Introductory speech of the President of the Republic of Azerbaijan Heydar Aliyev at the conference in the Presidential Palace on the implementation of the decree of 15 June 1994 "On the measures to strengthen the social maintenance of the population and stabilization in the financial situation of economy" - 29 August 1994

As you know, we have been recently dealing with various issues of the national economy, such as financial, production. Expanded conferences on the economy were held on the 11th and 18th of August. The first conference discussed the situation in industry, construction and social sphere. On the 18th of August, the situation of agriculture and in agro-industrial complex, instructions were issued for the implementation of necessary measures, and certain activities are being carried out on the discussed issues. However, the economy of the republic requires constant attention. Therefore we are dealing with these issues systematically and have to do so.

As you know, an extensive and fundamental decree on the economy of the republic was issued on the 15th of June. This decree of great significance is aimed at strengthening the social maintenance of the population and the stabilization of the financial situation. The decree emerged after many discussions, researches, exchange of views and contains specific theses about the activities to be implemented into life. We have determined the ways of its implementation after joint discussions and consultations. We thought when the decree was adopted and even now I think that the implementation of this decree will to a certain degree be conducive to the improvement of the social conditions of the population, in particular, will contribute to the birth of necessary changes for enhancement of the financial situation of the republic.

The present conference is dedicated to the implementation of this decree. Two and a half months have passed since the adoption of the decree. That is why, I have invited you here today. I want to know how the decree is being implemented, which results we have achieved, what we have obtained and what have not been done, why they have not been done, what are the reasons and what should be done. Of course, we should both take measures in the economic sector and adopt documents. However, some documents are of long-term program nature, some are associated with the resolution of the current issues. At a certain stage, the decree issued on the 15th of June is aimed at ensuring the long-term revival of economy, improvement of social conditions of the population. If we had realized it, it seems to me that we could have gained more progress. Therefore, I have invited you here to get information, to discuss the issue. I would like everyone – each of us – approach the problem seriously and with responsibly to all the issues in the areas of our responsibility, at the same time, in every sphere of life of the republic, including in economy.

Deputy Prime Minister and Minister of Economy Samad Sadigov has the floor to speak about the issue under discussion. Next is the turn of the finance minister to report. The decree sets the tasks for the Cabinet of Ministers, ministries of economy, finance, labor and social maintenance of population, other ministries, the National Bank. I would like to learn how these tasks and, in general, the decree is being carried out. Simultaneously, to clarify what should be done at the present stage to ensure our strategic goal, that is, to strengthen the social maintenance of population and liberalization of the financial situation of our economy. This is the purpose of the conference.

Closing speech

At the beginning of the conference I said that the objective of proposing this issue for the discussion is to review the implementation of the decree which is very important for the social conditions of the population and economy. To strengthen the social maintenance of the population, as well as stabilization of the financial situation in our economy depend on the implementation of this decree in its entirety. From this standpoint, the decree is a long-term and comprehensive document. If we had managed to implement all the provisions, sections of this decree within two and a half months, no doubt, we could have made better achievements. Taking into account the mistakes made in the implementation of this decree, and for the purpose of redrawing the attention to its implementation, we deemed it appropriate to start the debate of today. The discussion shows that there is indeed a need for it. Our discussion, exchange of views which lasted for several hours today are very necessary, for our current and future activities.

The decree is aimed at strengthening the social maintenance of population and stabilization of the financial situation in economy. If we manage to cope with these two tasks, which are important for us, we can considerably improve the situation in the republic. It should be noted that many of the provisions, clauses of the decree have already been implemented. There are such items that were materialized immediately. For example, raising the minimum wage, or paying compensation to low-wage groups of population, raising pensions, paying additional funds to the pupils - all these measures were performed immediately. Prices of energy bearers, bakery products were increased then.

Some articles of the decree have been implemented into life in subsequent periods. Nevertheless, many articles of the decree have not been realized, thus, it may be for this reason that we could not get the desired results. I do not at all think that if we realized all of the measures, we would have brought about a lot of changes. No. However, it would have been the basis for us to reach a new phase and acquire new changes. Speaking here some of the ministers expressed their opinions on some of the issues, saying there were no objective reasons for the implementation of some of the items. I do not want to repeat them. I think that the Cabinet of Ministers, ministers, local authorities and all the organizations responsible for the implementation of this decree should have implemented these activities. Unfortunately, some of them have been realized, however, the rest have not been realized. There are no so much objective reasons for the measures not to be realized. Just time was lost, bureaucracy played its role. Thus, we have lost much. For example, I want to refocus on an item. This is a very important issue. When we adopted the decree, we exchanged views for two months whether or not to raise theprices for the energy bearers, bread and the minimum wages.

