Speech of the President of the Republic of Azerbaijan, Heydar Aliyev in the conference devoted to the social-economic problems of the Republic held in the Presidential Palace - 24th November, 1993

Dear participants of the conference!

As all you know, two days ago the prices of bread and bakery products were increased in Azerbaijan. In relation with it some problems have emerged, there have emerged changes and tensions in the life of the people.

Currently, supply of people with electricity, gas, heat, and water and other things connected the life of the people is not satisfactory. The situation with transport is not satisfactory. Because of this problem we have this conference today. We want to find a way out of the current situation, to search for new ways, to exchange views, and to adopt decisions.

In the country, where there is an economic crisis, prices of the products necessary for providing the people in the republic must be regulated. The independent Azerbaijan lives in the neighborhood of other countries. Low prices of necessary products for the providing people in these countries creates conditions for negative cases, and affects our economy, as our economic and humanitarian relations with those countries are very broad and diversified.

Aggravation of financial situation and rage of inflation, high prices of some products, undoubtedly must be regulated from the very outset; certain measures had to be taken for the providing of people with those products. The increase in the price of bread and bakery products is a problem which emerged at the beginning of the year. Because of some subjective factors this problem has not been solved, and these reasons are clear. The number of refugees is very high in our republic which lives in the state of war. As some of the regions have been occupied, the economy has declined, resulted in the fall of the level in the living conditions of the people.

Increase of prices for bread and bakery products has always created suspicions and caused hesitations. However, as our financial monetary-credit situation has worsened, we discussed these issues on the 19th November. At the conference important proposals were made; the necessity of raising the prices was stressed. That is why, two days ago this problem was solved.

Increase in the prices of fuel products also arise from necessity. The companies engaged in fuel production repeatedly made proposals on this issue.

While taking these steps, we knew that there would be difficulties. However, the economists, all important companies were like-minded in these proposals. This step will render support to the improvement of the economy and improve the financial situation.

The decree on the compensation because of increases in prices and minimal wages has been issued. All this will help to improve the living conditions of people in some degree.

As the financial situation in the country is critical, payment of salaries, reimbursement, and raising the salary create certain difficulties. Necessary measures have not been taken to let this process move smoothly and not lead to negative consequences.

The quality of bakery products is very low. A lot of information is coming to the official bodies. The fields which provide the needs of the people suffer difficulties.

In connection with the increase in the prices the representative of the National Bank and the minister of finance should make their proposals on the current situation. What to do? How to overcome the tension? The Cabinet of Ministers must tell its opinion. The people attending this conference also should disclose their views and proposals in order to realize them.

Proposals were made about all the issues touched here. Organization of the conference is connected with increases of price for bread and bakery and oil products two days ago. Meanwhile, it is necessary to supply people with electricity, heat, gas, and water, improve the situation connected with transport and other issues. It became clear from the conference held two days ago, or from the speeches today that the economy and financial situation of the republic is critical. Unfortunately, the crisis has deepened more; necessary attempts for to stop it have been not taken. This conference could be considered as the continuation of the previous conference we held several days ago.

To overcome the crisis we must take concrete measures and then in the republic and then review the social situation in the country. The current critical situation shows that these areas were neglected years ago and in the recent years, the problems were left unresolved, there is arbitrariness, and planning is absent, necessary steps were not taken and economy was not reformed. As different fields of economy, the social sphere has also been destroyed.

M. Imanov, who made speech about the situation in power engineering, explained that equipment, spare parts, electric drives necessary for power stations are not sufficient, they have ordered them, but there is not anything yet. What concerns the gas supply, six billion cubic meters are produced is extracted in the country and it does not supply the country fully. In order to supply the country 17 bln m gas is required. On the other hand, any water pipe has been built, except the one built ten years ago. Loss is observed in the existing pipes. In the case of boiler houses, gas and electricity are insufficient.

Let’s talk openly. It means that Azerbaijan was sometimes criticized, and even scolded. The structure created by the Soviet Empire has been destroyed, and nothing has been added. If we have got our independence for this, for destroying the rest, for building nothing, after some time everything will collapse and we shall stay on an empty place.

