Speech of the President of the Republic of Azerbaijan Heydar Aliyev at the opening ceremony of the Tobacco Factory - February 1, 2000

Ladies and gentlemen,

Today we witness a significant event on the implementation of the market economy and economic policy in Azerbaijan. The Tobacco Factory, which starts to work and at which opening ceremony we have assembled today, is an obvious proof of the implementation of market economy, entrepreneurship and privatization.

I am not a smoker and do not like the habit of smoking. As for me, I wish no one smoked. But it does not depend on us. Many people in the world have this habit. Thus there is a need for cigarettes. That is why, to increase its production, to satisfy the need of people in this sphere are the duties of every government. If it were not our duty, I would not been present at this opening ceremony and not be pleased in the growth of cigarette production.

The tobacco production occupies particular place in the agriculture of Azerbaijan in the recent years. It is obvious that tobacco does not grow in every climate. There is a need for special climatic conditions and soil. But there are such regions in Azerbaijan where there are plants of tobacco and even people gather and production quality tobacco.

I was engaged in these issues in the 1970s. Those years we all were parts of the Soviet Union. In the agricultural and economic plans of the Soviet Union there were the production of some agricultural products in several republics and regions.

Tobacco in the agriculture of Azerbaijan exists since the ancient times. As in the Soviet Union there was a need of tobacco the production for tobacco, increased. But though the territory of the Soviet Union was large, it was impossible to grow tobacco in most of the regions. That is why, each year new plans were determined for Azerbaijan and they increased year-by-year. In our turn, we were trying to implement them.

I remember that in Azerbaijan approximately 25 thousand tons of tobacco was produced in the 1970s. But in 1980 we increased the production of tobacco up to 55-60 thousand tons.  I have to mention the fact that the regions and persons engaged in the production of tobacco received a lot of incomes. When the government bought the tobacco leaf, it paid large resources for it. That is why, the countrymen living in the regions, where the tobacco grew were interested in its production. I can say that in those years this production was implemented into life collective and state farms. People cultivated tobacco even in their yards and produced it individually. Then they were selling it to the fermentative plants and received large incomes.

I remember this fact today. It was approximately at the end of the 1970s. In Kalbajar, which is a mountainous district of Azerbaijan, people were engaged mainly in cattle-breeding. Crop sector was not developed there much. That is why, the financial status of the countrymen in agriculture was too low as well as their incomes. It was proposed to plant tobacco on small plots. Some people hesitated. But I remember that we adopted a decision. We decided to plant tobacco in 500 hectares and provided it. It is naturally that 500 hectares are not a big territory. But after two or three years the head and countrymen of this district, that is, its residents thanked for giving them such an opportunity.  They could receive good incomes from tobacco.

Thereby, on the one hand it was the demand of the Soviet Union, and the people engaged in production of tobacco were interested in it, on the other hand, it was a profitable sphere. All this could increase the production of tobacco. We built tobacco fermentation plants. But it is known that the highest value of the product is in final product. The final product of tobacco is the cigarette.

I have to say that we were demanded to buy the raw tobacco, but there was no opportunity to produce cigarettes from this raw material. They made excuses that there are a lot of cigarette factories in various parts of the Soviet Union – in Moscow, Leningrad and other cities. There is no need to build new cigarette factories in Azerbaijan. Thereby, the incomes received from the produced tobacco and works done by us were delivered to those factories.

We try to improve the quality of tobacco. I remember when by means of the invited experts from America there were efforts to plant the sort of “Virginia” in the farms of Zagatala. Then we had a little cigarette factory. Then it was called papiros. I remember, that factory was located at the center of the town. When we built the Republican Palace we pulled down the factory and built a square there.  Now there is the building of the National Bank. Those years we had a Bank Building as well. You know that building very well. Exactly there was a cigarette factory. Then we wanted to expand the capacity of this factory. But we were not allowed. Finally we achieved to build a tobacco plant.

I would like to introduce to you a small bit of history. Those years within the frames of the Soviet Union there were low-quality cigarettes production in this factory. But the demands of people were being satisfied. Many cigarettes, including “Philippe Morris”, - I do not know the names of other cigarettes, as I am not interested in them -  and others were not importing here. If someone brought a box of cigarettes abroad, it seemed a wonder to others.

