The President of the Kyrgyz Republic Sadyr Zhaparov signed the Decree “On Issues of State Property Management”. This was reported by the press service of the head of state.
“According to this Decree, the State Property Management Fund under the Ministry of Economy and Commerce of the Kyrgyz Republic will be transformed into the State Agency for State Property Management under the Cabinet of Ministers of the Kyrgyz Republic.
This measure is aimed at optimizing the activities of the authorized state body in the field of state property management and strengthening its functions.
The State Property Management Fund, as an independent state agency, was established on January 21, 1991 by the decree of the President of the Kyrgyz Republic “On the formation, reorganization and abolition of ministries and state committees of the Republic of Kyrgyzstan”. Over the course of 30 years, the department has been reformed and changed its organizational form seven times.
Currently, the State Property Fund, on behalf of the state, acts as a shareholder in 42 business companies in various sectors of the economy. There are also 88 state-owned enterprises in the following areas of activity: in the field of transport and communications – 11 SE, in the field of communications, television and innovative services – 12 SE, in the field of agriculture – 24 SE, in the system of state geology – 2 SE, the provision of various services – 39 GP.
The Fund is authorized to coordinate the staffing of each state enterprise, approve their reports on the results of financial and economic activities and draft budgets for the corresponding year, and also approve the amount of net profit to be transferred to the budget. Such centralized control over the activities of state enterprises began to be carried out after the adoption of the Decree of the Government of the Kyrgyz Republic “On streamlining the activities of state enterprises” dated September 11, 2019. Prior to the adoption of the aforementioned resolution, the Fund did not have the above powers, and state-owned enterprises worked directly with the supervising ministries and departments, which was one of the reasons for their low profitability. The full implementation of this resolution will significantly improve the activities of state-owned enterprises.
At the same time, today there is a need to revise the management system of companies with state participation, taking into account the current and long-term priorities of state policy, and to analyze the economic feasibility of the functioning of each individual Company. The main tasks in the framework of improving their activities are:
– increasing transparency, openness of the system of selection and promotion of personnel to management bodies;
– strengthening the system of motivation and responsibility of members of the Company’s management bodies;
– putting into practice the institution of “independent directors”.
At the same time, at present, it is necessary to solve all the existing problems in the field of leasing state property. So, for example, the Fund will have to carry out painstaking work to identify additional empty space in public buildings and premises. Taking into account the existing corruption risks and the lack of interest of state institutions in providing empty space for rent due to the fact that 100% of rental income is transferred to the republican budget, the work ahead requires considerable efforts and resources.
To date, the Jogorku Kenesh of the Kyrgyz Republic has approved the Privatization Program for 2023-2025. In addition to the sale of state property, this Program provides for the transformation of state enterprises into joint-stock companies with the preservation of 100% of shares in state ownership. Along with the above, as an alternative to privatization, the mechanisms of public-private partnership, investment lease, and trust management of property are also practiced.
Taking into account all the above arguments, in order to improve the system of state property management, as well as increase its efficiency, guided by Articles 66, 71 of the Constitution of the Kyrgyz Republic, it is decided:
1. To transform the State Property Management Fund under the Ministry of Economy and Commerce of the Kyrgyz Republic into the State Agency for State Property Management under the Cabinet of Ministers of the Kyrgyz Republic (hereinafter referred to as the State Agency for State Property Management).
Include in the Decree of the President of the Kyrgyz Republic
“On the Cabinet of Ministers of the Kyrgyz Republic” dated May 5, 2021
No. 114 the following change:
– Paragraph 5 shall be supplemented with the eighth paragraph of the following content:
“- State Agency for State Property Management;”.
The State Agency for State Property Management shall submit for consideration by the Cabinet of Ministers of the Kyrgyz Republic:
– within two weeks, the draft Regulations and the management scheme of the State Agency for State Property Management;
– within two months, draft decisions of the Cabinet of Ministers of the Kyrgyz Republic on the introduction of appropriate amendments to the regulatory legal and other acts of the Cabinet of Ministers of the Kyrgyz Republic arising from this Decree.
Cabinet of Ministers of the Kyrgyz Republic:
– within a month, approve the Regulations and management scheme of the State Agency for State Property Management;
– bring their decisions in line with this Decree;
– take other measures arising from this Decree.