Speech in the inauguration ceremony by Ilham Aliyev, President of the Republic of Azerbaijan - October 31, 2003

Distinguished Ladies and gentlemen!

Distinguished guests!

I`d like to express my deep gratitude to voters, citizens and the entire people of Azerbaijan for confiding in me and electing me President of the Republic of Azerbaijan.

I will justify this great confidence and cope with this duty decently. I will continue the policy of Heydar Aliyev.

On October 15, going to the polls, the Azerbaijani people voted for the policy Heydar Aliyev, voted for peace, law and order, prosperity, development, reconstruction and stability. I see no alternative to this policy in Azerbaijan.

Heydar Aliyev`s policy has brought great success to Azerbaijan. The development in all the spheres is underway and is making progress and success in Azerbaijan. Azerbaijan enjoys international respect and managed to occupy its worthy place in the international arena. The Image and influence of Azerbaijan have important and strengthened. Now Azerbaijan is reckoned with and respected. All large-scale international projects in the region are implemented into life with the participation of Azerbaijan by taking into its national interests.

Azerbaijan works successfully in the international organizations, its influence grows. Such an authoritative international organization as the Council of Europe recognized Armenia as an insisted Azerbaijan. This process continue. Azerbaijan will win even firmer positions in the international arena and all over the world.

The relations with our neighbors are successfully developing. Our bilateral relations are becoming stronger and regional cooperation is developing. The participation of the prominent statesmen from the neighboring countries in the inauguration ceremony in Baku proves it once again.

Taking the advantage of this chance, I welcome the Georgian President Mr. Eduard Shevardnadze, chairman of the Federation Council of the Russian Federation, Mr. Sergey Mironov, Turkish Deputy Prime Minister Mr. Abdullatif Sener, Vice-President of the Islamic Republic of Iran Seyid Mohammad-Ali Abtahi and the Ukrainian Prime Minister Mr. Viktor Yanukovch who are attending this ceremony.

The economy is strengthening and Azerbaijan is developing comprehensively. Economic reforms are being conducted in Azerbaijan. As a result of these reforms, our country has improved its economy within a short period of time. In the last five years the gross domestic product, which is the most important indicator of the economy, has been increasing by 10 per cent every year. The level of inflation is 2 per cent. Actually 10 years ago, the level of inflation was 1,600 per cent in Azerbaijan.

The private sector is successfully developing in Azerbaijan. It is very pleasing that the share of the private sector in the gross domestic product is 70 per cent. A class of entrepreneurs is being formed, a large-scale privatization program is being conducted. The land reform has been completed. Land has already been handed to the private ownership of the villagers. As a result of these reforms, the agricultural production is increasing. All this proves that the economic reforms conducted under the leadership of Heydar Aliyev in Azerbaijan are producing their excellent results.

Foreign investment is at a very high level in Azerbaijan and this process is continuing. And I can tell you that the volume of investments from all sources forms 15bn dollars. In terms of foreign investment per capita, Azerbaijan occupies one of the first places among the former Soviet republics and is also ahead of some eastern European states.

However, it is no secret to anyone that the investments and especially foreign investments are made in stable countries. Because the investor does not want to run a risk. From this point of view, Azerbaijan is a very favourable country for investments. The socio - political stability in Azerbaijan over the last few years has enabled us to take great steps in the sphere of attracting investments.

Of course, it is our duty to protect, maintain and strengthen this stability in Azerbaijan.

We shall not let anybody to violate the stability in Azerbaijan, and if someone tries to do it, we shall not allow this to happen and ensure that the Azerbaijani people live in conditions of peace, security and stability. This stability will allow us to develop Azerbaijan in future more rapidly and comprehensively. We have a lot of plans in this respect. Every sphere in Azerbaijan must be developed.

Oil strategy is the core of the economy. Of course, the main direction of the Azerbaijani economy is to implement into life its oil strategy. The new oil strategy launched by Heydar Aliyev in 1994, has brought great success to Azerbaijan. With the signiture of the "Contract of the Century" in 1994, this strategy is being conducted for nine years.

As a result of this, Azerbaijan is effectively exporting its oil and gas reserves to the world market. Azerbaijan is successfully cooperating with foreign companies in its own sector of the Caspian Sea.

Ten billion dollars of investment have been made in the oil industry of Azerbaijan. Tens of thousands of new jobs have been opened. A new infrastructure has been set up. Drilling rigs, platforms, oil pipelines, oil terminals and other infrastructure very important for our country have been created within a short time.

Azerbaijan is already exporting its oil to the world market with two pipelines. Since the restoration of the Baku-Novorossiysk oil pipeline, 2.5mln. tons of oil are exported every year.

The Baku-Supsa oil pipeline was built anew and provides Azerbaijan with a route to the West. By means of this pipeline, 6.7 million tons of oil are being exported every year. The Baku-Tbilisi-Ceyhan oil pipeline is being constructed at the moment, 40 per cent of the work has already been carried out and 1.2bln dollars have been invested in the construction of this pipeline. At the end of the next year we shall mark its operation.

Azerbaijan has already started to work successfully in the Shah-deniz deposit that has large natural gas reserves.

