The State Assets Management Agency of the republic of Uzbekistan

The Presidential Decree of the Republic of Uzbekistan No. PD-177 dated 28 August 2026, “On Additional Measures to Reduce State Participation in the Economy and Accelerate Privatization Processes,” is noteworthy not only for the scale of the objectives it sets, but also for the quality of the institutional solutions embedded in it. An important feature of the Decree is that it views the reduction of state participation in the economy as part of a systemic reform affecting the allocation of powers among government bodies, the status of state-owned and state-participated enterprises, and the rules governing engagement with investors.

Overall, the privatization programme set out in the Decree will contribute to broadening the base of private investment and enable the state to focus its resources on performing the core functions and responsibilities envisaged by the Constitution of Uzbekistan.

The combination of privatization mechanisms with the strengthening of the institutional architecture is generally viewed positively by the international investment community.

In particular, the provisions of paragraph 7 of the Decree deserve special attention. The prohibition on establishing new state institutions in competitive sectors without budgetary funding is consistent with the principle of “hard budget constraints” and represents a fundamental condition for ensuring fair competition between the public and private sectors. Transforming state institutions engaged in commercial activities into business entities, as well as removing non-core organisations from enterprises with state participation and subsequently privatizing them, will help establish a clearer distinction between commercial activities and the functions of the state.

The decision to abolish the State Commission on Privatization and transfer its powers to the State Assets Management Agency is also significant. Consolidating ownership functions within a single institution reduces fragmentation in the management of state assets and strengthens individual accountability for the final outcome.

Particular attention should also be paid to the preservation of the state’s special right to participate in the management of privatized enterprises that are of strategic importance to national security. This is provided for in subparagraph “i” of paragraph 6 of the Decree. A similar instrument of state participation has previously been used in Uzbekistan and, in itself, is not inconsistent with market principles. The significance of this provision lies in the three conditions attached to it: the right is temporary in nature; its application is limited to large and strategic enterprises and requires a separate decision by the Head of State; and the exercise of such a right must be publicly disclosed prior to the privatization of the enterprise.

The attention devoted by the Decree to the quality of communication with the investment community also deserves separate mention. Paragraph 17 provides for the organization of presentations (“Road Shows”) at international forums, as well as systematic engagement with foreign media and PR consulting companies to attract potential investors to participate in auctions and other sales processes.

This approach is consistent with established international practice in supporting major privatization transactions, where systematic engagement with the international investment community is an important condition for building a broad investor base, achieving fair price formation, and ensuring the subsequent liquidity of assets. From a corporate governance perspective, this, in turn, implies higher requirements for transparency, the quality of information disclosure, and the effectiveness of the governing bodies of enterprises undergoing privatization.

The consistent and high-quality implementation of the above provisions of the Decree should contribute to strengthening foreign investors’ confidence in Uzbekistan’s privatization processes while also supporting the development of the national capital market.