Opening the scheduled plenary session sitting of the Milli Majlis on 24 December, Speaker Sahiba Gafarova welcomed the attending Prime Minister and other governmental officials before announcing that today is the birthday of the President of the Azerbaijan Republic Mr Ilham Aliyev.

The esteemed President Ilham Aliyev won the deepest lov and sincere respect of our nation through his pivotal deeds carried into life for the sake of today and tomorrow. In his work, he invariably puts the interests of the citizens above all, serves the nation with distinction and is himself the best example of serving a nation. Led by President Ilham Aliyev, Azerbaijan has become a powerful state that is developing dynamically and commands a high international reputation. The bright tomorrow of our country rests upon the creation and development strategy that he pursues invariably today. The well-respected President and Commander-in-Chief Ilham Aliyev has become the architect of our Glorious Victory in the Patriotic War thanks to his brilliant mind, high leadership quality, courage, unwavering stance and a true military commander’s skills. We can safely say that Azerbaijan will continue the dynamic progress and will revive the de-occupied lands with the guidance from our venerable President in the years to come. Every corner of our Motherland will flourish.

Madame Speaker wished our dear President a very happy birthday on behalf of the whole Parliament. She wished him further successes in his tremendously valuable endeavours.

Then, Madame Speaker mentioned the 13 items on the agenda of the sitting, adding that the other documents included in the parcel of budgetary bills would be discussed today and tomorrow. The first 9 items on the agenda are the documents of the Budgetary Parcel that are coming up for the first reading.

Whilst talking about the first agenda item, to wit, the (first reading) Bill ‘On the 2021 State Budget of the Azerbaijan Republic’, Mrs Gafarova mentioned the exceptionally important stage in Azerbaijan’s history that the outgoing year 2020 had marked.

‘As I said a while earlier, the military and political victory over Armenia gained under the leadership of President and Commander-in-Chief of the Armed Forces of the Azerbaijan Republic Ilham Aliyev ended the Armenian-Azerbaijani conflict over Highland Garabagh. The reconquest of our lands from the occupation having lasted for almost thirty years and the restored territorial integrity of the country created new development opportunities and not only for Azerbaijan but for the whole of the South Caucasus.

‘The impact of the coronavirus pandemic on the economic life in the country had been another highlight of the passing year. The steps taken by the Administration of the country had made it possible to set the highest possible standards in countering the disease spread by the new virus alongside averting an economic crisis and keeping up the economic stability in the country.

‘Definitely, the new reality of the country and the new challenges could not but have borne in the composition of the 2021 Budget. The documents in the Budgetary Parcel tabled in the Milli Majlis today, too, fully reflect those changes that have occurred in the life of the country.’

According to Madame Chair, there will be exhaustive information about the technical features of the State Budget. She remarked then that the priorities of the 2021 State Budget were strengthening the social protection and national security, eliminating the aftermath of the war, clean-sheet restoration and arrangements in the freed provinces and combatting the COVID-19 pandemic.

It is planned to release AZN 2.2 bn from the next-year State Budget towards the costs of either restoring or building from scratch towns and villages as well as creating modern infrastructure in the de-occupied provinces to ensure the Great Return of the native population to there.

The State will continue concentrating next year on improving the financial and social situation of the servicemen and shahid families, meeting their essential needs and covering their household, medical and other social costs.

Mrs Gafarova went further to say that the 2021 State Budget Bill and the Bills in the Budgetary Parcel had been discussed profoundly at yesterday’s meetings of the parliamentary committees; the comments had recommended that the papers should be tabled at a plenary sitting of the Milli Majlis. Besides, the Chamber of Accounts had issued a favourable opinion statement about the Parcel. Madame Chair expressed a confidence that efficient and valuable offers would be heard during the forthcoming deliberations.

It was Chairman of the Milli Majlis Committee for Economic Policy, Industries and Enterprising Tahir Mirkishili who provided the first-reading brief upon the 2021 State Budget Bill of the Azerbaijan Republic. He mentioned the substantive discussion of all the Bills at the meeting of his Committee with the involvement of governmental officials and representatives of the relevant authorities. That meeting was broadcast live as instructed by the Chair of the Milli Majlis so that all the MPs could take part in it. That, in turn, made it possible to lay down and clarify thoroughly the Bills included in the Budgetary Parcel with the virtual involvement of all the parties concerned.

Mr Mirkishili proceeded to say that the restoration of Azerbaijan’s territorial integrity under the guidance of the venerable President and Commander-in-Chief Ilham Aliyev set in motion a new epoch in the national history. Meanwhile, the Azerbaijani Parliament is now busy preparing to pass the first budget of the state that prevailed in the Patriotic War.

According to the Committee Chairman, improvement of the budgetary mechanisms, the higher spending items, the creation and implementation of large-scale economic and social assistance packages that accompanied the adjustment of the 2020 State Budget as well as the economy having adequate resources and that all those were under the unfailing supervision of the Head of State guarded the national economy against harsh shocks.

