Rapid development of the construction sector is identified worldwide along with the development level of the country and wellbeing of its population. Azerbaijan, experiencing construction boom and resembling a large construction yard, is holding one of the leading positions worldwide on this indicator. Sky-scrapers are erected everywhere, big infrastructure projects, comparable with the masterpieces of metropolitan cities and developed countries, are being realized. Azerbaijan managed to gain these results in the first decade of XXI century under the guidance of President Ilham Aliyev. 

Creative construction 

Development of the non-oil sector,  was one of the principal directions over the past 10-year presidency of Ilham Aliyev and the construction sector has occupied a particular place. As a result of implementation of this policy, as well as creation of favorable conditions for foreign and local private investors, and multiple increase of state investments, attracted into the construction sector over the past years, the construction boom arose in Azerbaijan. 

All of it happened at the expense of implementation of new projects bearing state importance, annual construction of many social facilities. Both the state and private investors were engaged in these projects. As a result, the construction sector of the economy became a stably developing area over the past 10 years. 

“We must build and leave the future generations a powerful economy so that no problems concerning the future development of Azerbaijan could arise”, President Ilham Aliyev said at the governmental session dedicated to the outcomes of social-economic development of Azerbaijan within 9 months of 2013. 

Owing to annually growing investments flowing into this sector, this area became the most rapidly developing one. The past 10 years of Ilham Aliyev’s presidency will be certainly remembered as the period of construction boom in Azerbaijan. Meanwhile, this sector of economy became one of the main factors of development of the non-oil sector of the industry. 

If the volume of investments flown into the construction sector of Azerbaijan totaled about 1.7 bln AZN in 2007 and the private construction companies performed building operations worth almost 900 mln AZN, the sum of investments into the construction sector totaled 6.6 bln AZN already in 2010 and the operations worth over 4.5 bln AZN were performed.  These indicators comprised 7.8 and 6.1 bln AZN in 2011 respectively. Using all financial sources, the construction complex used funds worth 15.3 bln AZN for the performance of construction operations in 2012. The scope of performed building-assembling operations totaled 7.6 bln AZN. Thus, the volume of construction work carried out in Azerbaijan grew by 8 times within 10 years. 

Infrastructure projects 

The project of Baku-Tbilisi-Kars railroad has been one of the significant strategic results of the policy that Ilham Aliyev is implementing for strengthening Azerbaijan’s position both in the region and the world. “We currently have two big transport projects that are underway. Baku-Tbilisi-Kars railroad is still under construction. Commercial seaport Alyat is the second large project. This port’s commissioning has been scheduled for 2015. It will be the biggest commercial port in the Caspian Sea. 7 airports were built and reconstructed in Azerbaijan over the past 10 years. Construction of the new air-terminal complex of Heydar Aliyev international airport is still continued in Baku. Railroads are reconstructed, highways are built as well. Highways to the length of about 10km were built over the past 10 years, President Ilham Aliyev said while evaluating the results of implementation of infrastructure projects. 

While determining the strategy of long-term development of the transport system of the country, President Ilham Aliyev also took the growing importance of the underground transport of the capital into account. In November 2008 the Head of State signed a special order on measures concerning perspective development of Baku Metro. According to the order, a conceptual scheme for development of the underground transport system of Baku city was worked out with participation of special foreign companies. The scheme envisages stage-by-stage expansion in order to create a grandiose metro network. According to the plan, the number of stations will be increased up to 79 till 2030. Their total length will have reached 119km. It will let Baku to stay on a line with the biggest metropolitan cities of the world possessing huge networks of the underground transport. 

Investments in immovable property 

The construction boom observed in Azerbaijan for the past 10 years was accompanied by all-round construction of residential buildings, private and summer houses. Many companies engaged in construction of modern many-storied residential buildings were created. On the other hand, the growth of the personal income and general development of the economy of the country was the reason of broad-scale construction of private residential houses. 

