By Shakeh Avoyan
The Armenian parliament’s main oversight arm has criticized the government’s privatization policy, saying that it has not been efficient enough and has lacked transparency in recent years, it emerged on Monday.
The Audit Chamber of the National Assembly has scrutinized the sale of remaining state assets carried out since 2000 and found “significant shortcomings” in the process. Its findings are contained in a report to lawmakers that was made available to RFE/RL.
At issue is the government’s three-year privatization program which was due to be completed this December. The government’s Committee on State Property Management was tasked with auctioning off nearly one thousand enterprises during that period. But with only 350 of them privatized in 2000 and 2001, it is already clear that the target will not be met on time.
The Audit Chamber blames the apparent failure on the agency’s handling of the process which it says was not open and competitive. “Almost 77 percent of the privatization deals have taken the form of direct sales that did not ensure the transparency of the process and did not contribute to an influx of [private sector] investments,” its deputy chief, Gegham Gasparian, told RFE/RL.
According to Gasparian, an average state-run entity was sold off at less than a fifth of its face value set by the State Property Committee. He attributed that to a lack of competitive tenders that award a company to the highest bidder.
The three-year privatization program was approved by the previous Armenian parliament. The government will report to the current legislature on the status of its implementation later this year. It is expected that the deputies will discuss the Audit Chamber’s findings together with the government report.
The head of the State Property Committee, David Vartanian, announced last month that the long-running privatization process in Armenia has entered its final stage and will be completed by the end of next year. Vartanian has regularly complained that with the most attractive chunks of state property already sold, that it is increasingly difficult to attract investors for the remaining state enterprises most of which have long stood idle.
According to Vartanian’s agency, 1,789 large and medium-sized enterprises and 7,178 small ones have been privatized since the launch of market-oriented economic reforms in Armenia in 1991. More than 80 percent of the country’s Gross Domestic Product is now generated by the private sector.
The Audit Chamber’s report on privatization practices is part of its broader efforts to inspect various government agencies that deal with finances. It is currently investigating Armenia’s reputedly corrupt tax collection and customs services. The inspections began this summer after the new parliament speaker, Artur Baghdasarian, called for greater parliamentary oversight of the executive. Baghdasarian complained that the parliament body had previously done little to hold the government in check.