Sofia, April 16 (RFE/RL) - Elman Roustamov, Chairman of Azerbaijan's National Bank, said yesterday that his country is about to sell off most state enterprises, including several key banks, within the next two years.
Roustamov was speaking at the annual meeting of the European Bank for Reconstruction and Development (EBRD) in Sofia. He said that Azerbaijan is preparing legislation to privatize about 70 percent of state enterprises. This would include about 8,000 firms, including four key state banks (Prominvest, Agroprom, Amanat and the International Bank).
Roustamov said that small and medium-sized firms would be privatized first, and privatization of large industrial firms would follow. He went on to say that the program would eventually include state oil-refineries and mineral companies. These are Azerbaijan's largest and richest enterprises.
Roustamov said that the privatization of banks was particularly important, because it would end the current system of protecting state banks and paved the way for creating "a real market economy."
The protectionist system is rooted in the 1994 decree, which required state-owned enterprises to bank only with state-owned banks. The decree has effectively locked out about 200 private commercial banks, including six foreign banks, from doing business with major state firms.
Turning to problems of Azerbaijan's monetary policy, Roustamov said that its main goal is to reduce the central interest rate to stimulate economic development. The current rate is about 50 percent, already down from the January 1995 rate of 250 percent. But Roustamov said that the rate reduction would depend on inflation.
Asked about Azerbaijan's gold and foreign currency reserves, Roustamov said that there was "enough" to cover the cost of imports for about three months. Under the stabilization plan that Baku signed with the International Monetary Fund, reserves would have to be increased by the end of the year.