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WORKS / ECONOMY / From high tribunes

Dear Chairman!

Ladies and gentlemen!

I congratulate you cordially on the occasion of the fifth anniversary of the American - Azerbaijan Chamber of Commerce and with opening the fourth conference of this chamber. I wish successes to work of conference and to the general activity of the American - Azerbaijan chamber of commerce in the future.

Establishment of the American - Azerbaijan chamber of commerce is not by chance at all. After gaining its state independence at the end of 1991, Azerbaijan has overcome extremely difficult tests. You know about it, people who has seen Azerbaijan at that time and familiar with its situation remember it, probably.

The human is such being, which quickly forgets all bad, negative. However, the history does not forget it, it is reflected in its pages, and those interested always may get themselves familiarized with these events.

While achieving its state independence Azerbaijan was experiencing extremely hard times. First, there were a few years that a war was underway between Armenia and Azerbaijan, and the reason of war was connected to the territorial claims of Armenia to Azerbaijan, put forward in 1988.

Armenia has untied the conflict with the purpose to tear away from Azerbaijan its ancient territory - Mountainous Garabagh (Nagorno-Karabakh) and to attach it to Armenia. This conflict has developed further into war, blood was shed, tens of thousand people were killed, as much became invalids, have got mutilation. Tens of thousand families have lost their children, women have lost husbands. It, naturally, became for Azerbaijan a big tragedy. As a result of all it and on a number of other reasons, - speaking frankly, because of the military help rendered at that time to Armenia by the states, while there was not political stability in Azerbaijan at that time, - the armed forces of Armenia managed to occupy 20 percents of the Azerbaijan territory. More than one million Azerbaijani citizens, men, women and children were forced to leave the occupied territories. On this map you see parts painted in green, red and yellow colors. These are 20 percents of territory of Azerbaijan. The territory of the Mountainous Garabagh (Nagorno-Karabakh) autonomous region is painted in red. This area was illegally established in 1923. Establishment within the limits of Azerbaijan of this autonomous region at that time was for Azerbaijan as a stab in the back.

However when the Soviet Union was just formed, the maps of union republics taking place in its structure were created, unfortunately, not at will of people, not following the historical validity but in they way they wanted. And at that time there were many people of the Armenian nationality in the leadership of the Soviet Union.

In 1988 when the conflict began, in Mountainous Garabagh (Nagorno-Karabakh) lived some 170 thousand people. Azerbaijanis made of 30 percents, and the other 70 percents - Armenians. And now imagine, what was the number of population lived there 80 years back. Probably, as less as ten times. However, despite of it, owing to claims of Armenians such autonomous region was established.

Autonomous regions, autonomous republics in structure of the Soviet Union as a whole were the structures entering into the Soviet Union. During the Soviet period each autonomous region, autonomous republic existed, naturally, within the framework of its borders, within the limits of its power. However, in 1987-1988 the Soviet Union, communist authority already began shattering. A chance occurred to the aggressive separatists of Armenia to tear away Mountainous Garabagh (Nagorno-Karabakh) from Azerbaijan and to attach it to Armenia. Therefore this conflict began.

Unfortunately, during this conflict some political forces instead of uniting people inside Azerbaijan and to prevent the conflict together, to wage war for the protection of the territories, using armed groups, have led inside the country struggle for grabbing the power. All this has resulted to that armed forces of Armenia occupied such an extensive territory.

Also I want to inform, that adjacent to Mountainous Garabagh (Nagorno-Karabakh) territories painted in green and yellow colors, have not any relation to the Mountainous Garabagh (Nagorno-Karabakh) autonomous region. Only Azerbaijanis lived here, these are the territories of Azerbaijan. Mountainous Garabagh (Nagorno-Karabakh) belongs to Azerbaijan, too, however by virtue of that the Armenian population there prevailed a little, the status of autonomous region was granted to them.

