Starr, Frederick S. "Making Eurasia Stable". Foreign Affairs, Vol. 75, No. 1 (1996): 80-92.

 Starr, Frederick S. "Making Eurasia Stable". Foreign Affairs, Vol. 75, No. 1 (1996): 80-92.

• Central Asia is going to be important: it is rich in natural gas, oil, gold, and uranium; it borders China, Russia, Iran, and Pakistan; it is the primary route for heroin from Afghanistan into Europe; and it is awash with weapons from the civil wars in Afghanistan and Tajikistan.
• There are three possible trajectories for Central Asia: absorption into the hegemony of an outside power, most likely Russia; collapse into chaos and civil war; or a stable regional order centered around an anchor state.
• The development of an anchor state does not imply that Uzbekistan will become a regional hegemon, which would be universally opposed. Instead, a strong and stable Uzbekistan could allow for mutual cooperation among Central Asian states without having to depend on outside powers. 
• Of the Central Asian republics, only Uzbekistan could serve as an anchor state for a regional order. 
• Kazakhstan is wealthy, flush with oil and natural gas reserves, well governed by Nursultan Nazaybayev, and attractive to foreign investors. However, economic turmoil, lack of industry, ethnic tensions between Kazakhs and Russians, and Nazarbayev's resort to rule by decree make it unlikely to be a major regional player.
•  The Kyrgyz Republic is extremely poor, corrupt, and has intense regional and ethnic divisions that threaten to tear it apart. This all makes it a poor candidate.
• Turkmenistan is rich with natural gas wealth, but it has a tiny population and is likely to be dependent upon outside powers for its security.
• Tajikistan has been destroyed by civil war. State structures barely exist there. It is not able to project stability even in its own country.
• Uzbekistan is large, populous, rich in commodities with high export potential, and has smaller ethnic minorities than other republics, including a less than 10% Russian minority. Uzbekistan has historically been a center of power in the region, both prior to and during Russian colonial rule. It is also the most industrialized of the Central Asian republics and has the highest concentration of educational and scientific institutions. 
• There are still difficulties facing Uzbekistan. First among these are the cotton monoculture and Uzbekistan's preservation of the Soviet leadership.
• The cotton monoculture has contributed to the disappearance of the Aral Sea, one of the world's worst ecological disasters, and other public health issues. It has also left Uzbekistan dependent on food imports.
• The Uzbekistani leadership is retained from the end of the USSR and was fairly conservative and opposed to independence. As a result, many Soviet institutions, including the KGB, have been retained.
• Uzbekistan is not democratic and has no democratic tradition. The author claims that Uzbekistani politics are focused on balancing power clan, family-network, and regional interests
• Under President Islom Karimov, Uzbekistan has pursued a path of slow gradual reform without much regard for human rights or political freedom. Karimov's strategy rests on three pillars: sovereignty, political stability and rule of law, and gradual privatization that supports social wellbeing. 
• Having noticed the threat that foreign energy independence posed to Ukraine's independence, Uzbekistan has prioritized energy independence. To do this, Uzbekistan has built pipelines and reduced domestic consumption, hoping to achieve energy autarky.
• Uzbekistan has also pursued attempts at food independence, transitioning tens of thousands of acres from cotton production to wheat in order to reduce the dependence on food imports. 
• Early on in his rule, President Karimov made it clear that politics in Uzbekistan had certain limits. Islamists, radical reformers, and extreme nationalists are excluded from the political order. Political parties with these positions have been banned. 
• When Uzbekistan declared independence, the regional situation was scary. There were civil wars in Tajikistan and Afghanistan and there was a fear that this insecurity would force a security arrangement with Russia that would turn into subordination to Russia.
• This concern of subordination to Russia has meant that, even though Uzbekistan cooperated with Russia on Tajikistan, they have opposed dual citizenship and the transformation of the Commonwealth of Independent States into a military alliance.
• Uzbekistan inherited a heavily russified officer corps, which was 85% ethnic Russia at the time of independence. As of 1996, the officer corps was 65% ethnic Uzbek. 
• Uzbekistan has developed a separate national road network, has upgraded its Aeroflot fleet to become a regional transit hub, and has invited French companies to break the monopoly of Russian telecoms firms.
•  Uzbekistan's approach to privatization has allow for rapid privatization of small businesses, but Karimov has insisted that privatization of large businesses be delayed until the legal framework for a market economy has been established, a move inspired by Mikhail Gorbachyov.
• In 1992, Uzbekistan ended the system of price controls and privatized most retail stores. Since then, over 54,000 private businesses have been established. 
• The conservative approach to reform is evident in agriculture. Irrigation infrastructure, which is essential to cotton cultivation, is to be kept under state control. Out of fear that the breakup of kolxoz farms could cause social conflict, they are to be transformed into cooperatives rather than broken up into individual holdings. While 40% of farmland is privately owned, land cannot be sold or mortgaged.
• Uzbekistan was pushed out of the ruble zone in 1993, forcing it to adopt its own national currency, the so'm in July 1994. 
• Uzbekistan inherited the Soviet tax system relatively intact and has been able to collect taxes and maintain a relatively low budget deficit. This has made it more attractive to investors and as a recipient of international loans.
• Russia remains the largest foreign presence in Uzbekistan's economy and many experts who left following the collapse of the USSR have since returned. 
• Turkey has often been predicted to play a major role in the Uzbekistani economy, but this is not likely due to Turkey's own economic hardships and the fact that the Uzbeks do not like Turkey's condescending attitude.
• South Korea, Japan, and Germany have all been major investors in Uzbekistan. They have all been involved in establishing factories in Uzbekistan.
• The USA has been slow to become involved in Uzbekistan with the exception of a small number of countries. 
• The USA had previously ignored Uzbekistan or only concentrated on human rights issues, instead engaging on Kazakhstan and the Kyrgyz Republic. This may have changed in May 1996, when the State Department recognized Uzbekistan as an "island of stability" in Central Asia.
• Uzbekistan was the only Central Asian state to support the US embargo on Iran proposed in spring 1996. 

