REGIONAL DEVELOPMENT

Information on implementation of “State Program (years of 2004-2008) on social-economic development of the regions of the Republic of Azerbaijan”

As a result of effective implementation of “State Program (years of 2004-2008) on social-economic development of the regions of the Republic of Azerbaijan”, a great increase was gained in macroeconomic indicators’ gross in the country, the real value of Gross Domestic Product (GDP) increased by 2,6 times and was up to 38 milliard AZN during five years, the nominal value of GDP per capita increased by 5 times and comprised 4440 AZN. Non-oil sector increased by 1,8 times, as of end of 2008, the share of private sector comprised 84,5 percent in GDP. 2, 5 times increase in the industry of the country and 25,5 percent in the agriculture was observed.

In comparison with the 2003, the incomes of the population increased by 4 times and poverty level decreased to 13,2 percent. During this period the average monthly salary of workers increased by 3,5 times, exceeded the inflation rate by 1,7 percent and was 268 AZN.

The value of investment directed to the main capital from all financial sources for the development of industry of the country comprised 33,5 billion AZN within five years, 53,2 percent of this was internal while 46,8 percent was foreign investments. Total sum of state investments directed to the regions was approximately 6.8 billion AZN during this period. The value of investments directed to the non-oil sector increased by 6,2 times within five years and its special weight in the structure of general investments increased from 26,8 percent as of 2003 to 69 percent in 2008. Increase of the value of public investments during 2004-2008 years had a positive influence on the increase of construction of infrastructural, communal objects, social service in the regions and on the increase of quality in service sector.

9 Power Electric stations – power electric stations of module type in Astara, Shaki, Khachmaz districts, 3 electric stations in Autonomous Republic of Nakchivan, heat electric stations in Sumgait city and 2 power electric stations in Baku were constructed within five years. The provision of natural gas to Autonomous Republic of Nakchivan was realized after 13 years of interruption and Lerik, Yardimli districts and Horadiz city of Fuzuli district as well as Agjabadi, Beylagan districts, Guzanli settlement of Agdam district and other districts were provided with natural gas for the first time. The operations were started on the reconstruction of Oguz-Gabala-Baku water pipeline and also water supply and sewerage systems of Ganja, Shaki, Agdash, Goychay cities as well as of other towns in the country. More than 1000 km main road was constructed or capitally repaired, 600 km of roads of republic importance were reconstructed and 2700 km roads of local importance, 69 new bridges were constructed and 34 bridges were repaired in the regions within five years. New airports meeting the international standards were built in Nakchivan city, Ganja, Lankaran and Zagatala within five years.

The new metro station “Nasimi” was built in Baku, “Icharishahar” (Old Town) and “28 May” metrostations were reconstructed.

Within State Program 33 houses for disabled persons and families having martyr and 7 rehabilitation centers for disable persons were built in the regions, new diagnostics centers started to operate in Lankaran, Gazakh, Zagatala, Barda, Gabala, Ganja, Nakchivan and Shirvan. 636 new schools were built, 192 schools were repaired and 243 new classrooms were built in the regions within five years. During the past period within the “New school for renewed Azerbaijan” program of Haydar Aliyev Foundation, 238 schools were built. 18 modern Olympic Sport Centers were constructed in the regions of the country.

More than 88 percent of the created enterprises were private and with the purpose to support entrepreneurship activity The National Fond for Entrepreneurship Development of the Republic of Azerbaijan allocated 323,4 million AZN credit with low interest rate to 6991 entrepreneurs and as a result more than 68,2 thousand new jobs were created during last five years.

In general , more than 766 thousand new jobs (547,5 thousand permanent jobs) and more than 27,5 thousand new enterprises were created at the result of implemented works during 2004-2008.

“State Program on social and economic development of the regions of the Republic of Azerbaijan 2009-2013”

In order to accelerate the development of the non-oil sector in the country, to archive diversification of the economy, balanced regional and sustainable social and economic development as well as improvement of living standard of the population the “State Program on social and economic development of the regions of the Republic of Azerbaijan 2009-2013” was approved on the 14th of April 2009 by the Decree No. 80 of the Prezident of the Republic of Azerbaijan Mr. Ilham Aliyev. The document which has been prepared as logical continuation of the “State Program on Social and Economic Development of the Regions of the Republic of Azerbaijan (2004-2008)” considers strengthening the achievements made in regional development field and continuation of the started development measures in 2009-2013. In compare with the previous State Programme the new State Program also covers the measures directed to the social and economic development of Baku city districts and its suburbs as an important priority.