Thus, the population - more than one million of Azerbaijanis - were expelled from this territory. Azerbaijanis, living in Mountainous Garabagh (Nagorno-Karabakh), naturally, were expelled from this territory in 1989. However the population of adjacent to Mountainous Garabagh (Nagorno-Karabakh) areas were expelled during the war, approximately in 1992-1993 years, during occupation of these territories. This is to say that one million Azerbaijanis, our compatriots, have lost the homelands and they live in tents as long as 8 years. This does not have any analogue in the world.

Today in some corners of the planet, in various regions some conflicts also take place which continue two, three, four years. However so long conflict and simultaneously residing of one million from 8 million population of Azerbaijan in position of refugees in the country, in tents, certainly, have no analogue in the world.

Despite of all this, in May, 1994 we have acted for the discontinuance of war. Between Armenia and Azerbaijan the agreement on cease-fire and conducting peace talks was signed. There are more than six years that we try to solve this conflict peacefully. However, unfortunately, we cannot manage to solve it so far.

In 1992-1993 years when armed forces of Armenia occupied some Azerbaijani territories, the Security Council of the United Nations Organization has accepted resolutions. Four resolutions specifying the inviolability of the territorial integrity, and frontiers of Azerbaijan, unconditional removing of the armed forces of Armenia from occupied Azerbaijan territories were accepted. Unfortunately, these resolutions of the United Nations Organization remain on the paper so far and for this reason some days back in New York, at session of General Assembly of the United Nations Organization, I have criticized sharply the United Nations and its Security Council for such feebleness and inability to support the implementation of the decisions.

In 1992 the Minsk group of the OSCE was established for the solution of this problem and it was entrusted to conduct peace talks. The Minsk group has developed and presented the appropriate offers several times. Azerbaijan has accepted the given proposals. Despite of it, the Armenian party, abusing the advantage, the occupation of the Azerbaijani territories, has rejected these proposals.

In 1996 on Lisbon summit of the OSCE a document for the settlement of this problem was accepted, - I can tell, that it was not favorable for Azerbaijan, - for escaping from this situation, however Armenia has not accepted it. The essence of this document was reduced to the rehabilitation of the territorial integrity of Azerbaijan. It means that all occupational units should be removed from Azerbaijan. Mountainous Garabagh (Nagorno-Karabakh) is awarded the highest status of self-management within the structure of Azerbaijan state. It is very favorable to Armenia, however they have not accepted also it. And after that co-chairmen of the Minsk group Russia, the United States of America and France, three largest states of the world to which we assigned the big hopes, unfortunately, till now could not achieve the decision of this question. Promises are given each time, but nobody kept them.

The last year, in the beginning of 1999, between presidents of Armenia and Azerbaijan direct meetings for the exit from this situation have begun. First of all I want to tell, that the former president of Armenia Mr. Ter-Petrosyan accepted the proposals which have been put forward on that aforementioned Lisbon summit. At the end of 1997 we already could obtain the agreement. It has acted with such declarations about it. However, some forces located in Armenia and beyond its frontiers did not let him such to do it. He has forced to resign from his position, from the post of the president of Armenia. Then the actual President Robert Kocharyan was elected on his place. He opposed the decision of Ter-Petrosyan afterwards.

In 1998 negotiations were not held, since the new president was selected in Yerevan. However, in 1999 negotiations have begun between presidents of Azerbaijan and Armenia - Aliyev and Kocharyan. I can tell, that during some period these negotiations were successful, and both presidents shared opinion that for the settlement of this problem it is necessary to go on bilateral compromises. That is to say that both Armenia, and Azerbaijan should go on compromises. I think, that now it is a correct way, otherwise it is impossible. However, in October, 1999 in Armenia a large terror act that is known to you was happened.

Terrorists, having rushed in parliament, have killed the head of the parliament, the prime minister and several parliament members. The situation in Armenia has become tense. Our negotiations were interrupted for a while, however we continue negotiations. We, presidents of Armenia, Azerbaijan, met and talked in New York. We have decided to continue negotiations.

I declare today that Azerbaijan is not for resuming of military operations. It aspires and will aspire to the peaceful decision of this problem. However, the territorial integrity of Azerbaijan should be restored. Armed forces of Armenia should be removed from the territory of Azerbaijan. The high status of self-management in structure of Azerbaijan may be given to Mountainous Garabagh (Nagorno-Karabakh).

