Address of Haydar Aliyev, President of Azerbaijan, to the Azerbaijani people at the beginning of the new year of 2001, the new century and the new millenium - December 29, 2000

Dear compatriots! Brothers and sisters! Citizens of the Azerbaijan Republic!

I would like to express my hearty congratulations to the Azerbaijani people, to every citizen of the independent Republic of Azerbaijan, and to all our compatriots living abroad in connection with the approaching new year, the new century and the new millennium, and to wish everybody happiness, health and celebratory spirits.

Throughout the world, numerous conferences and forums are being held dedicated to the new century and the new millennium. The whole of the world community, representatives of state and private bodies, and famous politicians are analysing the stage of history that we are leaving behind, discussing the potential problems that humanity might face in the new millennium, and offering their vision of their nations and the world's development in the coming century.

Recently I have signed a Decree confirming the implementation of a specially designed development programme in connection with the changeover of the year, century and millennium. The programme is designed to embark on solving the major political, social and economic problems faced by the country at the dawn of XXI century and the new millennium.

Like the whole world community, the Azerbaijani people are entering the XXI century and the third millennium with great optimism. The current century is coming to its end, and an overall appraisal of the period of two thousand years is being made. Of course, the fact that we are at the juncture point of both centuries and millenniums is unique. Every citizen of Azerbaijan, just like every human being on earth, feels overwhelmed with pride and responsibility, experiencing the sensation of belonging to a unique historical epoch.

Humans do not usually see two millenniums meet during their lifetimes. We are all lucky to experience it. There are many people in Azerbaijan now who were born in the XIX century. They are now to become the eye-witnesses of a third century. Young people are now bound to experience peculiar feelings. When they grow up to become worthy citizens of XXI century Azerbaijan, they will often recall these historic days. The middle generation is entering the new century and the new millennium as active participants in and eye-witnesses of the XX century. The unique features of this moment define all current generations as occupying their own particular places in history.

The departing century will be recalled in future for the advance of science and the bloodshed of the two world wars, for the collapse of empires and the birth of new sovereign states, and for the tension of the cold war and the collective efforts to promote peace and stability.

Cultural integration and globalisation are the major trends at this new stage of historical development. When entering the XX century, humanity was looking forward to seeing further advances in science; nowadays we are not thatiimiformly optimistic about further globalisation. The prospects of this complicated and ambiguous phenomenon require deep analysis. Globalisation has to facilitate the process of sustainable development, support state integrity and management systems stability, remove economic discrimination and increase national welfare. Clearly, the process should account for individual national specifics and reflect the priority of international rule of law, the- evolutionary nature of the reforms, mutual trust and loyalty to principles of humanity. It was only natural that our country has not been able to avoid problems, arising in the aftermath of globalisation in many other countries.

Azerbaijan is making its contribution to the promotion of globalisation. Our rich natural resources and our economic potential, together with the favorable geographic location, are currently acquiring special geostrategic significance and turning the country into a bridge between the East and the West. Azerbaijan is making huge efforts to restore the Great Silk Road, to create the Euro-Caucasian-Asian transport corridor, and to produce and export hydrocarbons from the Caspian basin. These projects are highly significant for the overall development of many world nations, and are able to give a new impulse to fruitful cooperation and global development. On the other hand, Azerbaijan is facing certain difficulties in mastering and applying modern technology. To live up to the high requirements of modernity, the nation needs to solve a number of serious problems and put into practice the programs aimed at achieving these high goals.

The Azerbaijan Republic is now an integral part of the international community. Shortly after declaring its independence, the country acquired membership of major international organizations, including the United Nations, the OECD, the Islamic Conference, the CIS, the Black Sea Economic Cooperation Pact, the Organization for Economic Cooperation, the IMF, the World Bank, the EBRD, the Islamic Bank of Development, and the ADB. We have also established mutually beneficial relations with the Interparliamentary Union, the Council of Europe, the European Union, NATO, and other organizations.

The most significant achievement of the Azerbaijani people in the XX century has undoubtedly been the creation of the independent state of Azerbaijan. Having regained its independence, Azerbaijan has laid the foundations for the creation of a democratic, legal and secular state. During this period the Azerbaijani people have adopted the Constitution of their independent state, and, by bringing its legislation, its principles of the independence of the branches of power, and its legal norms up to internationally accepted standards, have shown their willingness to cooperate with other nations. During this period of time the country has seen fundamental reforms changing virtually every aspect of its social life. Azerbaijan has developed its national oil strategy, having concluded agreements with leading foreign oil companies, and secured its integration into the world economy.

We deeply honour the memory of those who made every possible effort to regain and protect their national freedom, all the sons and daughters of Azerbaijan who sacrificed their lives for the sake of national independence. On this memorable day we bow our heads as a sign of tribute to the founders of the Azerbaijan Democratic Republic, the victims of bolshevist terror, mass repression and deportations, genocide, the January tragedy, and to all our citizens who died defending Azerbaijan's territorial integrity.

The XX century has played an important role in the life of the Azerbaijani people. Some politicians have called it the century of oil. It is impossible to overestimate the role that oil has played in the century's world politics and economics. It was the fact that the nation emerged as a world oil power that enabled Azerbaijan to acquire in a short period of time the status that many other nations strive to acquire for centuries.

Oil, which has become a critical resource in modern times, has always been one of the greatest treasures of Azerbaijan, the Country of Flames. Oil, being extensively used worldwide, has been the driving force behind the development of science, technology, the economy, and in particular the industrial production that has led to fundamental changes in human lifestyle.

At the end of the XIX - beginning of XX century, the period known as kerosene times, this oil-derived product was a source of light. Despite the appearance of other sources of light, such as gas and electricity, for many years kerosene remained the primary means of producing light.

The creation of the internal combustion engine marked a new stage in oil utilisation. The oil fuel and gasoline period that began in the XX century increased the significance of oil due to its utilisation in means of transportation such as steamers, locomotives and automobiles. During the First World War oil had already acquired strategic importance.

Though the XX century boasts a long list of historical events, it can firmly be stated that its defining feature was the unprecedented scale of its scientific achievements. What lies at the base of all the scientific achievements of the XX century is oil. Despite the fact that many oil substitutes have already been discovered, none of them can completely replace this unique gift of nature.

The crucial role of oil in scientific and economic development has turned it into a critical factor in the domestic and foreign policies of certain countries, and has given it the international dimensions of a key geopolitical and geostrategic factor. The tough battle for oil deposits and oil markets has made a significant impact on the international power balance and world political developments. One has to also account for the sad historical reality, when certain oil-producing countries were deprived of the opportunity to use their natural resources for increasing their national welfare, and denied the chance of conducting their independent policy due to pressure from larger states. However, these nations have always fought to become the true owners of their natural resources, and have come more or less close to achieving their goals.

The desire to become the true owners of their own natural resources was one of the sustaining factors in the Azerbaijani people's struggle for their freedom and independence. Today, we can proudly say that the Azerbaijani people have realised their dream, cherished for years, to become the true owners of their natural resources, including oil, and are now independent in decision-making.

Azerbaijan's XX century achievements in the area of oil production, including the Caspian basin operations, deserve high appraisal. Many innovations in oil production, currently employed worldwide, have originated from Azerbaijan. New drilling methods, production technologies, and a unique Oil Rocks city created in the sea for oil production, have all placed Azerbaijani oil specialists among world leaders in the field. Evidence in support of this is the fact that newly discovered deposits in the former USSR received the names of "the second Baku", "the third Baku", etc. The country's oil production development was the driving force behind the development of such areas of science and branches of industry as chemistry, the petrochemical sector, geology, oil machinery building, oil refining, and pipeline, chemical and petrochemical production. Azerbaijan saw the numbers of scientists and oil specialists grow rapidly. Built on the achievements of the preceding generations, the development and implementation of the oil strategy, crucial for the current and future development of independent Azerbaijan, laid the foundations for the high living standards of future generations. It was the agreement signed in 1994, and labelled the Contract of the Century, that has predetermined Azerbaijan's dynamic development in the XXI century.

We have been successful in consistently implementing independent Azerbaijan's oil strategy, and we will build further on this success. Currently, Azerbaijan has turned into the geopolitical centre of the region, with our influence increasing in the region and beyond. Of course, we do not perceive oil as the thing in itself. We perceive it as a means of achieving our higher goals, such as strengthening the independence of the Azerbaijan Republic, developing the existing branches of industry and creating new ones, and increasing the national welfare. We can be confident that if these means are used effectively and efficiently, we will soon be able to turn Azerbaijan into a country boasting the highest living standards. In the last days of the century we have again been convinced that the Contract of the Century and our oil strategy are both successful.

Certainly, the achievements made in the oil sector have been primarily linked to Azerbaijan's powerful intellectual potential. It was this intellectual and creative potential of the Azerbaijani people that has allowed the nation to produce material and spiritual values that have already become part of the world's cultural heritage.

As we look back at the past, we realise what a unique heritage our people possess. Every citizen of Azerbaijan must be worthy of this heritage, and must assume responsibility for it, as well as for the present and the future of our country, with it's rich history, culture and high moral values.

Azerbaijan was destined to be a land dividing the East and the West and as such, was exposed to mighty influences of both the western and oriental civilisations. Moreover, there is much evidence which places Azerbaijan among the few regions known as cradles of mankind. The fact that this area was inhabited by prehistoric humans has been proven through Azykhanthropus fossils found at the cave site of Azykh. Rock paintings and petroglyphs in Gobustan and Gamigaya, the discoveries of the Kur-Araz and Khojalin cultures, and excavations of burial mounds are all suggesting that early human cultures existed in Azerbaijan thousands of years before the beginning of modern history.

During the end of the Ist century BC and the beginning of the P1 century AD, Azerbaijan found itself under a complex mixture of influence of many cultures and religions. Apparently the high degree of religious tolerance, a historic feature of our nation originates from this period. Inspired strongly by ancient Greek and Roman civilisations, Azerbaijani science, literature and art acquired their peculiar shape and spirit very early. Other important influences which emerged at various stages of Azerbaijani history were Zoroastrianism, Judaism, Christianity and Islam. Lying on a crossroad of caravan routes and serving as one of the centres of the Great Silk Road, Azerbaijan naturally digested a variety of political concepts, economic relationships and statehoods.

During the 2nd millennium AD the people of Azerbaijan developed a most original and distinctive culture. Two thousand years of this new era witnessed many important contributions by the Azeris to this universal spiritual heritage. Beginning with prehistoric origins, our ancestors managed to facilitate a splendid cultural environment as well as an inclusive social value system. These achievements have included material artefacts, folklore and literary work found in the territory of Azerbaijan.

In the year 2000, Azerbaijan celebrated the 1300-year anniversary of the Kitabi Dede Gorgud ("The Book Of My Grandfather Gorgud"), a magnificent epic depicting the glorious past of our land.

A great love for life and an aspiration for freedom and independence are the intrinsic features of the Azerbaijani literary tradition, from folk literature to great works by the most famous Azerbaijani authors, including Gatran Tebrizi, Nizami Ganjavi, Afzaleddin Khagani, Khatib Tebrizi, Imadeddin Nasimi and Muhammed Fizuli, who advocated the ideals of truth, justice and humanism. The beauty of the masterpieces by Safiyeddin Urmavi, Ajami Nakhchyvani and Sultan Muhammed Tebrizi still enrapture modern day readers.

Azerbaijan should also be proud of a great many contributions to science. The names of Nasireddin Tusi, Abulgasan Bakhmanyar, Shikhabeddin Sukhraberdi are internationally recognised. The oriental Renaissance, which affected many national cultures including that of Azerbaijan, was one of the brilliant pages in the history of universal culture. This epoch has become a culmination of the nation's achievements in various areas of life.

The heroic deeds of Javanshir and Babek, prominent Azerbaijani military leaders, served to establish a patriotic tradition as well as national symbols centred around a concept of national unity. Patriotism and national consciousness were finally proclaimed as the highest spiritual values of the people, thanks to the lives and efforts of Jakhan Pekhlevan, Gyzyl Arslan, Uzun Gasan, shah Ismail Khatai and other statesmen of the past.

