> POLICY RESEARCHl V J: .'

# Summary fini.r,t

In Uzbekistan sta,e ente:-ccc-ses a-ie lbet,<g caa -g. .urd inrto shareholding companies; a. nd orvarc **u ca-te :risus** accc:uxfor 45 percent of all rcgistercd fr: IS. £.n 1v I **.Si-C S** decisions to ser prices, ou---ut. andc **LsLiLOL** mtrictccie .irc ens not market-based, nor _N_ whcIN v; mivcwcicth; j **th** businesses, especiall tho' .l- cor'.etcial rmanfactaring and ser ices.

Lines of authority foe corporate goveroauce - 3Iron - state enterprises to private enterprises are il-defined, so there is little discipline on corpcate perfornance a,e little separation between government and busitness. Nascent frameworks ha;e abeen created for competition policy (for firrms in the commercial sector) and regulatory policy (governing utilities in the infrastructure monopoly sector). But impiementation and enforcement have been hampered by old-style instruments (such as price controls) rooted in central planning, by lack of a strong independent regulatory rule-making authority, by the limited understanding of the basic concepts of competition and regulatory -eform. and by weak institutional capabilities fcr analyziia market structure and business performance.

Based on fielidwork :n Uzbekistan, Broaudman Refrmmging co -petit i<sup>on policy mstitutionsand legal</sup> fra ; \vorks in line with the country's goal of srengtrL ncl .-g strc.-tu eai reforms and improving cn.-on]''ic .

"n **I ovWo' 0i-** the aNloty of go' **Cr'inieflt** and associated 's:iLutiIm .o s zblk&sran' industrial nmarket s,ru crue , in ' **N ts** of enterprise conduct and perforrnaql .cc.

N iaking t're authorit esposible for competition and trgolatory poicynmaking into an independent agency -a "champo: on' of coopention -ansNerable directly to the prime nministe'.

Strengthening ir.cg **ntintes ann :nstitutions for** corporate governance and bringing them in line with internatioarl practice.

Subiecting infrastructure monopolies to systemic competitive restructuring and unbundling. Nwhere anpropriate. For other utilities. depoliticize tariff setting and implernentation of regulations; ensure that price, output, and investmcent decisions by service suppliers are **ptrci.-mnOp"ttitt** (creating a level playing field among usersj: and mcrease transparency and accountability to 'he pu/mite.

recommends: Deepening senior policy officials' understanding of, and appreciation of the benefits from., enterprise competition and hiow me affects economi.c groinvh.

- This paper a product of the Poverty Reduction and Economic Maraagement Sector eJnit. eFurope and Central Asia Regional Office-IS part of a larger effort _in_ the region to assess structural reform in Central A.ia. Copies of the paper are available free from the World Bank, 1 8 18 H Street NWV(, Washington, DC' 20433. Please contact Sandra Craig., room H4166, telephone 202473-3 I6v, fax 202-522-2753, email address scraigpl NNworldbank.org, Policy Research Working Papers are also posted on the I<sup>7</sup> eb at NNNvNw.wsoridbank.org research.!';noricIng'qapers. The author may be contacted at hbroadmanCh-Nvorldbank.org. May 2000. (21 pages)

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