It is very important information which I wanted to communicate to you, since not knowing about it, you can not understand the way, passed by Azerbaijan after gaining its state independence.

One should also add, as it was noted here by mister Matske, that the congress of the United States of America instead of taking in this issue an objective position to make efforts for the decision of the problem, in October, 1992 has accepted the unfair amendment to the law, having a discriminative character regarding Azerbaijan. According to this amendment the congress has completely deprived Azerbaijan of the help on behalf of the United States of America, the help rendered to the states, recently received independence, and the reason is that Azerbaijan has ostensibly declared blockade of Armenia.

That is a paradox. Armenia occupied the territories of Azerbaijan. If the question is blockade of the railway through Azerbaijan, you can see that it passes through the Iranian border and continues in Armenia further. On this map you see that 130 kilometers of this railway is under occupation of Armenia. Because of the occupation of the given road Azerbaijan may not use this railway. The Nakhichevan autonomous Republic being a part of Azerbaijan, is deprived of all lines of communication. We communication with Nakhichevan is possible only via air communication, planes. Now imagine, who declared blockade to whom, Azerbaijan of Armenia or Armenia to Azerbaijan? However, in the American congress the question is accepted completely differently. There is a lot of years we work above it. The American government acknowledges the unfairness of this article and act for its abrogation. Many members of the congress say that this article is unfair, it should be abrogated.

In 1997 we together with the President of America Mr. Clinton have signed a joint statement. Both of us have stressed the necessity of the abrogation of amendment to 907^th section of FSA. Our friends, the oil companies, cooperating with us also actively aspire to this. Day prior to my arrival here the "Exxon" - "Mobile" company has published an article in one of the newspapers about necessity of abrogation of amendment to the 907^th Section of FSA. However, it is impossible to cancel this amendment. Why? Each time we receive an answer, that in the congress there are lot of pro-Armenian Congress members which prevail during voting. Therefore, it is impossible to cancel the amendment to the 907^th Section.

You know, I speak today with you frankly. I say it not only to you, but also to all American people. America is considered to be the most fair state of the world. I share this opinion, too.

This is a democratic, fair and humanistic state. But if in the fair, democratic and humanistic state so unfair law is accepted, and the authorities, the government, the congress of the United States of America may not achieve the fair solution of this problem, as they say, because of subjective opinion of separate deputies or congressmen, one must know that here we have lost much. However, the United States of America lose much as well, as they lose image of the fair country. The government of United States of America should know about it.

We are trying today and we will try further. It is not a question, for example, that the United States of America annually render the direct help of Armenia for the sum of hundred million dollars, supports Georgia, the countries of the Central Asia, and do not help us because of ban imposed by this law.

Certainly, the annual help in hundred millions dollars is extremely necessary for Azerbaijan which is experiencing a heavy economic situation, it is necessary to our refugees. However, we have overcome difficult times, we will go through it as well. It is not the problem, the problem consists in the moral side of this question. The problem is not in the material side but in that we are subject to discrimination. There is no basis for discrimination against us.

In such conditions Azerbaijan began to live as an independent state. In such situation, as I have already told, different armed forces in Azerbaijan wanted to grab power, made the armed attempts of coups d'etat.

In 1993 a civil war began in Azerbaijan, and the country appeared before the threat of a partition. As you know, at that time I did not live in Baku. People invited me to Azerbaijan. People asked me to take the duty to be the leader of Azerbaijan. And I have agreed with it, since then I am the President of the Republic of Azerbaijan.

However, after that we have had also difficult times. At the time of my recurring appearance at power different armed forces tried twice to make revolution, however thanks to our people we have prevented it. Not by force of the weapon, but by force of people. We began to stabilize the internal situation in Azerbaijan. One can say that the years of 1994 and 1995 became turning point. The political stability in Azerbaijan was completely established in the next years.

