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NKR: Privatization Began Ten Years Ago

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  • NKR: Privatization Began Ten Years Ago

    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
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