The International Monetary Fund (IMF) stated that the privatization of state enterprises in Uzbekistan has failed to realize its initial objectives, and the role of the state in the national economy remains quite significant despite the reforms being implemented.
Since 2019, the management model for state enterprises in the country began transforming from a decentralized structure to a more centralized one. During this period, the Agency for State Assets Management was established, which became a single state body responsible for monitoring financial and economic indicators, as well as for the privatization, transformation, and corporate governance of state assets.
Subsequently, in 2020, the Ministry of Economy and Finance received shareholder powers over large and strategically important state enterprises. In the same year, enterprises were required to implement international financial reporting standards and develop key performance indicators.
Following this, the state company UzAssets was formed, tasked with managing shares in the largest state-owned enterprises. The goal of this company is to increase transparency, improve corporate governance quality, and overall operational efficiency.
In 2021, a strategy for reforming state-participated enterprises for the period 2021–2025 was approved. This strategy involved reducing state participation in competitive sectors by 75%, implementing a 'sell or explain' principle, forming supervisory boards with independent members, and conducting competitive selection of management staff and establishing audit committees.
The IMF acknowledges that the legislative basis for conducting reforms has been strengthened. In 2023, the Law 'On State Property Management' was adopted, which defined criteria for justifying state involvement in economic activities. In 2024, the Law 'On Privatization of State Property' came into force, enshrining the principles of legality, transparency, accountability, equality of participants, and anti-corruption measures.
Nevertheless, according to the fund's assessment, the implementation of this strategy has not led to a significant reduction in state presence, and the initial goal has not been achieved. The report also points out that the limited number of large privatized state enterprises hinders overall economic progress and efficiency.
Seven privatization programs were launched since 2020. According to the State Assets Agency, the number of state enterprises decreased from approximately 3000 at the time the strategy was approved to about 2000 by the end of 2025, and by the end of February 2026, it was 1917.
Enterprises were excluded from the register for various reasons: privatization (515), liquidation (1313), reorganization (757), or transfer to charter funds/PPP projects (260).
The added enterprises included major groups such as 'Uzavtosanoat', 'Uzbekneftegaz', as well as grain and cotton holdings, and energy and railway companies. These organizations were not previously counted as state enterprises until they were transferred to the state before restructuring, privatization, or liquidation.
It is important to note that the definition of a state enterprise used by the State Assets Agency is limited to organizations directly owned by the state, excluding enterprises that are part of large groups.
Despite this, the IMF assesses the successes of privatization as moderate. Over the period 2021–2024, total revenue from privatization amounted to approximately 2.5 billion dollars. Most of these funds came from the sale of shares in small state enterprises, real estate, and non-agricultural land, primarily to local buyers.
Among the major deals, the fund highlights Coca-Cola Bottlers Uzbekistan, the Fergana Oil Refinery, and 'Ipoteka-bank', which attracted foreign investors. The highest privatization activity was observed in the energy, banking, chemical sectors, construction material production, and hospitality business.
According to the IMF, large state enterprises often remain under full state control. The fund cites several reasons: the ongoing transformation of companies such as 'Uzbekistan Railways' and the Uzbekistan Airways, unresolved long-standing issues, including delays in liberalizing gas and electricity tariffs, the high strategic importance of certain enterprises, and external factors related to geopolitics and trade fragmentation.
Furthermore, the IMF points to the insufficient diversity of the investor base, especially the shortage of foreign capital that could bring new technologies and expertise.
The IMF separately noted the creation of the National Investment Fund of Uzbekistan (UzNIF) in 2024, which was entrusted to the management of the international company Franklin Templeton. This fund received share packages ranging from 25% to 40% in 12 large non-financial state enterprises and one financial company. The tasks of UzNIF include increasing transparency, improving corporate governance, establishing market valuations, and attracting institutional investors; however, the IMF emphasizes that the fund itself does not replace the need for broader reforms.
The fund advises Uzbekistan to develop a clear and transparent policy regarding state property, which must be regularly reviewed to determine the fate of enterprises: remaining in the state sector, being privatized, or being liquidated.
