Speech of the President of Azerbaijan Heydar Aliyev in the American-Azerbaijan Chamber of Commerce - February 16, 2000

Graham Allison: Now we come to the main part of the day. I am honored to present you the President of Azerbaijan, Heydar Aliyev. President Heydar Aliyev had outstanding merits in years of working for the government. In essence, the new history of the revival of the country and the first phase of its development he, as a true leader of his people, led Azerbaijan forward, conducted his country during the search for peace in the Armenian-Azerbaijani conflict over Nagorno-Karabakh and the establishment of independent international relations with the West and the United States. President Heydar Aliyev demonstrated that he is a true statesman and together with other leaders in the region looks for the economic development of the region and the road of safety, stability, and as a guarantee of the future of not only Azerbaijan, but also of the whole region, he is an invaluable contribution to the development of a network of pipelines. I especially note the Baku Ceyhan pipeline. For us Americans, it is especially important. Mr. Brzezinski has expressed his opinion on this issue. Azerbaijan has established strong relations with the United States of America. These relations are the cooperation of governments, business and people.

We are honored to see here the President of Azerbaijan Heydar Aliyev and we look forward to his comments

Respected member of Congress Mrs. McCarthy!

Respected ladies and gentlemen! 

Dear friends! 

I am very pleased this evening as I am with You now and greet all of You very warmly and cordially. I wish You and each of You, American-Azerbaijan Chamber of Commerce good speed.

Before me our very esteemed friends made very valuable speeches here. Respected Mr. Bzhezinski, respected Ambassador Eliason, respected Mr. Kalitski have told very valuable and significant words here. I consider that these speeches have formed definite apprehen­sions about Azerbaijan, our region and problems. But I, naturally, as the President of Azerbaijan do my utmost to introduce Azerbaijan very well. If really, as Ambassador Eliason stated here, some Congressmen are not able to show the location of the Caspian countries on the map, so we have to do a lot work for the time present. It is natural that this prolusion doesn`t concern the persons sitting here. You know Azerbaijan well. But I cheer the opening of a new chair at Harvard University relating to Azerbaijan and Caspian area. I am thankful for the assistance of American-Azerbaijan Chamber of Commerce rendered for it, I am hopeful that this chair will outlive, develop and we introduce Azerbaijan, the Caucasus and the Caspian area a lot not only to America, but to the world at the same time. 

I`ve arrived in the United States of America for the business visit for the present and it is the third day that I am in Washington. Today we have conducted very significant talks with Mr. Bill Clinton meeting with him in the White House. Mrs Albright, Sandy Berger and the other responsible persons of the White House were participating in our meetings and nego­tiations in the White House. I want to notify You that my meetings and negotiations held with President Clinton acquires a great significance for me and Azerbaijan. 

It is natural that we have got a lot of problems to be discussed. But we have mainly dis­cussed the problems on solution of Armenian-Azerbaijan, Upper Garabagh conflict by means of peace. We have conducted discussions regarding with the use of energy resources of the Caspian Sea, securing of oil and gas production and launching them into the world`s market, especially Baku-Ceyhan oil pipeline. 

We have also discussed again the problem on liquidation of unjust Article 907 adopted by Congress against Azerbaijan in 1992. We touched upon some problems concerning the development of American-Azerbaijan relations. I want to denote once again that I attach a great importance to this meeting and we cherish great hopes. President Clinton and I have declared today that there are amicable friendly relations between Azerbaijan and the United States of America. We as the Republic of Azerbaijan are planning to broaden the relations with the United States of America and we cherish hopes for the United States of America. The Caucasus and the Caspian area have attracted the attentions of some countries of the world recently. There are two processes not being similar to each other. First, there exist mil­itary conflicts in the Caucasus and they disquiet the people. Blood is spilled, there is a war on, battles, the stability is violated in the Caucasus being very complicated region. It is nat­ural that all of them put difficulties in the way to use the great possibilities of the Caucasus for the life of the people. The second process is the use of energy resources of the Caspian Sea, oil and gas production by oil companies of the world`s big countries and States in the Caspian area and launching of the produced oil and gas into the world markets in the future.

It is known to You that Azerbaijan is a country having very old history as well as the Azerbaijan people. In connection with the break-up of the Soviet Union in 1991 Azerbaijan declared its independence. It is the first time in the late centuries that we have been existing as an independent, free State and people for eight years. We consider it the greatest achieve­ment in centuries-old history of our people. Naturally, we are going to stand guard over this achievement, that is to say to preserve, strengthen and keep in hand our State independence very firmly. But this eight-year period became very complicated for the life of Azerbaijan. The factor complicating our life existed as early as in 1988 in the period of the Soviet Union by the starting of Armenian-Azerbaijan, Upper Garabagh conflict and its continuation up to the present time. 

