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On February 11, a meeting dedicated to the unified action plan on “Azerbaijan's New Digital Architecture” was held under the chairmanship of President of the Republic of Azerbaijan Ilham Aliyev.
The head of state addressed the meeting.
Speech by President Ilham Aliyev
- At today’s meeting, we will discuss issues related to digital development. There is a need for this. This issue will largely determine our future development. The trends and tendencies taking shape in the world are clear. The application of artificial intelligence, the creation of data centers, and the introduction of reforms related to digitalization actually determine the future development of countries. Certain work has been done in this direction in Azerbaijan, and we will discuss that today. The most important thing is to include this issue in the list of top priorities in our future activities.
We have extensive experience in the fields of oil and gas and connectivity – the relations with international companies, our extensive experience, and the implementation of these giant projects with many countries. These issues require knowledge, skill, and technical capacity. At the same time, they require extensive international relations. At different times, Azerbaijan has implemented many important infrastructure projects together with its neighbors in various directions. In other words, we have experience in this area and have already established platforms. Transport and energy corridors should also be transformed into fiber-optic corridors in the future. Certain work has been done in this direction. When oil and gas pipelines were built, this issue was also resolved. However, of course, this does not meet present-day requirements. Therefore, our initiatives in the direction of digitalization, artificial intelligence, and the creation of data centers should ensure long-term and sustainable development of our country. We have many advantages. One of them is our geographical location. This is an advantage that does not depend on us. However, the geographical location of each country can work for its benefit or detriment. We have linked our geographical location to the development of our country and have succeeded in that. Therefore, our location between Asia and Europe, our location on the North-South corridor, and the existing infrastructure have provided us with this advantage.
As I mentioned, our experience working with major transnational companies is also a great advantage. There is a positive investment environment. Over the past 20 years, more than 350 billion dollars have been invested in the Azerbaijani economy. Foreign investments are protected – both by law and, at the same time, this is observed in everyday practice. The protection of both local and foreign investments paves the way for the development of every country, including Azerbaijan. I can say that we have a unique experience here. Our oil and gas projects, which have been going on for more than 30 years, are in progress today in exactly the same way they were signed. This experience, of course, should also be reflected in relations with companies that play leading roles in the digital world.
Another advantage is that as a result of the work we have carried out in recent years, we have been able to significantly increase our energy generation capacity. Over the past 20 years, our generation capacity has almost doubled and is now equal to 10,000 megawatts. New power plants – whether gas, hydro, solar, or wind – have shaped the realities of present-day Azerbaijan. Currently, we have at least 2,000 megawatts of unused generation capacity, which is a prerequisite for digitalization, artificial intelligence, and the creation of data centers.
I should also note that in the region where we are located, in the wider region, there are not many countries that have such capabilities. Today, Azerbaijan fully provides itself with the key energy sources and even exports them to global markets. Considering that our plans for the creation of renewable energy are also clearly visible – this has been repeatedly discussed – our generation capacity will further increase in the future on the basis of the contracts signed. Therefore, we must make the best of this advantage. Of course, the growing demand for electricity within the country must also be taken into account. In particular, we have extensive plans for industrial development. The population is growing, and so is industrial production, especially in the non-oil sector. In January of this year, our non-oil industry increased by about 8 percent. Therefore, our energy capacity must be consistent with the overall development of the country.
At the same time, as you know, relevant documents have been signed with foreign partners on the construction of green energy cables, and we will export part of the electricity. However, the creation of data centers, as I said, also requires major energy resources.
As I mentioned regarding fiber-optic connectivity, these cables have also been laid in addition to the energy infrastructure. Currently, a project to lay a fiber-optic cable that will connect us with the Eastern shores of the Caspian Sea is well underway, and I hope that it will be completed this year. Thus, our connectivity with the East will be provided, and we need to work on new connections with the West. Of course, this is one of the key points in addressing the issues to be discussed at today's meeting.
