President of the Republic of Azerbaijan Ilham Aliyev has met with members of MEDEF (Movement of the Enterprises of France) International in Paris.
Vice-president of MEDEF Marie-Ange Debon greeted the President of Azerbaijan.
She said: Dear Mr. President, Your Excellency, dear Ministers, dear Ambassadors, dear members of the delegation.
We are very honored, very glad, to have you with us today. I think it’s not the first time that we meet you. With MEDEF international you have a long standing relationship. It’s your ninth meeting with MEDEF international. So it’s quite impressive.
I had the opportunity to lead a delegation in May, and you received the delegation. Some of the people who we met in May are in the room. I think it was both very helpful, very productive and fruitful to have these exchanges.
Today, Mr President, I think, you can see that your visit attracted a lot of people, a lot of companies. In fact we have more than 70 companies from most of the sectors of the French economy, which have asked to be allowed to attend. So it demonstrates obviously that your country attracts the attention of French companies. It demonstrates also that both countries want to further develop their economy. So, today it’s a real opportunity for all these companies. And thank you again for this opportunity to raise questions about all the initiatives, all the projects that you have launched.
We are impressed by all the initiatives, which have been launched. We would like to be able to share with you, to exchange with you about other projects implemented in Azerbaijan or all projects that you want to launch in order to have a more diversified economy in Azerbaijan. I’m not going to be long. We are all here to listen to you. So thank you again, Mr. President. If you agree, we will have some questions from the room. But first, the floor is yours. Thank you again. And thank you to our two ambassadors, who perfectly know that diplomacy and economy are too strong topics, and support a lot of companies to better work together. Thank you very much, Mr President.
The head of state made a speech at the event.
Speech of President Ilham Aliyev:
Thank you very much for your invitation. I am very glad to meet with the representatives of MEDEF again. As you already mentioned it’s my ninth meeting. During my first official visit to France, I had a meeting with the French business community. And that was very important from the point of development of our economic cooperation. And I’d like to underline the very important role of MEDEF and members of MEDEF in the promotion of bilateral economic cooperation.
Today I think we have a very high level of economic ties. Many projects have been implemented, many French companies successfully work in Azerbaijan. According to the information I received before my visit to France, more than 50 French companies successfully work in Azerbaijan. The total investments in our economy are more than two billion dollars, primarily in energy sector. But also there are some investments in non-oil sector, which for us, at this stage, is very important. And the volume of contracts signed by the government structures of Azerbaijan and French companies is close to two billion dollars. So, this shows, first of all, the potential of our country. This shows the interest that the French business circles show in working in Azerbaijan, and also it shows that in Azerbaijan we have very good conditions for local and foreign business groups to work and to invest and to be good contractors. French companies working in Azerbaijan helped us to develop different sectors of our economy. We have very strong ties in oil and gas sector, which is a traditional sector for us. And the projects, which are being implemented, lead to mutual benefit.
We have also developed strong cooperation in the areas of infrastructure, transportation, public transportation, metro and transportation related to the railroad infrastructure, water management, and investments in this area. Then I would name space industry, which is relatively new for our country. But several years ago Azerbaijan joined the international space club, with already two satellites in operation. And hopefully the third one will come again with active participation of French companies.
We have good prospects in the area of agriculture. I am glad that during the last several years this sector of our economy also started to develop rapidly, and also with the participation of French companies, particularly in development of our vineyards, and using our climatic conditions to maximum degree in order to increase productivity of our agricultural products.
We have good cooperation in the area of education. The French Lyceum, which already operates for three years, is a good indicator of this cooperation. After that we opened the French-Azerbaijani University. So, this not only strengthens our educational potential, but also the children and young generations who study in these educational centers are already becoming kind of public ambassadors of both countries because their life will be linked to cooperation with France.
In Azerbaijan, we have developed a very substantial reform package, primarily last year. Last year was a year of very deep economic reforms, which received very strong support from international financial institutions and which lead to diversification of our economy. In fact, we were working on that for many years in order to reduce dependence on oil and gas, and managed to do it. Today, oil and gas is something more than of thirty percent of our GDP. The rest part is non-oil sector. Now we actively work on diversifying our exports. That is needed especially now, when the oil prices collapsed three-four times. And we need to compensate the revenues, which we don’t get now as before, with a non-energy export potential. Therefore, we invested largely in industrial, in agricultural sector and we are also looking for the markets. We have traditional markets, which are in the neighborhood. But the European market is also very attractive for us.
Taking into account that last month we launched negotiations with European Commission on a partnership agreement, which is supposed to be a very comprehensive document, which will cover all the areas including economic cooperation, I think that one of the important elements of our cooperation could be increase of our bilateral trade. Today, it is, I think, less than one billion euros. But primarily if you look at the structure of our trade it’s mainly our oil export to France. Therefore, we need to diversify it, to buy more and sell more. And I think we have very good instrument of our economic cooperation, which is a joint economic commission, which met relatively recently and which addresses all the important areas of our cooperation. Reforms will allow us to have a long-term sustainable development, economic development and modernization of our country and our economy because, as I said, already several times in Azerbaijan, for us the post-oil period has already started. Not because we run out of resources. No. We have huge oil and gas reserves, which will be available for the markets, for the decades ahead. But because now we need to plan our future as if we don’t have natural resources, base our economy on competitiveness, on proper management.