Mr. Ilham Aliyev the President of the Republic of Azerbaijan said, that at the result of implementation of this State Program the whole infrastructure of the country will meet an international standards. In this regard, the State Program sets forth as a priority task to tackle all unsolved problems over all fields of the economy and regions of the country as well as concrete problems of each village in all the regions and problems that worry the people.

The State Program considers complex measures covering development of non-oil sector, creation of public utilities and other infrastructure objects, new production and processing enterprises, strengthening of production activity in the existing enterprises, acceleration of the application of communication and information technologies, improvement of social infrastructure as well as building and reconstruction of educational, scientific, medical, cultural and sport centers meeting international standards and construction of residential buildings for the invalids and martyrs’ families by using the existing potential in all the regions and capital of the country more efficiently in accordance with the purposeful policy of the state in the field of increasing of the people’s living standard with the dynamic development of the economy in our country.

In general, the measures to be implemented within the framework of the Action Plan of the State Program are defined in 3 levels:

- Measures of country importance;

- Measures over the districts and suburbs of Baku city;

- Measures to be implemented in the level of economic regions of the country;

The Action Plan of the State Program considers 1066 measures over the country as well as 58 measures of country importance, 40 measures over Baku city and 968 measures over the economic regions:

Action Plan of the State Program consists of the following sectors:

1. Tax and monetary-credit policy

2. Measures on expansion of industrial and agricultural production,

3. Measures on environment and use of natural resources,

4. Measures on road infrastructure and transport,

5. Power, heating and gas supply,

6. Measures on improvement of communication services,

7. Measures on upgrading water supply and sanitation services,

8. Measures on amelioration and irrigation,

9. Measures on safety of population,

10. Measures on housing and social protection,

11. Construction and reconstruction of health care, cultural, sport and education facilities

First year of implementation of the “State Program on social-economic development of the regions of the Republic of Aaerbaijan ( 2009-2013)”

Implementation of the State Program in 2009 played an important role in macroeconomic stability, extending entrepreneurship activity, creating new enterprises and jobs, improving the level of infrastructure and public services, reducing the level of poverty and improving the well-being of population in the country.

Gross Domestic Product (GDP) in the amount of 34,6 billion AZN was produced in 2009 and increased by 9,3 percent in comparison with the same period of the previous year at the result of continuation of expedient measures fulfilled in the country. The value of GDP per capita was 3917,3 manat (4874,1 US dollar) and increased by 7,9 percent comparatively to the same period of the previous year. The production sector shares 64,1 percent, while the service sector shares 28,3 percent in GDP.

Production of GDP increased by 3,2 percent in non-oil sector during the reporting period. Value of general product of agriculture with constant prices increased by 3,5 percent, plant-growing by 4,0 percent, animal-products by 2,8 percent. Having the productivity of average 26,6 quintal of each hectare 2988,3 thousand tons of grain was produced in 2009 at the result of government support to the grain production.

Incomes of the population per capita was 2537,7 AZN by increasing 6,7 percent in comparison with previous year, level of inflation was 1,5 percent and level of poverty reduced up to 11 percent in 2009. Average monthly salary was 298,0 AZN in 2009 and increased by 8,6 percent comparatively to applicable period of the previous year. In order to develop economic and social fields in the regions of the country 2,9 billion AZN investment out of 7,4 billion AZN was directed to the regions in 2009.

During 2009 the following new enterprises were created in the regions of the country:

Gadabay gold-copper conversion plant, Sumgayit techno park-(first stage), Electronic counting machines and radio-construction factory in Baku, “Gemiqaya” mineral waters factory in Nakhchivan, Flour confectionery production workshop, asphalt-concrete factory in Sharur district, “Azerelectronics” factory in Shamakhi district, “Gilan” piano factory in Gabala.

