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Kyrgyzstan liquidates unprofitable state enterprises

The government of Kyrgyzstan decided to liquidate or reorganize loss-making state enterprises. Prime Minister of the country Sooronbay Jeenbekov said this at a meeting on optimizing the number of state enterprises and joint-stock companies with state participation.

Following the instructions of the head of the Cabinet, since August 2016, the government’s executive office together with the State Property Management Fund has conducted a work to optimize the number of state enterprises and joint-stock companies. A draft resolution on the creation of an electronic trading platform has also been prepared.

It is planned that the sale and lease of state property will be carried out not by the State Property Management Fund, but at the electronic trading platform on-line.

The Prime Minister Sooronbay Jeenbekov stressed that many state-owned enterprises are currently unprofitable. They do not fulfill their basic statutory tasks; continue to be an instrument of organizing corruption or lobbying schemes. But the main goal of a state-owned enterprise is to make profit, but there are still enterprises in the country that are subsidized annually from the republican budget in violation of the country’s legislation.

Up to date, decisions have already been taken to liquidate 114 and reorganize 63 state-owned enterprises. In addition, job competence of the heads of state enterprises and joint-stock companies with the state share of participation will be considered.

A total of 1,130 state enterprises are registered in the republic today. At least 900 of them are non-functioning, 164 are working and 66 are transformed into government institutions.

«As of today, there are such state-owned enterprises that show a small profit on the results of its annual activities. At the same time, the amount of profit of similar enterprises in the private sector is much larger and can not be compared with the indicators of the state companies. The analysis showed that the number of enterprises with state participation should be reduced. Many of them are subject to transformation into state institutions, privatization or liquidation," Bolsunbek Kazakov believes.

If the total revenues of 33 state-owned enterprises amounted to 42.8 billion soms in 2016, their expenditures amounted to 41.9 billion soms. The country’s budget received only 364 million.

Following the results of the meeting, Sooronbay Jeenbekov instructed the ministries, departments and state bodies to study the analysis submitted by SPMF on the reorganization of state enterprises and submit proposals by March 31, 2017. He recalled that previous attempts to optimize the public sector were not brought to a logical conclusion; the results remained barely visible for the revenue side of the budget of the republic and the civil society.