Privatization of major state enterprises delayed: EBRD

The European Bank for Reconstruction and Development (EBRD) has cited delays in the privatization of large state-owned enterprises in Azerbaijan.

The bank conducted research on 29 transition economies worldwide jointly with the World Bank. The assessment was based on a 1 to 4+ point scale. 1 means that a given country has absolutely failed to do away with central planning of its economy, while 4+ indicates that standards inherent to the world’s developed countries are being applied there.

The report said the share of the private sector in Azerbaijan’s Gross Domestic Product (GDP) made up 75% in 2007. Privatization of major state-owned enterprises was rated at 2, while that of small enterprises - 4-, structural and management reform in businesses 2, liberalization of prices 4, foreign trade and monetary system 4, anti-monopoly measures 2, banking reform and liberalization of interest rates 2+, the operation of stock markets and non-bank financial institutions 2-, and infrastructure reform 2.

The EBRD claimed that the conditions for doing business in Azerbaijan were challenging. Monopolies are impeding competition in the domestic market.

Nonetheless, the bank pointed to a number of improvements. The “One window” system has been established to simplify business start-up and licensing procedures, and a draft law on investment activity is currently under discussion in the parliament. The anti-monopoly law is at the stage of adoption as well. Progress is also observed in legislation on fighting corruption.

The research dwells upon opinion polls held among different layers of the population - from farmers and workers to housewives - to determine the impact of the transition period on their living standards.*