Because many of the structural problems found in Uzbekistan are common with those in other Central Asian republics, the analysis presented and the policy recommendations developed in this paper are applicable beyond Uzbekistan _per se._

# II. UNDERSTANDING OF CONCEPTS **OF COMPETITION AND REGULATION**

_Institutional Framework._ Uzbekistan has made substantial progress since the advent of reform to develop an institutional framework to foster the establishment of a competitive business environment. While the framework is still evolving, to date it includes, among other measures and actions, the establishment of the Anti-Monopoly Committee (AMC), which is housed within the Ministry of Finance; development of program entitled _The Concept of State Anti-Monopoly Policy,_ which formulates the main objectives of the Government's competition and regulatory policy; and enactment of several laws, such as the laws "On Competition and Restriction of Monopoly Activity in Commodity Markets", **"C)n** the Limitation of Monopolistic Activity", "On Natural Monopolies", "On Protection of Consumers' Rights", and "On Advertising".

As articulated in the _Concept of State Anti-Monopoly Policy,_ the central objectives of the Government's competition and regulatory reform program-implemented by the AMC-are to develop competition and entrepreneurship in Uzbekistan's economy; regulate the activities of monopoly enterprises; prevent abuse by firms with dominant market positions; enforce sanctions on firims who engage in unfair competition; and protect consumer rights.

The nascent institutional framework and policy objectives are generally consistent with international practice. In trying to achieve the objectives, however, Uzbekistan's authorities face a key challenge: ensuring that policy officials in all key agencies and ministries (at both the national and local levels) as well as market participants-businesses (including SOEs, the Privatization Investment Funds (PIFs) and banks), consumers, workers, and the general public-both understand the basic concepts of competition and regulation, and are motivated to act in such a way as to capitalize on the role that competitive forces can play in fueling economic prosperity and growth. There are several areas where this challenge is partiCularly proncunced and where there is a priority for action-in particular mobi:lizing training, pragmatic policy advice and public education about competition and regulation.

_Monopoly Register._ One of the primary instruments by which the AMC implements competition policy is through its Register of Monopoly Enterprises - a policy instrument common to Russia and. many other CIS countries.<sup>4</sup> Uzbek enterprises that are deemed as "dominant"defined by statute as generally having a market share of at least 65 percent, and under certain conditions a market share of at least 35 - percent are listed on AMC's Register and therefore must declare (register) their prices and prolfits for AMC approval. In addition, registered monopolists, once they agree with their input sellers and output buyers on volumes, delivery times, and other conditions (as well as prices) must register these transaction terrms with the AMC along with their expected profits. In certain cases-typically for infrastructure ("utility") monopolies-the AMC directly determines prices and profits.

As of October 1, 1999 there were 716 enterprises and 1,924 products listed in the" AJMC's Monopoly Register, of which 91 enterprises and 205 products were registered as monopolies at the national (Republic) level, with the remaining (and vast majority) of monopoly firms and products registered in the AMC's 14 regional offices. Table 1 indicates the sectoral distribution of the registered monopolies. In Uzbekistan there are approximately 176,800 firms with business licenses, the vast

> 4 A description of Russia's competition policy framework is contained in Broadman (2000).

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