Brefort, Loup, and Itzhak Goldberg. "Uzbekistan". In Between State and Market: Mass Privatization in Transition Economies, edited by Ira W. Lieberman, Stilpon S. Nestor, and Raj M. Desai, 248-250. Washington, D.C.: The World Bank, 1997.

Brefort, Loup, and Itzhak Goldberg. "Uzbekistan". In Between State and Market: Mass Privatization in Transition Economies, edited by Ira W. Lieberman, Stilpon S. Nestor, and Raj M. Desai, 248-250. Washington, D.C.: The World Bank, 1997. 

• In 1992, Uzbekistan began a privatization program based on the sale of shares in state-owned enterprises to employees and to the general public. This was generally successful for small businesses and for select enterprises that could attract foreign buyers, but has not been successful at privatizing larger businesses, as the population lacks the capital required to buy these companies (248).
• The chairman of the State Property Commission of Uzbekistan, Viktor Chjen, was opposed to privatization using a voucher system. He opposed vouchers because he did not believe receiving a vouchers made their holders into active participants in economic governance and because distributing free vouchers did not raise funds for the privatized companies to upgrade facilities (248).
• Chjen wanted the form of privatization pursued by Uzbekistan to foster public participation in the process, for ownership to be generally available and not limited to insiders, and for privatization to be linked to access to funds for modernization (248). 
• Other countries expressed similar objects to voucher-based privatization schemes and have partially followed the model pursued by Uzbekistan (248). 
• As of 1997, Uzbekistan is pursuing privatization through the sale of "public participation shares". The idea is that shares of privatizing enterprises are purchased by private privatization investment funds. Shares of these funds, called "public participation shares" are then sold to the public and/or investors and can be managed by private asset management companies (248-249).
• The privatization process is divided into two stages. During the initial stage, purchase of company shares is limited to certain individuals and the number of shares that can be purchased is capped. During the secondary stage, shares can be bought and sold freely by anyone except state entities (249). 
• During the initial stage, shares of the 300 medium and large state-owned enterprises to be privatized are sold by the government. 21% of these company shares are to be sold at the stock exchange, a maximum of 23% are sold to the company's employees, and a minimum of 30% are reserved for sale to investment funds at heavily discounted rates (249).
• Among the 30% portion reserved for sale to investment funds, they are sold at a set price based on the company's book value. Should not all reserved shares be sold, the remaining shares will be auctioned off to investment funds (249).
• Investment funds are given generous credit terms by the government for the purchase of company shares. For every share purchased, the fund may buy five more on credit, with seven years to repay the loans and no interest payments for the first four years. This scheme is intended to give the funds the financial ability to invest in and restructure these enterprises (249).
• Public participation shares are priced at 100 so'm, which was equivalent to 5-10% of the average monthly wage. Citizens were limited to holding 100 shares in a single fund to prevent wealthy individuals from seizing control of funds which control assets worthy significantly more than the price of the shares (249).  
• For the scheme to be successful, the authors calculate that each investment fund will need to sell 600,000 public participation shares. This is the most difficult part of the plan, as it requires convincing Uzbekistanis to invest a considerable part of their incomes (249-250). 
•  The successful of privatization depends on timing and the simultaneous readiness of the investment funds and the privatizing companies. The authors recommends that funds be able to purchase shares and to operate as soon as they are established, in order to maximize the chances of success (250).
• The Uzbekistani system of privatization differs from some pursued by other post-Communist states in that privatization of companies is optional and dependent upon the market. If investors do not believe that a certain company is likely to be profitable, they can refused to buy shares, and it will remain unprivatized (249). 
• The authors are writing this paper based on their experience as part of a team of World Bank economists who assisted the design of Uzbekistan's privatization program in 1992 (250, footnote 1). 

