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Date:06/02/14

Speech of minister Ali Abbasov at 17th Eurasian Economic Forum


Ministers, Excellencies, All Participants!

Let me first thank the Marmara Group and Chairman Suver for the invitation to this high-profiled summit organized with support of the government of Turkey and wish all the best to participants and organizers. I enjoyed joining the event last year and it is great to be back. Public figures, private sector executives, members of civil society are all here to discuss on how to strengthen economic, humanitarian and cultural relations between countries and people across the Eurasian region.    
 
It is my pleasure specifically to emphasize the role of the host country - Turkey in this development. Today, Turkey, with its booming economy and geopolitical weight, has turned into a regional power which perceived as a leading player of the region by many countries around. The country possesses up to date information and communications technologies (ICTs), including satellite, radio and TV broadcasting and expands its soft power throughout the region. 
 
The experience of the developed economies proved that ICT has a great impact on global prosperity. Today, the growth of ICTs is twice higher than the world’s overall economic growth and its revenues are at historic high with 4 trillion USD. ICTs can be seen as an important driving force for closer integration of the entire region.   
  
The Government of Azerbaijan pays a great importance to the development of ICTs. The main target of "Azerbaijan 2020: Development Concept" is to empower ICTs for doubling non-oil sector of country’s GDP in coming 8-10 years. ICTs sector has been envisioned as priority sphere of Azerbaijan’s development and 2013 has been announced as "ICT year" by the presidential decree.  Country’s telecommunication infrastructure has been revived and fully digitalized. Today, there are 70 internet users per 100 citizens, 50 percent of them enjoy broadband communications. Azerbaijan keeps a leading position in this index among the CIS and Central Asian countries. Mobile sector infrastructure is modern and provides 3G, and 4G services. The mobile penetration is 110 percent.  Digital TV coverage is around 98 percent of the population and we are about to complete digital switchover this year.  
 
To increase the efficiency of public administration and to provide transparency and inclusiveness, we have achieved very good results in e-governance making many online services available for public use.      
 
Development of innovative entrepreneurship, improvement of the legal framework, adoption of various assistance and incentive mechanisms, affordability of financial resources and venture capital financing, implementing and maintaining macroeconomic stability are those solid measures taken by the government. We also support start-ups and R&D groups aiming to stimulate the production of high tech and innovative services and goods. Newly established State ICT Fond and High Tech Park are serving to this purpose. The government thinks that with providing reasonable fiscal and monetary policy, Azerbaijan will straighten the competitiveness of local companies enabling them to participate in local and regional market’s ambitious projects along with foreign counterparts. To achieve this goal, favorable business environment and financial resources will be available via the State Fond. Additionally, highly qualified specialists and engineers, so necessary for innovative and technological development, are trained.   
 
Important measures are taken for creation of internet economy. It is well acknowledged that internet economy’s share is growing year by year. Based on the Boston Consulting Group report in 2010 in the European Union (E27) countries, 4.1 percent of GDP fall on internet economy.  In Great Britain 7.2 percent, in Sweden 6.6 percent and in China’s Hong Kong 5.9 percent of the GDP revenues did come of internet economy. Based on the estimation, in coming 4-5 years, the share of internet economy in developed countries on average will reach 16 percent while it will be 8 percent in developing countries.
 
However, in our region we don’t have such expectations. The main reason is obvious – lack of highly developed national and intraregional digital and broadband infrastructure. The government of Azerbaijan takes preemptive measures in this regard.  Together with the State Oil Fond, we have prepared a roadmap to roll out of vast broadband internet infrastructure with model "Fiber to Home" in urban and the rural areas of country in 2014-2016. By 2017, around 400-450 million euro will be allocated for this program.
 
Due to the high profitability of the project, 20-25 percent of the money will be provided via reinvesting. The main expectations from the program are following: by the end of 2016 to provide broadband access to services to 85% of the country’s population: 30 Mbit/s speed to rural settlements and 100 Mbit/s to cities; improvement of the competitive environment, expansion of broadband and Internet market, increase of investment opportunities and development of small, medium-sized enterprises (SME), and stimulation of start-ups; the project also should be transparent and for the project participants responsibility and accountability is a key requirement.
 
We pay special attention to public-private partnership (PPP) as well in the implementation of this project and consider the private sector as a key contributor to the project.
 
Because of its geographical location and economic potential the Eurasian region is in the spotlight today. In the classic sense, Eurasia means two great joint continents of Europe and Asia. However, we are talking about the region that is surrounded by South Caucasus, Central Asia, the Middle East and Eastern Europe. A region, rich with  natural resources and hydrocarbon reserves, which also has high scientific, technological potential and human resources has a potential to compete with the advanced countries of the world in all priority directions of the development.
 