I have noted that one of the processes running in the Caucasus lately is a conflict over­whelming the whole Caucasus. The first conflict in the Caucasus became the Armenian-Azerbaijan, Upper Garabagh military conflict. It is the conflict leading to very hard and trag­ic results. The subsequent conflicts being in the Caucasus, almost are the conflicts appearing in the other regions under its influence. I can talk a lot about the history of this conflict, but I am not going to take your time. I suppose that You are aware of it. I can precisely tell that there was a war between Azerbaijan and Armenia from 1988 up to 1994. Going those years in the result of aid to Armenia rendered by some countries and owing to some objective, subjective reasons the Armenian armed forces occupied the land of Azerbaijan Upper Garabagh and the large territory around it. More than one million Azerbaijanis have been exiled forcedly from the occupied territories, they live in hard condition under the canvases in the other regions of Azerbaijan. At present 20 percent of Azerbaijan`s territory is situated under the mentioned occupation of Armenian armed forces.

My respected friend Mr. Bzhezinski visited one of the camps where live refugees when he was in Azerbaijan. When I met with him after that visit I remember the words which he told. 

He told that he saw the refugees being in some regions of the world-1 saw in Afganistan, in the Near East and Africa. But Bzhezinski told that he had never seen such refugees up to that time living in such a hard condition. So, You can imagine now how the great part of our people live in a very hard condition.

In May, 1994 we signed Agreement with Armenia on stoppage of the fire. There is not fire now and blood isn`t spilled. But there doesn`t also exist peace. We have been trying hard for five years to solve the problem by means of peace. OSCE and Minsk Group organized by it are engaged in this problem. Minsk Group is headed by three big countries of the world- Russia, United States of America and France. But these works haven`t secured the elimination of the conflict yet.

In 1999 when I was at the 50th Anniversary of NATO I decided, State Department of the USA desired and Mrs. Albright rendered her assistance in order to arrange my meeting direct­ly with the President of Armenia Kocharyan. The meetings began. Then we continued these meeting in Geneva, met in Yalta, then we held a few meetings on Armenian-Azerbaijan frontier. President Kocharyan and I expressed the same view that we would solve the prob­lem by means of peace. For this purpose we came to conclusion that there must be made mutual compromises. We discussed these compromises as far as possible. But we couldn`t have come to the final conclusion up to present yet and this conflict hasn`t been solved. But I am optimist and cherish hopes that we shall attain the solution of the problem by means of peace. 

Almost everything on the land has been destroyed on the occupied territories of Azerbaijan. It is necessary to do a lot of works in order the people live and be engaged in labor activity as well as great funds. It is necessary to repair the railways and highways and we cherish hopes that after obtaining of peace the World Bank, International Monetary Fund and European Union, the other financial centers of the world will allocate the neces­sary funds for the solution of these problems. 

I declare that if we could obtain peace between Armenia and Azerbaijan, the occupied ter­ritories of Azerbaijan be released from occupation, the territorial integrity of Azerbaijan be restored and more than one million people return their native homes there will be created a great ground for securing of peace and, cooperation and security in the Caucasus.

The second processes which I have told are the processes running in the Caspian area. Unlike the first one this process bears the positive character and these works were namely founded by Azerbaijan in 1994. Azerbaijan has formed relations and concluded con­tracts with the huge oil companies of the world for the purpose of using of rich oil and gas resources in its own sector in the Caspian Sea.

In 1994 we signed the first contract. The American, European Companies, the oil com­panies representing 11 countries, the American Companies among them as "Amoco", "Pennzoil", "Unocal", "Exxon" and the others, as well as "BP", "Statoil", Russian Company "Lukoil" assembled and founded a Consortium and signed Contract with Azerbaijan State Oil Company. But it was not easy to sign this contract, there were a lot of obstacles. There were held a lot of works against the Contract after its signing. But we could prevent all of them togeth­er. 

Mr. Bzhezinski told here that we have constructed one oil pipeline -Baku-Novorossiysk pipeline, that is the oil pipeline reaching Russia`s Port in the Black Sea for exportation of oil and it is natural that for the purpose of full supply we have constructed the second oil pipeline Baku-Supsa which runs to Supsa port of Georgia in the Black Sea.