In our reforms, of course, we also use experience of developed countries. We also have good consultancy, which helped us to prepare the strategic road maps for every sector of our economy. Economic development in Azerbaijan is stable. We had in previous years a very high rate of GDP mainly driven by oil and gas sector, but not only. Today, stable economic and political situation in Azerbaijan is one of the main prerequisites for attractiveness of our economy. We achieved those results despite the very heavy burden, which is a humanitarian catastrophe. As a result of the Armenian occupation we have to accommodate hundreds of thousands of refugees and IDPs who lost their homes, their property because of the Armenian aggression against Azerbaijan in violation of all the international law norms. So, we have over a million IDPs and refugees as a result of this aggression. And taking care of them also needs a lot of money. We invest largely in social protection of these people. And 250,000 of them were provided with new apartments and houses during the last years. It is size of a big city where we built all the modern infrastructure.
Talking about the conflict I’d like to express some concern with respect to some companies from Europe, and also unfortunately from France, which have their activity on the occupied territories of Azerbaijan in Nagorno-Karabakh and around Nagorno-Karabakh, because not only Nagorno-Karabakh, but seven districts surrounding Nagorno-Karabakh are also under occupation. And there is illegal activity by some companies, which is unacceptable. It violates international law, it violates our legislation. Azerbaijan is taking serious steps in order to raise this issue on the international arena, including our application to international judiciary institutions. Therefore, I would like to express this concern, and send the message to those companies, which illegally work on our land, just to refrain from this activity. It will not bring a lot of profit, but it can create a lot of complications. And this is not in line with very good friendly relations between our countries. I understand that these companies do it on their own risk, but my duty is just to warn them to refrain from that. Finalizing the topic of Armenia-Azerbaijan conflict, I’d like also to express my surprise. I was informed that several days ago the Armenian president speaking at MEDEF instead of trying to persuade investors to invest in their country, tried to discredit Azerbaijan, its economy with absolutely groundless facts. He was talking about innovations, saying that Armenia is a country of innovations. Frankly speaking, we were laughing in Azerbaijan because there is a very famous saying: ‘If you are so clever, why are you so poor?’ And the fact that Armenia doesn’t have natural resources, doesn’t mean that the people should suffer from that. Most of the developed countries in the world, including France, don’t have natural resources. But they develop their country because there is proper management, transparency, accountability, standards, education, knowledge, innovation. Therefore, instead of telling fairytales to French companies, the Armenian president would have better concentrated on their terrible economic situation in the country, where more than half of population lives beyond the poverty line and without any prospects for the future. According to their official statistics, 60,000 people leave Armenia every year. According to our information, this figure is close to 100,000. If it was so good and attractive, probably people would prefer to stay, not to leave.
As far as Azerbaijan is concerned, of course, we have difficulties, we have problems. We are still in the process of implementation of reforms. But I’d like to bring just several figures to your attention to show that Azerbaijan demonstrates, I think, one of the best performances among the oil producing countries, especially taking into account that our revenues from oil dropped three-four times. Davos World Economic Forum ranks Azerbaijan’s economy number 37 with respect to competitiveness. This is a very good rating. So, we are among the 40 most competitive economies in the world. And this is a recent rating. This rating was not given to us when the oil price was high. In another rating of Davos with respect to the level of development of the developing countries, Azerbaijan shares the first and second places. We have a very low foreign debt, which is 20 percent of our GDP. And our hard currency reserves are more than five times bigger than our foreign debt. In other words, if we prefer, we can repay our foreign debt within a couple of months to have zero foreign debt. We managed to reduce unemployment, which is now at the level of five percent and poverty, which is below six percent. Employment in Azerbaijan was mainly inspired by the very favorable business climate and also investment climate. For the last 20 years more than two hundred billion dollars were invested in Azerbaijan’s economy. And this process continues. Hopefully this year also a large number of companies will invest. It is very good that they invest now not only in oil and gas, but also in the service sector, in tourism, in hotel business, in agriculture. So all the investments of foreign companies and local companies are duly protected. Therefore, it creates additional incentives and interest in investing in Azerbaijan. At the same time, having a strong economic position in the region with good connection to the neighborhood and with substantial financial reserves, we can afford to attract contractors to the sectors, which we consider of strategic importance.
For the coming years our main area of concentration will be the non-energy sector of our economy, mainly agriculture. And I invite prominent French companies to come to Azerbaijan and to work with our government to implement projects related to modernization and increase of productivity. Irrigation is one of the main areas of our attention. Only this year we will accumulate a lot of investments and bring water to at least 100,000–150,000 hectares of land, which was not irrigated before. That will create an additional large volume of products.