As centuries passed, the Treaties of Gulustan (1813) and Turkmenchay (1828) divided Azerbaijan and its people into two parts. However, today all Azeris who reside throughout the world regard the independent Azerbaijani Republic as their motherland and a citadel of national sovereignty, spirit and culture, as a result of the national awareness movement which was widely spread during the 20th century.

The progress of the Azerbaijani people as an independent nation in the 20th century can be traced back to the recent and remote past, particularly to national ideas which developed during the 19th century. These ideas, largely associated with the enlightenment movement, were elaborated in the works by Abbagasu Aga Bakikhanov, Mirza Kazembek, and other influential authors. The democratic press, a new people's education system and secular theatre which emerged during that time did much to precipitate the formation of national awareness.

In 1872 after the leasing system was abolished by the tsarist government, the Azerbaijani oil industry was given a strong impetus. Baku began to attract foreign investment, and this capital flow grew steadily. In 1883, the Transcaucasian Railroad was commissioned, and a commodity exchange with Russia and Europe improved considerably. Due to both domestic and foreign investments, Baku was rapidly evolving into a new financial centre. Another milestone was the construction in 1896-1906 of the Baku-Batum oil pipeline which enhanced the delivery of oil by sea and railway to Russia and international markets. The integration of Baku into the world trade community was accelerated by the development of two important transport directions: to the North Caucasus and Russia, and to Tiflis (present-day Tbilisi) and the Black Sea coast. It was Baku oil which allowed Russia to become the world leader in terms of oil output. In a global context the period embracing the late 19th and early 20th century was marked by an emergence of new economic relationships in the world. This overall trend deeply affected all aspects of life in Azerbaijan. Rapid socio-economic development, a primary characteristic of that time made Baku the industrial heart of the Caucasus.

The economic boom implied a revival in education, science, art and literature. A new type of municipal and district schools were opening in Baku, Ganja, Naxcivan, Shusha, Sheki, Salyan and other cities. A cohort of prominent enlightened thinkers, including Jalil Mamedkulizade, Suleyman Sani Akhundov, Uzeir Bey Hajibeyov, Habib Bey Makhmudbekov, Rashid Bey Efendiyev and Firudin Bey Kocharly, graduated from the Gori Teacher's Seminary. They strove to commission schools which represented a modern and progressive approach toward education and education system reform. Traditional teaching practices were abandoned and the new system introduced by Seyid Azim Shirvani in Shamakhi, Mir Mokhsun Navvab in Shusha, Mirza Ismail Gasir in Lankaran, and Mirza Kazim Askerzade in Irevan. Alongside traditional subjects history, Russian, geography and natural history were taught in these new schools. Since the 1880s, four-grade primary schools, known as "Russian-Tatar", became widely spread. The network of the new-type schools was becoming more and more extensive. A female gymnasium, founded in Baku in 1896 under the patronage of Haji Zeinalabdin Tahiyev, played an exceptional role in the history of women's education in Azerbaijan.

One of the implications of the enlightenment was an increase in the number of Azeris who went abroad to receive higher education. As they returned home with degrees, they formed the core of the new Azerbaijani intelligentsia, who further promoted enlightenment and created the national press and theatre.

The need for a national press arose naturally as the city of Baku developed, its population grew and demand for information became palpable. Hasan Bek Zardabi, a prominent figure of the period, became the first to articulate this need and pursue it through practical efforts. On 22 July 1875, the first issue of the Ekinchi newspaper was printed, signalling the birth of the Azerbaijani press. Molla Nasreddin, a new magazine directed by Jalil Mammadquluzada, laid the foundation of the journalism school not only of Azerbaijan, but of the whole region. From the very beginning, the national Azerbaijani press entered a phase of intensive development.

Another remarkable achievement of the period was the beginning of the national theatre. The first scenic productions of Azerbaijani plays were comedies by Mirza Fatali Akhundov performed in Petersburg and Tiflis in the 1850s. In 1873, Hasan Bey Zardabi joined with Najaf Bey Vezirov to found the national Azerbaijani theatre. Again, plays by Mirza Fatali Akhundov became the pioneering productions, staged in Baku by a troupe of Azerbaijani students. This troupe debuted with The Vizier Of Lenkoran Khanate and Gaji Gara. In the second half of the 1870s, theatrical performances in Azerbaijani took place in Guba and Sheki. Notably the graduates of the Gori Teaching Seminary were actively involved in these productions. Thus, amateur performances of Akhunov's comedies were arranged in Sheki by Rashid Bey Efendiyev in 1879, in Shusha by Yusif Bey Melikhaknazarov in 1882, and in Nakhcivan by Muhamedtagi Sidgi in 1883.

The end of the 19th and beginning of the 20Ih century was the time of enthusiastic innovation in Azerbaijani theatre. In 1908, Leyli And Mejnun, an opera by Azerbaijani genius Uzeir Hajibekov was staged for the first time. This performance had a great effect on the further development of opera in Azerbaijan and other oriental countries. In 1916, Muslim Magomayev wrote Shah Ismail, another masterpiece of Azerbaijani opera. The beginning of Azerbaijani operetta is associated with musicals by Uzeir Hajibekov, which he created in 1909-1913, acting as a composer and a playwright.

Productions by William Shakespeare, Friedrich Schiller, Nikolay Gogol and Lev Tolstoy in Azerbaijani were most influential for the formation of Azerbaijani dramatic composition. The literary school founded by Mirza Fatali Akhundov, which had grown into a powerful movement in art was becoming increasingly impregnated with democratic ideas. This movement produced a number of famous names of the 20th century literature, culture and politics.

The spirit of the new Azerbaijani literature is best understood from the heritage of Najaf Bey Vezirov, Abdurrahim Bey Haqverdiyev, Mirza Alekper Sabir, Suleyman Sani Akhundov, Uzeir Bey Hajibekov, Nariman Narimanov, Hashim Bey Vezirov, Jalil Mammadquluzada, Abbas Sahhat, Muhamed Khadi, Abdulla Shaig, Alibey Guseinzade, Ahmad Aga Oglu, Ahmed Javad, Husein Javid, and others.

In the beginning of the 20th century, Azerbaijan made outstanding progress in many fields, especially culture, education and the national press. However the principal development of that period was perhaps the creation of the Azerbaijani middle class, which soon assumed a leading role in the country's public life. Azerbaijani intelligentsia contributed much to the national revival, awareness and spirit. Thus, the complex process of social and political development which catalysed in the 19 th century culminated in fundamental changes in Azerbaijani society. Leaders of the Azerbaijani public and political scene who had been raised in the new environment, were well prepared to respond to demands of this new century. All this prepared the way for the rise of the Azerbaijani Democratic Republic. Such was the f i r s t p h a s e of the 20 th century history of Azerbaijan.

The second phase began after the fall of tsarist Russia and the first Azerbaijani independence. The Azerbaijani Democratic Republic (ADR), a newly proclaimed sovereignty, set a course toward large-scale reform and soon was in possession of all state assets, including the parliament, the army and currency. Under any criteria, the ADR may be regarded as the earliest democratic republic of the Orient. The historic declaration adopted by the National Council of Azerbaijan became the manifesto of principles to be followed by the ADR in domestic and foreign affairs. The declared principles, which included self-determination of the Azerbaijani people, equal rights for all, peaceful relationships with other nations and respect for their sovereignty and territorial integrity, won the ADR international esteem. In January 1920, Azerbaijan's independence was recognised de facto.

Although the Azerbaijani Democratic Republic existed only for 23 nonths, it will be remembered as one of the most glorious episodes in the history of our people. Its attempts at creating a democratic society and restructuring the national economy, culture, education, health and defence, albeit they were never completed was the first experience of restored sovereignty on Azerbaijani land. The most important message of the short-lived Azerbaijani Democratic Republic to future generations is that Azerbaijani independence is not a myth. Today, we treasure the memory of Mammad Amin Rasulzada, Alimardan Bey Topchubashov, Fatali khan Khoyski, Hasan Bey Agayev, Nasib Bey Usubbeyov, Mekhti Bey Hajinsky, Mammad Yusif Jafarov, Khudadat Bek Rafibekov, Akperaha Sheykhul Islamov, Teymur Bey Makinsky, Samad Bey Mekhmandarov, Ali Aha Shykhlinsky, Sultan Mejid Ganizade, Khalil Bey Khasmammadov, Ahmad Bey Pepinov and Shafi Bek Rustambekov, the apostles of the first Azerbaijani republic.

Remarkably, the present-day Azerbaijani Republic, which regards itself as the ADR's successor, has adopted the anthem written by Uzeir Hajibekov and Ahmad Javad, the three-colour flag as well as the emblem of the first Republic. This fact is a source of pride and inspiration for every Azerbaijani citizen.

The third phase began in April 1920. Azerbaijan remained independent during the early period of the Soviet regime, and a military and economic treaty with Russia was signed on 30 April. At that time, foreign diplomatic missions were functioning in Azerbaijan, including a Russian consulate. In foreign affairs, Azerbaijan managed to secure territorial integrity and became a party to important treaties of Moscow and Karsk and the Genoa Conference. In 1920, Baku hosted the 1st Assembly of Oriental Peoples. As the Bolsheviks realised that oriental nations are not supportive of further revolutionary transformation they resolved to sacrifice Azerbaijan's independence to their own political goals. The formation of the Transcaucasian Federation in 1921 was the first arrangement to infringe on Azerbaijani sovereignty, and the proclamation of the USSR on 30 December 1922 put an end to independence. Although Azerbaijan was granted state attributes, including a flag, an emblem, an anthem and even a constitution, it effectively ceased being an independent nation in the context of international law.

From 1922 to 1991, Azerbaijan was part of the vast Soviet empire. During this seventy-year period, the country accumulated rich economic and intellectual potential, which can be illustrated by the facts given below.

In the 1920-1930s, due to the titanic efforts of the Azerbaijani people, the country's oil sector flourished, new industries were introduced, extensive electricity and irrigation networks were built and agricultural sector rehabilitated. The nation achieved total literacy; a great number of new schools, hospitals, policlinics, colleges, universities, research institutions and cultural facilities emerged in the country.

In 1937, the Azerbaijani Soviet Socialist Republic adopted a constitution and launched large-scale educational programmes under the banner of a cultural revolution. The national education system was reformed. Prior to World War II, Azerbaijan had more than 4,000 primary schools and 16 universities.

In 1938 the Azerbaijani Branch of the Soviet Academy of Science was founded; the same year was marked by construction of new theatres which numbered 18 by 1940. In 1937, Uzeir Gajibekov wrote Keroglu, an opera which caused a sensation in Azerbaijan's cultural life.

Political purges of 1937-1938 had a devastating impact on science and culture in Azerbaijan. More than 50,000 people were killed, and another 100,000 exiled to Siberia and Kazakhstan. The regime destroyed many outstanding talents, including Husein Javid, Mikail Mushfig, Tahi Shakhbazi, Salman Mumtaz, and others.

World War II was the worst nightmare which mankind has ever faced. Nazism threatened not only the future of Italy and Germany, where it was conceived, but that of the entire human race. Taking advantage of an economic upsurge, the Nazis arose as a formidable destructive power. The fact that the world nations despite vast political, ideological and economic differences recognised the need for unity to face the threat of annihilation was perhaps the most important lesson of the 20th century. The anti-Nazi coalition, which comprised many countries, paid a terrible price for the salvation of the world. We are proud that the Azerbaijani people made significant contributions to this high-cost victory.

During the war, the Azeris made apparent many examples of true fortitude and bravery both on the battlefield and on the labour front. Shortly after the outbreak of hostilities, 87 regular battalions and 1,124 militia detachments were formed. More than 600,000 men and women from Azerbaijan served on between 1941-1945. Azerbaijani divisions marched a long way from the Caucasus to Berlin. Approximately 130 natives of Azerbaijan were conferred the Hero of the Soviet Union title, and 30 people received the Order of Glory. More than 170,000 soldiers and officers from Azerbaijan were awarded other Soviet orders and medals. New glorious pages were added to the Azerbaijani history through the lives of Hazi Aslanov, Israfil Mammadov, Asian Vezirov, Adil Quliyev, Ziya Bunyadov, Geray Asadov, Melik Maharramov, Mekhti Huseinzade, Makhmud Abiliov, Akim Abbasov, Tarlan Aliyarbekov, Hajibaba Zeynalov, and many other heroes.

