The socio-economic development of the Nakhchivan Autonomous Republic in the years of independence is characterized as a time of great development and progress - the path leading from the renaissance to the development of the Nakhchivan’s economy model. On the one hand, the loyalty to the path of the political and theoretical heritage of Heydar Aliyev and the correct methods of management on the other hand underlie the activities on improvement and development undertaken in the Autonomous Republic in these years, as well as changes in the economy, cultural life and well-being of people.
As a result of the improvement activities undertaken in 1995-2017 and the progress achieved in the economic and social spheres, the Nakhchivan Autonomous Republic has developed into the most advanced and developed region of Azerbaijan. The purposeful policy implemented since 1995 and aimed at development of the main sectors of economy of the Autonomous Republic, including industry, construction, agriculture, transport and communications, boosted the growth of production and improved the living standards of people.
The growth of industrial production from year to year is one of the conditions to ensure economic security of the Autonomous Republic. The commissioning of new production firms, along with the recovery of operation of the existing manufacturing companies enabled to increase the scope of the industrial output. As a result of the successful implementation of large-scale industrial reforms in 1995-2017, 386 new industrial companies started to work in the Autonomous Republic. If in the early 1990s there were 56 industrial companies in the Autonomous Republic, in 2017 the number of such companies grew 7.9 times to reach 442 companies.
Creation of new industrial companies contributed notably to the increase in the varieties of new manufactured goods and at the same time boosted the number of employees engaged in this sector. So, if in the 90s of the last century 2,020 employees were engaged at the industrial companies of the Autonomous Republic, in 2017 this indicator grew 7.8 times and exceeded 16,000.
One of the sectors with a high level of the average monthly salary in the Autonomous Republic is industry. At present the average salary in the industrial sector is over 375 manats, up 37 times compared to the respective indicator in 1995.
Creation of companies that produce import-substituting and export-oriented goods with the effective use of local feedstock is already yielding results. Established for this purpose Gamiqaya Holding Group of Companies, CAHAN Holding commercial alliance of companies, Design Holding commercial alliance of companies and dozens of their subsidiaries, as well as such limited liability companies as Lezzet Food Industry LLC , Araz-3 LLC, Nakhchivan Salt Production LLC, Lezzet Biscuit & Chocolate Factory LLC and Babek Sirab OJSC, Nakhchivan Automobile Plant are the companies making a significant contribution to the industrial potential of our Autonomous Republic. In 2017, 60 production and service companies having the modern production equipment started working with the help of the state financial assistance and private investments.
The expanded scope of production activity in the industrial sector also had a positive impact on the volume of exports. Industrial products worth over $320 million were exported in 2017.
The proper implementation of the first and second Government endorsed programs for social and economic development of the Nakhchivan Autonomous Republic in 2014-2018 and for the development of fruit and vegetable growing in the Nakhchivan Autonomous Republic also contributed notably to achieving these successes. The implementation of these programs opened up the ample possibilities to expand the volume of local production in the Autonomous Republic and supply people with quality food products. As a result, all possibilities have been currently created in the Autonomous Republic to produce 125 types and 568 variations of food products, as well as 247 types and 845 variations of non-food products. The demand for 344 types of goods, including 108 food products and 236 non-food products are fully met by local production.
Creation of industrial parks with a modern production infrastructure is the important part of the state policy, which envisages the development of industry. The provisions on industrial parks approved with an eye to continue the economic policy and ensure modernization of the industry will open up new opportunities for development of this industry at a faster pace.
Therefore, the main objectives of the reforms implemented in the industrial sector of the Autonomous Republic in these years were to recover and reorganize operation of the existing industrial companies, to produce industrial goods meeting the world standards, to ensure a sustainable and consistent development of the industry. Serious preconditions have been created for the Nakhchivan Autonomous Republic, which historically had been formed as an agrarian region, to develop into an agrarian-industrial region.
Agriculture has always had the leading positions in the economy of the Nakhchivan Autonomous Republic. The consistent implementation of the agrarian reforms, the basis of which was laid by the National Leader Heydar Aliyev, and the structural changes in agriculture have created strong preconditions for the development of the agricultural sector.
In recent years, the construction of modern melioration and irrigation systems in the Autonomous Republic, the provision of state support for the development of fruit growing and vegetable growing, the creation of an extensive network of refrigeration facilities and greenhouses, the implementation of complex measures for livestock development, and special attention to bee-keeping, which is a highly profitable industry, have yielded results. As a result of works done in the agricultural sector, 254 livestock farms, 84 poultry farms, 15 fish farms, 104 bee-keeping farms, 65 horticultural farms, 8 vineyards and 31 refrigeration barns with the total capacity of 14,000 tonnes, 21 greenhouse complexes with the total area of 128,162 square meters were created in the Autonomous Republic thanks to the loans extended on preferential terms. The capacity of long-term grain storage facilities was brought to 27,000 tonnes, the capacity of short-term grain storage facilities was increased to 43,380 tonnes, and the number of grain processing companies reached 19.