When we look at the history, this region was considered as the center of trade routes and played an important role in economic development in a vast region. Everyone is aware of the historical significance of the Great Silk Road. It is not a coincidence that Azerbaijan supported the initiative and played a leading role in restoring the historic Silk Road since the first day of gaining its independence. Generally, Azerbaijan is known as the initiator of infrastructure projects in the region. Infrastructure projects such as Baku-Tbilisi-Ceyhan oil pipeline in energy sector, new Baku - Tbilisi - Kars railway, the Trans-Anatolian gas pipeline (TANAP), Trans-Adriatic Pipeline (TAP) are just some examples. "Shah Deniz-2" final investment documents signed these days with the initiative of H.E. Mr. Ilham Aliyev, the President of the Republic of Azerbaijan play a significant role for the development of countries covering a large region. As a continuation of these initiatives, we are actively working on building regional and international transit information highways and data centers that will serve the transnational ICT sector development.
 
Given that South Caucasus and Central Asia region is located between developed Western Europe and South-East Asia, we have started the implementation of project on construction of two large-scale fiber-optic highways. These initiatives are designed to connect Europe and Asia via shortest possible routes. One of the projects, Europe-Persian Express Gateway (EPEG) started operating since the last year. 10,000 kilometers in length and a capacity of 3.2 TB/s network has turned into a great example of regional cooperation.
 
Fortunately, with Azerbaijan’s initiative significant improvements can be witnessed in the implementation of the region’s new "Trans-Eurasian Information Super Highway" (TASIM) project. We hope that TASIM project, the transnational fiber-optic highway with expected total length of 11,000 km and an initial capacity of 2 TB/s will be covering Eurasian countries from Western Europe to the Pacific.
 
With Azerbaijan’s initiative, a resolution on the establishment of the "Eurasian Connectivity Alliance" (EuraCA) was unanimously adopted during the 67th Session of the UN General Assembly’s plenary meeting on September 4th, 2013. The establishment of the Eurasian Connectivity Alliance will have positive effect on the creation of open global information society, the spread of high-speed internet access and related services, the establishment of ICT related and knowledge-based industries, expansion and diversification of trade and economy in the region. We believe that the EuraCA will turn into a significant platform for the detection, constructive discussion and the solution of existing problems in the Eurasian region. The main objectives of the EuraCA are the provision of quality and cheap connection to the region, the regional content development, network infrastructure expansion and acceleration of TASIM project implementation process.
 
Using this opportunity, I would like to express my gratitude to all the countries for supporting TASIM project and the EuraCA proposal at the UN’s 64th and 67th sessions. Joint work of many countries and international organizations on TASIM and EuraCA is a striking example of cross-border cooperation between public and private institutions, in other words "Cross-Border PPP".
 
2013 was a very significant year for TASIM Project, so during 19th BakuTel international exhibition and conference in December in Baku a Memorandum of Understanding on the establishment of TASIM Consortium was signed between 5 regional operators - China’s "China Telecom", Kazakhstan’s  "KaztransKom", Russia’s "Rostelekom", Turkey’s "Turktelekom" and Azerbaijan’s "Aztelekom". We believe that all the financial, technical and other documentation works related to TASIM project will be finished by mid-2014. An initial TASIM Consortium Secretariat and office is currently funded by the government of Azerbaijan.
 
One of the factors which draw attention to the realization of the above-mentioned projects is an active involvement of the most of the Great Silk Road countries. In fact, in the beginning of the 21st century, we are witnessing the transformation of the ancient Silk Road into a Virtual Silk Road.
 
Development of the satellite infrastructure is also very important in the overall development of the region and is seen as a part of Virtual Silk Road. Currently satellites of Turkey, Russia, Kazakhstan and the Arab countries operate in a wide region. As you know, "Azerspace-1" telecommunications satellite was launched into orbit and started its commercial activities since July of 2013. A large number of television and radio channel (mostly foreign) broadcasting, and various communication channels are carried out by the satellite. Primary and backup satellite ground control centers were established and are operated. Observation satellite and second telecommunications satellite are to be launched respectively by 2016 and 2017.
 
Establishment of network infrastructure and information highways across countries combine the strengths and capabilities on ICT development in the region and plays a special role in the solution of socio-economic problems, including poverty, illiteracy, unemployment and other social misfortunes.
 
Dear Participants!
 
International and regional cooperation is a great importance in a globalized world. We believe that this kind of events create new opportunities for solving the problems common to all of us. We also believe that this important summit on economic cooperation in the Eurasian region will be a great contribution to the expansion of the new cooperation and finding solutions for sustainable development. Once again, I wish success to the summit.
 
Thank you for your attention!



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