In order to improve and extend the access of the entrepreneurs to the financial resources of the Entrepreneurship Support Fund of the Republic of Azerbaijan the rules for access to the financial resources was simplified, maximum interest rate of credits was cut to 6 percent, credit getting period was reduced to 25 days, credits’ maximum amount icreased up to 5 million AZN. In total about 130 million AZN credit was allocated to 2101 entrepreneurs by the Entrepreneurship Support Fund of the Republic of Azerbaijan. The regions of the country share 99.2 percent of financed investment projects, 88.5 percent of credit amount and 94.7 percent of the new jobs will be created in the regions. In general 17 entrepreneurs received 31.9 million AZN from the Fund in order to build refrigerator-storehouse complexes with the capacity of 48 thousand ton meeting international standards for the purpose of keeping fruits and vegetables in Aran, Guba-Khachmaz, Ganja-Gazakh and Lankaran economic regions of the country.

In addition, investment projects of 15 entrepreneurs in the amount of 15.9 million AZN from Aran, Daghlig Shirvan, Ganja-Gazakh, Lankaran, Shaki-Zagatala and Absheron economic regions in order to build the refrigerator-storehouse complexes with the capacity of 199 thousand ton was funded by the Fund.

In order to increase the production level and crop sorts implementation of the following projects was already started by Azerbaijan Investment Company: new Hovsan diary plant, reconstruction of Goychay milk plant of “Milk-Pro” LLC, construction of Masazir Salt plant, construction of “Davachi Broyler” JSC.

Implementation of the following projects within the State Programme already started: construction and restoration of new infrastructure objects’, improvement of public utilities, improvement of the electric energy, gas and water supply systems, construction of medical, educational, cultural and sport institutions. During the reporting period implementation of the new projects like road junction complexes in Baku, new bridges and 16-134 km part of the main Baku-Guba-Russian road, Nakhchivan-Sadarak, Ujar-Yevlakh and Baku-Shamakhi main roads, circle roads of Bilasuvar city, first suspension road bridge in the country in Zagatala district was finalized. In order to Improve the level of the services in passengers transportation sector such projects like new Baku International Bus Station Complex, Barda and Gabala bus station buildings, “Azadlig Prospekti” new metro station and second exit of “28 May” metro station was successfully finalized. In order to improve the electricity supply system in the country the power electric station with the capacity of 525MVt in Sumgayit, Shahdagh power electric station in Guba constructed and construction of Aghdash regional electric substation and “Goychay-1” Water electric station is going on.

In order to improve water supply system the new water pipeline was constructed in Aghdash city and construction of the new Shamkirchay water storehouse with the capacity of 160 million cube meter started.

In order to improve ecological situation in the country several measures were held with the purpose of restoration of ecological balance, environmental sustainability. The year of 2010 was announced as Ecological year. Previous year Hovsan aeration station was reconstructed and water cleaning systems of module type which provides 224 thousand persons with pure water was installed in 122 villages of 12 districts of the country. Construction of the Waste Treatment Plant in Baku already started. This plant is being constructed in Balakhani area which is going to reduce the pollution of the atmosphere with greenhouse gas.

Another important project is being implemented in “Garadagh sement” (Garadagh cement) OSC. The new dry land production technology is going to be applied which is prevailed in Europe.

With the initiative of the President of the Republic of Azerbaijan wide scale campaign of planting 3 million trees, creation of the forest lands along the roads, creation of the parks in the capital and other regions of the country already started. For this purpose the Sadarak and Bina trade Centres in Baku were moved in order to improve the environment condition of Baku International Airport named after National Lider Heydar Aliyev, creation of natural landscape, and planting of greenery in the area.

In order to improve the living conditions of Garabagh war invalids and martyr families the building of 16 apartments in Ujar, Sabirabad, Tovuz, Dashkesen, Agstafa, Gakh, Bilasuvar, Saatli, Shirvan and Surakhani, Gardagh districts of Baku city, the building of 81 apartments in Khirdalan city were constructed and given tothose category of people.

In 2009 63 health centers, 87 education centers and 7 Olympic Sport Centers were constructed and repaired. 6 new school buildings for 1600 pupils was constructed by financial support of Heydar Aliyev Foundadtion.

At the result of implemented works 74 thousand new jobs and 5314 new enterprises were created in 2009.

The regions of the country share 70 % of the created new jobs.

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