The World Economic Forum (Davos forum) on the Strategic Dialogue on the Future of the South Caucasus and Central Asia brought together renowned economists predicting the global economic situation, experts and government officials to the Azerbaijani capital Baku on Monday to discuss important economic issues of concern to humanity.
The opening ceremony of the forum was attended by Azerbaijani President Ilham Aliyev and First Lady Mehriban Aliyeva.
President Aliyev made a speech at the event. The President welcomed participants and drew their attention to Azerbaijan`s economic development.
The President indicated that he had taken part in the World Economic Forum seven times. This attendance and taking part in discussions with international business elite helped very much in the diversification of the economy, he said.
President Aliyev informed the forum participants that Azerbaijan, a country that was part of other empires for many years, has been pursuing an independent policy only for 21 years.
Speaking about the socio-economic development of Azerbaijan, the President said that although in the early years of independence Azerbaijan went through a period of crisis, in 1993 the country laid the foundation for a successful energy policy and managed to get out of a difficult situation.
President Aliyev said Azerbaijan has a very advantageous geographical location, and without infrastructure this location does not mean a lot. “We have natural resources, and we’ve built a diversified transportation network for our hydrocarbons,” he underlined.
“And I think that was the biggest challenge in the end of the 1990s, and the beginning of this century, and that challenge was successfully met. Today we have a diversified network of pipelines, 7 oil and gas pipelines which transport Azerbaijani oil and gas to international and European markets,” he said.
According to President Aliyev, at the same time, Azerbaijan has now started to play the transit role for its partners across the Caspian with respect to the transportation of hydrocarbons.
“But our main target over the last 10 years was diversification of the economy. If you look at the economic development of Azerbaijan, we will see that our economy has been one of the fastest growing ones in the world for the last 10 years. GDP grew by 300 percent, industrial production by 2.5 times,” he said.
The President said that it was managed to reduce unemployment, and now the level of unemployment is 5.2 percent.
“Ten years ago almost half of our population lived in poverty, now the poverty level is 6 percent, and budget spending grew almost 20 times, and the inflation is around 1 percent.”
The Azerbaijani leader welcomed the reflection of the country’s achievements in the assessment of the World Economic Forum, as the forum ranks Azerbaijan 46th with respect to competitiveness of the economy, and the first for the fourth consecutive year in the CIS.
“Even during the times of economic and financial crisis, Azerbaijani economy was still growing. Even when the oil prices dropped sharply, the country’s economy was still growing because the non-oil sector started to produce good results,” he said.
President Aliyev said that such major credit agencies as Fitch, S&P and Moody’s recently upgraded Azerbaijani credit ratings, which is also a good indication of the reforms.
“We are now transforming the oil wealth into human capital. And one of the main targets of the future is education. Education is the most important factor for any successful development of any country. And the investments in education, the contacts between our universities and the leading universities of the world allow us to plan our economic future, based on a very, you know, intelligent human capital,” he stressed.
President Aliyev said that at the same time, Azerbaijan is now investing in new technologies, and the ICT sector is becoming one of the priorities in the country. The President stressed that on February 1 the first Azerbaijani satellite Azerspace-1 was launched successfully, which is only the beginning of the development of the country’s space industry.
President Aliyev said these years of independence were the years of transformation, not only of the political or economic system, but were also the years of active investments in the areas which will generate wealth in the years to come.
“And to create a positive investment climate was one of the priorities in the beginning of our reforms, and for the last 10 years we got more than $130 billion worth of investments, and part of those investments are foreign investments,” he said.
The President said a good investment climate, a predictable political situation, a stable situation in the country overall, and of course, regional links, are the main prerequisites for success of any country.
“Today, one of the topics that we address is, of course, regional cooperation, integration and I am very glad to see the results. I expected something like that, because Azerbaijan plays its role in the regional cooperation,” he said.
According to President Aliyev, the projects that the country launched in the mid-1990s were aimed not only at the economic development of Azerbaijan, but also at broad regional cooperation.
“We are the first country that opened the Caspian Sea for foreign investments, and we are the first country to build a corridor from the Caspian to the Mediterranean and from the Caspian to the Black Sea,” he said.
The President said those oil and gas corridors then started to play the role of geopolitical and transportation corridors.
“We are now finalizing the implementation of one of the most important projects, which is a railroad connection between Azerbaijan, Georgia and Turkey,” he said, noting that the railroad will be not only a regional project, but also a project which will connect Europe and Asia.
