Azerbaijan Lays Foundation for Third Phase of Privatization

The Azerbaijani President Ilham Aliyev signed a decree "On additional measures in the field of improvement of the state property privatization," which means the beginning of the third stage of privatization.

The Cabinet of Ministers is commissioned to submit a new draft law of the Azerbaijan Republic "On privatization of state property" to the President within two months. The current law has been in force since August 2000. The President instructed the government to establish a criterion for setting the price of the privatized state property on the basis of its market value.

The President took over the authority to make decisions of privatization of state property. On 20 May 2016 the State Committee for Property Affairs of Azerbaijan suspended the privatization of state property by its own decisions.

The Cabinet of Ministers within one month is to submit proposals to the President on the list of state property subject to privatization in the current year and on an annual basis. These proposals will be made, taking into account the proposals of the State Property Committee and presented to the President, together with the draft state budget.

The economist Gubad Ibadoglu believes there is no need to adopt a new law on privatization, and the current law can be modified to the new realities. "Privatization of individual projects should be the primary method of divestiture of assets at this stage. However, most interesting will be the list of upcoming privatization of property and conditions for the participation of foreign investors in the process," said the expert.

Note that the first law on the privatization of state property was adopted in 1995. The privatization was carried out on the basis of two state programs for privatization of state property confirmed by the President. Since then about 50 thousand small, medium and large enterprises have been privatized. According to unofficial data, foreign investors participated in the privatization of not more than 100 objects. ---08D