In such conditions in September, 1994, six years ago, we have signed for the first time the contract on joint development of rich petroleum deposits of our country in the Azerbaijan sector of the Caspian sea with large oil companies of the world, in particular, with the companies of the United States of America. Six years long period passes from the time of signing of this contract. It is not a long period. However, this contract became a remarkable event both for our country, and for 11 large oil companies which have signed it, including the companies of the United States of America. This contract has opened the way using by the states of the world of energy resources of the Caspian sea - oil and gas resources.

The Azerbaijan geologists perfectly know the Caspian sea. More than 50 years back, during the Soviet Union, we extracted oil in the sea in Azerbaijan. At that time oil in the sea was not extracted neither in Northern sea, nor in gulf of Mexico, and in other places.

In 1948 an oil-fountain gushed forth in Azerbaijan for the first time in the world, the industrial oil development began. And in 1949 our country began to develop oil from the sea depths for the first time in the world. You see, what a big potential our scientists, geologists, experts, oilmen have. Therefore we have perfectly studied the Caspian sea.

When we were a part of the Soviet Union, the Soviet government extracted oil in other places, for example, in Siberia and other places as it was there cheaper, and deposits discovered by us remained undeveloped, however, we had no opportunity to use these deposits as we wanted. Only finding by Azerbaijan of the state independence, liberation of our people, the fact that it became the master of its destiny, have enabled our republic to solve its problems, allowed it to undertake this step. And we have undertaken it.

Today it is known, that more than ten millions tons of oil was extracted under the first contract. Before this oil was exported via Baku - Novorossiysk pipeline, however, at that time we have understood, that the alternative pipeline is necessary also. We have constructed Baku-Supsa pipeline. The oil extracted today is transported abroad via these two pipelines. In general, we have signed 19 contracts so far. Tomorrow we will sign one more. It will be the twentieth contract.

In 1997, when I was here with official visit, we have signed four contracts in the White house in the presence of the US administration. One of them is the contract signed by us in the White house with "Chevron" company. Three years has already passed from 1997, my friend Matske informed me, that in the near future they will receive a big volume of oil and gas on "Absheron" oil field. I believe in it, otherwise I would not offer this oil deposit. If mister Matske and his experts did not trust in it, they would not carry such struggle over "Absheron" oil deposit. But they tried a lot. I'm waiting for and I am absolutely confident that we will achieve it. But it is only one contract.

Another - mentioned by me is the "Contract of century". The oil companies already receive income there. Some 1 billion 200 million dollars was received. The American companies, in particular, have received the 350 million dollars worth income. You see that investments are made and the income is received also. If to take only American companies, they have invested some 1 billion 200 million dollars in general. The total amount of investments makes 3 billion 200 million dollars. 1 billion 200 million dollars of them are invested by American companies, however they have received 350 million dollars of income. Now the oil development will increase. Within 2-3 years they will pay back all investments and begin to receive the income from oil. The example given by me testifies to we shall achieve what successes, carrying out other contracts.

As a whole, under 19 contracts signed so far Azerbaijan should arrive attract approximately 60 billion dollars of investments.

Of course, in process of growth of oil extract the construction of the new, large oil pipeline for its delivery to the world markets is necessary also. For this purpose we have made a decision on construction of Baku-Tbilisi-Ceyhan oil pipeline some years ago. To tell truth, this decision has faced a considerable resistance. On the one hand, performance by Azerbaijan of such a big work in the Caspian sea and attraction of the American companies, the companies of the western countries to the Caspian sea displeases our neighbors. You must know about it. Secondly, others consider with the big doubt our projects. Sometimes even American newspapers write that there is no such amount of oil in the Caspian sea.

They write a lot of falsehood, and I want to stress it. Therefore construction of the given oil pipeline is connected also to it. And second, it is connected with the fact, that oil companies operating in Azerbaijan have taken in this issue a little bit conservative position. That is, a pier, let's not hasten, we shall wait a little more, let there will be more oil, however, we have not paid attention to this, we continued the work. In November of the last year at the Istanbul summit of the OSCE four presidents of Turkey, Azerbaijan, Georgia and Kazakhstan signed the final contract on construction of Baku-Ceyhan oil pipeline. Our parliaments have ratified it. Now we have begun the practical work.