Over the past period, 714 production and service companies of agricultural destination were created in the districts and villages with an eye towards efficient using of local resources in the districts of the Autonomous Republic, and increasing the level of employment.
At the same time favourable conditions were created for family farms to enable their development, since they are playing a special role in food supply. Last year 13 family farms received the government financial assistance worth 243,000 manats. Also, Nakhchivan Products Limited Liability Company purchased products from 386 family farms and sold them in an effort to encourage the business activity of family farms. All these steps also open up wide opportunities to enable family farms to develop, to supply the domestic market with high-quality local products and to export manufactured products.
Given the important role of family farms in the development of the agricultural sector, the Family Farm Products festival was held for the first time in the Autonomous Republic in 2017. The festival enabled to sell different types of packaged products, thus giving a good stimulus to the activity of home products manufacturers. Along with all these measures, the improvement of products, on a scientific basis and in an industrial way, manufactured by family farms, supplying family farms with packing materials for packaging products, provision them with containers according to the profile of their production activities brightly testify to the support provided to these farms.
Encouraging free entrepreneurship and supporting creativity are the main conditions of the market economy. The state aid provided to entrepreneurship activities attracts attention mainly due to the internal possibilities and priorities of the socio-economic development of the Nakhchivan Autonomous Republic. Therefore, the measures taken to encourage investments in the economy of the Autonomous Republic, revitalization of activities of the traditional industries have produced their results in a very short time.
The Nakhchivan Autonomous Republic already ranks first among other economic districts of our country in terms of its investment attractiveness, and this became possible as a result of supporting business activities and providing a real credit support to entrepreneurs. To this end, a total of 1,978,000 manats were allocated as loans through the National Fund for Entrepreneurship Support in 2017 to support 25 projects and thus back the development of the industrial, agricultural and service sectors. Since 2000 the Fund has allocated funds totaling more than 136,182,000 manats to finance 1,244 projects.
At present the interest rates applied to loans in the Autonomous Republic are at the lowest level and this fact has revitalized the credit market. In this regard, it stands to mention 4-8 percent long-term loans disbursed from the funds of the Nakhchivan Mortgage Fund OJSC in the framework of the lending activities undertaken in the Autonomous Republic. So, these loans, along with improved housing provision of the population, also serve to develop the real sector.
The implemented complex reforms give grounds to assert that the development of small and medium-sized businesses has developed into a priority area of the economic policy. Today, the activities of thousands of business entities in the Autonomous Republic, the opening of tens of thousands of jobs in the private sector, the creation of favourable conditions for foreign businessmen, the increase in the share of the private sector in GDP to more than 87 percent are the real results of this policy.
Privatization of state property, which is one of the main directions in the development of entrepreneurship, is of great importance. As a result of the successful implementation of the State Programs on Privatization of State Property in the Nakhchivan Autonomous Republic, state-owned companies and facilities were transferred to private ownership, state companies became joint-stock companies, new production and service industries were created or the activity of the existing real sectors was restored, protection and effective use of state property was kept under constant control. As a result of these works, 4,122 firms and objects, as well as state-owned vehicles were transferred to private ownership.
The measures taken to encourage investments and exports as one of the most important areas of the economic reforms implemented in recent years have created preconditions for expanding the entrepreneurial activity in the Autonomous Republic, improving the investment and business environment, and stimulating activities in this area. So, in 2017, a document was issued proving the encouragement of investments in one project, and in 8 cases expenditures were covered to promote exports.
Export-oriented goods of the food, construction, furniture and light industries produced in the Autonomous Republic are exported to such countries as Turkey, Russia, Latvia, Ukraine, Kazakhstan, China, Georgia, the United Arab Emirates, Iran and Iraq.
Decisions made regarding systematic state support to entrepreneurship and export incentives have created conditions to expand opportunities for export and promotion of products manufactured in the Autonomous Republic on the foreign markets. Foreign trade surplus was for the first time registered in 2009. In comparison with 1995, in 2017 the foreign trade turnover grew 24.2 times, and exports grew 218.5 times. Last year the foreign trade surplus exceeded $386,751,000.
One of the measures strengthening the export potential of Nakhchivan was the decision taken by the Government of the Republic of Turkey in October 2017. According to the decision, the provision of free trade opportunities for export of industrial and agricultural products manufactured in the Nakhchivan Autonomous Republic to Turkey, along with the expansion of economic cooperation between the two countries will also encourage a trade turnover and promote development of domestic production. The increasingly growing rates and diversification of the foreign trade turnover have occurred against the backdrop of the dynamic socio-economic development of the Autonomous Republic, promotion of locally manufactured products to the markets of neighbouring and faraway countries, and promotion of independent economy. The trade relations with more than 50 foreign countries were established over the past year.
Some achievements in various fields, aimed at improving the investment environment and further expanding of business ties, were registered over the past years. Over 90 foreign firms and joint ventures do work now in the Autonomous Republic as a result of creating a favorable investment environment.