The IMF believes it is necessary to significantly reduce the role of state enterprises in the economy, as more than 80% of them operate in competitive sectors. It recommends privatizing profitable enterprises in competitive fields according to best global practices, and liquidating unprofitable ones while ensuring targeted social protection and compensation for laid-off employees.
For those strategic enterprises that retain state ownership, the fund insists on eliminating weaknesses in corporate governance and removing strict budgetary constraints. It is also necessary to guarantee the independence of supervisory boards, eliminate functional duplication between the State Assets Agency, ministries, and local administrations, demand market returns, and fully cover socially significant obligations from the budget.
The IMF also drew attention to the high degree of state participation in the banking system. State banks in Uzbekistan accumulate about 63% of banking assets, which is significantly higher than the average in middle-income countries (about 23%). The fund warns that such a large state share in commercial banks could create vulnerability in the financial sector and lead to contingent liabilities for the budget.
Moreover, the IMF states that about 84% of state-participated enterprises operate in competitive sectors where justifying state presence is difficult. These include services, tourism, agriculture, pharmaceuticals, and markets. By the end of 2024, state enterprise assets reached 101% of GDP.
In 2024, only 46% of Uzbekistan's 2148 state enterprises (982 entities) showed profitability. The main losses were recorded in the electric power, housing and communal services, and water supply sectors, while the mining sector provided about 80% of dividends to the budget, indicating low return for the state from a significant portion of its assets.
The International Monetary Fund (IMF) has called on Uzbekistan to intensify efforts to reduce the role of the state in the economy, noting that despite ongoing reforms and privatization programs, government involvement remains significant.
According to the IMF report, the implementation of the strategy for reforming state-owned enterprises in Uzbekistan has not achieved the initial goal of substantially reducing state presence in the economy. Since 2019, the system for managing state assets has gradually transformed from a decentralized to a centralized model. During this period, the State Assets Management Agency was established, which received powers to manage state property, privatization, enterprise transformation, corporate governance, and monitoring the financial and economic indicators of state companies.
In 2020, the Ministry of Economy and Finance took on the role of shareholder in the largest and most strategically important state-owned enterprises. At the same time, state companies were required to implement International Financial Reporting Standards and introduce key performance indicators. Subsequently, the state enterprise UzAssets was established to manage state shares in major state companies and improve their efficiency.
The IMF noted that in 2021, Uzbekistan adopted a strategy for managing and reforming state companies for the period 2021–2025. This strategy aimed to reduce the state's presence in competitive sectors of the economy by 75%, implement a 'sell or explain' principle, create independent supervisory boards, ensure competitive selection of top management, and strengthen corporate governance.
The Fund also positively assessed improvements in the legislative framework. Specifically, the Law on State Property Management was adopted in 2023, defining the criteria for state participation in the economy, and the Law on Privatization of State Property was adopted in 2024, establishing principles of legality, transparency, accountability, equal treatment of participants, and anti-corruption measures.
Nevertheless, the IMF pointed to the limited practical results of the reforms. The report stated that the number of privatized large state-owned enterprises remained small, which slows down overall reform progress and economic efficiency improvement. Seven privatization programs have been implemented in Uzbekistan since 2020. By the end of 2025, the number of state-owned enterprises decreased from nearly 3,000 to approximately 2,000. According to the State Assets Management Agency, as of the end of February 2026, there were 1,917 state-owned enterprises in the country.
The reduction occurred due to the privatization of 515 enterprises, the liquidation of 1,313, the reorganization of 757, and the transfer of 260 enterprises into the charter capital of other organizations or public-private partnership projects. Furthermore, companies belonging to large state holding groups, which were previously not accounted for because they were not directly state-owned, were included in the list of state companies.
The IMF characterized the privatization results as moderate. Total revenue from the sale of state assets for the period 2021–2024 amounted to about 2.5 billion US dollars. Most of this income came from the sale of small state enterprises, non-agricultural land, and real estate, primarily to domestic buyers.