To say the truth, in AIOC, - so we name the Azerbaijan international operation company, this is the union of oil companies, - want to prevent this issue again. Therefore I address today to them, including to company "Exxon" as they want to trip this issue up. I call them to think. To think that this is a necessary work, it should be done, and we will do it.

Wrong information on the cost of this project was reported before. It was said that construction of this pipeline requires some 3 billion 200 million dollars. This cost was established by the consortium, however after calculations this figure has decreased to 2 billion 200 million dollars. Turkey engaged itself, that if the construction of this pipeline will require more than 2 billion 200 million dollars, it will pay superfluous means. That is to say that we have solved all problems.

Thus, as you can see, for short time, within 6 years Azerbaijan has done a big work for use of power resources of the Caspian sea. This work is necessary not only to us, but also the American, European companies. Today some Japanese companies have also arrived to Azerbaijan.

It should be noted that the author of discovering of these rich oil and gas deposits at the Caspian sea for mankind is Azerbaijan. We did it. Work was done in the Kazakhstan sector of the Caspian sea today also. It was communicated here that a large deposit was discovered. Realization of some development works are underway in Turkmen sector of the Caspian sea also. I was informed, that "LUKOIL" company has drilled a borehole in the Russian sector of the Caspian sea and good results were obtained there. That's normal. We know that everywhere in the Caspian sea, - somewhere it is more, somewhere - less, - there are such oil and gas fields. We are proud of it. We see the great future of this business. The signed contracts are envisaged for 30 years long period, however, we carry out them ahead of schedule.

And now about the work of the American - Azerbaijan chamber. I think that the exhibition with which we have familiarized today, gives a good information. Heads of the American - Azerbaijan chamber, our ministers will speak here, giving concrete examples. However, I want to tell, that for during years the American - Azerbaijan economic relations have received a big development. First, in oil sector, and second - in non-oil sector. If the companies of the United States of America have invested to Azerbaijan some 1 billion 600 million US dollars during the past period, if I am not mistaken, 1 billion 400 million US dollars of this sum was invested to oil sector, and the other 200 million dollars - in non-oil one.

Some 200 American companies with different background function in Azerbaijan today. Some of them are American - Azerbaijan joint ventures. Some of the perform a large-scale work, others - work of smaller importance. At the exhibition I have seen that some company performs work on translations and other works. I don't even know many of them. However, I see that if the company comes from here to Azerbaijan and is engaged there in translation, I should tell that many companies want to be engaged in translation in our country too, there is a competition. But they have arrived and have won the market, it will be difficult for our companies, is testifies that investment conditions in Azerbaijan is favorable now. A special book about investment opportunities of Azerbaijan is issued. Speaking about it, I want to touch upon the basic part of our relationships with the United States of America.

However, subject of today's conference is Europe, Asia and geostrategic position of Azerbaijan here. Speaking about it, I can tell that despite of difficulties, there are nnie years that our country is living and developing in conditions of independence. It passed in two stages. Till 1995, an economic recession was observed in Azerbaijan each year. Industrial and agricultural production, the GDP (Gross Domestic Product) were annually reducing on 10, 15, 20 percents approximately. In 1995 we managed to stabilize the situation. Development begins from 1996. For example, this year the our GDP has increased approximately by 9 percents, industrial production - by 4,5 percents. The agricultural production has increased approximately by 8 percents, the situation in other fields in the same also. What is the reason? The reason in that after finding by Azerbaijan of the state independence and, in particular, after establishment of political stability in our country, our republic is seriously engaged in realization of economic reforms. However, for their realization it was necessary for us to provide the process of state building in Azerbaijan. It was necessary to adopt laws. Azerbaijan goes on the way it chosen. According to this, the process of legal, democratic, secular state building is underway. All this reflected in the Constitution, adopted by us in 1995. During the past five years we have been adhering to this path and we will adhere it henceforth.

