Experts: State Should Not Invest in Real Sector

This year, the Azerbaijani government is investing in the creation of the metallurgical complex in the west of the country. However, experts believe that, as in other areas of business, the state's role in the business environment has to be limited only by the format of partnership between the state - the private sector.

At the January 10 meeting of the Cabinet of Ministers dedicated to the socio-economic development in 2014 and the upcoming challenges, President Ilham Aliyev said that this issue is reflected in the State Investment Program. "This year we expect to build a large metallurgical complex. This is a project that requires large public funds. Despite the fact that now our revenues will decrease, I believe that this project is a priority for the development of our economy, "he said.

Embedding billion US dollars in the steel sector, leaving the private sector aside, is an inefficient public spending decision. Economist Rovshan Agayev said the state investment in any commercial project of local importance, either in industrial, municipal or tourism sector is wrong. "The government can take part in the creation of investment funds through which investment can be directed to the development of selected areas or businesses. In this case, the state's share in these projects should be limited to 25-30% of the funding, "said the expert.

State's direct participation in the creation of the metallurgical complex is also criticized by the economist Nazim Mammadov, who called the state "the worst businessman." According to him, after the financial recovery the Dashkesan mining plant can be transferred into private hands that will replenish the state budget.

Recall that on April 23, 2013 the decree of President Ilham Aliyev established CJSC Azerbaijan Steel Production Complex with preservation of 100% of the shares at the state. The joint-stock company included 97% shares of the Dashkesan ore-dressing plant." According to the feasibility study, in 2015-2018 years there will be established four pelletizing plant, iron and steel and finished steel products that will replace imports totaling $ 1.3 billion. ---08B