The order of the President of the Azerbaijan Republic dated 19 March 2020 envisages the composition of a AZN 3.5-bn support package mobilising the State Budget, the state funds and other financing sources and devised to cover as many as 3 million people. The coverage is much larger than before thanks to the economic and social assistance programmes carried into life purposefully and tenaciously.

Given the summary of M1120, the GDP and the non-oil sector shrank by 4.3% and 2.9% respectively during those eleven months, which is effectively exactly what the Ministry of Economy had indicated in its forecast put to the Milli Majlis in August 2020. And yet, the non-oil industrial sector, the agriculture and the sector of communication and information technologies had the corresponding growths by 11.4%, 2% and 1.6% in the same period. Besides, the State Budget revenues exceeded the period forecasts - including the tax collections forecast. All that spells the endurance of the national economy. It is a fact that Azerbaijan had - for all the difficulties it had to go through - macroeconomic stability, the 2.8% inflation and a stable rate of exchange of the manat. The whole stabilisation had been achieved thanks to the targeted reforms implemented by the president of the Azerbaijan Republic.

Mr Mirkishili went further to mention that the World Bank made public last week the findings of the Doing Business 2020 report research. Accordingly, Azerbaijan had risen by six tiers to the 28^th position amongst the 191 countries studied. In addition, the World Bank had put Azerbaijan in the top ten of the most reform-implementing countries.

To sum up, the economic stability maintained throughout 2020 makes it possible to switch to an economic growth stage in 2021. It follows from the economic forecasts to hand that the GDP of Azerbaijan should rise by 3.4% with the non-oil GDP set to ascend to 70.5% of the total GDP next year. The annual inflation is forecast to make 3.0% while the national currency rate of exchange should stay stable. There are substantial stimulating activities in stock for next year to increase the private sector’s share of the aggregate anticipated economic growth and in the state budget revenues alike.

The planned excess of the 2021 State Budget revenues of this year’s adjusted counterpart by AZN 1,303 bn with the 2021 total set to reach AZN 25,427 bn is considered an acceptable scenario. Importantly, this growth will be attained with reliance on non-oil revenues whilst new instruments will be put to use, too. It is as important, in Mr Mirkishili’s opinion, that the annual incoming transfer from the State Oil Fund is to remain unchanged next year but be reduced in the next 3 years afterwards. That the planned non-oil sector collections are to rise by 3.8% to 45.8% of the total projected revenues will be one of the factors adding to the stability of the budget. This figure has thus grown from 26% to 45.8% over the past decade. Further still, the share of the non-oil sector in the collections by the Tax Service is anticipated at 78% of the 2021 total in continuation of the on-going growth from 50% ten years ago.

Next, the Committee Chairman pointed out that the US$40/1 barrel price of crude oil underpinning the budgetary estimations and projections as matching the pertaining analytical conclusions. International organisations are suggesting that the average annual price per 1 barrel will hover at US$ 41-43 next year. At the same time, the forthcoming vaccination is bound to bring about a resumption of economic activity starting in Q220; the related forecasts imply that the price of crude oil will rise by a further 15% thanks to that. The base price of the 2021 State Budget is US$40 per 1 barrel specifically in view of such suppositions.

Regarding the 2021 State Budget expenditures, they will be AZN 1 billion 50 million above the adjusted 2020 spending plan, and should amount to AZN 28 billion 543 million ultimately.

Minister of Finance Samir Sharifov remarked as he was talking about the 2021 State Budget of the Azerbaijan Republic Bill that the expiring year 2020 would remain a unique one in the national history because it was during this year that the Armenian military aggression was terminated by the Army of Azerbaijan. Restoring the liberated territories is the topmost of the tasks in the list for now, according to the Minister who recalled the intended allocation of AZN 2.2 billion from the 2021 State Budget for this particular purpose.

The Minister then mentioned the plan to release AZN 4 billion from the next-year State Budget towards the costs of improvement of the logistical base of our Army. It is also planned to spend on restoring the borders and de-mining certain territories of the country. Both the 2021 State Budget Bill and the Consolidated Budget Bill for the next three years are composed in compliance with the Budgetary System Law. The chief emphasis is firmly on promoting development of the non-oil sector; this is the goal set by the President of the country. The plans and projections take into account the expectations of the changes due next year and their influence on the economy of Azerbaijan, the macroeconomic realia of the coming year and the anticipated transition to the next stage of national economic growth. The Government will focus its efforts on restoring economic activities.

The price of crude oil, again, is set at US$40 per 1 barrel in the 2021 State Budget; the US$ is to buy AZN 1.7 next year. The next-year State Budget’s expenditures are projected to add up to AZN 28 billion 543 million, which is going to be AZN 1 billion 51 million or 3.8% up on the current-year counterpart. The defence and national security, social protection and provisions, education, agriculture and environmental protection expenses are to rise by 20.5%. 14.1%, 8%. 5.1% and 0.8% respectively compared with the corresponding spending items of this year.