Many laws were adopted. First, separation of legislative, executive and judicial powers was provided. We have been using some codes of laws of former the Soviet Union till recently. However both in this, and in the last year we have adopted many codes and laws. They provide both the process of state building, and judicial power, and provide also the realization of economic reforms.

In November the new parliamentary elections are about to be held in our country. There is a serious preparation for them, and I want to tell, that in some cases the biased information is given on this issue. Therefore, I want to declare, that pre-election process goes normally, in democratic conditions. Some 15 political parties have been registered for participation in elections so far. They collect signatures for attending the elections. 800 candidates are nominated from the single member constituencies. It means that 8 candidates are nominated for 1 mandate. Pay attention, what basis is laid for free and democratic elections.

Full freedom of press is established in Azerbaijan. Human rights are protected. All this exists. Unfortunately, some newspapers here give the biased information. All this makes us anxious. You know, we are not answerable before anybody. We have the independent state. Nobody force us to go on the way of democracy and market economy. And nobody can force us to this. This is a way that we have chosen on our own. And we go on this way. However, each country going on this way, has some peculiar features. It is impossible to copy the situation in the United States of America or that of some developed European countries and to apply on any other country. We face with difficulties, misunderstanding on this way, however, we keep to go and we will go on this way.

During the last six, seven months we have managed to improve the judicial system of Azerbaijan up to the modern level, having reconstructed it on the basis of democratic principles. All judges were examined by testing, and those passed were appointed to this post. This kind of experience was undertaken for the first time in the history of Azerbaijan. I should also tell that during examination by method of testing some people, who have been working on the position of for a long period, during 20, 30 years, could not pass these tests and had to resign. We see and we have seen already the positive aspects of these actions. Now we are even more convinced with the results of these tests.

Different kinds of reforms are carried out in economic sphere. As you know, land reform was carried out in Azerbaijan. The land was conferred to the people of rural areas. The program of a privatization is underway, we see its results. The economy became liberal. Now 98 percents of agricultural production falls on the share of private sector. Know that in this sphere we are one the firsts among the CIS countries. 99 percents of trade is in hands of the private sector. Some 40 percents of industrial production falls on the private sector. The same situation is in the sphere of cargo transportation and in other branches of economy.

We have passed the first stage of a privatization. Now the law on the second stage was adopted. I have issued a decree ratifying the program underway. We bring our economy in conformity with economy of the countries with free economy; we integrate and provide the flow of foreign investments to Azerbaijan.

For last five years the flow of foreign investments to Azerbaijan has made more than 5 billion US dollars. Azerbaijan takes the first place among the CIS countries on the volume of investments per capita. Due to what? First, due to that we have created conditions in Azerbaijan for investment. Stability, laws, rules - without it the no would come in our country. Second, we have liberalized our economy, gave independence to people. We help to the development of business. In the result of all this Azerbaijan enjoys the flow of investments from abroad and internal manufacture develops even more.

However, this is internal affair of Azerbaijan. At the same time, as you know, Azerbaijan takes an extremely important geographical position. I have already told that the merit of Azerbaijan before world, including in front of the United States of America, - I don't care who thinks what about it, - is that Azerbaijan has opened, have shown the world the opportunity of the Caspian sea and the Caspian basin. Now it is necessary to take advantage of it. There is no importance in use of rich oil and gas deposits of the Caspian sea by the Caspian countries since our needs are insignificant. But the world is in need of these resources. We did it. Second, the service of our country is that Azerbaijan takes an extremely important position in restoration of the Great Silk Way, takes a strategic position and participates actively in this project.

As you know, the Great Silk Way has left the great trace in the history. It is necessary not only for the development of economy, maintenance of commodity circulation between the states, but also rapprochement of civilizations, rapprochement of the Eastern and Western civilizations.

