Azerbaijan’s National Action Plan calls for studying, in 2028-2029, whether some markets currently run as state monopolies can shift to a competitive model. Experts say sectors such as postal services, internet and road construction are best suited to the change.
Under the National Action Plan, authorities will first identify which product and service markets could be opened to competition. The process envisages full or partial privatization of state monopolies, wider market access for the private sector, and new management models. Discussions already cover potential competition in postal services, internet infrastructure, road construction and energy generation.
What criteria will guide the decision
Milli Majlis deputy Vugar Bayramov said shifting state monopolies to a competitive system has been under discussion for a long time. He said the move would help make the economy more transparent, shrink the shadow economy and save state funds.
Bayramov said which sectors get opened to competition will depend on further assessment. Key criteria include how heavily a sector is subsidized by the state, how much funding it receives, and how its production costs compare with those of the private sector. He added that the focus is mainly on sectors where the state acts as a natural monopoly, noting that international practice sometimes hands over a share of equity to private investors and sometimes transfers management rights instead.
Postal services, internet and road construction highlighted
Economist Emin Garibli said electricity, water and gas supply are run by both state and private entities in various countries, but these sectors require heavy capital and may not currently be attractive enough for Azerbaijan’s private sector. He suggested a similar approach could apply to infrastructure bodies such as Azerbaijan Railways.
According to Garibli, postal services, internet services, road construction and broader infrastructure development are better suited to a gradual shift toward private management. He stressed the process should not be abrupt but phased, following proper preparation. Citing alternative energy generation as an example, he noted that foreign investors, including Chinese and Arab companies, are already active there, though distribution of the power produced to the domestic market remains under the authority of state bodies such as Azerishig.
Caution urged in sensitive sectors like education
Emin Garibli said diversifying the economy requires gradually transferring some of the state’s management powers to the private sector, but he does not consider full privatization appropriate for all strategic sectors. Citing education as an example, he said that despite the growth of private school networks, maintaining state oversight in this area still proves justified today.