The whole of Azerbaijan's economy was restructured in order to accommodate the requirements of the armed forces. The light, spinning and food industries converted completely to military production. Within a short span of time Baku transformed into an important arms producer. In 1942, the city's industry was manufacturing 130 brands of arms and ammunition. Despite great difficulties the Azerbaijani oil sector supplied sufficient fuel to the front and priority industries. The novel technology of high-octane gasoline production which was developed by academician Yusuf Mamedaliyev was introduced in the country. In 1941 Azerbaijan produced an unprecedented volume of 23.5 million tonnes of oil, which accounted for 71.4% of the total Soviet output. During wartime, the Azerbaijani oil industry supplied a total of 75 million tonnes of oil and 22 million tonnes of gasoline and other petroleum products. Oil from Baku was an essential element which contributed to the victory of the Soviet Army, which was engaged heavily on land, in the sea and in the air. Four fifths of all Soviet planes, tanks and automobiles were fuelled with gasoline produced in Baku from local oil.

The war proved one more time that the Azeris are a nation of heroes who face all hardship with dignity.

After the war, Azerbaijan entered a new stage of rapid economic and cultural development. As early as 1948, Azerbaijani industry doubled as compared to pre-war output levels, and in 1960 exceeded the same by 2.8 times. Agricultural production grew by 2 times, railroad transportation by 2.9 times, and capital investment by 3.8 times. New industries were built including chemical, petrochemical, oil processing, ferrous and non-ferrous metallurgy, instrument making and electric engineering. Power, water and agricultural infrastructure was expanded considerably. The workforce from Azerbaijan contributed much to the rehabilitation of the economy in Russia and other Soviet republics. The discovery and development of many oilfields in the South

Caucasus, Tatarstan, Bashkortostan and the Tumen region of Russia are associated with the names of Azerbaijani scientists and specialists.

However, the progress of Soviet Azerbaijan slowed in the 1960s as negative trends took shape in the country's economy. In the context of the USSR, Azerbaijan was becoming increasingly backward in terms of national income, industrial and agricultural production, technology and labour productivity. The decline in the economy implied a failure to adequately address social problems and improve the national welfare. This period of socio-economic recession in Azerbaijan lasted for many years.

In 1965 the gross national product in Azerbaijan increased by only by 3.6 times, and industrial production only by 4 times over the 1940 level, whereas in the USSR these indices averaged 5.7 and 7.9 times respectively. Azerbaijan's national income, capital assets, capital investment and industrial labour productivity (that is, the key effectiveness criterion in industry) fell behind average USSR levels by 2, 1.8, 1.7 and 1.5 times, respectively.

A crisis was observed in capital construction. Schedules of commissioning industrial installations, residential buildings, utilities and cultural facilities systematically failed. During the 1960s the deficit of capital assets totalled about 1 billion roubles which accounted for 10% of all Azerbaijani capital assets in 1969. Missed opportunities associated with the potential of the key industry and social sectors were the principal preconditions of the 1969s depression.

Performance of the oil, energy, chemical and petrochemical industries and ferrous metallurgy became very irregular, in parallel with the deterioration of technical and economic indicators.

Transport sector problems included an increase in carriage standstill time, delays in ship loading and unloading, decrease in rolling-stock speed, and underutilisation of carrying capacities. Unwarranted standstill time also increased in passenger traffic, which provoked growing discontent especially in the city of Baku.

In agriculture, problems were associated mainly with reclamation of rainfed land and mechanisation of labour. Improper growing practices severely impeded the productivity of cereals, cotton, vegetables, grapes, tea and other crops.

The strategy of placing industrial facilities proved to be completely faulty. The majority of large plants were built in Baku and Sumgayit. As a result, labour resources of smaller townships were underused, and migration to the capital constantly added tension to existing housing and communal problems.

The deep and protracted crisis of the 1960s called for fundamentally different economic concepts, major structural changes, new economic practices and incentives.

The year 1969 became a turning point in the modern history of Azerbaijan. That year, as well as the entire decade to follow, was characterised by energetic efforts and creative initiative which allowed the country to overcome stagnation through comprehensive development programmes.

The period from 1970 to 1985 undoubtedly was one of unprecedented rejuvenation in Azerbaijani society, which embraced large-scale socio-economic reforms and witnessed people's living standards rise to a new level. The Soviet government enacted five special resolutions designed to assist economic revival in Azerbaijan. These historic acts, vital for the country, set forth a long-term strategy of economic development for the 1970-1980s, et seqq.

Azerbaijan achieved an outstanding upsurge in all sectors of the economy and culture as a result of the implementation of this programme, which allowed for the growing material and cultural needs of the people to be met. For the first time in the post-war history, the 9lh Five-Year Plan of economic development was accomplished ahead of schedule. Retrospectively, it is obvious that the economic basis for the present-day progress of the independent Azerbaijani Republic, which is confidently integrating into the world economy, was founded during that period, in 1970-1985.

Ongoing growth in industrial and agricultural output, exceeding development plans and their accomplishment ahead of schedule, and qualitative improvements in all sectors of the economy illustrated intensive development of Azerbaijan during the 1970-1980s. The share of the Republic in the Soviet Union's "distribution of labour" and foreign trade considerably increased.

Labour productivity grew in 1985 past the 1970 level by 2.1 times in industry and 1.8 times in agriculture, whilst the USSR averages were, respectively, 15% and 27%. Per capita income in Azerbaijan increased by 335% over the same period, whereas the USSR average was 164%.

An important problem was associated with the management of the country's labour resources, and major changes occurred in this field.

Due to the creation of new jobs in medium and small cities and rural areas, the annual size of the workforce averaged 813,000 people (a 1.5-time increase), and reached its peak in 1985 (2,360,000 people).

New directions of the development in economic structure were planned out in order to secure ongoing growth apart from an overall course toward re-equipment and technology upgrades. These included the priority advanced sectors, such as machinery building, the chemical and petrochemical industries, ferrous and non-ferrous metallurgy, oil and gas production and processing, as well as energy and mining.

A number of Union-level regulations were enacted on an initiative of Azerbaijan in order to stimulate the enhancement of industrial infrastructure, namely, in instrument making, electronics, electric engineering, machinery building and automobile production, including modernisation of existing plants. These acts provided guidance for the improvement of industry placing policy, the comprehensive development of cities and districts, the efficient management of labour resources and raising living standards.

Implementation of the strategy demanded creative efforts from many plants, research facilities, design and installation staff, and ministries and administrative bodies. Effectively, the regulations addressed all aspects of practical work, including allocation of capital from the Union-level budget, the import of manufacturing equipment, listing of priority construction projects (to be contributed to by the whole of the Soviet Union), human resources development, etc.

The legal framework provided a sound backing for the systematic accomplishment of plans and sustained industrial growth from the early 1970s to the mid-1980s. It would be sufficient to mention that joint output of the 9th and 10th Five-Year Plans well exceeded that of the period from 1945 to 1970.

At the time of the 11lh Five-Year Plan, total industrial output reached 58.5 billion roubles, which exceeded the levels of the 8lh and 9th Five-Year Plans by 3.2 and 2.1 times, respectively. During 15 years, total industrial production doubled in comparison with 1921-1970. Each percentage point of production growth during the 1970-1980s represented growth in absolute volume. Whereas a 1% growth during the 9th Five-Year Plan was equal to 45 million roubles, during the 11lh Five-Year Plan it translated to an 100-million increment, exceeding the 8lh Five Year Plan by 3.3 times. Over the same 15 years, sf69% of industrial capital assets were renewed, which was a big portion of national income. The provision of funds for industries grew by 1.4 times in 1980 over the 1970 level, and further by 1.3 times during the 11th Five Year Plan.

An important factor for industrial growth in Azerbaijan was the wide application of the latest scientific developments and technology. From rl971 to 1985, 581 new brands of machines, equipment and instruments were designed; the manufacture of 1,056 new products were launched; and 94 automated process management systems were built. In 1985, there were 2,519 mechanised production lines, 310 automated lines, 1,300 complex mechanised lines with automated units, shops and production sectors.

In early 1982, 73 research and production groups were formed, compromising a total of 264 large facilities. Their share in real production volume was boosted from 0.29% in r969 to 26%. The acceleration of industrial development especially in high-tech sectors lead to an increase in the share of industry in GDP from 22% in 1970 to 24% in 1980, and to 28% in 1985.

The high technology level of industry allowed much room for raising the efficiency and quality, cost cutting and optimising human resources. Thus, in 1985, labour productivity in industry grew by 2.1 times and income by 3.2 times against 1970. The share of top-quality products in the total output increased by 13% in 1980 and by 17.2% in 1985 (as compared to 1.3% in 1970), totalling, respectively, 30% and 46%. The Quality Mark was assigned to 451 items of produce.

In 1970-1985, 213 large plants were commissioned two thirds of which began operation during the 9th and 10th Five-Year Plans and the first two years of the 1 llh Five-Year Plan.

The face of Baku completely changed as new modem-style architecture came to the city. Monuments which were dedicated to Imadeddin Nasimi, Jafar Jabbarli and other historical figures were erected. Housing experienced a boom with the number of residential buildings having doubled over 14 years; effectively another Baku was built.

Standing behind these figures is a titanic effort on the part the Azeri people which brought the Republic to a leading position in the USSR in the production of oil products, steel pipes, non-ferrous metals, synthetic rubber, electric motors, building materials, air conditioners, ear spares, mineral fertiliser, china, faience and carpets. About 350 items of Azeri products were exported to 65 countries.

During this period national income grew by 2.5 times and industrial output and industrial labour productivity doubled and the manufacture of customer goods tripled. Production output during those 14 years was equal to that produced during the previous 50 years. Total agricultural product grew by 2.7 times, and productivity in agriculture doubled.

Total investment in the economy amounted to 21.3 billion roubles, exceeding that of the previous 50 years by 1.5 times. More than 250 large plants were commissioned. Over 2 million people received better housing.

However, these figures albeit they speak for themselves, cannot depict the structural, qualitative changes which occurred in Azerbaijan's economy. What is most important, the basis for a number of industries which had been new to the country, was set up.

A daily output of Azerbaijan's economy of that period would include 41,000 tonnes of oil, 37 million cubic metres of gas, 2,200 tonnes of steel, 69,000 metres of pipes, 4,900 tires, 2,700 tonnes of fertiliser, 968 air conditioners, 734 refrigerators, and 546,000 metres of fabric.

Azerbaijan successfully adopted new advanced industries including electronics and equipment manufacture for light and food industries. After commissioning of an air conditioner production facility electric engineering began in the country and soon its capacity increased by 1.5 times.

Baku oil refineries underwent the first major reconstruction in their history, which included the installation of double petroleum refining equipment.

Close attention was paid to the development of professional staff. The system of higher education was expanded and adjusted to the requirements of the rapidly growing economy.

The issue of power supply was also seriously addressed in the 1970s. Today Azerbaijan can boast a managed to create a broad and totally independent electricity network capable of producing up to 5,000 mw. Eight 300-mw power generating units were constructed in Mingachevir with financial support from the Union budget. The Kur power plant was constructed and since 1979 the construction of the Yenikend plant was under way. This construction was not completed due to well-known reasons. We have managed to complete this project only after regaining Azerbaijan's independence, when a soft loan was received from the EBRD in 1994.

For a serious upturn in the social sphere and economy, we needed first of all skilled specialists. Along with those students who received higher education in Azerbaijan, 3,500 students from Azerbaijan were sent to 170 leading institutions and universities of Moscow and other Soviet cities. It became a good tradition to send around 800 Azeri students annually to other Soviet republics to receive higher education. An important issue was the training of young men in higher military schools. Generally this process had a great impact on the future development of Azerbaijan.

