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World Bank"s Report Makes Expert Laugh

2017 November 03 ( Friday )  11:07:43
Print version
Русский Azərbaycan

The institute of bankruptcy does not work in Azerbaijan, and I do not understand how the country could advance on this item in the international rating - Akram Hasanov

This week, the World Bank Group published an updated report Doing Business - 2018. Judging by the document, among other achievements, Azerbaijan achieved the greatest progress on the index "solving issues related to bankruptcy", moving 39 steps forward!

"I admit, I do not quite understand how Azerbaijan rose in the Doing Business rating on the mentioned item; maybe other countries lost their positions," the well-known bank expert Akram Hasanov responded to the request of Turan, noting that the institution of bankruptcy does not work in the country . Not only individuals, but even companies very rarely declare bankruptcy due to weak legislation. The Law on Insolvency and Bankruptcy adopted in 1997 is outdated and does not meet the requirements of the time. "A rare company will decide to declare bankruptcy, acting in the shadow economy. The income of many companies is unofficial, so what bankruptcy procedure can there be in this case? After all, if the money is hidden, declaring bankruptcy, to put it mildly, is unprofitable," Hasanov said.

According to him, the number of bankruptcies increased only due to the liquidation of 11 commercial banks. "This has not happened in the history of our country. I think this circumstance could influence the growth of the position in the rating of Doing Business (laughs - Ed.). I have already said on many occasions that the liquidation of banks occurs with egregious violations, and creditor committees have been created only in four out of the eleven bankrupt financial organizations with very limited powers, and only in Bank Standard the committee seeks to comply with creditors" rights, grant documents on loans issued, inspections by the Central Bank and other documentation. However, our legal requirements have not yet been fulfilled. And when the World Bank reports that we have risen 39 steps to take bankruptcy-related decisions, I frankly do not understand what decisions they talk about," the expert said.

According to Hasanov, the seriousness of the report is doubtful, mainly from the point of view of the effectiveness of achievements expressed in the growth of positions: "This is a semi-serious document. I will cite a similar example with the growth of the rate of business registration in the country. I.e. it is possible to open a company in a couple of days, and since local legislation has achieved this, we were raised in the corresponding rating. As a result, an opportunity is created to establish one-day companies and a field for corruption. Doing Business believes that this is good, but the Germans are laughing. Why are not they in Germany rushing to raise their ratings by speeding up this procedure? The answer is that they are afraid of corruption, and they do it right."

Returning to the issue of promoting our country in the Doing Business - 2018 rating to address issues related to bankruptcy, Hasanov half-jokingly noted this could have been caused by the organization of creditor committees, mostly fictitious entities: "Perhaps this is a success, because this did not happen before. I.e. a bank was closed and the creditors who invested their money had no information about what was going on there at all."

Recall that according to the report, Azerbaijan took the 57th place in the Doing Business-2018 rating, promulgated by the World Bank Group. According to this document, Azerbaijan implemented four reforms during the reporting period. These reforms dealt with access to credit, protection of minority shareholders" rights, execution of contracts, and regulation of bankruptcy.--0--