AZERBAIJAN AM005-X 1 EBRD BOARD of GOVERNORS’ 30th Annual Meeting July 1, 2021 Written Statement by Mr. Mikayil Jabbarov, Minister of Economy, EBRD Governor for the Republic of Azerbaijan Your Excellency Mr. Chairman, Honourable Ms. President, Fellow Governors, Distinguished Guests, Ladies and Gentlemen, I would like to sincerely thank the European Bank for Reconstruction and Development (EBRD) for the organization of the virtual 30th Annual Meeting of the Board of Governors of the Bank. Let me take this opportunity to congratulate the EBRD on its 30th anniversary and call your attention to another anniversary, later this year. Republic of Azerbaijan marks 30 years since the country gained its independence after collapse of the Soviet Union. Our success in transition towards a market economy is also the EBRD’s success as we have strong and lasting partnership over 29 years. The EBRD has so far invested 3.1 billion EUR through 177 projects in the country. The value of the current portfolio of projects supported by the EBRD in Azerbaijan is more than 1.15 billion EUR. In Azerbaijan, the EBRD helps small and medium-sized businesses grow and succeed through its network of experts. It provides business advice to local small and medium-sized enterprises and has helped more than 1,000 firms to improve their performance and growth. Furthermore, we are currently exploring the prospects of cooperation for the development of trade, SMEs and SOEs. We believe that the Memorandum of Understanding on cooperation between Entrepreneurship Development Fund under the Ministry of Economy and EBRD soon to be signed attests to our mutual intent and commitment towards reinforcing our collaboration. Dear All, We live in challenging times. Over the last year and a half, we have witnessed how the pandemic has affected our societies, our economies. Introduction of vaccines is the seeming light at the end of the COVID-19 tunnel, but the extent of the crisis and its AM005-X 2 implications are likely to be long-term. In this regard, the key to economic recovery and “building back better” is multilateral cooperation and global solidarity. The Government of Azerbaijan promptly took coordinated and effective measures to mitigate the negative impact of COVID-19 and maintain socioeconomic stability. In comparison to the same period in 2020, during January-May of 2021, Real GDP grew by 0.8 percent and GDP per capita grew by 0.3 percent. The value added in the oil and gas sectors in January-May 2021 was decreased by 6.7 percent. In the non-oil and gas sector this number was increased by 4.5 percent. The Government issued the Action Plan to minimize the impact of the pandemic, to strengthen social protection of the population, to protect human health and vulnerable sections of society, to provide financial support to affected entrepreneurs and employees. The Government also established the Task Force, consisting of senior officials from the relevant state authorities to coordinate the measures to prevent the spread of coronavirus. In order to facilitate the rapid response during pandemic, one permanent and 13 modular hospitals were built within the short period of time, and local production of face masks, disposable protective clothing, disinfectants, sanitizers and etc. was launched swiftly. Furthermore, the dedicated Coronavirus Response Fund was set up in order to provide financial assistance to the country’s response. Around 12 million US dollars were allocated to the Fund from the President`s Contingency Fund. The Government launched relief package worth of over 2 billion USD, businesses affected by the pandemic benefited from significant tax incentives and tax holidays. Other business support measures included granting state loan guarantee to entrepreneurs operating in the sectors affected by the pandemic, subsidization of loan interest rates and ensuring better access to finance by allocating additional funding to the Entrepreneurship Development Fund. The support program is not only an anti-crisis measure, but also a program of economic expansion credit expansion, and stimulation of aggregate demand. This wide-range support package adopted by the Government serves sustainable development goals, including the preservation of social balance and economic development in the post-pandemic period Furthermore, we provided direct financial support to individual entrepreneurs, implemented temporary exemptions from taxes, insurance, and customs payments, partial payment of salaries to employees, financial support to essential passenger transportation system, state guarantees and subsidizing interest rates on bank loans to businesses, subsidized interest rate on existing bank loans without state guarantees, salary increase for the medical staff and state support measures and promotion of private investments in the areas identified as the main priorities of the AM005-X 3 state's economic policy in mid-term period. As a result of these measures, the number of daily cases has been decreased and the quarantine regime has been gradually softened. Azerbaijan has reaffirmed its global solidarity by making a voluntary financial contribution of 10 million USD to the World Health Organization, and has provided humanitarian assistance to more than 30 countries. Our country has started vaccination campaign since the beginning of this year. We have already used 2.25 million doses of vaccines, including over 1 million people (10.4% of population) fully vaccinated. 