This way has played its historical role. Then, of course, it became a history. Now interest to restoration of this way exists everywhere. Interest is displayed both in Japan, and in the Central Asia, the Caucasus, and Europe. For this purpose, the European Union has launched TRACECA program. TRACECA program covers a part of the Silk way, the Caucasus - Central Asia, and also the Balkan countries - Romania and Bulgaria. However, the problem on complete restoration of the Silk way is a very big problem. We were here again initiators of this issue. In September, 1998 under our initiative and under the initiative of Georgia an international conference was held in Baku, Azerbaijan. We were the first who have organized such international conference. High officials from 32 countries have attended this international conference, including representatives of Japan and the United States of America. In spite of the fact that the United States of America is not located on the Silk way, it displays a big interest. Nine delegations led by presidents attended the conference. 14 international organizations took part at the conference. We have discussed the problem, everyone came to one opinion. A document was adopted. This document was signed by twelve states participating at the TRACECA program. It considerably reduces the roads connecting the East to the West - approximately as many as two thousand kilometers. However, the question is not only in reduction of distance, but also that it is an alternative itinerary. If before one was required to pass through oceans and seas, or the territory of Russia in order to go from the East to the West, now it is possible to use both oceans, and territory of Russia, but the itinerary of the former Silk was may be used as well. We have played, we play and we will play our role in this issue in future.

I want to tell you some words about the Caucasus, and about South Caucasus, in particular. The South Caucasus, in particular, Azerbaijan, is a gate between the East and the West. At the same time, South Caucasus is very complex region. Now three independent states - Georgia, Azerbaijan and Armenia are located here. Unfortunately, some conflicts exist in each of these countries. The heaviest one is Armenian -Azerbaijani conflict since it is a conflict between two states. In Georgia there are the Abkhazian and the Ossetian conflict. If these conflicts will be settled, the South Caucasus can develop very intensively due to both the strategic opportunities, and natural resources.

First, economic relations can develop between the countries of South Caucasus. Second, it would be very essential to use the Silk way for development of economic relations with other countries. However, the basic problem is the Armenian-Azerbaijani conflict. If the Armenian -Azerbaijan conflict is settled, I think, that the Georgian-Abkhazian conflict will be settled as well. Then the Chechen conflict in Northern Caucasus may be settled.

I want to stress that the first conflict in territory of former the Soviet Union, in the Soviet space was the Nagorno-Karabakh conflict which began in 1988. This conflict, as the saying goes, has caused the chain reaction. After this the Abkhazian, Ossetian conflicts began in Georgia. At last, the Chechen conflict began. The Chechen conflict, of course, has resulted in the extremely difficult situation on Northern Caucasus.

On the one hand, the conflicts existing here must be settled, and on the other hand, the Caucasus, including the Southern Caucasus, must get rid of this terrorism, extremism and aggressive separatism.

Please, Mister Sestanovich. I regret, that you came at the end of my speech. Never mind, you will be told later. These events, these factors - the international terrorism, extremism and aggressive separatism are one of the most dangerous trends threatening the world today. It can be observed both in South Caucasus, and in Northern Caucasus, in the Chechen Republic. It appears now in the south of the Central Asian countries - Uzbekistan, Kyrgyzstan, Tajikistan - and poses a great threat.

Azerbaijan opposes the Islamic fundamentalism. However, one wing of Islamic fundamentalism - Wahabism is of special danger. Wahabism, on the one hand, is spead by Talibs in Afghanistan, under supervision of the well-known terrorist Bin Laden, and on the other hand is financed by some countries. Such a large state as Russia cannot cope with terrorists in the Chechen Republic during many years because this Wahabist movement has woken religious feelings in people living there via different channels. This fanaticism has driven people in such condition, that they aspire to realize their idea even sacrificing themselves. Now Wahabism influences to some extent our neighbor Dagestan and this causes our extreme concern, this territory is the most southern part of Russia. We are disturbed because this movement may be spread at some regions of Azerbaijan. We struggle against it. We know that the United States of America always struggled against the international terrorism. However, I think that the government of the United States of America should pay a special attention to the situation in our region.

As a whole, as soon as the process of use of resources of the Caspian basin was launched with participation of large oil companies and other companies of the world, we have constructed three oil pipelines, you can see, how many oil and gas fields are in the Azerbaijani sector of the Caspian sea. However, some of them are endangered.

