Business & Economy

We are a very fearless nation. We are not afraid of the fact, that Azerbaijan increases its military budget day by day. Probably we would be the most fearless nation in the world, if there weren’t the privatization. The privatization of the public property started in 1994. It seemed, that the society got used to this fact during these last ten years. While we still worry when they speak about privatization of any essential economic structure or building. Now the main subject of conversation for the armenians is the subject of “Sport-Concert Complex” privatization. On the other hand the siciety fright is a result of our experience. The first privatization phase had awful economical results. The first serious analysis were published in 1996-97. It turned out, that the privatization had become a separate branch of business. The rich people bought a company or a factory, and after taking out the facilities, sold them and made profit. The profit from this action was used once more for privatization. The next negative fact was that the owners of the companies had no responsibilities for the bulding by their contracts. This was the reason they could make those factories to pieces and sell them.

After the misfortune of the first phase the authorities decided to make changes in the law about privatization. The big production factories were privatized one-by-one after this, and what is more important, by separate contracts. These contracts contained some resposibilities for those factories owners. To tell that the new method was excellent, will be wrong, but for sure it had some positive results. The prove is the privatization of the telephone sytsem, which results are clear to everyone and there is no need to speak about those things. Instead of this, it is worth to mention, that the government could use the fact of the presence of the contract twice. “Armentel”, trying to escape from meeting the international economical court, made some compromisses. But it is the same, whenever an essential thing is set out for privatization, most of the politicians start to speak about this intensively. It is easy “to win dividents” in this way, because the society is scared. Each time the fact of privatization is considered as cheating. The populist political powers have the tendence to consider everything as strategic or national wealth. For example, now, considering the “Complex” as natinal wealth, they compare it with the “Matenadaran” and the “National art gallery”. The cheating is clear. There is no country in the world, where the biggest old manuscripts deposiatary or the national gallery are private. But each field can be private. Each country decides itself the limits of the controlling and regulating leverages. For example, in France there is both private property in the governmental sector of water suuplying system. The only juridical limit is that the owners of the basins and water systems must be citizens of France.

The only interest in economy is the economical effectiveness, and if the planes make flights, it doesn’t matter whether those are state-owned or private. It is clear too, that the government doesn’t manage the economy very good. And this is the reason why the countries, having market economy, try to privatize all the fields, in which the private sector has demand. Probably the best example can be the case of the british railway. As soon as a field becomes profitable, it is privatized, and in case of working withоut any profit, the government goes back and operates the field itself. The most suitable example for the government economy bad management can be met in Russia. In a country like that, where they “drink” much, and where vodka is as essential for them as the bread, the state company “Rosspirtprom”, which produces the 60 % of the alcohol and 40 % of the vodka in Russia, works without any profit. In May 1, 2005, the debt of this company covered 1 billion russian rouble. By privatization of this kind of fields, the government helps itself to stay away from the difficult control. Instead of this, taking only the pleasant responsibility of taking taxes from them. Even in this kind of conditions, the contract with the owner is very important. Our state officers learned to dictate “right terms” in the result of a lot of mistakes. For example, the privatization of Yerevan Brandy Factory was successful “by chance”. The french company wasn’t dictated terms: neither for buying grape nor for the bottling minimum capacities, etc. And the management of “Zvartnots” are argentine armenians: giving the management of the airport to Ernekyan, together with some other responsibilities it is also noted, that the airport can not be closed for more than seven days, except in case of force majeure conditions. Otherwise the government has the right to stop the contract without returning the investments to the owner.

I.e. if the privatization is made according to a good contract and in the right way, the country always wins from this. But the problem is that the future owners always manage to interest some state officers and make a contract like they want to make. Otherwise the society would not be so afraid of privatization. The “Sport Cncert Complex” is not one of the main buildings presenting the face of our city. Moreover, in case when the new owner promisses not to change the profile and the form of the building. Please don’t think, that I want to glorify this privatization. First of all, the deal contract hasn’t been published. And on the other hand this is one more example for a secret deal. And I think we should be afraid only of not public-announced and of privatizations without any competition.