President Aliyev stressed that the energy factor, as far as the Azerbaijani government is concerned, is not the main priority any longer. However, the country’s energy potential plays and will play an important role in energy security of the region, and particularly in the energy security of Europe, he said.
President Aliyev said one of the most remarkable developments of the last period was an agreement on the Trans-Anatolian pipeline (TANAP) project — an idea generated by Azerbaijan and supported strongly by the country’s partners in Turkey and Georgia.
He said Azerbaijan has undertaken a major financial commitment in order to implement this project, and to build another corridor for at least 100 years.
“Taking into account huge gas reserves of Azerbaijan, and potential reserves in the region, this corridor can play its role for decades to come,” he said.
In conclusion, the President expressed his gratitude to the Founder and Executive Chairman of the World Economic Forum Klaus Schwab and his team for holding this forum in Baku.
He expressed confidence that this event will have a very serious implication on our day-to-day life, and the region will be more stable, more predictable and more prosperous.
Importance of Baku meeting
Speaking at the opening ceremony, Klaus Schwab said the World Economic Forum being held in Baku was important for the future of the South Caucasus and Central Asia. He expressed his gratitude to President Aliyev for the excellent organization of the event.
Noting that he visited Azerbaijan 20 years ago, Schwab said the country has made strides, while Baku has undergone profound change.
“The fact that the forum is being held in Azerbaijan makes us all feel proud,” Schwab said, noting Azerbaijan’s significant steps in the diversification of its economy, rational use of its natural resources, information and communication technologies, finance and construction.
Schwab said the head of the Azerbaijani state was representing the country’s and the region’s economic potential at a high level by taking part in the annual Davos forum. He stressed the importance of the Baku forum from this point of view.
S.Caucasus-Central Asia coop
Other speakers stressed the importance of Azerbaijan’s policy towards economic diversification and cooperation between the regions of Central Asia and the South Caucasus.
Kazakhstan’s First Deputy Prime Minister Bakytzhan Sagintayev said that cooperation between Central Asia and the South Caucasus was of great importance for the world. Sagintayev also spoke about the economic development of Kazakhstan and the opportunities for regional cooperation.
“According to experts, Kazakhstan is one of the most attractive CIS countries for investments,” he said. “More than $160 billion in foreign direct investments has been attracted since 1993.”
According to the head of the major Russian bank VTB, Andrey Kostin, Azerbaijan has achieved great success in the past 10 years and the landscape of economic growth is fine.
Development of some other countries of the South Caucasus and Central Asia, such as Kazakhstan, is also remarkable, Kostin noted.
“These countries with large resources are successful compared to others in the region, but oil and gas are not permanent, so, alternative energy sources are important,” Kostin stressed.
Speaking of the region’s security challenges, Kostin said that considering the proximity to Afghanistan and Iran, the fight against drug trafficking and increasing manifestations of Islamic fundamentalism, cooperation issues have to find a solution for the region to flourish.
According to him, coordination in the issue of energy resources is also important in this context.
“It is important to create a global transport corridor which will give a strong impetus to the development of the region. It is also important to cooperate in investment issues. Russia has great interests in the region,” Kostin said.
According to Kostin, Russia can benefit from cooperation with these countries.
“Our approach is the multistage integration between the countries. We clearly understand there is a need for cooperation in the region and Russia understands that the development of these countries is important for itself.”
Kyrgyzstan’s First Deputy Prime Minister Djoomart Otorbaev said “we can be proud of fraternal Azerbaijan’s successes”, stressing the importance of cooperation for the development of the region.
Turkey’s Minister of Energy and Natural Resources Taner Yildiz said he believed in the success of the Baku meeting. He spoke about the measures being taken by his country to contribute to regional development.
Turkey is using energy resources and power projects for the stabilization and development of the region, Yildiz noted.
“Along with the implementation of the South Stream project with Russia, Turkey is also successfully implementing the Trans-Anatolian gas pipeline (TANAP) project with fraternal country Azerbaijan,” Yildiz said.
“On the other hand, Turkey continues its energy cooperation with Iran, despite the political problems of the latter,” he said. “It is also developing a partnership in the energy sector with neighboring Iraq.”
Yildiz also stressed such projects as Baku-Tbilisi-Kars and Baku-Tbilisi-Erzurum, which are the key tasks in the transport and energy security of the region.
Voting regarding the future of the region was held during the forum and included three points – disunity, integration and polarization. 62.3 percent of participants voted for integration, 22 percent for fragmentation and 15.7 percent for polarization of the regions.
A working dinner was held with the Azerbaijani President and First Lady’s participation at the end of the forum.