Finally, we agreed on the provisions, decisions contained in this decree. But at the same time, we all agreed that this is our first step as a guide in our future work. We came to such a decision that the gradual resolution of these issues will contribute to their without any trouble resolution and to the revival of the national economy. Here two months and a half have passed, we are now thinking of how much to raise the prices of the energy bearers. Different figures were mentioned. Of course, the figure which we want to agree on in the nearest future will be much higher in comparison with the previous one. However, as it is stated in the decree, if the Cabinet of Ministers raised the prices gradually - for example, a little bit after a month, we would not have then encountered such a situation. The failure to implement the provisions of the decree in time, no doubt, damages our overall activities very much.

Take the construction sector. We have finally reached a resolute decision here: the buildings with no prospects should be stopped. We had identified the facilities that needed to be built and all our funds to be mobilized and accumulated to that end. Why should this list be expanded now? After all, we have simply no finances, opportunities to expand the list. If we have a chance, no doubt, let us expand it. It is always necessary to carry out construction for the development of our republic. However, now we live in such a situation that we need to live within our means. This old saying is very important for our current situation.

Then we weighed out this issue: the construction of living houses should go ahead; very important social facilities from which we can benefit for the improvement of the social conditions of population social state should be invested in and completed by us. However, is it necessary to build factories, plants or other production facilities now? Many of our current factories, plants operate at 20 percent of their capacity, others 30, some for 10 per cent, all of them remain idle. In this case, are new constructions of significance? Of course, not. We discussed these issues before the adoption of the decree. These have been clearly enshrined in the decree. Then, it is simply sabotage and unnecessary to kick off a new process.

One of the speakers rightly touched on the issues of streamlining and reduction in the state bodies. We heard here that a total of 15bn manats are spent on this sphere. It does not mean that when we make cuts, the costs will reduce by 3-4bn manats, the money will stay in our budget. The state bodies that are swollen damage our common cause instead of improving it, lead to all-out bureaucracy. We have just heard here that now the number of the personnel has increased by several times compared to that of ten years back. After all, why is this needed, for what is it needed?

Now we are in transition to the market economy, many sectors of the economy have been liberalized. Plants, factories have been granted great powers and freedoms. In this case, the governing bodies should be further limited as it is not in old times when purchases of each nail, button, etc were planned by Moscow, the center: the amount, the prices - all of them were defined by the planning committee of the Soviet Union, bodies from top to down were needed to calculate all these. Now time is different.

At present, over the recent years, the liberalization of our economy has been going on and this process continues now. In this case, the governing bodies should not be swollen, on the contrary, should be further reduced; should not be expanded, on the contrary, should be down-sized. These and other unfulfilled provisions of the decree are, of course, very important. By the way, let's take the issuance of securities. These securities would to a certain extent facilitate the improvement of the financial situation in the country. But this is not such a thing to delay it for two and a half months. This issue could have been solved to issue the securities.

I demand that the Council of Ministers, ministers – particularly, economy, finance ministers and other ministers who are involved in this sector, banks, in particular, the National Bank to take urgent and concrete steps for the implementation of the provisions of the decree that remained unfulfilled and get results from them as soon as possible. Of course, as some time has passed, there might be certain additions, novelties in the implementation of some provisions as the decree was adopted two months and a half ago. But it is necessary to consult about them jointly and act together.

There was a talk about the oil industry here, the vice-president of the State Oil Company made a speech. On 26 August, I met oilworkers, made serious statements that we are earnestly dealing with their issues. I vowed that these issues will also be dealt from now on. We have to seriously deal with this sector. For this purpose, all the proposals of the oil company should be looked at seriously at the economy, finance ministries. The Cabinet of Ministers should also examine this issue. I think that this issue should not be delayed. I ask you to look at this in the next three-four days and come up with proposals. We all together need to examine the state of affairs at the State Oil Company, and as a whole, look jointly into the production, pricing issues, the welfare of workers and other related issues. Let's make a decision so that all the issues are resolved. Perhaps, it will be necessary to issue a decree, and we must make sure that all these issues are reflected in this decree.

