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