Another advantage of ours is that we have already established contacts with the world's leading companies in this area. Negotiations have been held with several leading companies, and the capabilities of our country have been demonstrated to them. At the same time, we have close ties with global funds that manage the world’s major – and I can say largest – financial resources. The State Oil Fund of Azerbaijan has been cooperating with these institutions for many years, and a part of Azerbaijan's foreign exchange reserves is managed through those institutions. We are already investing in these institutions, and the issue of attracting investments to Azerbaijan from these institutions was also raised in recent negotiations with them, and a positive response was received. In other words, we are now working on specific projects, and part of the shares of leading companies in the fields of digitalization and artificial intelligence are also at the disposal of the largest American funds, as I mentioned. This is our great advantage. In addition, the Charter on Strategic Partnership signed between the U.S. Government and the Government of Azerbaijan in this building yesterday also provides us with this advantage. This Charter is a historic document. It has already been published in the media, and everyone can see what it consists of, including data centers, digitalization, artificial intelligence, and our close ties with American companies in this area. In other words, this is also our advantage.
At the same time, we have strategic partnership documents with 10 European Union member states. Of course, European companies cannot compete with American companies in this area; they are probably at least a generation behind them. However, certain work is underway there, and effective cooperation with companies from those countries should be ensured.
Last year, we signed a comprehensive Strategic Partnership Document with the People's Republic of China. So, we are one of a handful of countries in the world that are already working in the format of a strategic partnership signed with the world's leading powerhouses. In other words, this is our advantage as well. You may find another country in the world with such an advantage, but only if you look hard. Therefore, it would be completely unacceptable not to use it. Taking all this into account, issues related to a centralized coordination of work in this direction have been discussed for some time now. On my instructions, an exchange of views is currently underway on these issues, including under my chairmanship today. Considering that this issue, as I noted, is a priority, we must begin, under my chairmanship at today's meeting, to prepare a specific action plan for the work to be done. We must complete it as soon as possible and thus give a stronger impetus to this area.
Today's presentation will highlight the key issues. Before we do that, I would like to bring some of my thoughts and tasks to your attention. First of all, there should be very close coordination between state agencies in this area. There should be close contacts between state agencies here; isolated activities should not be allowed, and the Ministry of Digital Development and Transport should prepare an action plan together with state agencies and submit it to me in a short time.
In order to organize work on this issue more effectively, I believe that each state agency, first and foremost the ministries, should designate a deputy for digitalization, artificial intelligence, and cybersecurity, or a new staff unit should be created, or this area should be assigned to one of the existing deputies, so that the employees and management of the Ministry of Digital Development and Transport know whom they will be in contact with. This area should be considered a priority in each state agency. This is the first point.
In recent years, various platforms and applications have been developed by various state agencies – ministries and other state bodies. In order to conduct this work in a coordinated fashion, I believe that this will no longer be necessary, and the created platforms and applications should be gradually eliminated. For how long, you will make your suggestions when you submit your proposals. Public services should be implemented through “MyGov” – that is, from a single center. Everyone should know this – both public institutions and citizens. This will also provide our citizens with a huge advantage. All services people need should be provided from a single point. Now, how long this will take, of course, you will tell me. At the same time, the advantages of the platforms that exist today, the experience gained, the people and personnel who participated in the development of these platforms should also be involved in the common work. In other words, I acknowledge the results achieved, but today the time has come for this to be consolidated in a single center.
As for personnel training, this is one of the top priorities. Certain work has recently been done in this direction. We should pay greater attention to this area in our education system. Both students at higher education institutions in Azerbaijan and those sent abroad by the state should further develop their expertise in this field. Therefore, considering that this will be a long-term and expanding process, there will be a significant need for personnel in this field in the future. Of course, certain changes should be made to the curriculum in order to provide students of secondary schools with basic knowledge.
The application of artificial intelligence should be widespread in state institutions. This is the case in leading countries of the world today. In fact, according to my information, in some developed countries artificial intelligence agents, as they are called, help civil servants with day-to-day activities. Artificial intelligence can, of course, be an assistant in determining whether a decision is correct or not. Therefore, this system should be considered, and people in governing bodies should make extensive use of artificial intelligence.
As for the private sector, support mechanisms should be developed to ensure that the same approach is used. We can encourage the private sector to pay greater attention to this area, and suggestions about that will also be provided.
Key targets should be set for cybersecurity. This area is also one of the critical ones. Last year, we were subjected to an orchestrated and aggressive cyberattack. We also know where it came from. Necessary measures have been taken to protect ourselves from these serious problems. Therefore, serious attention should be paid to this area. We already have a functioning Cybersecurity Center, and its work should always be in the spotlight.