Then spoke Minister of Economy Mikayil Jabbarov who brought up the continued strengthening of the macroeconomic stability despite all the difficulties during 2020. The national economy has become smaller but it has also demonstrated high endurance and this is especially true of its non-oil sector. Restoring the de-occupied lands, taking the native population back there and ensuring their employment are the paramount tasks, Mr Jabbarov said.

The stringent quarantine imposed this year did not go without having a certain impact on the national economy. For example, there was a slump in fixed-capital investments. On the other hand, the investments put in the private sector rose by 8% though the state organisations had a reduction in their investments. The Government took the most serious steps to mitigate the pandemic’s impact on the economy; consequently, the Government was able to slow the economic recession somewhat. As much as AZN 6.8 bn was collected in taxes for the State Budget in January-November this year.

The increase in the non-oil collections was brought about by the taxation system having encompassed the employee salaries paid in the sector, amongst other things. This has also made the shadow economy smaller, by the way. As many as 84,800 people have been employed on the contractual basis in both the non-oil and private sectors since the beginning of 2020.

Chairman of the Management Board of the Central Bank Elman Rustamov briefed the participants of the meeting of the monetary and credit policy of the country. He mentioned a large-scale strategy of financial stability maintenance prepared for next year, noting that the same strategy would deal with supporting the financial sector, making the insurance service and securities markets stronger and addressing associated problems along the way. Mr Rustamov emphasised that stability would also be underpinned by the new approach to the deposit insurance. The 2021 State Budget’s projections are made against the background of the ambiguities as to global economic activity. Using all the available resources efficiently should secure remarkable results in terms of economic growth and better public welfare.

The strategic foreign exchange reserves of the country have remained steady while those of the Central Bank have grown by more than 3% this year, Mr Rustamov mentioned. The monetary condition grew by 54% during 2018-2020; four banks were retired from the banking system of the country as a result of the sanation undertaken to put the system back on a sound footing.

The next speaker, who was Chairman of the Chamber of Accounts Vugar Gulmammadov, pointed out that the 2021 State Budget would be the first one to apply also to the previously-occupied territories of the country. The documents drawn up and introduced together with the 2021 State Budget Bill conform to the requirements of the Budgetary System Law and provide for the transparency of the whole Budgetary Parcel, Mr Gulmammadov noted before offering his own suggestions regarding individual spending items and telling the assembly of the favourable opinion statement that the Chamber had already made on the Bill.

That was followed by the deliberations during which MPs praised the State Budget Bill and made their remarks and proposals regarding it. The speakers were the MPs Zahid Oruj, Ali Masimli, Fazayil Agamali, Aydin Mirzazade, Elman Nasirov, Elshan Musayev, Azer Badamov, Bakhtiyar ALiyev, Musa Gasimli, Ahliman Amiraslanov, Ganira Pashayeva, Samad Seyidov, Shahin Ismaylov, Sabina Khasayeva, Tahir Rzayev, Mahir Abbaszade and Sahib Aliyev.

Next, Chair of the Milli Majlis Sahiba Gafarova announced that the deliberations on the State Budget Bill would be continued tomorrow.

The draft amendments to the Law ‘On Political Parties’ was tabled for the first reading then.

Deputy Chair of the Milli Majlis and Chairman of the parliamentary Committee for Public Associations and Religious Entities Fazayil Ibrahimli who briefed the MPs on the essence of the draft amendments told them that it was proposed to add Article 17-1 ‘On Allocation of Funds from the State Budget to Political Parties’.

Funds for political parties are released from the annual state budgets. It is stipulated in the current edition of the law in question that 10 per cent of the allocations from the State Budget shall be distributed on a pro-rata basis amongst those political parties that have won at least 3 per cent of confirmed votes but are unrepresented in the Milli Majlis. The amendments envisage a reduction of that amount from 10 to 5 per cent To clear out certain omissions in this; the balance 5 per cent would be allocated to new parliamentary parties in accordance with the party associations of those MPs that would win repeated elections and by-elections.

The MPs Malahat Ibrahimghizi, Siyavush Novruzov, Fazil Mustafa, Razi Nurullayev, Sabir Rustamkhanli and Tahir Karimli commented on the Bill before it was put on vote and approved in the first reading.

The draft amendments to the Law ‘On the Orders and Medals of the Azerbaijan Republic’ was considered in the second reading towards the end of the plenary sitting. The amendments have to do with the institution of the jubilee medal of the Azerbaijan Republic ‘The 15^th Anniversary (2005-2020) of the Ministry of Emergencies of the Azerbaijan Republic’.

First Deputy Chair of the Milli Majlis and Chairman of the parliamentary Committee for Law Policy and State-Building Ali Huseynli said as he was briefing the assembled on the Bill that the personnel of the Ministry of Emergencies discharged their duties in a suitable manner during the martial law period as well as afterwards. The ministry had not been established with fine foresight for nothing. As regards the new medal, it will be a good addition to the existing orders and medals of Azerbaijan, Mr Huseynli said.

The Bill was put on vote and approved in the second reading.

With that, the sitting of the Milli Majlis was over.

The deliberations upon the Budget will continue tomorrow.

The Press and Public Relations Department
The Milli Majlis