Then people smoked these cigarettes. Thereby, I gave you information about the history of the tobacco plant.

When Azerbaijan gained its independence and we started to pursue the policy of market economy in our country, we tried to provide each enterprise with new technology, in order to improve the quality of production.  We focused our attention on this plant as well. When you see this plant, built within a small period of time, you can imagine that we were not able to realize it then. First of all, we needed big investments and new technology of which we were not aware.

We have to be honest today. I can say that this tobacco plant caused us various problems in the recent three or four years. I am pleased of the fact that the company, which bought this factory, kept all the employees working here for many years. I suppose, their delegations are present here as well. But they have to keep in mind that I shall not forget the fact when this factory was seized by different mafia-groups who used this factory for their own interests.

After the arrival of a foreign company we founded a joint venture. I am informed about it. We hoped that by means of that joint venture the production will be renewed and have the highest quality. Unfortunately, they could not fulfill their responsibilities. It is true that they brought themselves some equipment and investment. But they could do nothing.  I repeat that some mafia-groups tried to use this plant in order to benefit from it, on the one hand, and made efforts to destroy the economic and political situation in Azerbaijan, on the other hand.

That company and its delegation discharged most of the employees of this plant, thus, they were complaining. I remember before we started to work with this company on every ten or fifteen days 100, 150, 200 employees of this plant were instigated to protest in front of the building of the Cabinet of Ministers and the Presidential Palace. They were standing there for hours and complaining about their poor condition, that they were discharged and could not receive wages. It is natural, they had rights and reasons to complain. But the point is that some forces were trying to use it against the government and organizes disorders.

Some representatives of the law-enforcement bodies found way to this plant, abused their offices and received illegal incomes. I consider some forces belonging to opposition parties were interested in this plant. I guess that they had their own incomes from this plant. That is why, they incited them to complain. They even brought up this issue to the sessions of the parliament and made speeches claiming that government cannot run this plant.

The former administration of the State Labor Committee, people working in some companies, even in the Cabinet of Ministers did not solve this problem in order to satisfy their own interests and did solve problems there. Thereby, the situation was getting worse, people were suffering and complaining. Some people abused the situation. At last, Nazar Nasri, who is present here, appealed to me and I received him. He made some proposals. When I was interested in them, I found them very interesting.  I gave instructions to the State Labor Committee and the Cabinet of Ministers to consider this issue and take necessary measures. As I said, the employees of the plant were coming to complain once a week.

Imagine, even after my instructions some people from these organizations were trying to impede the solution of this problem.  I was informed that even when some forces from this plant, who received illegal incomes and created disorder after realizing the real opportunity to run this plant, declared that they would privatize and reconstruct it themselves. But it was impossible to believe in it. If it was true, why did they tease both us and themselves?

I am happy of being aware of these processes that the company of the “European Tobacco” whom I accepted personally and gave instructions, took the responsibility to reconstruct the plant and produce high-quality products here, he could privatize this plan within the frames of law. From this privatization the budget of Azerbaijan could receive some incomes.  It is gladdening that no any person was discharged from this plant. Some of them are already involved in their work, some are receiving subsidies and will be involved in future. I would like to mention that I disclosed my conditions to them and they fulfilled it. It means that people work, the staff is not fallen apart and a new enterprise was founded.  Many foreign enterprises invested in this plant. It is obvious that it will have positive results.

As you may know, we make efforts to increase the volume of foreign investment in Azerbaijan in the recent five years. We have successes in this sphere.  In this period they have invested more than 5 billion USD in Azerbaijan. Most of it was invested in the oil sector. We have achievements in this field and there will be more in future.

We try and will try to involve more foreign investment in non-oil sector. We have opportunities and investors for it. There are places, enterprises and opportunities to invest. If we are not successful in this sphere, it means that many people in various governmental organs have attempted to obstacle it.

I receive a lot of information that when the investors come to Azerbaijan and make their proposals some organizations able to do business help them, create conditions for the investors. They want benefits, take bribes or take interests from it. When investor thinks on it, he realizes that he will not be able to take incomes and returns to its country.

