PRIVATIZATION BEGAN TEN YEARS AGO
Azat Artsakh Nagorno Karabakh Republic [NKR]
26 Aug 05
Ten years ago privatization of the state property began. In February
1995 the National Assembly passed the law on privatization and
denationalization of state enterprises and unfinished buildings. On
the basis of this law the Agency for Census and Denationalization of
State Property was established,which was put in charge of
privatization. The first programme of privatization, the 1995-1996
programme was adopted. Privatization in Karabakh can be divided into
two stages. In the first stage which lasted from 1995 to 1998 shops,
public food places, services, rented areas and unfinished buildings
were privatized. The second stage, the privatization of large
enterprises, began with the adoption of the law on privatization of
state property in 1998. According to the head of the department of
state property management and privatization of the NKR Ministry of
Territorial Management and Development of Infrastructures Arsen
Abrahamian, by August 1, 2005 871 small enterprises (92 per cent of
the 936 enterprises included in the programme) have been
privatized. Of these 168 were privatized by the staffs of the
enterprises, 430 by the lessees, 184 were put out to auction, 62 by
direct sale. 26 enterprises were provided free of charge according to
the investment plan. Budget return on privatization totaled 468
million drams. As to large enterprises, A. Abrahamian said, 62of the
104 companies one of the shareholders of which is the state (the
evaluated cost of which is 2 billion 953 million) have been
privatized. Half of these enterprises were privatized through direct
sale, 18 (28.1 per cent) were put out to tender, 14 (21.9 per cent)
were provided free of charge. State budget receipts from
privatization of the mentioned companies totaled 727.3 million
drams. Besides small enterprises and large commercial organizations
structural units separated from the property of 34 companies were
privatized as well, of which 28 (82.3 per cent) through direct sale, 5
were provided free of charge, 1 was put out to tender. Budget return
on these units totaled 84.5 million drams. Budget return on
privatization of unfinished buildings totaled 4.2 million drams. As to
the aims of privatization and denationalization, A.
Abrahamian said, `Generally, privatization of state property is the
most lasting reform of the government. The public opinion about the
idea of privatization varies, but it has many positive sides. The
privatization of state enterprises allows improving the effectiveness
of the operation of these enterprises.
Besides the competition between companies of different types of
ownership enable sustainable economic growth. The government expects
growth in the number of private companies through privatization. The
means from privatization, as the numbers cited above show, are a
source of budget receipts. There are also other aims, such as the flow
of foreign and local investments, importof new technologies.’ In
reference to investments A. Abrahamian mentioned that since the
beginning of privatization investment programmes of 7 billion drams
have been implemented, about 2 thousand NKR and foreign citizens have
become proprietors. A. Abrahamian said the investors mainly implement
their liabilities (by 95 per cent). `But, of course, there are cases
when the buyers cannot make the payments and investments in time,’ he
said. In such casesthe government studies the possibilities of
implementing the liabilities of the investor. If the possibilities are
good, the payment of liabilities is deferred, if not, the government
resorts to confiscation through court. A. Abrahamian mentioned 20
similar cases. `It should be noted that the governmentis interested in
completion of the contract by the buyer. Therefore, if the least
chance is there, it tries to solve the question in favour of the
buyer.’ In connection with the legislation of the republic
A. Abrahamian mentioned that it provides for normal privatization and,
according to him, it does not need any changes.
SRBUHI VANIAN.
26-08-2005