Of course, as I have already mentioned, contacts with the world's leading companies in this area should be stepped up. I believe that today's meeting and the fact that this issue is under the control of the president will also send a serious message to many of our partners that Azerbaijan considers this area a priority. What are the opportunities we have? The advantages I have listed should also be communicated to our foreign partners. The advantages I have not listed should now be communicated by you so that we can give a strong impetus to this area.
As I mentioned, an action plan should be prepared and submitted to me. The issues already discussed and to be discussed today, including those that will be touched upon in the presentation, should be included in the action plan.
Now, the floor is given to the Minister of Digital Development and Transport, Rashad Nabiyev, for the presentation.
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Speech by Minister Rashad Nabiyev
-Esteemed Mr. President,
Honorable Mrs. Mehriban,
Distinguished colleagues,
Mr. President, first of all, I would like to express my gratitude to you for your continued attention and care toward the fields of digital development and transport. Thanks to this attention and support, the added value created in these sectors has been steadily increasing in recent years. Last year, growth in the transport sector in our country was 5 percent, while in the ICT sector it was approximately 8.5 percent. As you rightly emphasized, the digital economy is already surpassing the traditional economy globally. It is expected that artificial intelligence will generate additional value of approximately 16 trillion US dollars by around 2030.
Esteemed Mr. President, as you have highlighted here and in line with the instructions you previously provided, an initial action plan has been prepared to advance our technological development, taking into account global best practices, our country’s current situation, and the new challenges ahead. This action plan is built upon four pillars: the first is the acceleration of digitalization and digital transformation; the second is the widespread implementation of artificial intelligence and AI-based solutions in both public institutions and private companies. The third pillar is the innovation ecosystem. If we implement digitalization correctly and have AI solutions, we need to create an innovation ecosystem in such a way that private companies can generate additional value around it. Finally, after establishing all of this and transitioning to the virtual environment, our main challenge will be related to cybersecurity. These are built around four key factors that form the main focus of the Action Plan. First, human capital; second, the modernization and expansion of existing infrastructure; third, aligning our legislation with contemporary requirements; and fourth, ensuring the agility of management processes.
Mr. President, we view this process in a phased manner. Digitalization itself is a step-by-step process, and today we are following the path the world has taken almost stage by stage. The first phase involves the digitization of primary data—in other words, transferring information from paper-based to electronic formats. The second phase is the digitalization of services and processes. At this stage, many processes have already advanced considerably, both in state-owned companies and in private enterprises. The final stage we aim to reach is the development of “smart” and proactive services, which encompass digital transformation itself. Thanks to your attention and support, our primary focus in recent years has been on establishing a regulatory framework and ensuring that our activities are carried out in a coordinated manner. In this regard, the adopted Digital Development Concept holds particular importance. Moreover, following the adoption of the Digital Development Concept, amendments have been made to more than 200 regulatory legal acts, and new ones have been enacted. In parallel, the expansion of infrastructure has been fully ensured. The “Online Azerbaijan” project has been successfully completed. When the project was launched, the country’s average internet speed was approximately 12 Mbps; today it stands at 90 Mbps. In state-owned companies, this figure is 150 Mbps. By the end of the year, we plan to increase this figure to 200 Mbps, and today there is no remote area of Azerbaijan where broadband internet is not provided.
The country’s data center — the “state cloud” (i.e., the government cloud) — has been fully established. With both backup and primary facilities in Baku and Yevlakh, when we began the process, around 50 government institutions were hosting their digital resources there; today, this number has reached 270. With the introduction of the “SİMA” Biometric Signature, 4 million unique users have used this signature over the past three years. The introduction of “SİMA” has significantly simplified the operations of not only public services but also private companies, particularly banks. For example, today our citizens can fully carry out any banking operations—such as opening or increasing a deposit account—through applications, without having to visit the bank in person.