IT is developing very rapidly and we have a special program for development of that sector. Modern technologies, industrial potential, construction, of course, transportation – there are a lot of opportunities for companies from all over the world to work in Azerbaijan.
Among the strategic projects, which we are implementing, I’d like to name two of them. First, of course, is the Southern Gas Corridor, the project which is considered to be the biggest infrastructure project in Europe for now. The cost of the project is close to 40 billion dollars. It is an integrated pipeline system connecting Azerbaijan from Baku to the Italian coast, crossing six countries. It is a project, which has strong support from European Commission. It is a project where Azerbaijan took the leading role. And this project is changing the energy map of Europe. It will bring a new alternative source of natural gas to European consumers. Of course, many companies participate in the implementation of this project. And this is a project of energy diversification, energy security, and it’s really a project of the 21st century because it was not an easy task to organize the implementation of the project neither from the technical, nor from financial points of view. This project is strongly supported by international institutions, primarily by the World Bank. I’m glad that French banks also provide financing to implement this project.
Another strategic direction of our concentration is creation of a transportation hub in Azerbaijan. Our geographical location is advantageous, we are just between Asia and Europe. With a modern transportation infrastructure, which we already have, we already attract a lot of interests. We have six international airports, which can receive all types of planes, including the biggest cargo planes. We already became an air cargo transportation hub for the region. We have railroad connections with all the neighboring countries. Connection between Azerbaijan and Turkey via Georgia will be implemented this year. So, this opens a corridor from China to Europe, through Caspian Sea, through Azerbaijan, which shortens two times the time for transportation of the cargo. And the first testing train already crossed our territory. Last year we also completed the missing part of the railroad connecting us with Iran, thus investing a lot into the creation of the South-North transportation corridor, which stretches from India, Pakistan, Persian Gulf, Iran, Azerbaijan, Russia, Northern Europe. And we organized several important international meetings and events. As far as our responsibility is concerned, everything is done. So, as soon as the missing part of the corridor is built, we will open a new route, which will allow cargo to be transported from India to Northern Europe within fourteen days, instead of 40-45 days as it is today. So, both these corridors from north to south and east to west cross Azerbaijan because of our policy, not just because of geography.
Geography without infrastructure doesn’t mean a lot. We are building now the biggest sea port in the Caspian Sea with the handling capacity of 25 million tons. The first stage will be completed this year. As I said, six international airports, modern cargo ships, plus a ship-building factory in Azerbaijan, which can produce all types of ships, modernization of the railroad infrastructure, and, of course very good contacts with the neighbors because in transportation you can’t achieve goals if you don’t cooperate with the neighbors. With all our neighbors, northern, southern, western and eastern all across the Caspian Sea, we have excellent political and economic relations, which is also important for the regional stability. And stability inside, prosperity inside and predictable situation beyond our borders, good relations with the neighbors – this is what is happening already. This is a reality. So, in other words, our policy created a new reality, a new cooperation format in the region.
We also initiated a regional cooperation format – not only bilateral, but already trilateral. For instance, trilateral economic and political cooperation formats of Azerbaijan-Georgia-Turkey, then Azerbaijan-Turkey-Iran and the recent one Azerbaijan-Iran-Russia. So, these are trilateral formats of cooperation, which create a very positive political and economic climate in the region. And as I said, the Southern Gas Corridor with respect to cooperation format is also very attractive because here we have Azerbaijan, Georgia and Turkey, then we have EU members Greece and Italy, and we have Bulgaria and also Albania. So, seven countries, already for three years gather every year in Baku for the Advisory Council of the corridor in order to strengthen cooperation. And this is not only gas, this is business. This is investment, this is employment, this is predictability and cooperation.
To conclude my comments I’d like to say that last month in Brussels, as I said before, we gave a start to a new process of EU-Azerbaijan cooperation. Azerbaijan has already signed documents on strategic partnership with nine members of EU. So this means that one third of EU members are our strategic partners and it`s natural that now we work with European Commission on strategic partnership, a partnership agreement, which will strengthen our ties even more. But, of course, coming back to what I started with – our relations with France – we have big importance, we have excellent political relations. President Hollande visited Azerbaijan two times in 2014 and in 2015. Before that president Sarkozy visited Azerbaijan. I visit frequently your country. And my today’s and tomorrow’s official visit is another indicator of our strong cooperation, and business ties are an integral part of that cooperation. Now I will probably stop in order to leave time for questions.
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President Ilham Aliyev responded to questions on prospects for cooperation in a number of fields, including railway, global transport projects, metro construction, communication technologies, space industry, air transport, energy, oil and gas industry, financial and banking system, urban infrastructure, agriculture, irrigation, tourism, hotel industry, renewable energy.
The meeting ended with the signing of a Memorandum of Understanding between Azerbaijan Airlines Closed Joint Stock Company and Thales Air Systems SA.