- Speaking at the opening of the reconstructed complex of Azerenergy OJSC, the President stated that the country's energy sector is open to foreign and local investors. Natig bey, do you think this was the right decision?

- There are many state-owned areas in Azerbaijan that although they are promising areas, they have not been transferred to privatization or long-term management. We have been proposing to the government for years that a decision must be made on the partial or full privatization of these areas or their transfer to long-term management. Because these state-owned companies are a huge burden on the budget, as well as there have been repeated studies in different years that these companies have become a source of serious corruption. They have received subsidies from the state budget and the lack of transparency in their activities reduced cost optimization. It has reduced profitability. In general, partial or full privatization of the energy sector and other areas or their transfer to long-term management is the right decision.

- In his speech, the President acknowledged that for some time, this area was kept in the state monopoly. Why was this area monopolized until now and why is it decided to get out of the monopoly right now?

- There are both objective and subjective reasons for keeping these areas in the state monopoly for a long time. The objective reason is that these areas are also strategic areas. In other words, it can be shown as an objective reason that since these areas ensure the security of the state and are part of the security issue, it became necessary to try to keep these areas under state control. However, subjective reasons played a greater role here. Because for many years, these state-owned companies have always received large amounts of assistance, investment costs, and tax benefits from the state budget. Billions of dollars have been allocated for repair, construction, and reconstruction in these areas over the years. Especially during the period of big oil money, after about 2004, there were huge investments in these areas. It was not in the interest of the officials in charge of these areas to take steps to privatize or partially transfer management. Therefore, I think that at that time, in fact, the main reason for the delay in privatization or partial transfer to management was the material interests of some groups of officials. Now we are facing a serious financial shortage in the country and it is time to release the country's budget from the additional burden. Given that there is a fall in oil prices and that the economic and social situation in the country as a whole is likely to enter a more volatile crisis in the future, there is a need for additional investment in the country. One of the most attractive areas for investors may be the electricity sector.

- Is the energy sector of Azerbaijan attractive for investors? Is it a lucrative field?

- Everywhere in the world, the energy sector, especially the distribution sector, i.e. electricity distribution companies to the population and businesses, has always been considered a profitable and strategic sector. Large tenders are held in many countries. Big companies are competing to win it and to invest. So states offer it to the companies that offer the best. That is, it allows the management or privatization of this area. I do not think that privatization will be the first step in Azerbaijan. If contracts are likely to be signed, these may be contracts with rent in the early years, but with the right to privatize later. That is, in the first years, it will be leased, and then the company will be given the right to privatize. Preference will be given to that company to privatize first. This field is considered attractive in Azerbaijan, as well as all over the world. It may be of interest to investors. The only problem here is that when this area is in the private sector, there must be a common agreement between the state and the private sector so that there is no sharp rise in electricity prices for the population. The mechanisms for regulating this must be developed in advance.

- But there was a Barmek incident in the history of the energy sector. In his speech, the president even touched upon the activities of that company and called it a fraud. Was Barmek really involved in fraud?

- There were some problems with Barmek. There were pros and cons to this company's activity in Azerbaijan. On the positive side, they preferred to work on the infrastructure. It made significant investments in the metering of Baku and the construction of new substations. But there were enough questions about the company's transparency. Investments were likely to be exaggerated. Because Barmek's initial agreement stipulated that there was a condition that some part of the investment would be deducted from the taxes paid to the state. Most likely, the possibility of exaggeration of certain investments was correct. However, the positive side of Barmek was that it played an undeniable role in taking new steps to improve the management of this area. It worked effectively. They simply could not reach an agreement with the state in the end. The contract with Barmek was abolished due to a conflict of interest. But it was also a big blow to the country's investment image. Because enough articles have been published in the international press.

- After the events that befell Barmek and its head, can any investor be interested in investing in this area?

- In fact, Azerbaijan is a country that investors who want to come here will not be able to come in any case without a formal and informal agreement with the government and decision-makers. Barmek was a fairly weak and small company. Large, world-class companies are likely to come here. That is most likely calculated for this. For example, this area will probably be open to European and American companies. These companies will most likely be world-renowned companies. It is impossible to treat those companies like Barmek. The Barmek incident, of course, dealt a severe blow to the country's investment image. In fact, the investment image of Azerbaijan, to put it mildly, was not so good. But after that, if investors make such a decision, it is likely that there will be formal and informal agreements.

- What are the obstacles in Azerbaijan to attract investors to any field and how should those obstacles be removed?

- Azerbaijan is not favorable for investment. Unfortunately, it is like that. If it were favorable, we would see a large amount of investment in the non-oil sector in Azerbaijan to date. The only convenient area is the oil and gas sector, where there are full rules of the game. When agreements are signed in this area, they are ratified by parliament and have constitutional rights. No government in Azerbaijan has the right to change these agreements, regardless of who they are. Therefore, in the oil and gas sector, foreign companies are fulfilling normal contractual obligations. It is impossible to apply this to other areas. There is no such practice in other areas that each agreement must be approved by parliament. Therefore, Azerbaijan must do a lot to increase the attractiveness of investment and the interest of investors in other areas. In fact, Azerbaijan is one of the most attractive countries for investment in the region. Due to the population, due to the high consumption potential, due to the geographical advantages. The biggest obstacle for investors is Azerbaijan's desire not to join the World Trade Organization (WTO). This is very important for all investors. WTO membership allows the country to build its own tires in accordance with the rules of the civilized world game and gives investors access to international courts. Azerbaijan must join the WTO to attract investment. Azerbaijan is negotiating with the European Union. These talks should be completed soon and a strategic partnership agreement should be signed, which is one of the factors that will increase the attractiveness of Azerbaijan for investors. But there are also serious problems in domestic legislation. The Competition Code must be adopted and the main issue is to improve the judicial system in Azerbaijan. There is a need for an independent and free judiciary. No investor invests in a country that is under the control of the executive branch and has a judicial system that can make a decision with a single phone call. The key issue for investors is the formation of a judicial system that can solve its problems fairly. Perhaps the first of the main problems facing investment in Azerbaijan is the unreliability of the judiciary. In general, investment is a matter of trust. Countries that build trust and build a fair system based on that trust always get more investment.

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