I do not want to say how much, how many times it is necessary to raise the price of energy bearers. For this we need to sit down, consult. Certainly, the prices should be raised. At the same time, this should not be delayed. I am reiterating, if prices had been raised a month after the decree and repeated again, it would have been easy to solve the problem now. But now time is lost. As time is lost, we need to treat the issue very seriously. I ask you not to delay with this issue. Within three or four days, we have in a comprehensive manner to examine the ways of increasing the production and identify the priority tasks in the production sector, as well as the welfare of workers, and of course, their tasks – what is necessary for the implementation of the duties related to oil and gas extraction; we have to meet all of them in order they can work harder, more productive over the remaining part of the year. As you know, we spoke in detail on the state of economy in the conferences of August 11 and 18. However, as economic issues are being discussed today, I want to reiterate that we should use our existing production facilities, production potential more efficiently. We demand this from the heads of relevant ministries, state committees, companies, associations, firms and ventures.

It is obvious to all and to my firm opinion is that there still remain unexploited opportunities both in the industry and agriculture. No-one should sit and wait what he would be given from the centre. Now leaders should be armed with agility, ability to take initiatives, demonstrate business skills. Without this our work will not progress. Business and entrepreneurial leaders of ventures establish relations, look for different ways among themselves, including in other countries, as well as in the countries of the Commonwealth of Independent States. As a result, these enterprises function, people work and receive wages. We had talk to this end and today I have the same demand again. I think that the ministries, state committees, companies, enterprises will seriously deal with these issues.

Here we also spoke about the economic reforms. Reforms should be carried out as we are late on this issue. But we need specific programs for the conduct of every reform. The Cabinet of Ministers, the Ministry of Economy, the Ministry of Finance, individual specialists must introduce such programs. For example, the speakers said, and we have been thinking so for a long time that small facilities in trade and service sector need to be privatized. There is no need to prove its importance. Or, let's take unfinished constructions. They should be immediately privatized as we won’t be able to complete them in the next three to five years with some of them, maybe in 10 years. However, it is possible for the private sector to complete the construction of these facilities by attracting foreign investment, and consequently, open new production areas.

At the same time, comprehensive economic reforms should be carried out. Vahid Axundov said here that the representatives of the International Monetary Fund have arrived in Azerbaijan. Some time ago, a representative of the Fund was in Baku, held meetings at various levels, and I also received him. We talked in detail and he openly spoke about the terms of the International Monetary Fund to provide our republic with credits. One of the main conditions was the conduction of economic reforms. The International Monetary Fund will not help Azerbaijan without this and will not make efforts to mobilize funds for Azerbaijan from its other international financial sources. We are also lagging behind all the countries of the Commonwealth of Independent States in the sphere of economic reforms. However, we have opportunities to accelerate it and we should use them. Economic reforms in our country are needed to develop the forms of property in accordance with the world practice. It seems to me that the instructions envisaged in the decree related to the credit are completely true. At the same time, giving loans have not been completely banned. The question is how and why they will be granted. For example, we heard here that 200bn manats in credits were granted, but of no use.

The minister of agriculture made a proposal over cotton harvesting. I think this issue needs to be urgently addressed. This issue should be considered at the presidential office, the Cabinet of Ministers within three to four days and everything what is needed for harvesting of agricultural products, especially cotton and grapes, tobacco, extra measures in grain production should be implemented. If we give 10bn manats in credit for this and it will be effective, we should do so. However, I would like we solve this issue in a comprehensive manner. Fatma Abdulla-zade noted here and I also said previously that we have opportunities related to picking cotton. In the past, students were sent from Baku to gather cotton, schools were closed in villages. Now, there are so many refugees there, all of them are diligent people. These people want to work. If they pick the cotton and are paid once a week, this would be a great material support to them. Once again, I repeat, we must look into this matter urgently, if necessary, prepare and submit a special order or decree to this end.

Muslum Imanov spoke about the issues related to electricity here. I think this issue should also be treated as a priority issue, and I instruct the Cabinet of Ministers to deal with it. Issues both related to the preparations for the winter, and in general to the use of electricity and issues related to the regulation of its prices should be discussed. We indeed should increase the price of electricity to the world level. On the other hand, we should avoid the waste of electricity. We produce electricity with difficulties. If we take the Trans-Caucasian region, now the population in Georgia almost live without electricity. Armenia is also in deep crisis. But we are not in such a situation. In the recent years, only the Nakhchivan Autonomous Republic experienced a similar crisis. I have said again and again, and reiterate that the energy and fuel crisis in the recent years led to great difficulties in living conditions of the people there.

We are not serious about saving issues. In general, it is not only about now. I remember when I was the first deputy chairman of the Council of Ministers in Moscow, I led several areas. Then a lot of coal, 620m tons of oil was produced annually. Even with such an abundance of energy sources, we were taking serious measures to save on electricity. Because, unlike the Western countries, electricity in the Soviet Union cost a trifle and, thus, they were not thinking of saving even at apartments. Even ten years ago, both in the western and eastern Germany, every evening ads were on TV channels, calling people to turn off unnecessary electricity devices, lamps.

