In 2003 the Government of the Republic of Uzbekistan took specific measures along with strengthening of the legal basis for denationalization and privatization in the country. The share of the private sector in economy was significantly increased, the property structure - changed by way of sharply cutting the role of state, expanding the practice of restructuring the inefficient enterprises, as well as introducing corporate methods of management in joint-stock companies.

With such aims in mind, the denationalization and privatization program for 2003-2004, which includes 3,728 enterprises and establishments, 37 percent of which are the liquid institutions, envisages to fully sell the share of state in charter funds at exchanges and other markets in the amount of 25 percent and less. Also, the program envisions the sale of state assets of a number of enterprises, whose share makes up 17,3 percent, on the stock exchange primarily for the private ownership. In accordance with the given program, the state maintains the ownership of major package of shares (51 percent and more) in charter funds only at the strategically important enterprises, the group of which doesn’t exceed 17 percent of the total amount of enterprises privatized in 2003-2004.

The introduction of flexible mechanisms in selling of low- and unprofitable, as well as economically ill-footed enterprises on competitive basis with zero cost involved to investors, known to have proposed best business plans and committed to invest, played a positive role in realization of the denationalization and privatization program. The state shares at the 415 joint-stock companies and more than 70 other venues were sold by way of gradually decreasing their starting prices. Twenty enterprises were sold with zero, symbolic costs to investors with their further investment commitments on recovering the enterprise activity.

All those measures together with wide information support through participation of media gave an opportunity to sell 2015 installations and share packages. This is 1,6 times more than in 2002. As a course of these efforts there were established more than 980 private enterprises and about 400 companies with non-state forms of ownership as well as attracted major investments, including foreign investment to the privatized enterprises. In particular, the investments were made in sectors of consumer oil and food industry, chemical and cotton processing branches of the economy.

The shares of 972 joint stock companies under the state assets and privatized enterprises were sold in 2003. The sales value totaled UZS 41,42 bln which was three times more than in 2002. It should be noted that foreign investors bought more than 70 percent of the shares sold through primary stock markets and off-exchange (28 percent in 2002).

Through republican real estate stock market 13,9 thousand realties were sold. The total amount raised from sales made UZS 23,5 bln which was 1,5 more than indicators in 2002. In general, the realties under state ownership prevailed in the sales. During 2003 assets of enterprises totaling USD 23,9 mln were sold to foreign investors. The foreign investors also bought assets worth UZS 9,6 bln with investment commitments of USD 28,5 mln. and UZS 1,7 bln.

In 2003 contracts were concluded for the amount of USD 33,1 mln. and UZS 4,7 bln. with certain investment commitments (taking into account the delivery of equipment).
From this amount the foreign investors fulfilled investment commitments for USD 14,26 mln which makes up 100,4 percent of forecasted investment and loans in 2003.

In comparison to the indicators in 2002, the total amount of fulfilled commitments amounted to USD 3,7 mln. (1,4 times).

The total turnover of the securities market made up UZS 93,4 bln. in 2003 and doubled in comparison to the turnover in 2002.

There was a rising tendency of the absolute exchanges of secondary sales of shares in stock markets in 2003. Overall in the secondary securities market the shares worth UZS 20,8 bln were sold.

It should be noted, that three times more shares were sold in secondary stock market than in off-exchange. It is first such indicator ever for the entire period of operation of the securities market in Uzbekistan.

The government efforts were directed towards decreasing of the secondary sales of shares in unorganized off-exchange markets, which would not provide the transparency of contracts.

The practice of attraction of investment to the development of enterprises through offering corporate bonds now becomes common. The total volume of emission bonds in 2003 made UZS 23,3 bln. and it was a steady growing tendency.

In 2004 a number of measures will be taken to address further development of stock market in Uzbekistan, including the secondary securities market.

The volume of the gained profit from privatization for the year amounted to 1,3 times, whereas the profits from sales to foreign investors raised to 3,4 times and made UZS 56,06 bln.

The improved investment climate in the country attracted attention by major foreign companies such as the Dutch LNM Group, the world steel producer, Thermophos International B.V., the leading producer of phosphorus in EU, Bateman BV, an active participant of investment processes in different sectors of economy, the world's major companies producing construction goods - Heidelbergercement (Germany), Lafarge (France), and Zeromax Group (USA). The Russian businessmen are also interested in investing in Uzbekistan.

The increased interest of foreign investors has also contributed in intensification of the work on individual projects of privatization of 30 realties of leading branches of economy. As a result of those efforts, the presale preparations of 12 realties have been completed. The bids were held for sale of assets at the open stock companies “Ohangaroncement”, “Ammofos”, “Kizilkumcement”, and State Joint-Stock Company “Uzkabel” long with redemption-dues USD 10,5 mln. and investment program of USD 15 mln. The negotiations over the sales of 51 percent package of shares of the OSC “Ammofos” to Energo Therm (the Netherlands) are coming to end.

There were announced tenders for sales of shares at companies “Uzmetkombinat”, “Kukon alcohol plant”, “Andijan biochemical plant” and “Foton”.

In partnership with Bureau for Privatization Support of Enterprises the reconstruction work of five enterprises in the oil and gas, metallurgical, canning and automobile industries was completed in 2003. As a result of the given work the competitiveness, export potential and investment attractiveness of the joint stock companies “Uzbekkhimmash”, “Uztorcvemet”, “Namanganconcerva”, “Namanganmash”, “Toj metall” have substantially enhanced.