In October of 2011, the Head of State introduced changes into the “Rules of keeping, using, placement and management of resources of the State Oil Fund of the Republic of Azerbaijan” and thereby determined a new investment policy for resources of the Fund. According to the decision of the President of the country, SOFAZ started purchasing immovable property (offices) in the central cities of Europe and Asia. An office worth 217 mln EUR was purchased in London’s West End district in December 2012. A property including offices and commercial facilities worth 135 mln EUR was bought at Vandome square of Paris in the same month of 2012. The Fund purchased a Gallery Actor office-shopping center worth $133 mln in Moscow. 

1 mln 339 thousand square meters of residential area was built and commissioned in Azerbaijan in 2003. Of this total, 757 thousand square meters were built at the expense of citizens’ own funds. About 1 mln 748 thousand square meters of residential area were built and commissioned as early as in 2012. In general, 15 mln 37 thousand square meters of residential area was built in the country during 2004-2012. Of this total, over 10 mln square meters were built at the expense of personal finances of the citizens. 

Building materials 

The reforms on the development of non-oil sector conducted by President Ilham Aliyev over the past decade have contributed to the accelerated development of the construction sector, resulting in multifold increase in production of modern construction materials. Cement plants operating on a new modern technology have been built, production of steel structures has been launched and enterprises for production of modern building materials have been established in Azerbaijan.

In 2003, production of building materials was about 68mln manats, in 2004, the figure exceeded 106mln manats, in 2005 it was at 136.6mln manats, and in 2006, the figure reached 165mln manat.

In 2007, the country was gripped with a construction boom, the growth of gross domestic product reached the world peak and in this period production of building materials jumped up, reaching 253mln manats. The construction boom continued growing in 2008, which led to a sharp increase in demand for building materials. In this regard, the volume of building materials rose to 352mln manats.

During the global economic crisis in 2009 production of building materials did not drop, but even increased, reaching 452mln manats. This trend continued in 2010 and production of building materials again reached 452mln manats. In 2011 the volume of building materials was worth 281mln manats, and in 2012 it reached 312mln manats.

Thus, production of building materials has risen by 4.6 times over the past decade. This growth has contributed to the creation of thousands of new jobs in the production of building materials, ensured the needs of the construction industry at the expense of local production, as well as influenced the further development of non-oil sector of the industry.

Appearance of capital city

Construction works that gripped the country over the past decade have completely changed the image of Baku adding the capital city into the list of the best-equipped and most beautiful cities of the world.

The rapid economic development of the country and multifold growth in state budget revenues promoted the implementation of  major works on landscaping of Baku. Every year the state budget allocated significant funds to the executive power of Baku for landscaping works. All the same, additional funds from the reserve fund of the head of state were used for these purposes. 

When launching the work on landscaping the capital city, the President set the task to change the image of Baku, renew the exterior of administrative, residential and other buildings in the national architectural style and, thus, change the overall panorama of the city, turn it to one of the best-equipped cities of the world.

The operations on improvement of the capital started primarily in the center. The State Flag square was created and the Day of State Flag was established. The facades of historical buildings were renewed without any harm to the architectural style, modern lighting systems were established on the buildings. Then the landscaping works covered other areas of Baku. As a result of the works mainly launched in 2006, the facade covering were changed on all buildings situated at the central streets, in settlements and micro-districts and modern lighting systems were installed. Reconstruction work was performed at most buildings . 

The Baku Boulevard was reconstructed, a shipyard was created in Baku, the Safe city automated system was established over this period. The stable supply of ecologically safe water to the country, especially, the residents of Baku remained among the main goals of the Head of State. 

One of the major objectives of President Ilham Aliyev after his election in 2003 is the transformation of Baku into one of the most dynamically developing cities, attractive for foreign investors. The Baku White City project has become one of the most important projects in this direction. The Black city which has been playing an important role in oil industry for over a century will become history after the completion of this project.

The present-day image of Baku reflects the way of development that Azerbaijan has passed over the past decade and evidences the overall economic development of the powerful industry of the country. Over 800mln manats has been used for the landscaping works in the capital city through the period from 2006 to 2012.  This figure is still another proof of the economic strength of Azerbaijan.