Control over the quality of food products holds a prominent place among the measures implemented in the field of ensuring food security and free access to foreign markets for products manufactured in the Autonomous Republic. To that end, modern laboratories with the physical infrastructure and high-level human resources have been created. In order to improve the quality control system, the Central Food Testing Laboratory under the Consumer Goods Expertise Center LLC underwent the International Accreditation. Conditions were created for the unhindered access to foreign markets for food and non-food products holding the certificates of quality and origin issued by the Expertise Center. During this period of time the Expertise Center underwent audits by the international accreditation organization, and the accreditation period was extended until 2023.
According to observations, the investment into the economy of the Nakhchivan Autonomous Republic surrounded by the constant care of the Head of State is increasingly growing at a steady pace. In 1995 the volume of investment in the economy of the Autonomous Republic comprised 3,049,000 manats, while over the past period this figure increased 329.9 times to reach 1,005,761,000 manats. In total, the investment in the economy of the Autonomous Republic in recent years has exceeded 8 billion manats.
During this period of time the attention was focused on efficient governance and development of outlying localities - villages and settlements. In recent years 151 settlements and a rural center were built and populated. Important measures were taken to restore and develop the infrastructure in the Autonomous Republic, to improve the provision of public services, including electricity, gas and water, to construct health, educational, cultural and sports facilities, and to continue improvement of the social status of people. Large state investments were made in these areas.
Boosting the trends of a dynamic growth in the social and economic sphere, along with the prioritised development of material production, largely depends on updating the infrastructure and applying modern standards in this area. More than 12,000 infrastructure facilities have been built and commissioned in the Autonomous Republic in recent years. For now, administrative buildings, as well as scientific, educational, medical, cultural and sports facilities have been completely reconstructed in our Autonomous Republic.
Large-scale activities have been also undertaken in the power sector. New production sectors were created, the infrastructure was upgraded, and energy security was ensured. Previously there was only one power generation company in the Autonomous Republic. As a result of the targeted reforms implemented in this area in the past period, the number of power generation companies was brought to 8, and their total capacity reached 239.4 megawatts (MW).
In connection with the restored gas supply after a long break, consistent and purposeful measures have been taken to construct gas pipelines. As a result of the repeated reconstruction of the gas infrastructure in the Autonomous Republic, the gas supply to the population and economic entities is 100 percent complete.
The development of the road transport infrastructure is of great importance in the Autonomous Republic. Construction of new roads, bus terminals with modern service capabilities, commissioning of comfortable large-capacity buses on intercity and inter-settlement routes have improved the level of service. Over the past period the modern Bus Park was put into operation in the city of Nakhchivan. Also, relevant measures were performed to enable transportation along the Baku-Nakhchivan-Baku route and improve the quality of services for passenger transportation to the neighbouring countries and back.
A new air-terminal complex was built and put into operation with the aim of developing air transport in the Autonomous Republic. The Nakhchivan Airport received the status of an international airport. Over the past period a new administrative building, the Eastern and Western terminals were commissioned at the Nakhchivan International Airport with an eye towards further improving the quality of services rendered to the population and ensuring full safety of aircraft operations. The Car and Spare Parts Sales Center and the underground garage were built in Nakhchivan. In addition, the international passenger train along the Nakhchivan-Tabriz-Tehran-Mashhad route is now in operation. The necessary measures were implemented in the area of connecting the Baku-Tbilisi-Kars and Nakhchivan-Julfa-Tabriz railroads.
The undertaken measures secured a growth of freight and passenger traffic, which are the key indicators of the transport sector. 16,323 tonnes of cargo were transported within the transport sector in 2017, up 25.8 times compared to the figure in 1995.
Reconstruction of the drinking water and sewerage systems was performed as an integral part of the measures taken in the field of improvement of the public utility systems serving to increase the comfort and standard of living of people.
The improved social welfare of the residents of the Autonomous Republic made it necessary to build modern and comfortable residential complexes, shopping centers. The newly built residential complexes and shopping centers, along with ensuring the comfort of people, are also important in terms of opening new jobs.
Consistent measures are currently underway to promote an increase in the tourist potential of the Autonomous Republic, to construct a modern infrastructure in this area and to develop various types of tourism. As a result of the measures taken, a total of more than 410,000 tourists from foreign countries and other regions of our republic visited the Autonomous Republic in 2017. This is 10 times up compared to the figure for 1995. Attracting local and foreign investment in the tourism sector, further improvement of the quality of services, hosting international sporting and cultural events have given an additional impetus to the development of the tourism industry.
The achieved pace of development of all economic sectors in the Nakhchivan Autonomous Republic is the result of the far-sighted development strategy. This is ultimately changing the appearance of the cities and villages of the Autonomous Republic. At present, every citizen of the Autonomous Republic feels in everyday life the real fruits of the improvement work, social and economic development and sustainable growth. All this has become possible owing to the loyalty to the political line of our National Leader Heydar Aliyev.
Ministry of Economy of the Nakhchivan Autonomous Republic
