The state's role in Uzbekistan's economy remains substantial despite privatization programs, according to a report from the International Monetary Fund.
The Fund notes that since 2019, the model for managing state-owned enterprises (SOEs) has gradually shifted from a decentralized to a more centralized approach. That year, the Agency for Management of State Assets was established as the single government body responsible for managing state assets, privatization, enterprise transformation, corporate governance, and monitoring of SOEs' financial and economic performance.
In 2020, the Ministry of Economy and Finance was given shareholder functions over large and strategic SOEs. That same year, SOEs were required to transition to international financial reporting standards and develop key performance indicators.
Later, UzAssets was established — a state asset management company tasked with managing stakes in the largest enterprises with state participation. Its mandate is to improve operational efficiency, transparency, and the quality of corporate governance.
In 2021, a strategy for managing and reforming enterprises with state participation for 2021–2025 was approved. It called for reducing the state's presence in competitive sectors by 75%, introducing a "sell or explain" principle, creating supervisory boards with independent members, competitive selection of management, and audit committees.
The IMF acknowledges that the legal framework for reform has been strengthened. In 2023, the Management of State Property Law was adopted, establishing criteria to justify state participation in the economy. In 2024, the Privatization of State Property Law was adopted, enshrining the principles of legality, transparency, accountability, equal treatment of participants, and anti-corruption measures.
However, the Fund assesses that implementation of the strategy "fell short of its original goal" and did not lead to a significant reduction in the state's presence. "Moreover, the number of large privatized SOEs remains limited, which constrains overall progress and economic efficiency," the report states.
Seven privatization programs have been launched since 2020. The number of SOEs fell from nearly 3,000 when the strategy was adopted to around 2,000 by the end of 2025. According to the State Assets Agency's database, there were 1,917 by the end of February 2026.
Enterprises were removed from the register for the following reasons: privatization (515), liquidation (1,313), reorganization (757), and transfer into charter funds or public-private partnership projects (260).
Enterprises were added to the list when they belonged to large SOE groups — such as Uzavtosanoat, Uzbekneftegaz, the grain holding company, the cotton-processing holding company, and energy and railway companies. These had not previously been counted as SOEs because they were not directly state-owned. They were only added to the register after being transferred to state ownership ahead of restructuring, privatization, or liquidation.
Because of the definition of an SOE used by the State Assets Agency, only organizations directly owned by the state are included in the database. SOEs belonging to large state enterprise groups are not included.
The IMF considers the results of privatization to be modest. Between 2021 and 2024, total privatization proceeds amounted to around $2.5 billion. The bulk came from the sale of stakes in small SOEs, non-agricultural land, and real estate, mostly to domestic buyers.
Among the major privatizations, the Fund highlights Coca-Cola Bottlers Uzbekistan, the Fergana Oil Refinery, and Ipoteka Bank, which attracted foreign investors. Privatization has been most active in energy, banking, chemicals, construction materials, and hospitality.
According to the IMF, large SOEs often remain under full (100%) state control. Among the reasons cited are the ongoing transformation of Uzbekistan Railways, Uzbekistan Airways, and airport operator Uzbekistan Airports; unresolved legacy issues, including delays in liberalizing electricity and gas prices; the strategic importance of certain companies; and external factors such as geopolitics and trade fragmentation.
The Fund also points to insufficient diversification of the investor base, particularly a lack of foreign participation, which could bring new skills and technology.
Separately, the IMF notes the creation of the Uzbekistan National Investment Fund (UzNIF). Established in 2024 and placed under the management of international firm Franklin Templeton, the fund received stakes ranging from 25% to 40% in 12 large non-financial SOEs and one financial company.
UzNIF's objectives are to improve corporate governance, boost operational efficiency and transparency at these companies, establish market-based valuations, and attract institutional investors. But the IMF stresses that creating the fund "is not a substitute" for broader reform.
The Fund recommends that Uzbekistan adopt a clear and transparent state ownership policy, to be reviewed regularly, that defines which enterprises should remain state-owned, which should be privatized, and which should be liquidated.
In the IMF's view, the role of SOEs in the economy should be substantially reduced — more than 80% of them operate in competitive sectors.
Profitable SOEs in competitive sectors should be privatized in line with international best practices, the Fund recommends, while loss-making ones should be liquidated, with targeted social protection and compensation for displaced workers.
For strategic enterprises that will remain state-owned, the Fund recommends addressing weaknesses in corporate governance and eliminating soft budget constraints.
It also recommends ensuring the independence of supervisory boards, eliminating overlapping functions between the State Assets Agency, ministries, and local authorities, requiring market-rate returns, and fully compensating socially significant obligations from the budget.
The IMF also draws attention to the high share of the state in the banking system. State-owned banks account for around 63% of banking assets in Uzbekistan, compared with an average of about 23% in middle-income countries.
A high state share in commercial banks, the Fund warns, can be a source of financial sector vulnerability and create contingent liabilities for the budget.
The IMF also noted that around 84% of enterprises with state participation in Uzbekistan operate in competitive sectors, where state involvement is harder to justify — among them, bazaars, agriculture, services, tourism, and pharmaceuticals. SOE assets stood at 101% of GDP at the end of 2024.
In 2024, only 982 out of Uzbekistan's 2,148 SOEs (46%) were profitable, the Fund noted. The bulk of losses came from the electricity, utilities, and water sectors, while around 80% of dividends paid into the budget came from the mining sector. The state is getting a low return on much of its assets.
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