In November, 1997 the first consortium started the production and exportation of oil. Over eight million tons oil have been produced and exported up to present time. 

In addition to it the interest to the Caspian Sea increased. American and European Companies and the Companies of the other companies arrived in Azerbaijan to work together. New contracts have been signed in the last five years. 19 contracts have been signed already. 30 big oil companies participate in these contracts. Those companies represent 15 countries. The sum of the funds to be invested on these contracts amounts approximately to 60 milliard US Dollars. They have been concluded for the term of 30 years and according to the initial calculations 4,5 million tons of oil must be produced. But our working experience shows that it will be rather more that it is expected. 

10 big oil companies of the United States of America operate in Azerbaijan. The last com­pany "Conoco" has taken place lately in a large field in Azerbaijan equally to the company "Exxon". Three milliard US Dollars approximately have been invested for the purpose of per­formance of these contracts. More than 50 percent of them belong to Companies of the United States of America. Generally, over one hundred companies of the United States of America are acting in Azerbaijan now.

So, Azerbaijan opened the Caspian Sea to the World, did a lot of practical works for the use of rich fields of the Caspian Sea. At present these works are also under performance in the other sectors of the Caspian Sea- Kazakhstan, Turkmenistan and Russian sectors. Naturally, two pipelines are not quite enough in order to export the oil. Therefore we have been making efforts in order to construct Baku-Ceyhan oil pipeline and in the result of it we signed the contract on the construction of Baku-Ceyhan oil pipeline during the Summit of OSCE held in Istanbul in November of the last year. This contract was signed by Turkey, Azerbaijan, Kazakhstan and Georgia. Kazakhstan is also intending to export a part of oil to be exported on its territory through Baku-Ceyhan oil pipeline. That Contract was also signed by the President of the United States of America Mr. Bill Clinton. 

These are the works done during this five-year period. But the potentials of the Caspian Sea are large. There exist nearly 120-130 tons of oil and gas field detected in Azerbaijan sec­tor of the Caspian Sea. 

I must say today that if there wouldn`t be assistance and support personally of President Bill Clinton since 1994 we could neither sign nor realize these contracts and sign the con­tract about Baku-Ceyhan oil pipeline. 

Maybe, no one could imagine in the United States of America nearly ten or fifteen years ago that there were so many resources in the Caspian Sea and the huge oil companies of the United States of America would operate there with a great inclination. But it is a reality today and it is a reality having the great future. So, we have brought the United States of America to the Caspian region and Caucasus. Besides them we have also brought numerous companies of the European countries to the Caspian Sea and Caucasus. I consider that it is too significant and valuable for us and for the United States of America to act in the Caucasus and Asian region and be here. But besides the oil production in the Caspian Sea, we have also a potentiality on gas production.

In 1996 we signed one contract concerning "Shahdaniz" oil field. That consortium is headed by "BP". In the result of boring works having been conducted within the last year they have already declared today that there exists gas resource over one trillion m3!

But I consider that it is more than it is expected. 

Today the representative of "BP" approached me here and stated that in the history of "BP"-they discovered the huge gas field in Alaska for the first time- it is the second gas field in the world after it. But the Company "Chevron" of the United States of America doesn`t retard, too. There is "Absheron" field at the field of "Shahdaniz". We signed contract in the White House in 1997 on joint operation of "Chevron" and other companies in the field of "Absheron". 

When I was in Dawos I met with the President of "Chevron" Mr. Max as well as his rep­resentative there, too. He told me that they would gladden us odd-come-shortly. The con­ducted geophysical-exploring works show that it is expected gas over three million cubic meters in "Absheron" field. I suppose that it is not the end of the work. We shall be a wit­ness of such great marvels in the future.

So, Azerbaijan started its natural resources jointly with the big oil companies of the world after its independence. All of them involve Azerbaijan to cooperate closely with the United States of America, West and European countries and it will be so forever. If we wouldn`t get the State independence we couldn`t implement any of them. Therefore, as I told, the State independence is a great achievement for us. The population of Azerbaijan is eight million people. We implement the building process of democratic, juridical and high society in Azerbaijan. We implement numerous economic, social and political reforms. We implement the privatization program and land reform and have given all lands to the farm­ers to their private property. We have created condition for the flow of foreign investment into the country. Within the period of five years the investment over 5 milliards have been remitted to Azerbaijan. If the great part of this investment was attracted to the oil and gas sector in the previous years, but in 1999 nearly 60 percent of that investment was attracted to non-oil sector and 40 percents to the oil sector.