Prior to the break-up of the Soviet Union, ithere were attempts by some experts at identifying the economies whi ch would be self-sufficient after independence. An analysis revealed that only two of the former Soviet republics seemed to have this capability, and one of them was Azerbaijan. Some Azeri analysts argued however, that Azerbaijan has no chance to survive if cut off from the USSR. However, as time showed, the economic, technical and scientific potential accumulated by Azerbaijan during the Soviet period was soiund enough to support sovereignty through its early period.

The period from 1920 to 1991 was characterised by a flourishing of Azeri education, science and culture. Although the foundation of the secular theatre, modern schooling and democratic press in Azerbaijan took place earlier in the 19th century, it was during the Soviet time that illiteracy was eradicated, secondary school was made compulsory, the higher education system enhanced, the Academy of Science was founded, women's rights to participate in the socio-economic life were secured, dozens of theatres were opened, a film making industry was developed, and numerous newspapers and magazines were founded.

Regrettably, but this vast potential was nearrly lost during the time of political turmoil and the tragedy of Nagomy -Karabakh.

On 5 February 1991, while commenting ont the country's political crisis at a session of the Supreme Council of Azerbaijan, I spoke about some urgent measures, including the cancellati-on of the state of emergency in Baku, the threat of an escalation in the Nagorno-Karabakh problem, and the need to liquidate the Communist Party of Azerbaijan. I underlined that, since 1920, the Azeri people had never found themselves in such a desperate situation. Since 1922, Azerbaijan had been part of the USSR. No other Union republic had gone through such a tragedy. This was no minor thing. This issue called for a comprehensive analysis. My opinion was that "normalisation of the situation in Nagorno-Karabakh" meant a deliberate narrowing of the problem. The problem had to be stated this way: restoration of Azerbaijan's territorial integrity. Therefore we had to analyse: how did it happen that we had ceded Nagorno-Karabakh?

Three years before it had been part of Azerbaijan, for better or worse. However, the problem originated from 1920. In 1923, the Nagorno-Karabakh Autonomous Region was established. Later, the issue was raised many times by Armenian nationalists. But let us interpret history justly. Notably, at that time the movement of the Armenian nationalists was suppressed. But how did it happen that our republic, which had gained strength and international esteem, lost part of its territory in 1988? By raising these issues, I called for the Supreme Council and the people of Azerbaijan to work out a comprehensive and constructive programme. It was obvious that, since 1988, the course of events has been determined not by the will of the Azeri people, but by the Armenian separatists. Those who start thinking of remedial measures after the thing is done always lose. The Armenian nationalists, representing a massive force, were fighting for the separation of Nagorno-Karabakh from Azerbaijan in a stepwise manner, based on a national-level platform. Unfortunately, no force in Azerbaijan had been in a position to put up adequate measures to confront the aggression. And this is where the key to the tragedy lies.

The leadership of Azerbaijan of that period ignored the simple fact that the political situation in the world was rapidly changing. The new geopolitical situation was calling for new strategies, but Azerbaijan, unfortunately, was not prepared for that. The People's Front of Azerbaijan, which had emerged as a force supporting the Perestroika, soon isolated itself from the majority of the Azeri intelligentsia, whereas it should have created a national political platform based on a sound scientific analysis and forecasts. As a result, the rivalry between the Communist Party and the People's Front became a struggle for power. While crafty plans were implemented in Nagorno-Karabakh, some people who regarded themselves as big politicians were making our citizens victims of this game through their incompetent actions. Unfortunately, these politicians, who were speaking on behalf of the people, prioritised their personal interests and their ambitions and hunger for power, rather than the interests of the nation.

There is the reason why, until today, we have not been able to liquidate the consequences of this reckless policy. On the one part of the Union centre. The people of Azerbaijan therefore had no choice but to assume full responsibility and stand up for their interests.

Then the Soviet government resolved to pursue a policy of punishing the nation which had raised its voice against the injustice. The seizure of Baku by the Soviet Army on 20 January 1990 without declaring a state of emergency was accompanied by outrageous cruelty and violence.

The tragic events of 20 January, which were designed to crush the spirit of the insurgent people, to humiliate their national dignity and to demonstrate the strength of the Soviet military machine, represented open armed aggression and a military crime of the totalitarian Communist regime against the Azeri nation.

Whereas the consequences of the crime were evident, the government of Azerbaijan made every effort to conceal the essence of the tragedy. The fact that the majority of Azeri statesmen were absent from the session of the Supreme Council of Azerbaijan which was held on 22 January 1990 by popular demand, was further proof of their indifference to the people's fate and their involvement in the prelude to the massacre. The leaders of the country did not even think it necessary to attend the funerals of the Shekhids.

The People's Front of Azerbaijan, which had demanded many times that a political appraisal be given to the events of 20 January, failed to make any advantage of their rise to power. Therefore, albeit much time had elapsed since the tragedy, this bloody crime by the leaders of the former USSR and Azerbaijan remained uninvestigated.

Much evidence and factual materials related to the disaster of 20 January, which had been made available to the state committee of inquiry by the people, were deliberately taken out of Azerbaijan. At the same time, the judiciary did not initiate any investigations, but, instead, destroyed many important secret documents.

Whereas the events that had happened in other parts of the USSR, including Tbilisi and the Baltic countries, were openly discussed at top Soviet level, the events of 20 January were deliberately misinterpreted and concealed.

Only in 1994 were steps taken to make a political and legal appraisal of the events of 20 January, when the presidential decree of 5 January 1994 instructed the Milli Majlis to do so. The latter devoted a special session to the issue and, as a result, the true reasons behind the tragedy and those who were responsible for it were pointed to. The political and

legal appraisal of the disaster was formulated in a resolution made by the Milli Majlis on 29 March 1994. The tragedy of 20 January was one of the most terrible crimes against humanity committed by totalitarianism in the 20th century. Those who are guilty of this crime have not been punished yet, but we believe that they will be called to account by history, mankind and the Azeri people.

On the tragic day of 20 January, the Azeris demonstrated their adherence to their heroic traditions and their determination to sacrifice their lives for the freedom and independence of their mother

The historical period known as the "parade of sovereignties", which preceded the fall of the USSR, began in November 1988 when Estonia adopted the declaration "On Sovereignty", thus establishing the prevalence of Estonian laws over laws of the USSR in this republic.

In March 1990, the Supreme Council of Lithuania proclaimed independence. Later that year, after the 1st Congress of People's Deputies of Russia approved, on 12th June, the declaration "On Sovereignty Of Russia", a similar document, "On Principles Of Sovereignty", was adopted by the Supreme Council of Moldova. Also in June, independence was proclaimed by Belarus. Kazakhstan, Tajikistan and Kyrgyzstan became independent nations before the end of the year.

In spite of these changes, Azerbaijan continued to be a union republic through 1990, existing under the state of emergency regime, and Soviet soldiers were patrolling the streets of Baku, making violations of human rights a daily routine.

Having realised that the break-up is inevitable, the government of the USSR initiated an all-Union referendum, which took place on 17 March 1991. Official sources reported a 80% attendance, allegedly with 76% of votes in favour of the preservation of the Union. It was obvious, however, that the event was heavily rigged in all the republics, and Azerbaijan was no exception.

The only region which escaped this Communist-enforced referendum was the Nakhcivan Autonomous Republic. This demarche cost the chairman of the Republic's Supreme Majlis his post, which soon was filled by a second-tier Communist Party functionary.

By that time, there was no doubt that the Union was doomed, and a number of republics proclaimed independence. The Communist government of Azerbaijan, headed by Ayaz Mutalibov who fearful of being unseated had hastily expressed support for the Moscow coup of 19-21 August 1991, were pressed by popular demand to adopt the declaration of 30 August 1991, "On Restoration of Independence of Azerbaijani Republic". This declaration and tihe cancellation, the same day, of the state of emergency in Baku were steps to prepare presidential elections in Azerbaijan scheduled for 8 September. The government declined requests from some deputies to learn the popular attitude towards independence beforehand by means oof referendum. Although the independence declaration envisaged that tEhe constitutional act "On Independence of Azerbaijan" be adopted in two weeks, in reality this process lasted until 18 October, and publication of the act took another 20 days. The referendum devoted to this iss.ue was postponed to 15 November for unclear reasons.

Other attempts to preserve the USSR were made by Gorbachev and heads of nine republics who signed the 9+1 declaration and began the Novo-Ogarev negotiations. They tried to create the Commonwealth of Independent States to replace the Soviet Union, and it was planned to sign a new treaty on 20 August 1991. After that, the known coup took place in Moscow in August, when the leaders of Azerbaijan spoke in support of the regime of emergency. It is interesting to note that when Moscow reporters commented on return of Gorbachev from Foros and- neutralization of the faction of Yanayev-Kryuchkov, Azeri television announced the resolutions by GKChP. The signature of the treaty was postponed, and the mysterious "August Coup " put an end to the totalitarian system. The President of Russia abolished any activities of the Communist party in Russia and dismissed its Central Committee. On 14 September 1991, the Communist Party of Azerbaijan ceased existing, in accordance with the resolution of its extraordinary 23rd Congress.

On 9 April 1991, the Supreme Soviet of GJeorgiap assed an edict on restoring the sovereign status of the country, a decision based on the results of the referendum, followed after the August events by other Soviet republics. Unfortunately, Azerbaijan was not among them.

The referendum of 1 December 1991 revealed Ukraine's reluctance to join the Union Treaty, and few days later heads of Russia, Ukraine and Belarus, based on the resolutions of Cheir meeting in Belarus, declared the USSR defunct. Thus, 8 December 1991 became the last day of the Soviet era.

The movements and trends of the late 1980s early 1990s which led to the collapse of the Soviet Union were of different nature in the various union republics. In particular, in the Baltic states, Ukraine, Belorusia, Georgia, Armenia and Moldova these processes featured a high degree of unity of goals and efforts of both the authorities and the people, and were associated with lesser tension and adverse effects.

Finally, on 29 December 1991, a referendum regarding the constitutional act on independence was launched in the Azerbaijani Republic, and independence was declared for by 95% of the population. In other words, Azerbaijan's sovereignty was legally constituted only after the fall of the USSR became a fact of history.

The latter suggests clearly that the Communist government of Azerbaijan was making every effort to prevent the country from leaving the moribund empire.

Even after the independence act, Azeri leaders attempted to hand over some issues which were an exclusive Republic's prerogative, to the State Council of the former Soviet Union, and agreed to place the national armed forces under the Union command. Earlier, they insisted on delegating 27 deputies from Azerbaijan to the Supreme Council of the USSR, which attempt failed only due to the strong reluctance of the deputies.

The removal of the Communist Party from the political scene, the fall of the Soviet Union and the rise of new independent states all were the outcomes of a natural historical process, which is confirmed by the recognition of the new sovereignties by the world community, represented by the UN and other organisations. Therefore, Azerbaijan's independence, as well as that of other post-Soviet republics, should in no way be viewed as an achievement of whatsoever political forces or individuals, but rather as a objective result of historic processes or as a precious gift of the fortune to the whole of the Azeri people.

The first year of the 21st century - the year 2001 - will see the tenth anniversary of the Azerbaijan Republic's independence. This event will surely become one of the most important milestones in our history. The road to independence was far from being smooth and easy. Unfortunately, a tendency remains toward crafting a new history for the nation in order to play up to various political forces. This should not be allowed.

Looking back at the historic path we have traversed, we can see that independence of the Azerbaijani state is a national wealth and the monopolisation of privatised state property and assets, whether by private or state bodies is absolutely inadmissible.

Thus, 18th October 1991, the date of enacting the constitutional law on independence, marked the beginning of the fourth stage in the history of Azerbaijan in the 20th century. We now live in freedom from that time on and we are an independent state. Our people are the masters of their own destiny, their land and their country.

However, protecting independence is a far more difficult task than gaining it. Emancipation is not only a gift of fortune, a priceless treasure, but has also placed a huge responsibility on each and every citizen starting with the heads of state. During this new stage of historic development the Azerbaijan Republic has been faced with historically important tasks such as strengthening statehood, building a democratic, legal and secular nation, the restoration of territorial integrity of the country, coming to a workable solution to the Nagorno-Karabakh problem in accordance with national interests, and generally making the country a secure place to live and work. All of these require implementing a consistent, purposeful and wise internal and foreign policy with efficient use of the social, economic and intellectual potential of the nation, as well as its social and political forces.

