By Atom Markarian
The Armenian government’s drive to privatize the bulk of remaining state-owned industries by the end of 2003 faced serious difficulties last year amid weaker-than-expected interest from private investors, Minister for State Property David Vartanian announced Thursday.
Vartanian said his agency managed to attract buyers for only 75 percent of some 300 large and medium-sized enterprises slated for privatization in 2001. He said despite a considerable rise in the number of sold businesses, overall revenues from privatization stood at 2.5 billion drams ($4.5 million) or just over half of what the government had expected.
The modest figure reflects the absence of major privatization deals involving large foreign companies. In particular, the government last year failed to privatize the country’s power distribution companies and largest cement factory.
Vartanian told reporters that the state enterprises are unattractive mainly because of their outdated equipment and huge debts incurred since the collapse of the Soviet command economy. Their sell-off is part of a three-year government program launched last year. If successfully implemented, it will complete the decade-long privatization process in Armenia and leave almost the whole of its economy in private hands.
The program encompasses about 700 enterprises, including power plants, mining companies and chemical factories. The government hopes that the latter will attract foreign investors.
The private sector already accounts for more than 75 percent of Armenia’s Gross Domestic Product.