We are on the way of market economy in Azerbaijan and all of them have resulted in the great macroeconomic changing. In the result of them we created stability in the economy in 1995. Up to that period the economy didn`t develop, year by year it fell into decay for 20 percent approximately. In 1996 we started our development and the economy develops every year in our Republic. The gross product increased for seven percent, industrial pro­duction percent and agricultural production for three percent in 1999. There is also devel­opment in all other fields. 

In 1994-1995 the inflation rate formed 1400-1600 percent per year. We haven`t got any inflation starting since 1997. It is in the degree of zero today. We lead the open economic policy. Azerbaijan`s national currency can be exchanged to all currencies of the world. We cooperate very closely with the International Monetary Fund, World`s Bank on theses prob­lems and we get a lot of aids from them. All of them are our achievements. But we have also got some imperfections and shortcomings.

It was necessary to create social -political stability in the country in order to get achieve­ments. It was not easy for us. Because of Armenian-Azerbaijan conflict the social-political stability in Azerbaijan has been violated. Different unlawful armed groupings struggled against each other for the power. 

In 1993 the civil war began in Azerbaijan. Since 1995 we could have been securing the social-political stability. Every country is in need of social and political stability in the first instance in order to attract the investment. It has been secured in Azerbaijan. I can tell that the firmest internal stability among the States joining in the Commonwealth of Independent States exists in Azerbaijan. But it is natural that it is required to adopt the adequate laws for the attraction of foreign investment. We have adopted these laws. 

We have adopted very progressive taxation law lately. The customs duties in our Republic are very low. But there are some obstacles in the way of attraction of foreign invest­ment to Azerbaijan. There is red tape or abuse of power by separate persons and some other infringements in the executive bodies. As it is in the other countries, there is also corruption in our Republic. But the main ground is that we are fighting against all of them. We have adopted some important laws. I as the President of the Republic of Azerbaijan issued sever­al decrees about it. Principally we have done practical works. 

These very days there will be established a Centralized Agency on getting of licenses and direction of investments to any sphere in Azerbaijan. For the purpose of normal activity of big oil companies in Azerbaijan there doesn`t exist any obstacle. We are equable here. But there are some obstacles against the normal activity of different small and medial foreign companies in Azerbaijan and we are aware of it. But we take very serious measurements in order to eliminate them. So, I invite both small and medial companies of the United States of America to Azerbaijan and assure You that there will be created the proper possibilities for their arrival in Azerbaijan and to draw income and advantageous activity in Azerbaijan. 

I`ve got a lot of words to tell You but it is late. Therefore I consider that this informa­tion I have delivered to you will allow to form a large imagination about Azerbaijan. All these words which I have told to You show that Azerbaijan cooperates with the United States of America in all fields and is planning to continue its cooperation more widely. The United States of America is our friend and we shall develop these friendship relations. 

Mr. Bzhezinski has told very valuable words here about the independence of the Caucasian countries. It is a reality that it must be done a lot of works in order to maintain the independence of the countries similar to us. But I assure You that notwithstanding the pres­sures being committed against us from all sides, the Azerbaijan people and the President of the Republic of Azerbaijan is determined to protect the State independence and we shall never relinquish our hold. I believe that the United States of America considering Azerbaijan its reliable partner will also render its assistance in all fields thereafter.

Your country is the largest and withal the most developed country of the world from the economic point of view. Your country is a democratic country and You prefer strongly the values of democracy and human rights. We also go on this way in our Republic. But we need time in order to reach your level. The ground is that we have wended our way or we are on the scent and we shall never jump the track. You have reached this level within 200 years. But we can`t abide for 200 years. We should have reached the level of high democratic State, the level of economically developed country and create the necessary living conditions for our nationals within the shorter period. We shall attain these objects. 

I evaluate highly the American-Azerbaijan friendship. We have assembled here today and it is a noble manifestation of American-Azerbaijan friendship. I wish that this friendship always develop. 

I am also going to give a toast. Because the persons who have appeared before me have already proposed. Dear friends, I request You to mount this glass in honor of American peo­ple, in honor of the United States of America, in honor of the American Government , in honor of American-Azerbaijan friendship and reliable partnership, in honor of the President of the United States of America Bill Clinton. 

Thank You very much. 

The document was taken from the edition of “Together towards the New Century”