However, if we examine the initial years of an independent Azerbaijan we may observe that the manner in which these goals were attained was neither consistent nor resolute. People who led the country in 1991 and early 1992 pursued a policy which ran counter to political processes as practised in the international community and the USSR and counter to the will of the Azeri people who strived for independence. They shared the position of those who attempted to preserve the Soviet Union at any price and to prevent Azerbaijan from leaving the USSR.

Azerbaijan was faced with an urgent need to develop its own internal and foreign policy, a pressing task for any country which has just regained its independence. Unfortunately, nothing was done in 1991-1992. In addition to aggression from Armenia, the internal stability in Azerbaijan was shaken, and illegal groups of militants formed and were used in the violent struggle for power which took place during that time. This war for power and control was extremely detrimental for Azerbaijan.

The dangerous course which political processes in Azerbaijan have followed demonstrated that the government did not conduct independent but rather a wry and hypocritical policy from the period when independence was obtained through the act issued on 18lh October 1991. The leaders of the era did not undertake any genuine steps towards achieving actual independence for the country and ignored growing discontent and protest by the people and attempted to suppress it. Their actions complicated the formation of an independent state in Azerbaijan on the one hand, and lead the Nagorno-Karabakh issue straight to a dead end and created painful challenges for today's generation.

When the Soviet Union disintegrated and Azerbaijan became independent, the government of Mutalibov continued an internal and external policy which protected their own interests rather than those of the independent Azerbaijan Republic. In addition they conducted a unilateral policy in regard to foreign states. These ill conceived policies did not address the economic and political interests of Azerbaijan, nor its security and territorial integrity, nor did it encourage the state to exercise its sovereign rights.

We regret to remark that no well advised policy consistent with the independence interests of Azerbaijan was conducted over the period from March to May 1992. Independent statehood suffered great losses as a result of the armed struggle for power which began in Azerbaijan as well as the multiple authority which reined during the period. The enormous problems which Azerbaijan still finds itself unable to resolve were created during that same period.

In general, the time can be considered a period of utmost contradiction and danger in the history of independent Azerbaijan. For several months the country suffered a blow which would continue its effect through the generations.

In 1991-1992 the situation in Nagorno-Karabakh aggravated each day. The Khojaly tragedy took place. On 6 March 1992, Mutalibov had to resign. The period of chaos began. The betrayal surrender of Shusha and the betrayal treaty related to the quota on armed forces signed on 15 May 1992 in Tashkent by the then minister of defence Ragim Kaziyev have become a heavy and irreparable blow to the present and future of the Azeri people and its army. It was the time of hundreds of such betrays.

On 14 May Mutalibov returned to power and on 15 May the People's Front organised a storm of the parliament building. On 18 May, the Parliament declared illegitimate its decision taken 4 days before and the attempt of Mutalibov to regain his power failed.

In May-June 1992 power in the country was seized by an alliance of the People's Front-Musavat which in fact resulted in the restoration of neo-bolshevism in Azerbaijan. Anarchy in the economy continued. The material resources of the country were plundered ruthlessly and money earned through selling commodities abroad found their way to private accounts with foreign banks. The majority of the populace were on the verge of poverty. An incredible level of brain drain started with famous scientists, writers, poets, and artists moving from Azerbaijan to Turkey, Iran, Russia and other countries. The name of the Azeri language itself was altered, thus violating the constitutional law on the language.

Internal and foreign policy during the tenure of Mutalibov was full of contradictions, the state policy was dictated by Moscow and everything was subdued to restoring the Soviet Union. However, the situation worsened due to the fact that modern policy demonstrated no clear purpose and contradicted objective reality in the international arena as well as the hopes and aspirations of the people of Azerbaijan, which was potentially extremely dangerous for our statehood.

Developing tensions in relationships with neighbouring countries, an atmosphere of distrust then became rooted in Azerbaijan, and other variables resulted in certain severe negative consequences.

A major feature of internal and foreign policy as pursued by the government during that time was a total lack of any consistent and purposeful course to speak of. State policy was constructed not on one general concept and system, but rather on numerous ungrounded declarations which expressed the needs of state interest groups based on contradictory and emotional statements which as rule rebutted each other.

Such irresponsible statements often made by the political forces which ruled the country created a false impression within the international community of the true purposes and tasks, principles and goals of development of Azerbaijan which contributed to the further isolation of the country from the civilised nations of the world.

The domestic situation became more aggravated each day, and a complete lack of political, social and economic reforms were implemented designed to build a democratic state where the rule of law is observed. On the contrary, all moves made by the leaders of the time pulled society into a bottomless abyss. Social and political chaos, anarchy, state racketeering, and violence ended in an intensification of national opposition and an absolute crisis of power.

Such unwise and incompetent policy led to a complete failure of the People's Front-Musavat authority in the country, isolation of our country from the world, and the virtual formation of an anti-Azerbaijan coalition. This was accompanied by chaos and arbitrariness ruling during the construction of the Azerbaijan state, an armed struggle for power among political forces supported by certain state and political circles, economic breakdown, embezzlement of national property and a spontaneous rejection of everything positive attained during the Soviet period. As a result, in summer of 1993 the Azerbaijan statehood was faced with a threat of crisis and destruction, and the country was on the verge of a civil war and disintegration.

The opposition within the People's Front among its former broth-ers-in-arms ended with the Gyanja revolt. Deep political, economic and social crises in Azerbaijan resulted in a paralysis of power. The prime minister, Milli Majlis chairman and the heads of the law-enforcement and defence ministries all resigned. The country was not governed by any structure or person. June 1993 was a time of a deep political and social crisis.

The situation became so threatening that the independent state created by this favourable historic opportunity encountered a real danger of losing it all to anarchy which about through either deliberate action or incompetence. Therefore, the years of 1991-1993 are not only considered "lost" years in the history of independence of Azerbaijan but are also considered the time when Azerbaijan was confronted by the dilemma of "to be or not to be."

The temporary military defeat of Azerbaijan in the war with Armenia had, for several internal and external reasons, resulted in political support and aid being provided to Armenia, the Russian and the Armenian diaspora being the major among the supporters. Unlike Azerbaijan, Armenia began thorough preparations for victory in the conflict long before it began. The idea of "a violation of the rights of the poor Armenian people" in the Nagorno-Karabakh issue got across to the brains of each Armenian, thus becoming the prevailing component of the national ideology.

Large-scale fraudulent propaganda was carried out in order to win the sympathy of the international community. When the conflict began, the leaders of Armenia squared themselves on the concept of unity and unanimous agreement shared among their people, both inside the country and abroad, on the necessity to separate Nagorno-Karabakh from Azerbaijan. On the other hand, Armenia had worked on creating an army and forming armed detachments capable of conducting military operation in the Nagorno-Karabakh area.

The situation in Azerbaijan was absolutely different. Its leaders were well aware of the processes underway in Armenia, but were unwilling to bring the truth about the actual situation with Nagorno-Karabakh nei-vther to the notice of the international community, nor to its people.

Abdurrakhman Vezirov, a person brought to power by the notorious "perestroika" of the Gorbachev era stimulated realisation of the Armenian guileful intentions in the Nagorno-Karabakh issue. His policy came across the national interests of the Azeri people. After the bloodshed in January which was initiated to suppress the will of the Azeris to struggle, Abdurrakhman Vezirov had to flee to Moscow to escape from the anger of the people.

The fate of Ayaz Mutallibov, who took power after Vezirov, was similar. Ayaz Mutallibov, a faithful follower of any direction from Moscow, ignored the demand of the people to create an army and formed armed detachments of his guards individually. Yes, he preferred to protect his power from certain forces inside the country to protecting the Azeri land from Armenian aggression. As a result, he also had to flee to Moscow.

A new force grabbed power: the People's Front. Some time later, the rule of Abulfaz Elchibei placed the country on the brink of an abyss because of his incompetence, his ungrounded personal ambitions, and forces within the governing bodies. Azerbaijan where arbitrariness reigned was on the verge of a civil war. Being unable to control the situation, Abulfaz Elchibey also secretly flew to Keleki. Think it over. Three leaders who ran away in a similar manner...

In June 1993 Azeri people insisted on a change of power in the country and the second period in the history of Azerbaijan's independence began. The country had to be saved from disasters it was faced with, from the encroachment by internal and external hostile forces, from occupation of our lands, and finally, from the annihilation of independence and disintegration.

Beginning from June 1993, the first task of filling the power vacuum was fulfilled. The forces of separation which became active in various regions were neutralised, a tendency toward division was overcome, and the threat of civil was eliminated. The liquidation of armed groups serving certain persons and political circles began and criminal elements who organised the encroachment upon the statehood of Azerbaijan and its independence were isolated from society and punished. The integrity of state structures and the people was secured, and a sense of statehood and fatherhood was promoted among all citizens regardless of their ethnic and religious origin.

It is quite natural that resolute measures were to be taken with the aim of resolving the Azerbaijan-Armenian conflict and toward making the situation in Azerbaijan stable thus allowing us to live as an independent state. The problem was not easy: internal conflicts, a struggle for power, provocation by various forces with no national army in place - all these created a situation when the occupation of Azeri lands by Armenia became possible. They craftily made use of that situation and occupied our land step by step.

Beginning from November 1993, urgent measures were undertaken in Azerbaijan to create a national army and regular armed forces, and protect our land on the one hand, and to engage in all political and diplomatic means to achieve a cease-fire. As a result, a cease-fire agreement was made in May 1994, a vital achievement for our country.

The end of the war, an improvement in the domestic situation, a strengthening of social and political stability and a relief in tension which developed between Azerbaijan and its neighbours - all these helped to preserve the existence of Azerbaijan as an independent state and its further progress.

As a result of intensive efforts, the OSCE Budapest summit came to a decision in 1994 to regulate the Nagorno-Karabakh conflict in accordance with international law.

In September 1994, taking advantage of the relatively calm situation, growing trust and interest in our country among the international community we signed the first oil contract, The Contract of the Century.

On the one hand, new economic activity in Azerbaijan awaked the confidence of the people in their future as well as the sympathies of those nations who treated us as friends. On the other hand, this definitely was not welcomed by certain internal and external forces which did not want our country to develop successfully. Such forces stood against Azeri statehood and political and military groups moved by ambition did not want to resign and could not abide by the rule of law which was being established in Azerbaijan. Influenced and assisted by various foreign circles, they made multiple attempts to overthrow the lawful government of the Azerbaijan Republic, and to create a situation of a vacuum of power and civil opposition, as well as organised assaults on the heads of state.

In October 1994, the then prime minister Suret Huseynov and OPON detachment led by Rovshan Javadov and his brother Mahir, supported by opposition parties, attempted a coup d'etat and actions against lawful state structures. However, the resolute, effective and well planned measures which were taken by the Azerbaijani government and unanimously supported by the people helped to prevent this attempt. People awakened at night and gathered around the palace of the President to protect their statehood, their rights and future, and the insurgents were repulsed.

In March 1995, Rovshan Javadov, the head of a special police detachment, and his brother Makhir Javadov again attempted to overthrow the lawful state structures and change the balance of political power in a violent manner.

This time however, the majority of opposition parties which placed their ambitions above the interests of the state, provided direct and indirect support to the rebels. Instead of providing a proper assessment of the events and stand on the side of the statehood, they made contradictory statements in order to mislead the population and encourage the insurgents. It turned out later on that a number of parties and the ambitious politician who led them maintained direct criminal liaisons with the rebels and reached an agreement with them to overthrow the government. They even planned for specific positions in the future government they wanted to create following the coup d'etat.

However once again they encountered the strong will of the political leadership of Azerbaijan, supported by the people, who took resolute action for the sake of interests of the Azerbaijani state and people. Illegal armed groups and detachments, internal and external forces, as well as rebels who attempted the coup d'etat in Azerbaijan were all quashed by the governmental lawful forces and were properly punished, their secret and barefaced patrons were denounced.