Table from page 248, showing outcomes of 1992 privatization program using cash sale of shares:

Total in program	18,716
Cooperatives	3,175
Small enterprises	11,910
Medium and large enterprises	3,631
Agroindustrial	11,772
Industry	1,024
Construction, transport, communications	2,867
Services and retail	3,053
Fully or partially privatized	13,726
Still fully state-owned	4,990
Privatized Cooperatives	3,175
Privatized Small enterprises (mostly fully privatized)	9,547
Privatized Medium and large enterprises (mostly partially privatized)	1,004
Privatized Agroindustry	8,736
Privatized Industry	754
Privatized Construction, transport, communications	1,558
Privatized Services and retail	2,678
State-owned Cooperatives	0
State-owned Small enterprises	3,384
State-owned Medium and large enterprises	1,606
State-owned Agroindustry	3,036
State-owned Industry	270
State-owned Construction, transport, communications	1,309
State-owned Services and retail	375

Abdullaev, Umidjon. State-Owned Enterprises in Uzbekistan: Taking Stock and Some Reform Priorities. ADBI Working Paper No. 1068. Tokyo: Asian Development Bank Institute, 2020.

Abdullaev, Umidjon. State-Owned Enterprises in Uzbekistan: Taking Stock and Some Reform Priorities. ADBI Working Paper No. 1068. Tokyo: Asian Development Bank Institute, 2020.