Investment is being made in the construction of the Baku-Erzurum gas pipeline and, if everything goes according to the schedule, the Azerbaijani gas will be delivered to Europe in 2006.

The foundations of all these projects and work were laid in 1994. In those difficult and complicated conditions, Azerbaijan was regarded as a very risky country. In order to attract investments to Azerbaijan, President Heydar Aliyev carried out great work. And finally, he turned the myth into the reality.

Oil incomes serve the people, it is an integral part of the oil strategy, oil incomes should effectively serve the Azerbaijani people. With this aim, the State Oil Fund of Azerbaijan has been set up. The creation of this Oil Fund is a very significant event in the modern history of Azerbaijan. This fund meets all the international standards and its activity is transparent. The International financial organizations highly appreciate its activities.

At present, 800 million dollars have been accumulated in the Oil Fund. It belongs to the people. For this reason, the public is constantly informed on the activities of the Oil Fund. Each citizen should know the amount of the currency reserves of his country how they are spent.

With the development of economic potential of Azerbaijan in future, with the discoveries of new oil fields in Azerbaijan and operation of the Baku-Tbilisi-Ceyhan oil pipeline the possibilities of the country grow much. Every year, billions of dollars will arrive in Azerbaijan. With the help of these assets great construction work will be conducted in all the spheres in Azerbaijan.

Great work will be conducted for the solution of social problems. You know that allocated from the Oil Fund are first and foremost for improve the living conditions of refugees and internally displaced persons in Azerbaijan. By the decrees of President Heydar Aliyev 70 million dollars have been allocated for this purpose, new settlements and houses are being built for refugees and displaced persons. Tens of thousands of refugees and displaced persons have already moved from the refugee camps into modern houses. This process will continue and we shall continue to pay great attention to this issue in future as well. I am sure that in the nearest future, all refugees and displaced persons suffering from the occupation will be provided with modern accommodations.

Other social issues are also being solved in Azerbaijan. You know that recently by the decree of the President the wages of the employees the sphere of health, education, culture and others have been increased for 50 per cent. Pensions have been increased for 40 per cent. It shows once more that our President has always paid attention to social problems.

Hence forth this policy will be continued. All the potentials of the country will serve this purpose. And it is not accidental that 60 per cent of budget of the next year will be spent on the solution of social problems.

In the future Azerbaijan will turn into a very rich and powerful state. By continuing the oil strategy, we shall develop our country within a short time.

In particular, great attention will be paid to the non-oil sector. New plants and new factories will be put into operation. Necessary measures for are being taken for the development of entrepreneurship.

An economic development programme is developed in Azerbaijan. And this comprehensive economic development programme will allow us to turn Azerbaijan into a rich state within a short time. We have all potentials natural reserves, human resources and most important, will of the people. We shall

turn Azerbaijan into a rich and powerful state by joining our efforts and working the same goal. Karabakh is the most painful problem of Azerbaijan.

Great work has been done in the sphere of the army construction in Azerbaijan. A strong army has been created in Azerbaijan and this process will continue. This issue will always be in the centre of my attention. Azerbaijan must have a strong army capable to settle all issues. I am confident that the economic potential of Azerbaijan will give us an opportunity to enable the Azerbaijani army to meet the highest standards and tackle all the tasks it is facing.

The Azerbaijani-Armenian Nagorno-Karabakh problem is the most painful problem for our country.

We have been living under the cease-fire regime for many years. Unfortunately, the activities of the Minsk Group of OSCE directly involved in settling this issue have not produced any results. We are not losing our hopes yet. We still hope that the co-chairs will deal with this issue earnestly, with a

responsibility, and this issue will solved. However, this issue can be resolved on the several principals, on the principals of the international laws. The Azerbaijani lands should be liberated from occupation, one million refugees and displaced persons should return home and the territorial integrity of Azerbaijan should be restored. We shall never reconcile with the current situation.

Azerbaijan will never reconcile with the loss of its lands. Everybody should know, though, we are for peace, we do not want war, this issue should be resolved by peaceful means, but at the same time everybody should know that our patience is not endless. Azerbaijan will liberate its lands at any cost. I believe in the happy future of Azerbaijan.

I am sure that our country will develop and will be stronger and develop thoroughly, democracy will develop in Azerbaijan, political pluralism, freedom of speech will develop, and Azerbaijan will become a modern state.

To accomplish all this it is necessary to do a lot in Azerbaijan to turn Azerbaijan into powerful state, it is necessary to continue Heydar Aliyev`s policy in Azerbaijan. Today, speaking from this high rostrum, I promise to the Azerbaijani people that I shall remain loyal to this policy and will never deviate from this path; I shall continue Heydar Aliyev`s policy.

Today from this high rostrum I am appealing to our dear President Mr. Heydar Aliyev I say: Dear President, we shall strengthen your modern Azerbaijan, make it richer, develop it comprehensively and will lead it to new victories following your path.

Long live Heydar Aliyev, the national leader of the Azerbaijan people, the founder of the modern Azerbaijan!

Long live the heroic Azerbaijani people!

Long live, the free and independent Azerbaijan!