The power and strength of an independent Azerbaijan prevented many such dangers. All these have strengthened the confidence of our people in their statehood, as well as their resoluteness in the struggle for the independence. The Azerbaijani state had demonstrated to the entire world its readiness to fight terrorism, thereby placing the values of observance of law and security as of prime importance.

In mid-1995 the Azerbaijan state cracked down on illegal armed groups, grew in strength, and entered a qualitatively new stage of development: it became a state with sustainable social and political stability and lawfulness, the necessary components for nation building as well as social, economic and cultural reform. During this period, the initiators and participants of various political and military groups as well as irresponsible and ambitious leaders of political parties were forced to give up their plans and intentions. Their plans of taking power through armed force was foiled.

In the subsequent years, destructive forces inside the country and abroad used other provocative actions and even acts of terrorism against the heads of state aiming at disrupting the social and political stability in the Azerbaijan Republic and to hinder economic reform and the inflow of foreign capital. As a result of purposeful and resolute measures, all such attempts were prevented. Our country received an opportunity to build and develop an independent state in an atmosphere of peace and stability. The third period of building an independent state began.

The beginning of that period was marked by the adoption of the Constitution of our independent republic on the 12 November 1995 as well as parliamentary elections. It was the most fruitful period in our history from the standpoint of state building.

The establishment of social and political stability, the liquidation of illegal armed groups within Azerbaijan as well as the prevention of unrest caused by criminal forces helped Azerbaijan to build a state successfully. Having declared its independence, Azerbaijan stated that it would pursue building a democratic, lawful and secular state. These goals were expressed at an earlier time, but unfortunately they remained only words due to extreme internal tension in Azerbaijan with no practical measures being taken toward achieving them.

In 1995 the process of creation of necessary institutions for an independent state and state building was in full swing. The legal framework for this process was made through the first Constitution of Azerbaijan adopted through a nation-wide referendum. Later statehood in Azerbaijan was strengthened with democratic principles being established. The process of building a democratic, legal and secular state is progressing successfully and at a fast pace. Conditions for the development of a market economy have been created with considerable achievements being made in this field.

Azerbaijan strengthened as a state, and its armed forces were created and developed. The army was able to protect the national interests, soil and borders of independent Azerbaijan.

During the five years from the adoption of the Constitution, our supreme legislative body - the Milli Majlis - passed over 900 acts. Political, economic and democratic reform was being implemented in Azerbaijan based on the Constitution and these laws. The reform is being implemented in all the spheres and is designed to foster our progress in all fields.

Azerbaijan has defined the direction of its domestic and foreign policies. The former stipulates the creation of a democratic, legal state base; the development of a market economy and the implementation of economic reform programmes; the protection of every citizen's right to life and freedom; and an increase in national welfare. Azerbaijan's foreign policy aims at establishing and developing mutually beneficial relations with all the countries of the world, and consequently using these relations to enhance the international status of the country and to promote its economic, scientific and cultural development, Azerbaijan's peaceful foreign policy strengthens its independence. Among the major principles of Azerbaijan's foreign policy can be included the observance of inter-state agreements, regulated by international legal norms; respect for the sovereignty of all states; the peaceful resolution of all controversial issues; the establishment of mutually beneficial economic, scientific and cultural ties; and the removal of all barriers to inter-state cooperation. As the country has chosen a democratic and legal path of development, its foreign policy is set to reflect all the accepted international norms and standards.

The international authority of the country was significantly undermined by the lack of a consistent foreign policy during 1991-92 and several rash statements made by the country's leaders in respect of international, regional and interstate relations. This was markedly expressed in the relations with our neighbours. The neighbourly relations with Russia, Iran and the Central Asian republics sharply deteriorated following reckless speeches from the country's former leadership, and all this while waging war against Armenia. The primary goal was to restore the broken ties with the former SU countries, and Azerbaijan's accession to the CIS became the first step towards this goal. In addition, bilateral relations with the former SU countries-CIS members were continuously strengthened, with new forms of cooperation found for contacts with the Central Asian republics in an effort to ease the tension that had existed in our relations up to the end of 1993. Particular attention was paid to the issue of economic cooperation with CIS members, as contacts with Georgia, Uzbekistan, Ukraine and Moldova had yielded the first positive results.

Starting in the summer of 1993, Azeri-Turkish relations saw serious changes laying the foundation for a new stage of development. Currently, Turkey is Azerbaijan's most reliable ally and economic partner. A number of key documents, encompassing all the spheres of our cooperation, have been signed over the seven-year period during the official visits of the two country's leaders. Not only are Azeri-Turkish relations in the interests of the two brotherly nations, but they also make their contribution to peace and the promotion of stability in the region and worldwide.

Azerbaijan has also managed to establish mutually beneficial cooperation and fruitful bilateral relations in the areas of economy and culture with the neighbouring state of Iran. Iran was allocated a stake in the second oil consortium, made up of Western participants, developing the oil deposit of Shahdeniz. Documents covering all areas of bilateral relations have been signed between the two states.

Recently Azerbaijan has made significant progress in establishing closer ties with other Organization of Islamic Conference (OIC) member-states. Our cooperation with these countries within the framework of the OIC, and in a bilateral form, has been very fruitful.

Relations with such states as the US, the UK, China, Japan, France, Germany, and Italy have become the cornerstone of Azerbaijan's foreign policy. Partner relations have been established with all of the above countries. This can be interpreted as a positive result of our continuous efforts, since the end of 1993, to rouse the interests of the strategic world powers.

The wide participation of American companies in the international oil consortium on the Caspian Sea basin development, as well as oil and gas production and transportation, has raised Azeri-US relations to a new level. Further examples of this can be seen in the Declaration on Azeri-US relations, signed by the two countries' leaders; the cooperation between the nations' military agencies on defence issues; the creation of a favourable regime for FDI; and close connections in trade, investment and banking. All of these have made great contributions to the strengthening of Azerbaijan's independence and national defence, and have promoted its social and economic development. The agreement concluded on the expansion of partner ties between the US and Azerbaijan sets out the legal framework for the business activities of our citizens in the US.

The European thread of Azerbaijan's foreign policy has been growing increasingly important. Close ties have recently been established with the UK, who are now actively supporting Azerbaijan in its efforts to find a fair solution to the Armenian-Azeri conflict.

The country has also developed stable and equitable relations with other European states including Germany, France, Italy, Belgium, the Netherlands, Greece, Poland, Romania, Bulgaria and the Scandinavian countries. The legal foundation of these ties is reflected in more than 90 official agreements.

The launch of the TRACECA programme, aimed at the restoration of the Silk Road, has facilitated further development in Azerbaijan's relations with European countries. As a country located in the centre of this major transportation corridor, Azerbaijan has become an important link between the East and the West. Recently the list of the country's political and economic partners has been expanded to include China, one of the world's largest states and a permanent member of the UN Security Council, as well as Japan, a country with huge intellectual potential. Another major success in Azerbaijan's foreign policy has been the further development of Azeri-Israeli economic and political relations.

Over the period in focus, Azerbaijan has increased its participation in regional and international organisations. Efforts are being made to facilitate the country's accession to the Council of Europe as a full member. Currently, Azerbaijan has diplomatic ties with 137 countries, with effective consulate relations with all the member states of the Vienna Convention. 63 foreign embassies are currently functioning in Azerbaijan, with 24 offices located in Baku, while 39 other representations are accredited at the relevant embassies in Ankara, Moscow, Teheran and Tbilisi. Azerbaijan, in its turn, has opened 21 embassies, consulates or permanent representations in different countries around the world. The country is also represented in the influential international organisations.

Nowadays Azerbaijan's just demands in connection with the Nagorno-Karabakh conflict are finding support with all the countries of the world, as well as with regional and international organisations. This has clearly come about as a result of the country's continuous efforts in the diplomatic arena.

The significant achievements of Azerbaijan's diplomacy in recent years in its efforts to strengthen national independence, defence and territorial integrity, in addition to the establishment of integrated and mutually beneficial relations with different states, support the argument that Azerbaijan's foreign policy is developing along the correct path, and that the country is able to combine its national interests with the current processes in the world.

In the foreign policy area, the Nagorno-Karabakh conflict remains the most controversial legacy of the nation's former leadership. Internal power struggles in Azerbaijan, together with provocation and foreign support to the Armenian Army, created an opportunity for a part of Azeri land to be occupied by Armenian military units. This occupation initially spread over the territory of Nagorno-Karabakh, and later expanded to the neighbouring regions. Currently 20% of Azerbaijan's territory is occupied by Armenian military units. A total of 1 million of our displaced compatriots are having to lead a hard life living in tents.

In May 1994 a cease-fire agreement was signed between Azerbaijan and Armenia. Although peace has not been fully restored yet, Azerbaijan has lived without war, bloodshed and the Shekhids' sacrifice for six years already. During this period Azerbaijan has tried to obtain the support of every influential international body and state, and has made substantial progress in its efforts. There have been several opportunities to find a solution to the problem during this time period. However, the destructive position of the Armenian side, and the inability of international organisations and the Minsk group (with Russia, the US and France as its co-chairs) to put pressure on Armenia have rendered all efforts futile. Bilateral talks between the presidents of the two countries have yielded no positive results either.

Despite all the above, the Azerbaijan Republic considers a peaceful resolution of the conflict possible, and is determined to make every effort to reach its goal. In addition to increasing the effectiveness of the Minsk group's activity, we believe in the need for continuing to hold bilateral negotiations between the presidents of Azerbaijan and Armenia. Thanks to the development along these two strategic routes, the Armenian-Azeri conflict can be resolved peacefully through concessions and compromise.

The basic condition for the existence of any nation is its economy. Azerbaijan's economy, having existed for over 70 years within, a centrally-directed system, is now about to mark the 9lh anniversary of its market reforms. After regaining national independence, the country developed an independent economic policy. Its major platforms include the establishment of a system based on different forms of property ownership, transition towards a market economy, and integration into the world economy.

The decline of Azerbaijan's industry can be attributed to Armenia's military aggression, to periodical breakdowns in social and economic stability, and to the frequent changes in the country's leadership in the early 1990s. This deterioration later acquired chronic features. During 1991-94 most domestic enterprises had either stopped their operations or were producing at 15-20% of their capacity. The annual decrease in the industrial index had reached 20-24%, with corresponding declines of 15-20% and 40% for agriculture and investment. The annual price increase for consumer goods of 14-18 times was destroying the national economy. The national welfare fell dramatically. However, a way out of the crisis appeared in the form of the favourable geopolitical location of Azerbaijan, its natural resources, its asset base, accumulated over the years, and the significant economic and scientific potential of the country. On the other hand, considerable efforts had to be made to secure transition towards a market economy through a series of reforms.

Only after the situation had stabilized in 1994-95, could programmes aimed at providing social and economic solutions be launched. In early 1995 the country adopted its market transition strategy and embarked on its gradual implementation. Since then, Azerbaijan has proved its ability to carry out even the most radical economic reforms.

Huge efforts have been made in Azerbaijan to build the legal framework for further democratic changes and economic reforms, with nearly 900 laws having been passed. Among the most critical are the law on land reform; the law on privatisation and entrepreneurial activity development; laws aimed at reforms in the taxation and banking systems; trade liberalisation laws; anti-monopoly legislation; and social security provisions. As a result of the programme, aimed at achieving a transition to a market economy, production indicators improved and macroeconomic stability was attained. GDP growth in 1996 stood at the level of 1.3%, in 1997 at 5.8%, in 1998 at 10%, and in 1999 at 7.4%, the highest growth rate among CIS members.

Industrial production also improved as a result of the adopted programmes. Whereas in 1993 industrial output rose by only 0.3%, in 1998 the growth rate went up to 2.2%, while the corresponding figures for 1999 and 2000 were 3.6% and 6.9%.

One can now say with confidence that significant advances have been made in all industrial sectors including petroleum, petrochemical, metallurgy, machine construction, the production of construction materials, light and food industries, and the private sector.