99.94% of those 2 million doses of vaccines are “Sinovac” and the rest are “AstraZeneca”, “Pfizer” and “Sputnik”. Vaccination for citizens over the age of 18 is on voluntary basis and vaccinated people are entitled to COVID-19 passports. Also, I would like to highlight invaluable support and assistance provided by many Multilateral Development Banks (MDBs), including EBRD, in designing measures to cope with the immediate disruption of the coronavirus crisis. The EBRD continued to be a strong and reliable partner to the countries. The Bank helped its members not only to protect the economy, but promote further development through building back better, ensuring greener economies, improving the essential infrastructure, supporting small businesses and providing advisory services. It is worth mentioning that the Bank was the first international financial institution to approve the comprehensive series of response and recovery measures included in the Solidarity Package and now the Bank is involved in the preparation for the post-pandemic era. Azerbaijan has already prioritized its post-pandemic future. In the beginning of this year the President of the Republic of Azerbaijan approved the National Priorities for Socio- Economic Development of our country for the next decade. This document sets out 5 national priorities to be achieved in the next ten years. The mentioned below priorities are of utmost importance for achieving sustainable, resilient recovery and long-term growth after COVID-19 pandemic and they have mapped the country's development vector for the subsequent decade. The priorities are in line with the goals and priorities set in the EBRD’s “Strategic and Capital Framework 2021-2025”, which creates potential for new areas of cooperation between the EBRD and Azerbaijan. Those priorities are: 1. Steadily growing, competitive economy; 2. Dynamic, inclusive society based on social justice; 3. Areas of modern innovations and competitive human capital; 4. The great return to the territories liberated from occupation: As you know, last year Azerbaijan put an end to nearly 30-year- occupation of almost 20% of its territories by Armenia. We finally managed to sign an agreement which AM005-X 4 stipulates the unconditional withdrawal of Armenian troops from the occupied territories and return of all IDPs to the Karabakh region of Azerbaijan. Nevertheless revanchist rhetoric against Azerbaijan in Armenia is a matter of serious concern. Unfortunately, amid signing this agreement Armenia tried to violate the ceasefire several times. We have also spotted members of Armenian reconnaissance-sabotage group that infiltrated into Azerbaijan’s territories to plant mines. Azerbaijan has obtained maps showing locations of 97,000 mines in Agdam only. Many Azerbaijanis, including civilians and just recently two journalists have died as a result of mine explosions in the liberated areas. We also have to stress that “Protocol II” of the Convention on Certain Conventional Weapons, which is an annex to the Geneva Convention prohibits the use of landmines, booby traps and other explosive devices. Breaking these rules is considered a war crime under the Geneva Convention. Using mines to cause unnecessary suffering or superfluous injury is illegal; directing these weapons against civilians or civilian objects is also illegitimate as is using these weapons indiscriminately. At the critical juncture of new openings for entire region, it is of vital importance to finally realize that repeating the mistakes of the past has no chance to bring a different outcome. Building a peaceful and prosperous future is simply impossible at the expense of legitimate rights of others and attacking their borders either verbally or physically. Now, as a result of the liberation of the occupied territories and in line with new realities, we have to ensure a sustainable resettlement and reintegration of the region into the national economy for further development of the region to the level it had before the occupation . It will not be only the beginning of