Yes, in the recent years, the power satiations have neither been repaired, nor new equipment has been bought, nor any job has been done. Of course, they will collapse. Here the talk was also about the transport. I agree that the chief the transport department has not taken necessary measures. Thus, if the bus park and other transport parks have not been renewed, and necessary efforts have not been taken, of course, one day all of them will collapse.

Nowadays, I talked to the head of the department of Underground. Now he has been appointed to the railway department. I am also aware of underground work. I remember that when the underground was built, we bought many wagons, many equipment, rails and sleepers for them. Now none of is bought, they are also not produced in Azerbaijan. If there is a need to buy them abroad, it requires money and resources. Old ones are collapsing. It will be impossible to use the worn out outdated equipments.

Last evening I had a talk with our esteemed oilmen Gurban Abbasov, Khoshbakht Yusifzade, and the president of the oil company Natig Aliyev. Remember that in 1982, Azerbaijan was producing 15 bln cubic meters of gas. Then demand for gas was less than today. The Soviet Union bought three bln 3 of gas from Iran. Azerbaijan consumed 10-11 bln from 18 bln m3 of gas and rest of it was given to the republics of the Soviet Union in this region. Now we have fallen from 15 bln m3 to 6 bln m3. Of course, this will not be sufficient. Tariyel Huseynov has just said that demand is 15 bln m3. If it continues like that, the production will decrease more.

Let’s confess that as a result of flows inflicted on the economy of our republic, gross mistakes and mismanagement, the economy and social spheres, which must fulfill nation’s need, have collapsed. It is necessary to find out a way out of this situation. Now our republic is not under the domination of any state ask for gas. It is only possible to satisfy our need on the account of our own internal resources. If the internal resources of the republic is not used properly, let’s confess that our economy will be worse than today.

Last time we talked about this issue, there is no need for repetition, we must conduct new economic reforms, privatization, transfer the existing management to reliable hands and provide an efficient use of them. We must try to increase the production as soon as possible. We are forced to raise the prices, because the financial situation is very critical as we studied the situation several days ago. Now there are difficulties and tensions in connection of high prices. However, this should be done, and we did it. As it has been said here, and I want to stress again that these prices should have been increased at the beginning of the year or at the end of the last year, and monthly indexation had to be used. Then sharp difference would have not been felt. We have missed this chance. The people who had to do this job either were inexperienced, or did not engage in this work intentionally. I have mentioned that when we began our work here, when these problems were emerging we were not ready to solve those problems both because of the state of war and unstable internal socio-political situation in the republic. Now it is compulsory to solve these problems. It is inevitable and we have adopted a decision on it.

It is true that while making preparations for undertaking these measures, it must be determined in advance how to realize them. However, it was not like this, and I think that the Cabinet of Ministries had to present a mechanism for the realization of these proposals while they were preparing them and raising the question of demanding the increase of prices. They had to conduct a research for overcoming the difficulties in connection with the increases of prices, had to submit their proposals. Then it would be clear how the increase of pricea of bread, bakery products, and fuel would affect to the social condition of the people, and what should be done to avoid the aggravation of situation. The measures must not be limited only with compensations. We have already determined to pay compensations. However, it is getting clear that there is no cash in our banks for reimbursement. Thus, we had to make clear it, we have sufficient money.

It seems that in several areas salaries have not been paid until now. It means that payment of salaries should be provided. If additional money is needed, it must be brought in time. Undoubtedly, the Cabinet of Ministers must be engaged in this task. Or today, the minister of finance proposed to use bonds. Then two-three days ago during the discussion of this problem, he could not say that we had such a risk and we did not have money. Could not he say that as a financer and propose this and ask us to take it into consideration? However, he made this proposal half an hour ago, before our conference. I gathered some officials for overcoming the situation. There he proposed to use bonds as monetary units. All of these should have been done in advance. I think that we have difficulties due to the lack of preparations.

In a word, inevitable measures were not taken in time. We have just done this task and we should continue it. We must provide the realization of these measures hand in hand. That is why, urgent decisions should be adopted on the proposals made today. I told about some of them in the conference held here on the 19th of November. For example, we should increase the percentage of bank loans to 200%.

Not any decree has been adopted on it until now. Many days have passed; today a proposal was made that it is necessary to raise the interest rates in the banks. Perhaps it is beneficial, but it to be done in time. Thus, we are late here, too.