Macroeconomic indicators, which characterise the economic and social development of the nation, have markedly improved since the beginning of 2000. GDP has risen by 11.3%, or 21 trillion manats. The share of the real sector in GDP has also seen an increase, from 46.3% to 48.7%. The service sector weight fell from 47.5% to 44.6%. Output per capita reached 2.5 million manats ($562.3), an increase of 10.4% against last year.

Industrial production accounts for 25.6% of GDP. Every major branch of industry has seen an improvement, with the growth rates given below: the heating industry 5.3%; the energy sector 3.2%; the food industry 2.1%; chemical and petrochemical production 34.4%; metallurgy 2.5 times increase; machinery construction 78.2%; wood processing and paper manufacturing 10.5%; the production of construction materials 21.3%; light industry 47.7%; flour production 52.5%. The industrial output of the public sector has increased by 2.5%, while the private sector has shown a growth rate of 12.5% and accounted for 43.9% of the total production.

It is widely known that the welfare of the countryside heavily depends on agricultural reforms. The realization of land reform, the introduction of private property on land, the privatisation of the former kolkhozs' and sovkhozs' property, have all created the conditions for the accelerated pace of reforms in agriculture. Starting from 1995, more than 1,300 kolkhozs and sovkhozs have been closed down, with 35,000 private farms being created on their base. The first stage of reforms in agriculture can be said to be complete. As a result of the above, agricultural production grew by 4% in 1998, and by 7.1% in 1999. The year 2000 became particularly successful for the nation's agriculture.

The harvest collection was practically over before December Ist, and brought the following results: 1.538 million tonnes of crops including corn; 75,600 tonnes of grapes; 468,600 tonnes of potatoes; 764,000 tonnes of vegetables; 407,900 tonnes of fruits and berries; 260,000 tonnes of melons; 13,800 tonnes of tobacco; and 625 tonnes of green leaf tea. The levels of incremental increases in the above items were as follows: crops 445,500 tonnes, or 40.7% growth; potatoes 77,300 tonnes; vegetables 131,500 tonnes; fruits and berries 13,500 tonnes; melons 57,100 tonnes; tobacco 58 tonnes, or 72.7%. Nearly 90,500 tonnes of raw cotton were harvested in the republic. Despite the decline in the production of cotton, grapes and green leaf tea, the overall production of crops grew by 18.6% in comparison with the previous year.

The farming sector saw an increase (3.7%) in its production level as well. 195,000 tonnes of meat, 1.07 million tonnes of milk, 550 million eggs, 12,000 tonnes of wool, and more than 70,000 silk cocoons complete the list of achievements in the farming sector. The successful results achieved in farming gave rise to a 12% increase in total agricultural production.

To support reforms in agriculture and help farmers, the government passed a special law and a decree. Farmers were granted a 5-year exemption from taxes (with the exception of land tax), previous tax debts were written-off, and fuel purchases, were subsidised The above measures proved to be an effective stimulus to the sector's development. To further support agriculture, the government has adopted a state programme aimed at advancing the reforms in the sector and facilitating agricultural entrepreneurial activity.

Total economic and social sector investments for 2000 reached 4.2 trillion manats, while construction and repair works attracted 2 trillion manats of investments. In comparison with the previous year's figures, total investment and construction-repair works rose by 2.3% and 2.4% correspondingly. FDI accounts for 51%, or 2.3 trillion manats of total capital investments. 3.4 trillion manats were invested into the completion of the construction of production facilities. In the current year the construction of several strategic components has been completed, with the list including the Yenikend hydropower station; a gas turbine power plant on the Baku power mainline (with a total capacity of 55,000 kilowatts); the Gurtulush drilling rig; a bitumen plant in the Azerneftyag company; the second line of the Mill-Mugan header (with a total length of 52.9 kilometres); the academic building of the Naxichevan State University; the Central Hospital in Baku City; 302,500 square metres of housing; schools with a planned enrolment of 1,906 students; hospitals able to provide in-patient treatment for up to 40 patients; an emergency clinic with a capacity of 70 patients per shift, plus other items. Repair work on the Severnaya hydropower station and the construction of the Alat-Qazimammad main road have also been started in the current year.

Means of transport and individuals operating in the field of motor transportation shipped 80m tonnes of cargo and delivered 880m passengers over one year, which is an increase of 17.3% and 2.1%, respectively, on the previous year. 54.6% of cargo shipments and 83.5% of passenger transportations were carried out by private means of transport.

Since the beginning of the year, communications companies have provided 700bn manat worth of services to the population and to legal entities, which is 36.6% higher than last year. 61.3% of the proceeds from the services go to the private sector.

Since the beginning of the year, 12.8 trillion manat worth of consumer goods and paid services have been sold to the population, Goods turnover grew by 9.8% and came to over 10 trillion manat, whereas the amount of paid services grew by 5.7% and came to 2,5 trillion manat.

This year, $2,796m worth of commercial transactions has been effected with foreign countries, which is 88,1% higher than in the previous year. Exports have accounted for 63.3% of turnover, and imports for 36.7%. The positive trade balance stands at S680m. Non-CIS countries have accounted for 80.7% of turnover and the CIS for 19.3%. Commercial relationships with non-CIS countries have grown by 2,2 times, and those with the CIS by 18%.

The prices for consumer goods and tariffs for services rose by 1.8% as compared to the previous year. At the same time, the average monthly wage grew by 15% and stood at 204,200 manat, Per capita money income grew by 11% and came to 185,400 manat.

Recently, investments have been steadily growing, which is a key condition for economic progress. For instance, in 1996, investments grew by 65%, 67% in 1997 and 45% in 1998. The inflow of foreign capital into our country plays a crucial role in the growth of investments in the country's economy. In 1996-2000, S5bn was invested in the economy, Today, foreign investments in non-oil sectors (communications, machine engineering, food industry, services, etc.) are also considerably increasing, together with those in the oil and gas sector, The share of the oil sector stood at 33% of the total foreign investments in 1996,40% in 1997, and 50% in 1999. Currently the per-capita foreign investment in Azerbaijan stands at about $150, which is the highest indicator throughout the CIS.

Some $60bn is expected to be invested in the oil industry within the oil contracts signed between Azerbaijan and foreign companies, Te ensure the efficient use of proceeds from oil sales in spurring up the socio-economic development of our country, a special oil fund has been set up. In general, the oil strategy of Azerbaijan and the purposeful measures taken in this field are not only of great socio-economic, but also political significance, which bears evidence to the growing authority of Azerbaijan on the world arena and the strengthening of the country's state of independence.

Privatisation plays a key role in the process of deepening the reforms being conducted in the country. Recently, considerable work has been done in this field, and small-scale privatisation has been completed. Commercial facilities, catering outlets and all communal services are owned by businessmen. The privatisation of medium-sized and large industrial enterprises has begun.

The new stage of privatisation has been launched. Passing a new law on the privatisation of state property and the second state programme for privatisation will give a new impetus to this process, and will ensure its utmost efficiency. Preparations are being carried out for privatising the strategic facilities that are of crucial importance for the Azeri economy (in the metallurgy, machine engineering, fuel, petrochemical industries, infrastructure, etc.), and which demand a special approach. Thus, plans for the privatisation of each facility will be developed taking into account their place and role in the country's economy.

One of the most important directions in Azerbaijan's economic policy is the development of entrepreneurship. A corresponding legal framework has been developed for this purpose. As a result of the measures taken to privatise facilities and to create an environment conducive to business development, the share of the private sector in GDP currently stands at 62%, including 43% in industry, 98% in agriculture and trade, 77% in construction, 45% in cargo transportations, and 80% in passenger transportation.

The protection of the rights of entrepreneurs is also acquiring a high significance. Two decrees were issued in protection of the rights of businessmen and to prohibit ungrounded interference in their activities and ungrounded check-ups (on 17* June 1996 and 7* January 1999). To let up favourable conditions for business activities, relevant measures will continue to be taken in the country.

It is worthwhile noting that the social dimension of the reforms carried out and the social security measures taken have occupied a leading position in the country's economic course. As a result of this work, the average monthly wage has grown considerably over recent years. During the past five years (1994-1999), this indicator grew by a factor of 12 and came to 184,400 manat, Over the first seven months of 2000, this indicator kept growing and, for the time being, the average monthly wage comes to 204,200 manat. It is also important that wages grew while inflation remained very low (during the past two years, consumer prices were falling). For instance, in the first half of the 1990s, the inflation growth rate surpassed the growth of the population's cash income by a factor of three, while during the past five years people's income growth was 2.5 times higher than the inflation rate. In other words, the purchasing capacity of the population grew 2.5 fold.

In the recent years, the wages of employees in state budget-financed enterprises have grown by several times, and personal scholarships have been awarded to a large group of writers, poets, artists and scientists, and to young prodigies. Since l!t August 1999, the wages of those people employed at state-financed enterprises and organisations has grown by 1.8 times; the wages of persons engaged in the educationel sphere have risen by 25% since 1st January 2000, and of those working in science, culture and social security fields since 1st April, Since 1st January 2000, the minimum non-taxable wage rose from 60,000 manat to 100,000 manat, a move which preconditioned an increase in the actual income of the country's citizens.

As a result of the measures taken to improve pension provisions, the average monthly pension more than doubled. During 2000, pensions and welfare payments to the unemployed were paid promptly, Currently there is practically no debt in pensions and welfare, and those for December will be paid soon. In 1999, 635bn manat was paid in pensions, and this figure grew to 810bn manat in 2001, an increase of 16.5%. The welfare rate rose by 12.7% on the previous year's.

On 20th January, a group of individuals who were handicapped during the Karabakh war was provided with automobiles and apartments using state funds. The Centre for the Rehabilitation of the Handicapped was set up to help these people return to active economic life.

To increase social security for displaced persons, on Ist January 2000 the monthly food welfare was increased by 3,5 times.

To ensure the systematic resolution of refugee and displaced persons' problems, and to reinforce their social security, a state programme was passed on 17lh September 1998, The Fund for the Social Development of Displaced Persons was established in December 1999 to ensure the successful implementation of the above state programme, to improve the refugees' living conditions, and to create the corresponding social infrastructure and new jobs.

Bettering social security for the population is one of the state's priorities. As the country's socio-economic potential grows and budget revenues increase, relevant measures will be taken.

Today a solid foundation for a new stage in the socio-economic development of Azerbaijan has been laid, together with a foundation for high economic growth. The beginning of the new century will be a turning point in the deepening of economic reforms, with the main features being the restructuring of the economy and adjusting institutions to the new conditions.

Moreover, it should be noted that, just like the other FSU states, our country is living through a period of transition. There are certain objective obstacles and problems ensuing from the current situation. The fact that 20% of our territory is occupied by Armenian invaders and that over lm of our citizens have become refugees and displaced persons, forced into living in tough conditions, aggravates the situation. The poor conditions and hardships suffered by a part of our citizens makes us all anxious and worried, We must be sure that these problems, sufferings and hardships are of a temporary nature. The people must be certain that the country's administration understands the difficulty of the situation in this sphere, and is using all existing opportunities to alleviate their conditions. Our success in the different spheres of the country's life allow us to state with certainty that important moves will be made to solve the urgent problems, and that many hardships will be eliminated. The welfare of our citizens will get better and better, and they will have the prosperous life they deserve.

Today we are building a truly civil society in Azerbaijan. The manifold public organisations, parties, funds and societies comprising such a society are successfully co-operating with the state in resolving many important issues. We are making great efforts to ensure the democratic development of Azerbaijan in the truest sense of the word.

The Azerbaijan Republic is confidently moving along the path of democratic development. The essential democratic institutions and legal frameworks have already been formed. The free functioning of political parties and public organisations of different slants, the absence of censorship, the free publishing of hundreds of mass media, and unimpeded broadcasting by private TV and radio channels, are all vivid examples of political pluralism, of the freedom of ideas, speech and democracy that exist in Azerbaijan, The very fact that certain ill-wishers who harp on about the lack of democracy in Azerbaijan have never been pressurised or persecuted is a weighty argument in support of the potion that democracy does exist in Azerbaijan. We should not forget that all these achievements have been made over nine years, several of which have coincided with political disputes, chaos and unpredictability. The successes that have been made in democratic development under conditions of the ongoing war with neighbouring Armenia are indeed high. This is what we and representatives of the foreign countries who have been democratic for ages can assert.