Among the most significant deals, the IMF highlighted the privatization of Coca-Cola Bottlers Uzbekistan, the Fergana Oil Refinery, and Ipoteka Bank, which attracted foreign investors. The most active privatization was observed in the energy sector, banking, chemical industry, construction material production, and hospitality business.
However, the IMF emphasized that many strategic enterprises remain fully state-owned. The ongoing transformation of Uzbekistan Railways, Uzbekistan Airways, and Uzbekistan Airports was noted, along with unresolved structural issues, including delays in liberalizing electricity and gas prices, the strategic importance of certain companies, and external factors related to the geopolitical situation and changes in global trade.
The Fund also pointed to the limited diversification of the investor base, particularly the relatively low participation of foreign companies capable of bringing new technologies, management methods, and investments. The report reviewed the National Investment Fund of Uzbekistan (UzNIF), established in 2024 and managed by Franklin Templeton. The Fund was entrusted with stakes ranging from 25% to 40% in 12 large non-financial state enterprises and one financial institution. The IMF stated that the fund can improve the corporate governance, transparency, and investment attractiveness of these companies but cannot replace comprehensive state sector reform.
As further steps, the IMF recommended that Uzbekistan adopt a transparent state ownership policy that clearly defines which enterprises should remain state-owned, which should be privatized, and which should be liquidated.
The Fund advised privatizing profitable state-owned enterprises operating in competitive sectors in line with best international practices, while unprofitable enterprises should be liquidated with adequate social support for affected employees.
For strategic enterprises remaining under state control, the IMF recommended strengthening corporate governance, ensuring the independence of supervisory boards, eliminating overlapping responsibilities between state bodies, achieving market return indicators, and fully compensating for public service obligations through the state budget.
The IMF also drew attention to the significant share of the state in the banking sector. According to the report, state banks account for about 63% of the country's banking assets, which is significantly higher than the average in developing countries—about 23%. The Fund warned that such a high level of state ownership in the commercial banking sector could create additional risks for both the financial system and the state budget.
The report also noted that about 84% of state-owned enterprises operate in competitive sectors of the economy, including agriculture, services, tourism, pharmaceuticals, and retail trade. As of the end of 2024, the total assets of state-owned enterprises were equivalent to 101% of the country's gross domestic product. Only 982 out of 2,148 state-owned enterprises, or 46%, were profitable. The largest losses were recorded in the electricity, housing and communal services, and water supply sectors, while mining provided about 80% of the dividends flowing into the state budget. In the IMF's view, the state continues to receive a relatively low return from a significant portion of its owned assets.
Uzbekistan authorities are intensifying the privatization process, seeking ways to restore production capacities. In the near future, over 1,300 real estate objects, thousands of hectares of land, and state shares in several companies will enter the market.
During a video selection meeting dedicated to the results of socio-economic development in the first half of the year and determining priority tasks until the end of the year, it was noted that since the beginning of the current year, 57 industry and 76 regional enterprises have reduced their production volumes. This has resulted in the economy losing potential revenue of almost 11 trillion soums.
In light of the current situation, the Deputy Prime Minister was instructed to conduct an analysis of enterprise activities every ten days jointly with region governors and industry heads. It was emphasized that solving business problems must be done directly at the local level without delays.
The Industrial Council was tasked with developing proposals to help compensate for the production decline at 133 enterprises and restore production worth 11 trillion soums.
Special attention was paid to the privatization of state property. Currently, about 3,000 state assets worth a total of 22 trillion soums have been listed on electronic auctions. Nevertheless, regional authorities criticized the insufficient efficiency of state property sales.
A new privatization program will soon begin. According to the plan, the state intends to put 1,300 real estate objects worth approximately 100 trillion soums, 8,000 hectares of land plots, and state shares in 66 enterprises up for auction.
To stimulate business interest, the acquisition conditions have been eased: the initial advance payment amount has been reduced from 30% to 15%, and the remaining amount can be repaid in installments without interest charges.
Furthermore, the president previously criticized the work of local banks and warned of possible personnel changes.