We would like to thank you for the support you have already emphasized regarding “MyGov.” The “MyGov” platform has now been presented to our users with a new philosophy. Just last year, we were able to bring approximately 1.3 million new occasional users to “MyGov.” While this number stood at 2.2 million at the end of last year, by the end of January this year it has already reached around 2.5 million. By “users,” we mean citizens who use the “MyGov” platform at least once a month. By the end of the year, we plan to increase this number to approximately five million. The answer to the question what has made this possible, esteemed Mr. President, lies in the transformation of digitalization from a document- and institution-centric approach to a life-events approach. I would like to illustrate this with an example. We have identified key life events. Currently, we are structuring government–citizen interactions around approximately 12 life events. I would like to emphasize one point: when a citizen’s child was born, they first had to approach a medical institution and obtain a certificate — even if the processes there were already digitalized — and then physically submit that certificate to the Ministry of Justice. The Ministry of Justice would issue the birth certificate. After obtaining the birth certificate—which was also digitalized —the citizen would physically visit the State Social Protection Fund to receive the relevant benefits, and at the same time, submit the document to the Ministry of Internal Affairs to obtain an ID card. What happens today? The current process is such that when a child is born, the clinic immediately enters the information into the system, and the system automatically transmits the data directly to the Ministry of Justice. Through this system, the Ministry of Justice informs the citizen that they can register a name for their child electronically. It even provides options for selecting a surname, of course, if that surname is included in our approved list. In this way, the information is automatically, and now proactively, transmitted to the State Social Protection Fund. The benefit is determined and assigned without any action required from the citizen, and it is transferred directly to their card. In the next stage, obtaining the ID card is also ensured. Mr. President, we have already completed this process for some other life events, while work continues on others. In line with the instructions you have provided, I am confident that, in a coordinated manner with our counterpart ministries, we will be able to further advance this process.
At the same time, we face certain challenges. You have already mentioned some of them: in some government institutions, documents still exist in paper form; internal procedures are considered the main focus; in general, digitalization is sometimes not prioritized; and data is stored in a fragmented manner with individual standards. These issues hinder the creation of a comprehensive data repository — a ‘data lake’ — which is crucial for us in the future. Having a data lake and a well-structured database is one of the key factors that determine how effectively we can leverage artificial intelligence.
The other issue, which you have already emphasized, I will not dwell on. If services are not provided through a single window — that is, through ‘MyGov’ — we will not be able to establish practical, operational interactions with citizens using individual applications.
Since you have already highlighted the other points, I will not dwell on them. The assignment of deputies is one of the most important factors. For example, when we organize training sessions, sometimes individual deputies participate, and we cannot ensure continuity. However, with a dedicated deputy, we can provide them with knowledge and keep them informed about global trends in artificial intelligence, digital development, and cybersecurity.
Esteemed Mr. President, as you have already emphasized regarding artificial intelligence, our interactions with foreign partners give us reason to say that our country possesses competitive advantages. What are they? First and foremost, macroeconomic and political stability, which is one of the key factors for the construction of data centers. Another factor is the energy potential that has been established thanks to your special attention to this field, as today the development of artificial intelligence is directly linked to the availability of energy. Another advantage we have is that, thanks to your foreign policy, our political relations with both regional states and the world’s leading countries in this field are at the highest and most favorable level. A clear example of this, as you noted, is the interest shown by U.S. companies in our country, as well as the recently signed Memorandum of Understanding with the State of Israel, based on which we have already begun working on the corresponding agreement.
Another point is the agility of our government in decision-making. During our contacts on our visit to the United States, we concluded that the construction of any data center there takes approximately two to three years. However, the agility of our government will allow us to build these data centers in a much shorter period. This is one of the key factors for constructing data centers, and above all, the most important factor is the availability of data. The availability of this data will directly determine how quickly we can advance digitalization and digital transformation. You have already provided your attention and decisions in this regard, and I am confident that we will be able to complete this process in a relatively short period. As for the question of what more is expected of us, the answer lies in aligning our legislative framework with modern challenges. In this regard, I would like to particularly highlight the ‘Sandbox’ regime. What is it? In any given sector — for example, healthcare, education, or ‘fintech’ and financial services — it allows testing certain solutions, including those developed by leading countries, on a small scale under government regulation. Afterwards, these solutions can be scaled either within our country or in other countries around the world. All countries globally use this approach, and it is reflected in our action plan.
Here, the challenges are roughly the same as those we face in digital transformation—human capital. Regarding human capital, it is very important to ease our migration legislation and to recognize the status of both freelancers and digital nomads.