These shortcomings exist in our various official organs. I confess it today. I demand them to change this situation. Various organs obstacle the development of the economy of Azerbaijan, impede the investment in various sectors of economy of Azerbaijan and non-oil sector. I dare to say it not only because of the information at my disposal, but also because of the efforts to capture this plant and also because of my observations.

If I did not interfere in this issue, and did not give instructions to those people to solve the problem and not controlled it today this plant will not be existing.  That is why, I tell you that we are losing so many investors.

What are the results of work done in the recent five years? Many people spoke about it here. Azerbaijan has been invested 50 million dollars and the enterprise has been reconstructed. They said that 16 sorts of cigarettes will be produced here. The demand of Azerbaijan will be satisfied. But a portion of the need is being imported to Azerbaijan. It is natural, that various organs benefits from it, thus, Azerbaijan receives few incomes.

Employees of this plant and citizens of Azerbaijan will work in better conditions and receive high wages. It was said here that most of the employees have been sent to Europe for training and study. It means that this plant will be administered by the Azerbaijanis completely in future.

The heads of this plant said that they will export some portion of the produced cigarettes. It means that this production satisfies the need of the people of Azerbaijan, and as a result of the increase of production our republic does not import, but export these cigarettes as well.

These are the main principles of development of our new economic policy, market economy and private sector. We witnessed it in this plant.

I think that an obligation of this company is very important. They will try to improve the quality of tobacco planted in different regions. Here it is said that 20 thousand people will be involved in its farming. As I said it to the administration of this company, I wish that most of the raw materials be of high-quality tobacco planted in Azerbaijan in future.  I am pleased of this event today. I congratulate the administration of the “European Tobacco” company and wish them successes in their work.

It is gladdening that the staff of this plant is not changed, but they work in  better conditions, will receive more wages and work more efficiently. Thereby, the life standards of half of our people will improve.

In spite of this, the plant has covered a long and hard path and overcome the obstacles, it has a long way to pass still. When I mention the obstacles I mean the interference of various law enforcement organs in the business of the private sector. These shortcomings and defects exist in Azerbaijan. It prevents the development of private sector in Azerbaijan and damages the policy of our government. That is why, today I demand that the police, procurators and other authorities not to interfere in the activity of this plant. I demand the organs of law-enforcement and other authorities not to interfere in the activity of the private sector, prevent its development and search for illegal earnings. Only the Tax bodies may get interested in this plant. The police and procurators must not be involved in this plant or private sector. They have nothing to do here. This is the property of the company. It is the business of the company to decide what to produce and how to sell.

We should take taxes from this plant. It is natural, such experienced companies will make efforts to improve the production and quality and prevent the loss of production. This company is here for its benefits.  The company should improve its production and incomes and pay taxes in time.

It is said that they use a lot of electric energy here. The company must pay for it, for water and others needed for production. We have no other demands. There is no need for the interference of the police and procurators in the business of this company. I repeat that all my words belong to the private sector. I declare here once more as President of Azerbaijan that I take and shall take measures to develop entrepreneurship and speed up the development in Azerbaijan. The program of privatization will be implemented.

The rough mistakes committed by the former Property Committee in privatization must not be repeated by the State Ministry of Property afterwards. No one should prevent the foreign entrepreneurs from investing in Azerbaijan. All the authorities should establish favorable conditions for them. I address all the foreign investors, if you meet any obstacle in Azerbaijan, please appeal to me. I promise you to solve this problem, though I have much work.

I congratulate the staff of the plant. They do not complain any more. Not any other saboteur forces can send them to protest in front of the Presidential Palace and the Cabinet of Ministers, because the employees work in better conditions, receive good salaries and improve their skills.

When walking here and talking to people worked here since the past period I realized how they are pleased of the changes. In the conclusion, I would like to say that I am not a smoker. I wish that people stopped smoking because it is harmful. Though there are many filters in it, it is harmful still. I know that it is hard to give up his habit. That is why, I wish this plant to produce high quality cigarettes, thus, smokers will be harmed less.   

I appreciate the works done by the “European Tobacco” very high, and wish this company and its staff new successes in their activities.

“Azerbaijan” newspaper, February 2, 2000