Transition Report 202021 State Owned Enterprises
Transition Report 202021 State Owned Enterprises
Transition Report 202021 State Owned Enterprises
2
STATE-OWNED
ENTERPRISES
State-owned enterprises have historically played
an important role across the EBRD regions.
Today, they account for almost half of all
public-sector employment. In many economies,
state enterprises have more or less disappeared
from the manufacturing sector over the last
20 years or so. However, they remain important
providers of energy and (often subsidised)
services such as railway transport and municipal
utilities. They are often tasked with providing
such services to poorer and more remote sections
of the population, especially in countries with
limited capacity to involve the private sector in
the provision of public services. State enterprises
can also act as automatic stabilisers when faced
with adverse economic and technological shocks,
providing more stable sources of employment
during downturns and in economically
disadvantaged regions. However, significant
challenges remain when it comes to improving
the corporate governance of such enterprises.
36
37
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
1
ee Megginson (2000, 2016), Estrin et al. (2009), and Estrin and Pelletier (2018). See also Matuszak and
S
Szarzec (2019), Borkovic and Tabak (2020), and IMF (2019) for recent evidence from the EBRD regions.
2
See Mühlenkamp (2013), Estrin et al. (2020) and Szarzec et al. (2019).
3
See OECD (2005, 2015) and World Bank (2006).
38
CHAPTER 2 STATE-OWNED ENTERPRISES
State ownership can also be used to lean against rising CHART 2.1.
regional disparities by providing employment in areas that have State enterprises tend to step in where administrative capacity is
been affected by adverse economic or technological shocks, more limited
or where private-sector employment is scarce, preventing a
39
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
70
Economies in the EBRD regions
Comparators
50
Morocco
Greece
Turkey
Poland
Bulgaria
Tunisia
Romania
Cyprus
Croatia
Hungary
Russia
Serbia
North Macedonia
Lithuania
Mongolia
Slovenia
Albania
Estonia
Bosnia and Herz.
Montenegro
Slovak Rep.
Ukraine
Kyrgyz Rep.
Armenia
Georgia
Latvia
Kazakhstan
Kosovo
Moldova
Tajikistan
Azerbaijan
Uzbekistan
Belarus
Italy
Germany
Egypt
for the bulk of state employment in Turkey, Cyprus, Greece and
the southern and eastern Mediterranean (see Chart 2.2).
State-owned enterprises are typically larger than private State enterprises Rest of the public sector
firms, with the private sector being dominated by small
companies: over a third of state enterprises in the EBRD regions Source: Life in Transition Survey 2016, ILO, OECD and authors’ calculations.
have more than 100 employees, while 45 per cent of private Note: These estimates are based on the answers of primary respondents in the Life in Transition Survey
(except in the case of Egypt, Morocco and Tunisia, where estimates are based on ILO and OECD data).
firms have 10 employees or fewer (see Chart 2.3). A similar
pattern can be observed in advanced economies. As discussed
in the following sections, a single state enterprise (such as a
railway company, a coal-mining firm or an oil company) can CHART 2.3.
employ tens of thousands of people and dominate the labour State enterprises are typically larger than private firms
market of an entire municipality, city or region.
Economies in the EBRD regions Germany and Italy
State-owned enterprises are concentrated in the 100
90
transport and utility sectors 80
Percentage of total, 2016
70
While sectoral data for the early years of the transition process 60
are scarce, state enterprises in the early 1990s were typically 50
manufacturers (operating large plants in heavy industries, for 40
by 2015 those enterprises were concentrated in the transport 1-10 employees 11-20 employees 21-100 employees More than 100 employees
4
See also European Commission (2018), IMF (2019), and Matuszak and Szarzec (2019).
40
CHAPTER 2 STATE-OWNED ENTERPRISES
80
Employment Market value
BLR
70
Sectoral breakdown of state enterprises' total
90
AZE
70 50
UZB
60
40
50
UKR
30 RUS
40 ALB MNE
KGZ R2 = 0.2113
30 20 KAZ
MDA MNG SVN
20 BIH SVK
10 TJK ARM GEO HRV EST
10 MKD HUN LVA CZE DEU
KOS BGR ITA
SRB ROU TUR POL LTU GRC CYP
0 0
Economies in the Other emerging Advanced Economies in the Other emerging Advanced 600 800 1,000 2,000 4,000 6,000 8,00010,000 20,000 40,000
EBRD regions markets economies EBRD regions markets economies
GDP per capita in US dollars, 2016 (log scale)
Primary sectors Manufacturing Finance Telecommunications Electricity and gas
Regression line
Transport Other utilities Real estate Other activities
30-70%
Hungarian, Polish and Slovenian chemical and pharmaceutical
sectors). Meanwhile, the results of the Life in Transition
Survey indicate that state enterprises are also still playing an
important role in the manufacturing sectors of poorer countries OF ALL MANUFACTURING
(see Chart 2.5). Indeed, in Azerbaijan, Belarus and some EMPLOYMENT
countries in Central Asia, state enterprises account for 30 to
70 per cent of total employment in manufacturing, compared
with less than 10 per cent in most of central Europe and the
concentrated in natural resources and financial services
Baltic states (an estimate that is consistent across both OECD
(with the EBRD regions being no exception in that regard). In
and LiTS data).
the EBRD regions, their ranks also include construction and
engineering firms, as well as chemical firms and manufacturers
The rise of state-owned multinationals of fertilisers.
Increasingly, state enterprises are also playing an important
role at international level. National oil and gas companies, for
instance (such as Rosneft and Gazprom in Russia), are often
listed on major stock exchanges and operate internationally in Universal provision of
ways that are similar to their private-sector counterparts.