The elections for the Milli Majlis in 2000 also attested to this. The equal conditions ensured for all candidates, the elimination of any obstacles to the participation of political parties in the elections, and the essential measures taken to ensure the free, democratic and impartial will of the people, all stand as evidence that the country has accumulated considerable democratic experience over this short time.

In spite of what some believe, democracy is not chaos, anarchy and chance. Democracy can emerge, evolve and spread under conditions in which socio-political stability and the rule of law predominate. It develops in compliance with the mentality of a nation, and adjusts to the requirements set forth by each society, each period. So let us not worry, neither inside nor beyond Azerbaijan; our country has embarked on the path of democracy, and will progress along that road. This is an integral part of our strategic course, and we will never turn back or away from this route.

Gaining full independence and conducting fundamental reforms in many spheres of life is a very complicated and important process. Declarations of independence and state measures to protect and strengthen it are definitely insufficient in gaining full independence. It is crucial that every one of us, in particularly the younger generation, understands deep in his or her heart the true, high meaning of independence, for which we are willing to sacrifice everything. To understand this, the youth must have impeccable moral and ethical principles, understand the essence of the Azeri national and spiritual values, and be proud of their native culture, literature and science. This is a very important issue. Serving the purposes of the country's independence, today's education, culture and arts in Azerbaijan are involved in the process of educating true citizens. Azerbaijan's youth is the main source and guarantor of the irreversibility and inviolability of the nation's independence.

Once again, analysing our national and cultural heritage and history in the years of independence, we free ourselves from ideological bondage. At the same time, we help representatives from other nations to familiarise themselves with the contributions that Azeri culture has made to the thesaurus of world art. It was during the period of independence that we celebrated the 500th anniversary of Fizuli. The celebrations turned into a real feast of poetry and national culture on the one hand, and a celebration of Azerbaijani statehood and independence on the other. The people who arrived to celebrate this date with us from around the globe, including the UNESCO representatives, became acquainted with our motherland through Fizuli's poetry, and made the entire world know the truth about us.

In 2000, Azerbaijan celebrated the l,300th anniversary of the magnificent epic Kitabi Dede Gorgud, an event that was attended by heads of Turkic states and scientists from many world countries. This epic, which had long been prohibited, finally received its true appreciation in independent Azerbaijan. It is a heroic poem depicting not an individual hero, but the heroism of the entire nation. Its core idea is to demonstrate the readiness of all heroes, young and old, to sacrifice their lives for the freedom of their land. The glorification of heroism is the essence of the poem, which is very important in the context of the current tasks being faced by the people of Azerbaijan, including defending their independence and the territorial integrity of the republic.

Today, bringing up the younger generation to love its country is of paramount importance. Young people should have strong traditional roots and yet, on the other hand, need to be open to new ideas and views. In this respect, studying our history and eliminating the grey areas in it becomes critical. Despite all the hardships of transition, we have succeeded in opening many glorious pages of our past, which fills us with pride.

We have an urgent task to secure the social and political stability that we have achieved, and this demands the unity of our people. Every citizen, irrespective of his political beliefs or social status, should never forget that Azerbaijan is constantly threatened from outside. I have called many times upon all the political parties, organisations and citizens of Azerbaijan to choose the way of unity. Any personal ambitions should be abandoned. Our independence, which was obtained in 1991, is a historical achievement, and we are responsible for preserving it for the future generations. There may be various opinions on other matters, but not regarding the issue of independence.

I assure you that the Azeri state will always adhere to the ideals of sovereignty, freedom and independence. I do believe that Azerbaijan is destined to become a prosperous nation in the 21s1 century. There are many dates in the world to celebrate, but today, the whole of the mankind has one joy: time is unfolding into the new year, the new century and the new millennium. In addition, 31 December is important for us, as on this day all the Azeris throughout the world are celebrating their unity, fraternity and solidarity.

Every passing day of our lives will belong to history. Of course, now that the new millennium is starting, one could speak about historical achievements for a long time. Wishing to be brief, I will merely say that the two-thousand-year history of Azerbaijan represents a heroic chronicle of unbending valour and fortitude.

Speaking about the historical events and achievements of the past century is both easy and difficult. Every single year and month of the past century were recorded by scientists. Many important achievements were witnessed by us. Undoubtedly, all these will be treasured in the memories of generations to come.

The 20lh century changed the fate of the Azeri people, and a new, independent Azerbaijan emerged at the end of the century and the millennium. Our achievements are striking and can be confirmed by everyone.

During the last century, our people managed to shake off their outdated lifestyles and start walking the path of social and political resurgence, which was accompanied by a revival of science and culture.

Today, we can rightly be proud that our fathers conquered total illiteracy and made Azerbaijan a country of high educational standards by establishing a programme of enlightenment. Azerbaijan became the first nation in the region to feature its own theatre, opera, cinema, etc. The face of the ancient villages and cities changed. The aspiration for science and education and changed the inward life, the lifestyles and the appearance of the Azeris, who became part of the modern world.

Dear compatriots!

Sisters and brothers!

My beloved children!

The vast intellectual potential, natural wealth and a unique geographic location between Europe and Asia mean that Azerbaijan can assume a worthy place in the world community. The forthcoming restoration of the Great Silk Road under the TRACECA project represents an opportunity for the intensive development of communications and the global information system.

We are a young nation from the point of view of international law. In this period of global changes, we should devote every effort to the development of our spiritual wealth, which is culture, science and education, for only a society with high intellectual potential may hope to build a strong civil society.

The past 100 years in the life of the Azeri people have been closely connected with oil. Indeed, oil and the other natural resources that our country boasts of have played a crucial role for Azerbaijan. This cannot be denied. However, the main wealth of Azerbaijan lies in its citizens, its patriots, its wise nation. Our people have the full right to live in harmony and prosperity in the 21st century and to fully possess their country, their land and their wealth!

We are proud that it was our generation who had the chance to restore the lost traditions of statehood in the late 20th century. Enriching these traditions in Azerbaijan, strengthening independence and ensuring its irre-versibility require every one of us to do everything in our power. I believe that my fellow Azeris, who have been facing many of the challenges of history with deep dignity, will make a deserving contribution to achieving this supreme goal, and will be a guarantor of independent Azerbaijan today and tomorrow. The powerful economic potential created by Azerbaijan in the 20th century and its large army of professionals have set a solid foundation for the future progress of the Azeri people.

Language is one of the basic elements that defines a nation's identity. The successes achieved by the nation in this sphere over the 20th century are outstanding. We are proud of the fact that the Azeri language, the state language of the independent Azerbaijan Republic, has been enhanced lexically, polished grammatically and, while constantly developing, has occupied a deserving position among world languages in the 20th century. For Azerbaijan, the 20th century was marked by the intensive development of science, literature and the arts. Keeping up the traditions in these spheres, our people greatly enriched them in the 20th century, with new directions, forms and genres being created. Today any Azeri can be proud of the luminaries of the 2nd millennium, such as the poets and writers: Mirza Alekper Sabir, Jalil Mammaquluzada, Najaf bey Vezirov, Muhammed Hadi, Abdullah Shaig, Alibey Guseynzada, Huseyn Javid, Ahmad Javad, Jafar Jabbarli, Aliaha Vahid, Samad Vurhun, Mammad Huseyn Shahriyar, Suleyman Rustam, Rasul Rza, Mirza Ibrahmov, Mehdi Huseyn, Suleyman Rahimov; the composers: Uzeir Hajibekov, Muslim Magomayev, Kara Karayev, Fikret Amirov, Niyazi, Tofiq Quliyev, Jahangir Jahangirov, Suleyman Aleskerov; the singers: Jabbar Qaryaghdyoglu, Bul-Bul, Shovkat Mammadova, Khan Shushinsky, Seyid Shushinsky, Zulfi Adigezalov, Rashid Behbudov, Shovkat Alekperova; the performers: Abbas Mirza Sharifzada, Mirzaha Aliyev, Ulvi Rajab, Marziya Davudova, Sidgi Ruhullah, Alesker Alekberov, Movsun Sanani, Mustafa Mardanov, Okyuma Kurbanova, Leyla Bedirbeyli; the artists and sculptors: Azim Azimzadeh, Behruz Kengerli, Sattar Bahlulzada, Gazanfar Khaligov, Fuad Abdurrakhmanov, Elmira Shahtakhtinskaya; our prominent scientists: Mirasadullah Mirkasimov, Yusif Mamedaliyev, Heydar Guseynov, Hasan Aliyev, Mustafa Topchibashev, Aziz Sharif, Murtuza Nagiyev, Zahid Khalilov, Musa Aliyev, Hasan Abdullayev, Abdullah Garayev, Jafar Khandan, Abdulazal Demirchizadeh, Mamedjafar Jafarov, Ziya Buniyadov, Faramaz Magsudov and others, all of whom made a great contribution to the development of Azeri science and made it known worldwide. The types of arts new to Azerbaijan -opera, ballet, sculpture, and cinema - have been intensively developing.

The 20th century was remarkable for Azeri women, too. The sociopolitical processes which took place in the country at the beginning of the century, and the intensive development of the oii industry, gave a powerful impetus to the enlightenment of women and their involvement in social life. Thanks to the measures carried out since the early 1920s, the horizons for women's comprehensive development have been broadened. Over a short period, illiteracy among women was eliminated, and the level of education was raised. Women mastered the professions of teacher, doctor, engineer and others, and were represented in their respective fields alongside men. The first Constitution of the independent Azerbaijan Republic passed in 1995 ensured men's and women's equal rights and created a legal framework for their active participation in the process of building a democratic state. We take pride in the fact that the Azeri woman is an equal, active member of a democratic community, directly participating in the resolution of today's problems in Azerbaijan.

Physical culture and sports became an integral part of our lives during the 20lh century. One can not doubt the role of physical culture and sport in forming a healthy lifestyle and a go-ahead attitude. Patriotism and the development of intellectual and physical capabilities is very high. Showing the skills and mastery of many sports, our youth has brought the noble name of Azerbaijan up to a new level.

At this important point in history, I, filled with boundless pride, congratulate my fellow Azeris on the wonderful holidays and wish you health and eternal happiness!

At the threshold of the new century and new millennium, I would like to congratulate all our compatriots who reside throughout the world and believe in the happy future of Azerbaijan, irrespective of what corner of the world they live in.

Today we live in a free, democratic society. We guard our sacred land and aspire to peace and harmony. It would be difficult to overestimate the tenacity and braveness of our regular army, the officers and soldiers who ensure the inviolability of our independence and the territorial integrity of our state. On this bright day, I would like to congratulate each of them on the holiday, saying that I praise their services!

What all the people long for in the new millennium is peace and harmony. Humanity gives a resolute 'No' to destructive wars and conflicts leading to many people being displaced and turned into refugees. All of us want a good life. It happened so that over 1 million Azerbaijani residents were ousted far away from their hearths; the majority are living in tents and other unsuitable accommodation. Truly moved, I remember every one of them and share their dreams of coming back home, and I do believe that it will not be long before my brothers and sisters, who bravely face the challenges, will return to their native lands.

On this wonderful day I mourn for every one of our fellow Azeris who sacrificed his or her life to liberate our land. I would like to comfort their families and hope they have enough patience and perseverance. I state that these people, who sacrificed their lives for the love of our motherland, will always live on in our hearts!

All children-schoolchildren and students-are the future of Azerbaijan. I wish them happiness and successes.

No hardship will last forever. In the course of the entire history of humankind, the struggle between Good and Evil has always ended in the triumph of justice. This is why the coming year 2001 is one of hope and faith. I do believe our people will solve any tasks posed by the coming year with dignity. Our independence will be strengthened, our lands liberated, and peace and prosperity will rule in the Azerbaijan Republic.

Happy holidays!

Happy New Year

Happy New Century and Millennium!

Long live free, independent, democratic Azerbaijan!

Haydar Aliyev President of the Azerbaijan Republic

Baku, 29 December 2000

Historical backgrounds