Tashkent, Uzbekistan (UzDaily.com) - A round table was held in Tashkent with the participation of representatives of government agencies and international financial institutions, devoted to the discussion of legal documents aimed at reducing the state's presence in the economy, as well as the Strategy for the ownership, management and reform of enterprises with state participation for 2020–2025.

The participants of the event summed up the analysis of opinions on the draft of a number of documents on the privatization of state property.

For the first time in many years of privatization processes in Uzbekistan, specific criteria for state participation in the economy have been established, which are based on which enterprises should be privatized and which should be left in state ownership.

According to the State Assets Management Agency, at present the number of enterprises with state participation (CCP) is 2,965, the nominal value of government shares is 111.4 trillion soums, their share in GDP is 55 percent.

However, they employ only 6 percent of the total number of officially employed in the labor market. At the end of 2019, 9 percent, or 262 state enterprises, suffered a loss of 4.1 trillion soums, and those who completed the year with a profit have low performance indicators.

For example, ROE (return on equity) was 6.4 percent, ROA (return on assets) was 1.6 percent. 900 state-owned companies (30 percent) enjoy tax and customs benefits.

State-owned unitary enterprises account for 58 percent of all CCGT units. They have direct government orders, some operate without a license. Only 3 percent of independent members are on the supervisory boards, there are no committees and a compliance service, and mechanisms for evaluating the performance of supervisory boards have not been introduced. All this puts the private sector in unequal conditions, creates distortions in all sectors.

President of Uzbekistan Shavkat Mirziyoyev clearly indicated the need to inventory about 3,000 state-owned enterprises and take measures to drastically reduce government participation in the private sector and areas where competition is developing. As part of these tasks, 8 working groups were created under the chairmanship of the Prime Minister and his deputies, who critically examined the activities of 2,965 state-owned enterprises and prepared proposals.

In its turn, the State Asset Management Agency developed and submitted for public discussion 9 draft regulatory acts aimed at the effective management of state assets, a drastic reduction in government participation in the economy, and the introduction of modern corporate governance methods. They provide for the approval of the largest privatization program in the history of the country.

Private business will be offered 1,115 government shares, including in the field of oil and gas - 69, energy - 25, chemical industry - 8, financial organizations - 24, design institutes - 23, media - 94, markets and shopping malls - 509. It is planned to leave the state only 554 enterprises, sell everything else or abolish everything on the principle of "explain or sell."

- At present, a privatization strategy and other documents have been developed and in April they will be submitted for approval to the Cabinet of Ministers. Then, in July, a schedule for putting assets for auction will be developed and approved,” said Tulkin Nabiev, Deputy Director of the State Assets Management Agency.

For each object, it is necessary to conduct an inventory of assets and liabilities, then an assessment and examination of its reliability. Only after this, shares can be put up for sale on the Republican Stock Exchange "Tashkent", and shares and real estate by decision of the tender commission - at public tender.

It is planned to introduce modern methods of corporate governance in enterprises that remain at the disposal of the state. In particular, issues of increasing the term of office of the executive body and the supervisory board of companies from 1 to 3 years, the transition to IFRS, the further development of the institution of independent members of the supervisory board. By the end of 2020, the audit commissions will be abolished. Audit, appointment and remuneration committees will be created.

The implementation of these documents is expected to reduce state-owned enterprises by 81 percent, PMU - by 96 percent, conduct IPOs in 20 companies and increase the number of independent members of the supervisory board to 20 percent.