• This study was completed around the end of 2018, so it covers the situation at that point in time (1, footnote 1).
• An incomplete list of major state-owned enterprises in Uzbekistan is found on page 3 and includes: Uzpaxtakorsanoateksport, Uzdonmahsulot, Almalyk Mining and Metallurgy Complex, Navoiy Mining and Metallurgy State Company, Uzmetkombinat, Uzbekneftegaz, Uzbekenergo, Uzbekhydroenergo, Uzagrotehsanoatholding, Uzavtosanoat, Uzbekengilsanoat, Uzeltexsanoat, Uzbekoziovqovqatholding, Uzkimyosanoat, Uzstroymaterialy, Uzsharobsanoat, Uzbekiston Havo Yollari, Uzbekiston Temir Yollari 
• Uzbekistan commenced on major economic reforms at the end of 2016, aimed at liberalizing the economy (1).
• Uzbekistan's economy remains dominated by state-owned enterprises, will likely to continue being dominated by them, and any reforms must take into account their role in the economy (1, 8).
• State-owned enterprises are present in every sector of the economy and continue to account for fairly high levels in some economic sectors, like technical activities and construction, see Table 2 (4). 
• Based on the author's estimates from major state-owned enterprises, they still are responsible for approximately half of national GDP as of 2017, with this figure varying greatly by region. As of 2013, they were also responsible for 37% of total employment and half of all wage employment, the rest being self-employment (4-5). 
• Many state-owned enterprises are either monopolies or the dominant company in their sector and nearly all quasi-monopolistic companies are state-owned enterprises. As of 2018, state-owned enterprises dominated production of 120 different goods and service sectors (5).
• Considering how important the Uzbekistani government views state-owned enterprises as tools in carrying out industrial policy, it is likely that the government will adopt a gradualist approach to any reform (14). 
• State-owned enterprises are some of the main tools used to implement national industrial policy and national goals for import-export and production levels have translated into specific goals for some state-owned enterprises (2).  
• Historically, production in the Soviet Union was organized into sector-specific ministries, or "line ministries", that were responsible for organizing enterprises in that sector to complete planned objectives. In Uzbekistan, these ministries have largely been replaced by holding companies, associations, or concerns that serve the same organizational role in an economic sector (2, 5).
• While these ministries have largely been transformed into holding companies or joint stock companies, they retain many of their same functions and are expected to manage both the many smaller SOEs they control and also regulate private companies in that sector (2, 5-6).
• The government has recently begun to transfer some of these regulatory functions from state-owned enterprises to state agencies and ministries (6). 
• State-owned enterprises have priority access to scarce resources, electricity, fuel, foreign currency reserves, and financing. This gives them an unfair advantage over private firms. The fact that state-owned enterprises receive further tax breaks and incentives for completing the goals set for them by the state further privileges them over private businesses (15).  
• I have to question the idea that tax breaks for complete tasks assigned by the government is an advantage. It strikes me as an attempt to reduce the negative impact on SOEs of having to undertake projects that may be unprofitable or an otherwise non-ideal allocation of resources
• State-owned enterprise is not a specific legal-organizational form, but in fact encompasses several types of companies in which the state has a controlling interest. Most major state-owned enterprises are organized as joint stock companies (2-3).
• The fact that many companies that are effectively state-owned are not entirely owned by the state, instead having minority stock ownership by private persons, means that calculating the share of state control in the economy is difficult and Uzbekistan keeps no exact figures. Instead the government supplies misleading statistics that only show the share of economic activity by entities entirely owned by the government (4-5). 
• Joint stock companies are particularly likely to be state-owned. Of 659 joint stock companies in existence at the end of 2016, 73% were majority state owned, usually through another state-owned company controlling the majority stake in a smaller joint stock company. Moreover, 83% of all stock in joint stock companies was owned by the state (5). 
• Most, but not all, state-owned enterprises are organized as either joint stock companies, limited liability companies, or state unitary enterprises. Of these, sectorally-dominant companies are usually joint stock companies, with their subsidiaries taking a variety of legal-organization forms (8). 
• Privatization in Uzbekistan occurred in two stages: one from 1992 until the late 1990s, and one from the late 1990s until the present. The first stage was large-scale privatization of small business, including commerce, service industries, construction, transport, and agriculture, and privatization of housing stock. The second stage was a case-by-case privatization of larger state-owned companies (6). 
• Some state-owned enterprises have always been kept state-owned from the beginning of privatization in 1991. The most recently list (as of 2018) was a 2017 list of 50 major state-owned enterprises across multiple sectors that were not allowed to be privatized (7). 
• Privatization of large state-owned enterprises since the late 1990s have been largely unsuccessful, with the state retaining a controlling interest. Successful privatizations have mainly focused on the privatization of smaller components of these businesses or the sale of unused real estate assets (6). 
• Uzbekistan's method of privatization demonstrates a continued instance on the state retaining a major role in the economy. When a series of companies were privatized in 2015, half of those sold to strategic investors and one-third sold at public auction had the state retain 51% majority stake in the company (7).
• Of these companies, the Uzbekistani government was particularly likely to demand retention of majority stakes in companies in the chemical sector, grain processing, cotton processing, and ownership of city marketplaces (7). 
• Most state-owned enterprises are controlled at either the national or regional level. As of 2016, only 340 of over 1,000 state-owned enterprises were owned by local governments (8). 