As you know, in 1994 when the use of resources of the Caspian sea began, a powerful propagation was developed against us. It was aimed at prohibition of carrying out any works before definition of the legal status of the Caspian sea. We have acted against it and have answered to this. How did we answer?

In 1970, during the Soviet rule, the Caspian sea was divided into sectors. As you know, the Iranian part of the Caspian sea was established on this line. Iran has no right to leave beyond this line as this line was recognized as a border between the USSR and Iran under the document signed between Iran and the USSR in 1921, and then in 1940. This border was always protected by frontier troops of the USSR. The part, located above this line, belonged to the Soviet Union, and in the past - to Russian empire. However, when we, Azerbaijan, - I have already mentioned it, - began to develop oil fields in the Caspian sea beginning from 1949, the Soviet government, has made decision to divide the Caspian sea on sectors. This is the sector of Azerbaijan, and that is the sector of Turkmenistan. This part belongs to Kazakhstan and that - to Russia. We are guided by these principles. There is no other principle and we conduct the work on the basis of these principles. However, Russia, Turkmenistan and Iran opposed these principles previously. But we were keeping to carry out our work. We knew that it is impossible to develop any other principle. Seeing, that we keep on carrying out the work, Kazakhstan, Russia, Turkmenistan, also began to work in their sectors. An agreement on the average line was even signed between Russia and Kazakhstan. This average line is of high importance, this is border of the sectors belonging to the Caspian countries located on different parts of the Caspian sea. However, now some people assert that the Caspian sea must be divided into five equal parts so that five Caspian countries had equal sectors. How they may be equal?

Imagine that for allocating of a sector to Iran it is necessary to divide the Caspian sea must be divided so that this country had 20 percents. What will have Azerbaijan then? In this case Azerbaijan has to take the share of either Kazakhstan, or that of Turkmenistan. It is unreal. However, the question is put in such manner.

Until recently Russia did not have the certain position. However, in the course of the last five - six months the new President of Russia Mr. Putin has appointed the special representative over the Caspian sea. Former minister of energy Mr. Victor Kaljuzhnyj was appointed to the post of the representative of the President of Russia over the Caspian sea. He has visited all the Caspian countries. He has visited also Azerbaijan. Russia now agrees with the division of the Caspian sea into sectors. However, two years ago it did not agree. However, they are not able to come to the common opinion with Iran. I have advised them to come to the common conclusion with Iran. You see now Iran and Russia closely cooperate, they are friends. Friend should help to his friend.

In short, all our problems in the Caspian sea now is not consisted only of development of oil and gas as much as possible. I repeat once again: the main issue to be mentioned is that we have opened the Caspian sea to all world. The example shown by us provides ample opportunities for fair use of resources of the Caspian sea by all the Caspian states.

All this in aggregate - use of the Silk way, use of resources of the Caspian sea by Caspian countries together with other companies of the world - has opened a new stage for development of both economic, scientific, and cultural connections between Europe and Asia. Azerbaijan feels proud of being the initiator of this issue, we have undertaken courageous steps and we have shown, and we will show henceforth to other states, the example so that they went this way also.

Once again, I want to tell, that I am very pleased with meeting with you and I see the American - Azerbaijan chamber of commerce got stronger, now it is a powerful independent organization. I think that for successful work of this chamber all American companies should join it in future. However, first the large oil companies operating in Azerbaijan should join it.

The fact, that now the co-chairman of chamber is mister Matske inspires me since we always had fine relationships with mister Matske, with "Chevron" company. He is a very progressive person. And "Chevron" company has many sites fields in the Caspian sea.

I wish, that, firstly, we would see good results on "Absheron" field soon, and second, I wish that you and other large oil companies participated more actively in the works of the American - Azerbaijan chamber and rendered to it all kinds of help in the future.

Thank you for your attention. I wish health, new and new successes to all of you.

I have a souvenir with me. This is a work of the talented Azerbaijani artist. I, as the President of Azerbaijan, present this gift to the American - Azerbaijan chamber of commerce.

Thank you.

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