I am glad for having an opportunity to meet and welcome all of you.
In this hall we have people who represent our republic's business environment and have a tangible role in the socioeconomic development of the country.
Today's meeting is a symbolic one for it is taking place on the New Year's Eve when we sum up the results of the passing year and outline plans for future.
In 2012 we overall succeeded in realizing the outlined programs. Macroeconomic indicators of the socioeconomic development, the dynamic development of the leading economic branches and the progress registered in different spheres clearly demonstrate this. During the last five years we secured more than 10% average annual economic growth.
The Artsakh Republic is a social state whose economy is based on free market. The decision to have such a system was a deliberate choice derivative from historical, political, psychological and other peculiarities of our nation and state as well as global developments and the most efficient patterns of economic development. Therefore, the creation of favorable conditions for business taking into consideration the protection of society's socially vulnerable strata are among the key objectives of the state economic policy. Securing proper level of social justice and protection with dynamic development of a liberal economic system to a great extent depends on ensuring effective balance between the abovementioned components.
Within this context holding such meetings with national business circles, particularly the major taxpayers, is important and demanded. It is evident that developing entrepreneurship and raising the level of its social component requires creation of mechanisms for harmonizing the interests of entrepreneurs, state and generally the whole society. The state is interested in the existence of civilized entrepreneurship, which is able to ensure the country's stable economic development and the business sphere in its turn needs strong, fair and predictable state capable of creating appropriate macro environment for efficient activity as well as protecting their rights and freedom of entrepreneurial activity. The state will keep on assisting business, struggling against administrative and bureaucratic obstacles, supporting domestic producers and help them enter into new markets.
The fact that a considerable progress towards forming market economy has been ensured in our republic, I think, is obvious. Its striking evidence is the role the major taxpayers play in the development of our economy, which is quite palpable. Around 85% of industrial output, 62% of construction activities, 96% of communication services, more than 58% of state budget tax revenues, duties and social payments are secured by this very group of business entities.
It is very much encouraging that some organizations operating in Artsakh have been already known outside of the republic. The "Base Metals", "Karabagh Telecom", "Artsakh Bank", "Artsakh Fruit", "Artsakh HEK" and other companies belong to this category. Our leading business entities take an active part in realizing numerous social programs, solving problems of the society's different layers.
We also welcome the fact that during recent years a number of famous international organizations, particularly in the IT sphere have entered our country. Cooperation with such leading companies will substantially contribute to economic development and further improvement of business culture.
Mining industry is among the most important and perspective branches of the NKR economy. Considerable work has already been done towards the development of this sphere.
Among the priorities of our economic policy is the development of agriculture. Significant recourses have been spent realizing different programs in this sphere. As a result, gross agricultural product during the last 5 years has doubled with 13,3 percent average annual growth.
Although the achievements are palpable still much is to be done. Unfortunately, preferential tax regime existing in the branch has not yet led to the formation of healthy business environment. Only 28,4% of the gross agricultural product is produced in trade organizations. Possessing necessary conditions for the development of the branch we must set a task and carry out consistent work to meet the domestic demand with our own resources, as well as to ensure rapid growth of export and the development of processing industry.
During the last years construction has become one of the branches ensuring economic growth. Its share in the structure of the GDP increased from 9,2% to 12,4% securing more than 20% average annual growth. A big progress has also been registered in improving qualitative indicators of the construction activities.
Talking about the positive results in the construction sphere I would like to mention that here we also possess significant reserves, which should be used to increase the volume of construction works and solve policy issues.
Achievements, problems and expectations can be enumerated sphere by sphere. I would like to stress the development of small and medium entrepreneurship. The work done within the last years the share of small and medium enterprises in the GDP increased by 6,5%, the number of operating subjects and employees has risen, the scope of activity spheres enlarged, their financial situation improved. Nevertheless, there is a need to activate efforts in this sphere and make them more concrete.
The formation and improvement of legislation is among the most important bases for establishing and developing a civilized entrepreneurship. Activities in this direction should be of a consistent nature in order to further facilitate and stimulate business development.
The development of business environment to a great extent depends on the current tax system and tax administration effectiveness. Substantial work has been done here. Tax administration has been improved and in parallel with this the planned indicators on tax income were over fulfilled with 2,2 times increase during the last five years. However, some issues continue to exist in this sphere, so consistent work should be carried to solve them.
Many programs are to be realized for socioeconomic development of the republic. Our achievements allow claiming with confidence that by joint efforts, your active participation and constructive cooperation we will register new successes, which in essence belong to the whole Artsakh people.
Congratulating you all on the coming New Year I wish it to be a year of realizing the outlined programs that will improve living conditions and welfare of our people. In the coming year I wish robust health, happiness and success in your important work.
December 26, 2012