True, we have powerful power stations, fuel. But we are at war. On the other hand, as it was said here, now we are also short of fuel to run our power plants. The fuel balance has not yet been determined for the winter. In such a case, it is necessary that electricity is saved everywhere. It refers to every citizen, every enterprise. Cities are over-illuminated at nights. Of course, I do not want Baku and other cities resemble the period of the World War II in 1941-1945. Then green lamps were sparsely lit in Baku at nights. Now our cities should not resemble that period. But we are at war, in crisis. Energy resources are very valuable for us. We have to extremely economize on them. The executive authorities in Baku, Sumgait, Ganca, other towns and districts must treat it very seriously.

When guests from abroad say Baku is well illuminated at night, I am glad and pleased that despite the state of war, the living condition of the population is not so hard as against some people think. However, if we make a significant saving, we can benefit more. I change the local executive bodies, heads of ministers, companies to deal with the issue of energy efficiency as their duty. However, probably other controlling authorities should also deal with it. Now, in general, we should learn saving on everything in all areas. Because, I repeat, we are both in crisis and at war. In such a situation, we have no opportunity to live in luxury. Those who have opportunities should try this, too. Of course, I do not want to say everyone should be measured similarly. However, we should overcome this hardship together. Let the rich also make savings and maintain it for future. The needy would be able to survive if make savings.

In the war of 1941-45, per day blue-collar workers were given 600 grams of black bread per capita, the white collar workers 500 grams. The bread ration of children, unemployed women and others was 400 grams. People lived under such conditions for four years. True, Azerbaijan, which was not a battleground, perhaps, was in a better condition than other regions. Now we are not in that situation to set 500-600 grams of bread ration. Nevertheless, we have to know that we are in a state of crisis and at war, we must protect our homeland and keep over one million refugees. We all should know this. I want to comment on Vahid Axundov’s 37,000-manat worth “consumer basket” which is unclear on what basis it was calculated. He included 500 items on the list. This is the life of a king! Or, he calculates a kilogram of dairy products per person per day. Even in the best of times, who of the people sitting here have consumed this amount of dairy product? His proposed "consumer basket" also envisages smoked sausage. During the past years, dubbed as the stagnation period, there was no such sausage at stores. Now, when we are under such a hardship, you want to eat this sausage. After all, this cannot go down through your throat. If you eat it, they will come and grab you by the throat, saying that people do not have money to buy bread, but you eat this kind of the sausage. Or, you say that everyone should buy a blanket per year. I have had my blanket for 30 years. After all, who buys a blanket every year? As well as a pillow, its cover is only changed. I personally do not believe in the possibility of such things even when our independent republic becomes rich in the future. I cannot guarantee if some millionaires do so.

Of course, we must support the population, but this should be to the extent possible. We heard various opinions on the minimum wage. This is due to prices of energy carriers and some other things. As views differ from one another radically, we need to act wisely on the issue. I remember it took us two months to have discussions before the approval of this decree. It caused much disputes to raise the minimum wage up to 2,000 manats at that time and we finally approved it. Therefore, I am tasking the Cabinet of Ministers, the economy, finance ministers, the National Bank to discuss this issue in detail. As it can be seen from the title of the decree, of the execution of which I am speaking now, our major goal is to strengthen the social maintenance of the population. To this end, we should improve our financial state and know how much our revenue is. Once we determined our sources of income, no doubt, the minimum wages can be raised. I think these issues need to be carefully measured within a few days. Then we’ll hold a special meeting in my office. However, let everyone prepare their proposals regarding the sources from where the funds will be obtained.

As in all the spheres, the President of Azerbaijan is directly responsible for all spheres, including the social status of the population, and I have done my best for the constant improvement of the condition of population in the republic, and I shall try from now on. I consider it one of my major duties. Whoever makes helpful, financially sound proposals they will help us to get to a new stage thanks to our common efforts, no doubt, it will be a great achievement for us, and as the President, I wish this and will spare no efforts to this end. I am reiterating that it is necessary to deal with this issue in the next few days. Then I shall invite the ministers directly engaged in this issue and hold a special discussion and would decide on the possible level we can come to a consensus.

To recap, once again I demand that everyone here draw necessary, serious conclusions from what was said and take appropriate measures for the fulfillment of the tasks specified in the decree. I instruct Vahid Axundov to submit to me a report in writing on the performance of the decree every ten days. Along with tasks performed, the reports should deal with unfulfilled issues, the reasons for them and who are responsible for them.

I suppose that the present discussion was necessary and everyone should do necessary work to meet the duties that proceed from it. Thank you.