jobs have already been created, and 480,000 of them are permanent jobs. This is the first and main achievement of the state programme. Ilham Aliyev kept the promise he made ahead of the 2003 elections, proving that good management of the economy may help achieve the goals that seem impossible at first sight.

The new jobs and the growth in the volume of the population's income (the minimum salary alone increased by 6.7 times in this period) have had a tremendous influence on the reduction of poverty the level of which has fallen from 49 to 16 per cent over the last four years.

"To be honest, poverty reduction is much more important to me than economic indicators. The causes of high economic indicators are known. There is the oil factor and economic reforms which we are successfully conducting. But first of all, we must ensure that there are no poor and unemployed people in Azerbaijan and that those who wish to work have jobs," Ilham Aliyev said while commenting on the results of the programme.

As a consequence of all this, there is another important achievement of the state programme - the outflow of work force from the country has stopped. Moreover, there is a reverse process in place right now - citizens of other countries are trying to come to work in Baku, and people who once left their homeland are now coming back.

Thus, the tasks outlined in the state programme have been successfully implemented by 98 per cent, though the programme expires only one year later, Aliyev said. If we take into account that considerable amendments have been made to the programme and 13 instructions have been signed on the development of specific regions of the country in this period, we can confidently say that currently, this programme is the strongest and the most comprehensive document on which the republic's economic development is based.

Task 2: Development of the infrastructure

The programme separately addresses the restoration of the country's infrastructure which fell into decline as a result of the economic crisis after the collapse of the Soviet Union. Only now, thanks to the growth in oil revenues, is there an opportunity to implement infrastructure projects, and huge state investments have already been made in this sphere. This year their volume will reach 3.5 billion dollars.

First of all, the government's task was to provide the population with electricity, gas and drinking water. It is no secret that until recently, residents of many regions could only dream about them.

On the basis of the state programme on the development of regions in 2004-2009, it was planned to commission power stations with a capacity of 3,000 MW. Power stations with a capacity of 700 MW are already operational. In the next few years, it is planned to increase their capacity to 3,000 MW. If we take into account that up till now, the overall capacity of power stations set up in Azerbaijan has been 4,500 MW, it turns out that the country will in fact double its economic potential in five years. Moreover, Azerbaijan will not just meet its own demand for electricity in the next 10-15 years, but may also start exporting it, which will increase the country's economic influence in the region, Aliyev said.

On the basis of the state programme, all district centres, except for one or two, have already been provided with natural gas. Gas distributing networks have been created even in regions which did not get gas before. The level of gasification is 80 per cent in Azerbaijan today, which is also quite a high indicator compared to a number of countries that extract and export much more gas than Azerbaijan. But the task is to provide the population of Azerbaijan with as much gas as possible. "Thus, in 2008-2009, the process of gasification should be going on at a high pace," Aliyev said.

Moreover, Azerbaijan has already become a major gas supplier in both the region and Europe.

As for providing the regions of the country and Baku with high quality drinking water, we have already started working on this, but most of the work will be done in the next two years. According to the government's plan, it is planned to build water pipelines and sewerage systems in all districts. In order to supply high quality drinking water to Baku, the Oguz-Qabala-Baku water pipeline is being built with funding from the State Oil Fund. "This shows once again that Azerbaijani oil serves the Azerbaijani people," Aliyev said.

As for the updating of roads, there is obvious progress here. New flyovers, bridges and underground passages open almost every month. Motorways which will link Baku to regions and Azerbaijan to neighbouring countries are being built right now. At the same time, projects on long-distance motorways are being drawn up. The main objective today is to ensure that all the roads of Azerbaijan, both motorways and country roads, meet the highest world standards, according to the president. The current pace of road construction shows that this task will be implemented.

Of course, these infrastructure projects will have a positive influence on the development of entrepreneurship in Azerbaijan. Power and gas supplies and new roads return regions to life, create new opportunities to develop tourism and allow businessmen to use these benefits to set up and develop their businesses. This means the creation of new jobs and poverty reduction.

Assistance to business development is the main direction of President Aliyev's economic policy. He has repeatedly publicly expressed his political support for businessmen and has taken serious steps in this direction by approving special state programmes, introducing a number of tax and customs privileges and creating a "one-window" system to register business entities.

The state also provides practical financial assistance through the Azerbaijani National Fund to Support Entrepreneurship. In 2004-2007, businessmen received loans to the tune of 235.6 million manats. This money was used to credit 6,194 projects. This year alone, the fund will allocate another 95 million manats for this purpose.

In general, as we said above, all the projects being implemented within the framework of the state programme on the development of regions will get stronger financial support in 2008. It is not that 2008 is the last year of the programme. President Ilham Aliyev has long issued an instruction to draw up another five-year programme, and it is likely to be approved by the end of the year.

The head of state himself sees the main objective of the second stage in addressing all other socioeconomic problems of regions of the country. Moreover, the country should meet European Union standards by all criteria - political, economic, regional, and infrastructure, as is planned by the European Neighbourhood Policy which includes Azerbaijan and was adopted 18 months ago.

And finally, the most important thing: "I have repeatedly said this: the new programme should secure a solution to all issues and problems of every village. We must do everything possible in order to address all issues that concern the Azerbaijani people in 2009-2013." This is how Ilham Aliyev outlined the new stage of his economic policy ahead of the elections in 2008.