• Joint stock companies in Uzbekistan are governed by a general meeting of shareholders, a supervisory board, and the company's daily management, which can be an individual, a board, or even outsourced to a third-party management company (8).
• Management is selected by a combination of the supervisory board and the shareholders. The shareholders meeting selects a chairman of the management board or CEO and may select the other members of the board. In practice, the shareholders usually vote to cede the power to appoint other management board members to the supervisory board. In some enterprises, the shareholders may also vote to cede the power to appoint the chairman to the supervisory board. At some major enterprises, the chairman of the management board needs to be approved by the shareholders, the supervisory board, and the Cabinet of Ministers or the President (9).
• The supervisory boards of joint stock companies usually include high-level government officials and various ministers. Major state-owned enterprises usually have their supervisory boards composed of ministers, deputy ministers, and heads of state agencies (9). 
• Control over state shares in a joint stock company is exercised by appointing an individual or a company to act as the state's representative. The company can either be a state-owned company or a private asset management company selected via competitive bidding. These state's representatives have to be approved in this role by the Cabinet of Ministers (9-10). 
• Two different types of state representative exist. "State trustees" are appointed for enterprises where the government owns more than 25% of all shares, while "state representatives" are appointed for enterprises in which the government has less than a 25% share (10). 
• As of 2014, joint stock companies are required to uphold certain levels of transparency regarding their activities. These standards of disclosure are not consistently followed (8).
• Corporate governance standards were approved in early 2016, but they are voluntary and not all provisions are widely applied. One component of these standard is having independent supervisory board members, but, again, this is not widely done (8-9).
• The system used to monitor the performance of state-owned enterprises has gotten significantly better in the 2010s. In 2015, an elaborate and detailed set of key performance indicators (KPIs) were mandated for state-owned enterprises. This new system is used to determine the variable part of compensation to management and low scores for multiple quarters will result in the firing of the management board chairman (10). 
• Disclosure and transparency practices around the newly introduced KPIs still need to improve, as information on individual KPIs is not always available (10-11).
• The main document produced by state-owned enterprises to indicate their performance is a business plan, which must predict future goals in production and profitability. Business plans must be compared against actual performance by the supervisory board on a quarterly basis (10).
• Major state-owned enterprises must make additional reports. The chairman of the management board and the chairman of the supervisory board must report to the Cabinet of Ministers on a yearly basis on the performance of the company (10). 
• In addition to the formal governance practices introduced for joint stock companies, the government also has a number of other informal ways to influence the production and pricing decisions of state-owned enterprises (11).
• The assignment of ranks equivalent to minister and deputy minister to the chairmen and deputy chairmen of the management board blurs the lines between state and company and means that management often reports directly to the executive branch of the government, not to the supervisory board (11, 13).
• Important to note that this was recorded as a theoretical consequence of management ranks equivalent to minister. It may not be reflected in actual practice
• Many aspects of corporate policy for state-owned enterprises are not autonomously determined by the corporate management, but are set by governmental decree. Governmental decrees and laws regulate corporate investments, prices, and procurement of input goods (11-12, 14-15). 
• In particular, state-owned enterprises are expected to contribute to state investment projects, often using their own internal revenue to finance part of these projects (11-12). 
• Allocation of material resources is still largely determined by the Ministry of the Economy, which consults with relevant state-owned enterprises and other ministries to determine the quantities of certain goods that will be needed and allocates them between different state-owned enterprises, the government, exporters, and the domestic private sector (12). 
• There were indications in 2017 that this system would be changed, as access to controlled goods was limited for state-owned companies who now had to engage in commodity swaps. This may indicate a future trend towards market allocation of these scarce goods (13).
• Some state-owned companies do not have direct control over the use of the revenues from their own operations, as is true for Uzbekenergo and Uztransgaz (13, 15).
• Some highly profitable state-owned enterprises have their finances directly monitored by inspectors from the Ministry of Finance to prevent fraud and ensure correct calculation of taxes. This is the case for Uzbekneftegaz and Uzpaxtayog (13, 15).  
• The present [as of 2018] structure of government control over state-owned enterprises allows the government is effectively use these companies to advance industrial policy, but at the cost of effective corporate governance. Moreover, the way in which it intervenes into corporate governance erodes the effectiveness of the existing systems of corporate governance and accountability (13). 
• The level of government intervention limits the ability of the state-owned companies to effectively respond to market signals and to use their own resources to maximize growth/profit (13). 
• The regulatory role of major state-owned enterprises poses future regulatory problems, as these usually are no regulatory agencies outside of the dominant state-owned enterprise. Additionally, dominant enterprises usually sit on the commissions that issue permits to new entrants into a sector, creating potential conflicts of interest (14).
• In is unlikely that, baring further reforms, the priorities of state-owned enterprise management will switch from meeting quantitative production quotas to trying to improve general corporate governance, as per the KPIs introduced in 2015 (15).

