From July 1, 2014, the new law of Turkmenistan on denationalization and privatization of state property, which was accepted in the meeting of the Mejlis of Turkmenistan in December of the old year, will be put into force. The law adopted by national parliamentarians has become a rather timely step creating favorable conditions for development of efficient socially-oriented market economy of Turkmenistan.
For the first time the law has outlined the basic principles of denationalization and privatization including the equality of civil rights, ensuring of social security of workers , openness, ensuring of state and social control upon realization of measures in privatization of state property.
The novelty of the law is that the related articles have been added forms of denationalization and privatization as sale of shares of state property, stock markets, directs selling of private projects, sale of projects of state ownership used under lease.
The law clearly outlines the notion of denationalization and privatization of state property. In particular, it has been established that denationalization of state property –it means the change of state enterprise into a joint-stock company or an enterprise of other business form the founder of which is the state or one of its founders which should be the state. Privatization of state property means alienation of state property for compensation to transfer to a physical person or non-governmental legal persons.
Thus, the basic principles of denationalization should serve transfer by the state to a physical person or legal persons the functions of management of business entities fully or partly. It is the process of denationalization of property at the expense of production, property, and other material resources. The given process is realized by means of sale of state ownership projects for the interested persons on the basis of stock or other ownership.
Privatization is a more wide and structured phenomenon unlike usual sale of state enterprises. The essence of privatization can be expressed in a wide and narrow sense. In a wider sense, privatization is understood as reduction or slowdown of rate of expansion of state sector of economy accompanied with increase in the share of private sector. In a more narrow sense privatization presents a full or partly transfer of ownership right for property, production, state securities, other material and nonmaterial assets of state to private persons. Privatization mainly should facilitate enhancement of competitiveness of economy of the country as a whole and increase the efficiency of use of entities.
Thus, the process of denationalization and privatization in Turkmenistan includes two mutually complementary parallel process. It is a gradual liberation of the state from some functions of regulator of ownership relations which are not performed by ti in the market relations and formation of new legal and economic institutions and mechanisms without which it is difficult fully to realize the system of private sector,. Therefore, at the present stage of the state diminishing its ownership rights will have to continue controlling and regulating private ownership and market economy.
A special attention should be attached to the acts of the adopted law in which it has been outlined what can be objects of denationalization and privatization. So, Article 6 of the adopted law has been amended and added with the following objects as subject to denationalization and privatization : non-residential area in residential houses, unconsidered area of common use, objects of uncompleted construction, share of securities in the authorized capital of joint-stock companies, to the property of enterprises of various business forms belonging to the state (including those ones which produce agricultural products), production and non-production divisions and structural units of enterprises as private complexes the privatization of which do not break the technological cycle, separate divisions of state enterprises. It is also important to note that the same article now clearly outlines the list of objects, which cannot belong to denationalization and privatization.
It is not less important the fact that as a result of adoption of the law there arise the following advantages namely as: enhancement of efficiency of enterprises, increase in public revenues, rise of paying capacity and investment of population, attraction of workers to the management of the capital of enterprises, creation of a wide social basis of small and medium businesses and many others.
Consequently, as the essence of conception of denationalization and privatization should serve efficiency of production, which confirms that, some enterprises manage more successfully by the private sector. Privatization should facilitate rise of competitiveness of the economy as a whole.
In spite of the reached achievements in denationalization and privatization, the main thing for enterprises, branches, and economy as a whole remains process of their establishment as well as their post-privatization development. In this sense a very important act has find its reflection in the law and it gives an opportunity for purchasers of state property to get deferral of payments. Therefore, by part four of article 18 it is envisaged that in certain cases upon presentation to the interdepartmental central commission the term of payment of means for privatization of state property shown in the sale and purchase agreement, may be delayed by the authorized authority until three years; by the Cabinet of Ministers of Turkmenistan until five years.
The given obligation will enable to solve a range of issues connected with possible unstable functioning of denationalized and privatized enterprises, to reveal weak and strong points of the sides, peculiarities of restructuring, necessity of renewal and re-engineering. Upon consideration of results of denationalization and privatization, one should take into consideration the economic and social spheres. All this at the final stage, will enable to apply such a model in Turkmenistan, which successfully function in many developed countries of the world where practically any person can purchase a share, the state receives real financial means from their sale, and they are directed to the development of economy.