I do not want to take up your time by dwelling on other issues. They are mostly related to infrastructure and decision-making. In line with the instructions you have already provided, I am confident that we will also be able to carry out this process very efficiently.
Finally, as I have already mentioned, once the innovation ecosystem is focused, our main goal is to maximize the added value generated by all these solutions in this field. In this regard, in 2022, with your and Ms. Mehriban’s direct intervention and oversight, a legislative norm was adopted granting a special regime to companies operating in the IT sector. As a result, the number of companies registered as technopark residents has now reached approximately 165. Ten of these companies are foreign, and the revenue generated by them in this sector is approximately 1 billion manat. However, we believe this does not fully reflect our country’s potential. The key indicator for us is the export figures in this field. Unfortunately, our exports in this sector currently stand at around 100 million dollars. We believe that if the measures outlined in the Action Plan are implemented, we can increase this figure from 100 million to 1 billion or even higher.
Without dwelling too much on the list of achievements, as you have already emphasized, both enhancing the potential of our universities and the state program for education abroad are among the factors that directly drive the development of this ecosystem. In recent years, our particular focus on the exact sciences and information technologies will ensure the entry of new skilled personnel into the ecosystem in the near future. In parallel, both the ministry and other counterpart ministries, including the Ministry of Science and Education, have organized short-term courses, through which approximately 16,000 Azerbaijani youth have participated. The knowledge provided by these trainings is limited to a certain point. Following this, we have focused on the “Hire and Train” program, which aims to attract foreign companies to Azerbaijan and provide them with specific subcontract agreements. Currently, we are working with two such companies — Anderson and EPAM, both of which are based in the United States. Just as we view “MyGov” in the context of citizen– government interactions, we are applying the same approach to government–business relations. The legislative framework for this already exists, and “MyGov Business” will be launched in the coming months for use by our business community. We are implementing this project together with EPAM, and the requirement we have set for them is that in exchange for the $100 we provide them conditionally, they align the local contract with an equivalent $100 foreign contract and bring it to Azerbaijan. Our employees not only work on domestic projects but also gain experience by participating in international projects. How do we envision the outcome of this? Even if only 5 or 10 out of roughly 1,000 to 2,000 employees go on to establish a startup, and that startup succeeds in any sector, it would represent a crucial step toward achieving our ultimate goal of increasing the current $100 million to one billion—or even several billion dollars.
Esteemed Mr. President, there are quite a few issues that require our attention here. I would like to bring just a few of them to your notice. Currently, we do not have financial mechanisms to support the funding of startups, whether through venture capital, crowdfunding, or other means. A draft law has already been prepared in this regard, and it is also envisaged in the Action Plan that this law will be adopted within the next few months. If adopted, currently there are only three funds with a total of 12 million manat, which do not reflect the true potential of our market. In other words, these are angel investors contributing 12 million manat. Another 12 million manat is allocated for investments in startups at various stages, which is not sufficient for market development. If such a mechanism is established, I am confident that by attracting both local investors and foreign funds, we will provide a significant boost to the growth of the market.
I have already addressed the issue of human capital. There was a clear need here for easing regulations and applying the tools commonly used in global practice, both for digital nomads and freelancers. I am confident that, after discussing this with our counterparts and reporting to you, we can take significant steps forward. The initial revenues of startups are also very important. An important issue here is the extent to which the products created by a startup are purchased by the government itself. There are specific mechanisms for this, which are reflected in the Action Plan.
Esteemed Mr. President, you have already highlighted the importance of cybersecurity. In recent years, under your guidance, an Information Security and Cybersecurity Strategy has been adopted, and all our activities are being carried out in accordance with this strategy. The work of the Coordination Commission on Information Security has been reorganized, and I would like to assure you that within the framework of this Commission, all the cybersecurity challenges facing our country will soon be addressed in a comprehensive and multi-faceted manner. I would like to bring two points to your attention. First, the establishment of sectoral SOCs—known as Cybersecurity Operations Centers—is extremely important. We need to create the legislative framework for this. Second, the establishment of CERTs is also essential, and specific provisions for their creation are included in the Action Plan.
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The meeting then continued with discussions.