Shukurov, Sobir, Mansoor Maitah, and Luboš Smutka. "The Impact of Privatization on Economic Growth: The Case of Uzbekistan". International Journal of Economics and Financial Issues, Vol. 6, No. 3 (2016): 948-957.

Shukurov, Sobir, Mansoor Maitah, and Luboš Smutka. "The Impact of Privatization on Economic Growth: The Case of Uzbekistan". International Journal of Economics and Financial Issues, Vol. 6, No. 3 (2016): 948-957.

• From the beginning of independence from the USSR, it was recognized that traditional privatization through public sale would be difficult to carry out in the context of a socialist society without large private savings or developed capital markets (948).
• Uzbekistan therefore had to adopt other methods of privatization, such as the sale of firms for essentially nothing or the transfer of ownership to factory managers and/or employees (948). 
• Part of the difficulty was attitudinal. Uzbekistanis viewed themselves as dependent on the state, even when in private business, and it has taken a long time for an entrepreneurial mindset to establish itself (954).  
• In Eastern Europe, Kazakhstan, and Russia, privatization of state enterprises was performed on the basis of a division of a company into stocks and the distribution of those stocks among employees or the general population (951-952).
• This method of privatization was not adopted in Uzbekistan because it was felt that it would not result in the transfer of state enterprises to the persons who would manage them the best or who had the most interest in the success of the firms (952). 
• Uzbekistan's privatization tried to privilege groups with the strongest social connection to the property/organization being privatized, such as trade union members at a particular factory or collective farms for the purchase of state-owned sovxoz farms (952-953). 
• Privatization in Uzbekistan has lagged behind the economies of Eastern Europe (948). 
• There is a (very poorly done) literature review covering other papers on the impact of privatization on economic growth on page 949.
• The mathematical models used to calculate real aggregate demand, real aggregate supply, and the impact of privatization are explained on page 950.
• The actual calculation of some of the variables here is poorly explained and some variables, like "capital market development level", depend heavily on the subjective impressions of the authors. Still, even if unrefined, the variables used to determine the level of privatization will likely give a good general sense of the scale of privatization in that economy.
• The growth of the private sector in Uzbekistan came about through the transfer of state property into private hands and the establishment of new private businesses (951).  
• Private property, as distinct from personal property, was legalized in Uzbekistan in 1990. The value of protecting private property was recognized in Uzbekistan's first constitution and enshrined in law (950-951).
• Legal protections for private property did not, however, provide the infrastructure for establishing businesses (950). 
• In 1991, Uzbekistan passed regulations on property and on privatization and denationalization, which provided the legal basis for private property. In 1996, another major change was made by the creation of a Civil Code, which established a new field of law governing private property (951).
• Since 1996, more than 200 additional laws have been passed governing private property, including stock markets, joint-stock companies, and shareholders (951).
• The privatization process in Uzbekistan was guided by a set of principles laid out by President Islom Karimov: economic transformations should serve the interests of the majority not sectional interests, the privatization process should be directed by the state, no form of ownership (public or private) should have an unfair advantage in the market, economic regulation should be developed based on Uzbekistan's particular needs and conditions, the privatization process should be gradual, high wealth inequality or the lost of protections for social vulnerable groups are not acceptable outcomes of privatization (951). 
• In this vein, privatized firms retained some obligations to their employees, such as prohibiting certain disruptive changes in productive or the firing of pregnant women, the elderly, or invalids (952).
• The commitment of the Karimov to maintain a socially-oriented economy in which people are protected from certain market pressures has led the government to back away and even reverse some privatization, making it particularly reluctant to privatize large state-owned enterprises (956).
• Uzbekistan also sought to break up large monopolies during its privatization process. Instead of privatizing a monopolistic state firm, said firm would be broken up along sectoral and/or geographic lines and then the component parts privatized (952).