For the first time the law has outlined the basic principles of denationalization and privatization including the equality of civil rights, ensuring of social security of workers , openness, ensuring of state and social control upon realization of measures in privatization of state property.
The novelty of the law is that the related articles have been added forms of denationalization and privatization as sale of shares of state property, stock markets, directs selling of private projects, sale of projects of state ownership used under lease.
The law clearly outlines the notion of denationalization and privatization of state property. In particular, it has been established that denationalization of state property –it means the change of state enterprise into a joint-stock company or an enterprise of other business form the founder of which is the state or one of its founders which should be the state. Privatization of state property means alienation of state property for compensation to transfer to a physical person or non-governmental legal persons.
Thus, the basic principles of denationalization should serve transfer by the state to a physical person or legal persons the functions of management of business entities fully or partly. It is the process of denationalization of property at the expense of production, property, and other material resources. The given process is realized by means of sale of state ownership projects for the interested persons on the basis of stock or other ownership.
Privatization is a more wide and structured phenomenon unlike usual sale of state enterprises. The essence of privatization can be expressed in a wide and narrow sense. In a wider sense, privatization is understood as reduction or slowdown of rate of expansion of state sector of economy accompanied with increase in the share of private sector. In a more narrow sense privatization presents a full or partly transfer of ownership right for property, production, state securities, other material and nonmaterial assets of state to private persons. Privatization mainly should facilitate enhancement of competitiveness of economy of the country as a whole and increase the efficiency of use of entities.
Thus, the process of denationalization and privatization in Turkmenistan includes two mutually complementary parallel process. It is a gradual liberation of the state from some functions of regulator of ownership relations which are not performed by ti in the market relations and formation of new legal and economic institutions and mechanisms without which it is difficult fully to realize the system of private sector,. Therefore, at the present stage of the state diminishing its ownership rights will have to continue controlling and regulating private ownership and market economy.
A special attention should be attached to the acts of the adopted law in which it has been outlined what can be objects of denationalization and privatization. So, Article 6 of the adopted law has been amended and added with the following objects as subject to denationalization and privatization : non-residential area in residential houses, unconsidered area of common use, objects of uncompleted construction, share of securities in the authorized capital of joint-stock companies, to the property of enterprises of various business forms belonging to the state (including those ones which produce agricultural products), production and non-production divisions and structural units of enterprises as private complexes the privatization of which do not break the technological cycle, separate divisions of state enterprises. It is also important to note that the same article now clearly outlines the list of objects, which cannot belong to denationalization and privatization.
It is not less important the fact that as a result of adoption of the law there arise the following advantages namely as: enhancement of efficiency of enterprises, increase in public revenues, rise of paying capacity and investment of population, attraction of workers to the management of the capital of enterprises, creation of a wide social basis of small and medium businesses and many others.
Consequently, as the essence of conception of denationalization and privatization should serve efficiency of production, which confirms that, some enterprises manage more successfully by the private sector. Privatization should facilitate rise of competitiveness of the economy as a whole.
In spite of the reached achievements in denationalization and privatization, the main thing for enterprises, branches, and economy as a whole remains process of their establishment as well as their post-privatization development. In this sense a very important act has find its reflection in the law and it gives an opportunity for purchasers of state property to get deferral of payments. Therefore, by part four of article 18 it is envisaged that in certain cases upon presentation to the interdepartmental central commission the term of payment of means for privatization of state property shown in the sale and purchase agreement, may be delayed by the authorized authority until three years; by the Cabinet of Ministers of Turkmenistan until five years.
The given obligation will enable to solve a range of issues connected with possible unstable functioning of denationalized and privatized enterprises, to reveal weak and strong points of the sides, peculiarities of restructuring, necessity of renewal and re-engineering. Upon consideration of results of denationalization and privatization, one should take into consideration the economic and social spheres. All this at the final stage, will enable to apply such a model in Turkmenistan, which successfully function in many developed countries of the world where practically any person can purchase a share, the state receives real financial means from their sale, and they are directed to the development of economy.