Although there are certain negative points in the use of bonds we are forced to do it. However, the decision about this issue should be made urgently and an explanatory work should be conducted. People must understand that if they are given bonds instead of money, this bond is equal to a certain amount of money. The commercial companies must know that they must accept bonds and people should not face any difficulties in this issue. All these should be realized urgently. The decisions adopted on this issue should be realized and the Cabinet of Ministers, ministries, city and regional executive powers should take necessary measures. On the basis of the proposals made here the Cabinet of Ministers must adopt decisions and announce them. Beside this, the mass media, television, ministers, heads of executive powers, employees of ministries, and financial staff should explain the essence and necessity of the adopted decisions, and deliver them to the nation.

Now, one of our of main problems is the lack of money in our banks. Meanwhile, there is sufficient manat in circulation. That’s why, it is necessary to return the money in circulation to the banks - both to the National Bank and to other banks. Serious efforts should be made for doing it. I agree with the proposals made here.

Heads of the executive powers, ministers, and ministers were also invited here. The head of the executive power of Baku, his deputies, heads of the executive powers of districts of Baku, of all the districts and cities of the republic, the executive organs must function seriously in order to materialize these measures. All the commercial organs must be controlled, and all the money gained from sale must go to banks.

The top staff of Baku Police, chiefs of district police departments was not invited to this conference accidentally. They should engage in the enforcement of these orders directly. In general, law enforcement organs, - police, prosecutors, as well as the organs of national security, should provide for enforcement of these measures, because they are both in economic and socio-political nature. We should work day and night to regulate commerce; money gained from the commerce trade must be sent to the banks. As a result, cash will be accumulated in banks and it will ensure the payment of the delayed salaries and compensations.

Here it was mentioned that our commercial structures, generally, companies and commercial banks are conducting very large and broad financial operations. This is really true. Today I appeal to all the commercial structures, commercial banks, and private companies to direct all their activities for transferring cash moneys to banks in order to regulate the financial situation of Azerbaijan and to eliminate negative consequences connected with these measures. I declare it as an appeal, because we are in a healthy contact with economy. Meanwhile, I order the National Bank, the Ministry of Finance, and the Cabinet of Ministers to ask to commercial structures for the realization of these measures, and to control them. Let the Cabinet of Ministers take certain measures on this issue and control them.

The talk has taken place here about baking of bread and its sale in time, and its delivery to all the layers of people. The Cabinet of Ministers, as well as, the concerning ministries must deal with these tasks not only in Baku, but also in all the regions of our republic, including the refugee settlements. They must create conditions for all the layers of people for buying bread in time when the prices rise. It is important to control the quality of bakery products. I assume that the shortcomings in the State Company of Grain Products will be removed. As procurator-general has told, necessary measures should be taken for omissions and crimes there. In a word, I consider that the decisions adopted should be put in practice. On the one hand necessary measures should be taken, on the other hand mass media, economic and financial institutions, ministries, and executive organs should conduct explanatory work.

We have also touched upon the problems related to the supply of electricity, gas, water, and heat. I think that ideas in the speeches of the heads of related institutions are not satisfactory and demand not to spend their time for adopting decisions or for holding different meetings. I demand them to be busy with practical work, and to provide the supply for people, for all the spheres of industry and economy in these cold and hard winter days. The Cabinet of Ministers should have the responsibility of fulfilling them. There could be conferences or decisions in the Cabinet of Ministers as well, but practical work is required. Today we decided to ask certain people in the Cabinet of Ministers, to control these tasks and ensure the organization of work.

Meanwhile, concerning officials in the administration of the President supervise the materialization of these works in all the fields together with the Cabinet of Ministers and the organs of executive power and convey information accurately. In order to eliminate tense situation we must fulfill all of these duties. However, our strategic direction is, as we talked on the 19th of November, conduct economic reforms as soon as possible and to achieve fundamental change in economy. By modifying the forms of economy and encouraging people we must achieve economic development.

I think that all this is clear. All the people invited here are responsible for fulfilling these measures, and I demand all of you to be engaged in the realization of these measures by comprehending their responsibility. We should work day and night; explain these measures to the nation, and meanwhile to do necessary work for improving the situation.

Thank you. Thanks for attention.

«Azerbaijan» newspaper, 25th November, 1993

General historical background