• Revenue generated from privatization was not placed back into the budget -- as was the case in most post-Soviet countries -- but instead transferred to a special capital fund from which newly-privatized firms could borrow or receive grants in the absence of a developed credit market (952).
• Privatization in Uzbekistan can be divided into three phases:
• The first phase was from 1991 to 1993. This saw the privatization of the State Housing Fund, under which ownership of 5 million housing units was transferred to their occupants; and the privatization of vehicles. Some small businesses were also privatized in commerce, services, light industries, food processing factories, construction firms, and construction materials factories. New legal structures were created for these new small industries. This is also when rural farmland was privatized (952-953).
• Abuse of the privatization process was common during this initial period. Many new owners received property at far below market value and immediately sold it at market value for a large profit. Despite this usually being illegal and in contravention of the terms of the initial privatization, this practice was widespread (954).
• The second phase, from 1994 to 1998, saw the partial privatization of larger businesses by transforming state-owned companies into joint stock companies. Some industries were excluded from this privatization. The sale of stock in joint stock companies also created the beginnings of a securities market in Uzbekistan (953).
• In some cases, especially when the new owners did a poor job running the business, the government had to partially reverse the privatization, repurchasing shares in joint stock companies or issuing additional shares to regain majority control (953-954). 
• The transformation of public companies into joint stock companies came with unexpected organizational costs, as these companies had to dedicate staff members to complying with the transparency and reporting requirements demanded of joint stock companies. Many were ill prepared for this task, misallocated resources, and suffered setbacks following their transformation into joint stock companies (954). 
• The third phase, from 1998 onward, has been characterized by gradual privatization of additional large enterprises, particularly those where it is hoped that foreign capital can be attracted to assist in modernization (953).
• Privatization in Uzbekistan has led to a rising share of private enterprise in the national GDP, from around 50% in 1995 to over 80% in 2010 (953). 
• Uzbekistan's emphasis on transferring private ownership to groups linked to the company, like employees and managers, was not successful in producing well-run private firms. Many employee-owners and manager-owners were ineffective and some stripped and sold the companies for parts (953).
• Corruption and misuse of corporate resources was common. In particular, managers and heads of trade unions used company assets for their own personal enrichment (953). 
• In 2001 and 2002, the State Property Committee determined to reduce the share of stock held by trade union members, who were viewed as not being effective managers, to 10% of what it had been prior to 2001. This repossessed stock was then sold in an attempt to attract other investors, especially foreign investors (954).
• Although the intent was to improve corporate governance, this move, and similar ones undertaken during the late 1990s, reduced investor confidence in the security of stock ownership in Uzbekistan. After a repossession of trade union stocks in 1998, private investors sold their shares, dropping from 25-30% of stockholders to 5-10% of stockholders (954).
• Based on the experience of Uzbekistan, the authors recommend that large state-owned companies should be transformed into large companies or corporate structures with multiple subsidiaries, not joint stock companies, whereas middle-sized companies should be transformed into limited liability companies (954). 
• An application of the formula to Uzbekistan shows that privatization is positively correlated with economic growth, as was investment in human capital through training, education, etc., and the development of a stock market (955).
•  Looking at the actual variables used to make this determination and the lack of any attempt to look at other confounding variables impacting GDP growth during the period, these results need to be viewed skeptically. The overall trend of privatization being correlated with positive GDP should hold up, but I would not trust any conclusions about the impact of individual components of that growth.

 

Most of the valuable observations in this paper come from the author Sobir Shukurov's personal experience working for the State Committee for Privatization, Demonopolization, and the Development of Competition (Xususiylashtirish, Monopoliyadan Chiqarish, va Raqobatni Rivojlantirish Davlat Qo’mitasi) during the 1990s. The actual economics work here is pretty bad.