Page 6 - Azerbaijan State University of Economics

Adalat J. Muradov, Nazim Ö. Hajiyev: Analytical frameworks and procedures for application of
demonopolization

Demonopolization should be seen as a step from a central planning and management

system towards market economy. “Demonopolization” used here defines separation of one entity

into two or more ones at different disposals, which are separately managed, for purpose of

creation and development of a competition. Unlimited independence of economic activity and

productive forces belonging to the private property serves are typical for capitalism and are in

favour of the society and can be more efficient only when the competition is developed.

Transition of state-owned and state-run enterprises into private ones, creation of sufficiently

strong private monopolies interested in unlimitedly raising their products’ prices ignoring

customers’ demands and desires, and covering all fields will not bring in a great welfare and

opportunities. Only competitive private enterprises are intending to meet customers’ current and

expected demands by effectively produced high quality goods and services and introducing them

at attractive prices.

Demonopolization should be planned as an action leading to and supporting the

privatization. Delays have negative impact on economy involving undue influence of market

forces in a period between privatization and demonopolization. This time, long-term distortions

dictated by actions acceptable in this period under influence of the established situation, will

occur. When implementing demonopolization after privatization, demonopolization becomes

sufficiently complicated, because by this time resistance of new entrepreneurs established as a

result of privatization gets stronger. The process of privatization itself may get difficult due to

further demonopolization perspective. Such a perspective will create an unnecessary uncertainty

during evaluation of the state property and hand over the property to those exercising rather

tough impact on demonopolization.

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