Strategies of the Development of Entrepreneurship and SME

The privatization process of objects under state control has an important place ineconomic reforms implemented in Azerbaijan during last years. One of the main changes ineconomic structure in the country during the transfer to market economy is the privatizationand demonopolization of state property.It was considered to give the citizens 65% of property to be privatized free of charge atthe result of application of measures envisaged in State Program on “Prizatization of stateproperty” accepted in 1995-1998.The privatization process acts as a solution of economic and financial problems of thecountry. The adoption of State Privatization Program in 2000 and opening of more than 400industrial enterprises for privatization in 2001 put the start of new stage in this importantprocess.Due to the figures from 01.07.2007 about 47,259 small enterprises, as well as 420industrial, 123 agricultural, 543 construction, 10thousand consumer services, 3,780 trade,1,081 public catering, 19,737 trasport, 190 communal objects and enterprises, 665 petrolstations, 10,143 other state objects and equipments were privatized in the republic and thetotal value of privatized enterprises was 194.9 mln. USD.The shares with value of USD 2,409,000 and USD 4,235,500 were sold respectively inclose auctions to the labor collectives and paid auctions. But, the shares with the value of 18, 8thousand USD were remained under state property. 40% of privatized enterprises and objectswere situated in Baku, 50% in other cities and regions of the republic and 10% in NakhchivanAutonomous Republic.About 1,500 joint – stock companies were established on the bases of state enterprisesand afterwards were privatized. Due to the figures from 01.01.2007 5 enterprises ofestablished joint – stock companies belonged to industrial sector, 2 enterprises belonged toagrarian-industrial complex, 1 enterprises to construction, 1 to transport, 3 to service andother sectors. 40% of joint-stock companies were established on the bases of state enterprisessituated in Baki, 60% in other cities and regions of the republic. At the beginning of the currentyear the shares of 104 joint-stock companies with the total value of USD 38 million wassubmitted to the auction and shares with the value of USD 6.7 million were sold. USD 23.5million was included into the state budget from the privatization process and USD 3.2 millionfrom rent of state property in 2007.At the same time 35 state enterprises with the share capital of USD 6.7 million, as wellas 18 construction, 6 industrial, 3 trade, 3 transport, 1 consumer service and 4 otherenterprises became a joint-stock companies.One of the most important issues in privatization process is support, restructurizationand recovery of the activity of privatized enterprises. The measures to be taken in this field arethe privileges in tax, credit, custom payments, and protection of market and producers fromunfair competition and monopolization. The carried analyses show that a lot of privatizedenterprises couldn’t survive after their privatization because of unsufficient support from thestate, unfair competition, lack of financial resources, etc. Especially, processing and productionoriented enterprises, producers of tinned products, wine-making, poultry keeping, food andlight industry couldn’t obtained the necessary economic results. The problems such asunsufficient working capital of privatized enterprises, credit debts remained beforeprivatization, unprotection of interests of local producers created serious obstacles for theiractivity.The current stage of privatization process covers the enterprises related to the keysectors of the country economy. The privatization of small enterprises should be fully finished102