The Uzbekistan Finance Minister Timur Ishmetov in an interview to Ryan Chilcote, on the sidelines of the Uzbekistan Economic Forum, spoke about Uzbekistan’s privatization program and its goals.
According to him, there are about 3,000 state-owned enterprises in the country.
“The number is huge, but most of them are tiny companies. The original plan is to sell three quarters of them fast. We have already compiled a list of SOEs we have. In some area, we don't need them. Therefore, we are putting them for auction and selling them, at the market price,” the minister said.
Speaking about large state-owned enterprises, Timur Ishmetov said that the state cannot sell some natural monopolies. For example, National Electric Grids, the privatization of which is “not good”.
While, according to him, Uzbekistan is interested in the entry of companies to the energy production sector.
“They have already started building their businesses here. We are even thinking about the sale of existing power plants, and move to privatization or public-private partnerships in the distribution part,” he said.
The Minister said that it is planned to spread this practice in other areas.
“Several large, very good companies, maybe two not more than in the minerals production, we do not plan to sell, but are ready for a partial IPO. Because it is a tool for creating an effective company, attracting private investors, who will have hundreds and thousands of additional eyes to make sure that the company will be run effectively,” he said.
Timur Ishmetov admitted that Uzbekistan was late in starting the program for the privatization of state assets.
“The thought of keeping everything under control has nothing to do with any kind of security or safety. It's about efficiency and results. But I am happy that we started with the political will from our president, ”the minister said.
According to him, Uzbekistan has already completed several good deals, but this is only big beginning.
“There is a very good interest from investors. The [privatization] process, well organized, modern and transparent, showed that we can have good investors who will come to these enterprises and improve the situation. Secondly, we have money, but most importantly people started to trust us, ”he said.
Timur Ishmetov called the trust of investors, people who are ready to risk assets in Uzbekistan, as the main thing in the privatization process.
“The sooner we get rid of inefficient SOEs, the better for us. Better from the point of view of job creation, efficiency in the market, as well as the budget,” said the head of the Ministry of Finance.
The Minister of Finance stressed that the issue of creating jobs, taking into account the growing population, remains relevant for Uzbekistan. The private sector is important for the employment of people.
“This is not about selling one state-owned company, but about showing investors that the state is leaving these markets. Now they are free to come into this business and compete. I say that we must do this quickly, not because we need money or want to get rid of those companies because of the high cost of their maintenance, but in order to show investors that they can not be afraid that there will be unfair competition from outside. the state, ”he explained.
In October 2020, the President signed a decree aimed at pushing privatization of state assets, under which more than 620 assets will be transformed, put up for public auction, and sold to the private sector. Due to shortcomings in the implementation of this order, the director of the State Assets Management Agency was replaced and other personnel changes took place in the regional departments of SAMA. In February, the president instructed the government to expedite the privatization of assets with state shares.