Data from the United Nations Conference on Trade and affordable services
Development (UNCTAD) indicate that there are around
1,500 large state-owned multinationals in the world, State enterprises pursue a wide range of objectives besides the
which represent just 1.5 per cent of all multinational maximisation of profits, with particular emphasis being placed
enterprises but own about 10 per cent of all foreign on the universal provision of services at affordable rates. In
affiliates and account for around 10 per cent of global a recent IMF survey, 90 per cent of governments in central,
greenfield investment.5 In contrast with their private-sector eastern and south-eastern Europe reported that their state
counterparts, state-owned multinationals are heavily enterprises had objectives relating to the provision of specific
5
See UNCTAD (2017).
41
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
public goods and services.6 Similarly, state-owned banks may CHART 2.6.
pursue non-commercial objectives, such as increasing financial Railway companies are large employers, particularly as national
inclusion or improving access to finance for specific groups of monopolies
customers (as discussed in detail in Chapter 3). This section
looks at state enterprises providing transport services, utilities Economies in the EBRD regions Other economies
Ukraine
Belarus
Moldova
Bosnia and Herz.
Lithuania
Hungary
Azerbaijan
Latvia
North Macedonia
Turkey
Slovak Rep.
Slovenia
Bulgaria
Montenegro
Croatia
Romania
Poland
Serbia
France
United Kingdom
Germany
India
South Africa
increased over the years, with a view to improving railways’
efficiency and financial sustainability, reducing the burden on
government budgets and increasing the competitiveness of rail Single monopoly Infrastructure Passenger Freight Passenger and freight
travel relative to other modes of transport. Infrastructure and freight Other
1.5%
OF TOTAL EMPLOYMENT
benefited from debt cancellations totalling 7 per cent of GDP
in 2011. And in 2016, prior to its unbundling, Serbian Railways
had its debt to the state-owned electricity provider written off,
IN SOME COUNTRIES IN with that debt totalling 0.1 per cent of GDP. By 2019, however,
THE EBRD REGIONS Serbian Railway Infrastructure, one of its unbundled successors,
6
See IMF (2019) and OECD (2018a). 9
See IMF (2017).
7
See, for instance, Laabsch and Sanner (2012), Mizutani (2019), Tomeš (2017), Van de Velde et al. (2012)
and World Bank (2017).
8
See Working Party on Rail Transport (2012).
42
CHAPTER 2 STATE-OWNED ENTERPRISES
80 ESP
70
passenger fares, 2016
10
See Spinetta (2018) and Office of Rail and Road (2019).
43
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
municipal ownership (as witnessed, for instance, in the French CHART 2.8.
water sector, the German energy services industry and the In many countries, rural broadband coverage lags far behind that
Norwegian waste collection sector) with the aim of increasing seen in other areas
accountability.11
In contrast, in countries with weaker economic institutions, 100
Economies in the EBRD regions Comparators
to broadband, 2018
70
non-transparent utility subsidies tend to go hand in hand with 60
weak social safety nets, particularly in Central Asia and parts 50
Cyprus
Croatia
Slovenia
Greece
Bulgaria
Hungary
Latvia
Estonia
Slovak Rep.
Romania
Lithuania
Poland
Malta
Netherlands
United Kingdom
France
Belgium
Italy
Switzerland
Denmark
Iceland
Austria
Ireland
Czech Rep.
Germany
Sweden
Norway
Spain
Finland
Portugal
Luxembourg
pandemic on account of their ease of implementation, despite
such measures being a fairly imprecise way of channelling
support to the individuals who need it most (see Chapter 1). Country as a whole Rural areas
In countries with weaker economic institutions,
well-defined private-sector participation may help to clarify Source: European Commission.
contractual relationships between governments and service
providers and increase the transparency of state support for
municipally owned companies. By way of example, Box 2.2
discusses Romania’s experience of introducing private-sector
participation in the area of district heating.
11
ee Kishimoto et al. (2019).
S 13
See Kishimoto et al. (2019) and BEREC (2017).
12
See Foster and Rana (2019).
44
CHAPTER 2 STATE-OWNED ENTERPRISES
guarantee the provision of services at affordable rates for all its parliament to Kutaisi, although that move has since been
consumers.14 reversed.
Thus, there are various different models that can The distribution of state employment across regions can
successfully be used to ensure the universal provision of have a significant impact on the location of private-sector
broadband services, ranging from full state ownership to no activity. The effects of such relocation are likely to be larger
state ownership, but they all tend to require state intervention where the relocated jobs are more highly skilled and where
in one form or another. spending by employees and procurement by public bodies
will generate greater demand for goods and services supplied
by the private sector. Those effects can, in turn, be further
enhanced by improvements to the business environment and
Other objectives: leaning transport links.17
Against that background, this section looks at whether
against rising regional state-owned enterprises can help to support economic activity
in disadvantaged regions. That analysis examines the spatial
disparities distribution of state enterprises using the latest round of
Enterprise Surveys, which were conducted in 2018-20 by the
EBRD, the European Investment Bank (EIB) and the World Bank
Technological changes have been reshaping the geography
Group and covered more than 25,000 randomly selected firms
of production and the skill-sets that are demanded in labour
across the EBRD regions.
markets. In that context, the economic importance of large
cities has been increasing even faster than their share of the
population. Conversely, many smaller cities, particularly those
More state employment in smaller towns and
that are far from other urban agglomerations, have seen their
rural areas
The results indicate that state enterprises are more likely to
local economies shrink and their populations decline. This has
be located in smaller cities than private firms (see Chart 2.9).
led to rising income disparities across regions within individual
In the EBRD regions, 44 per cent of state-owned enterprises
economies.15
Governments can use a range of tools to address rising
regional disparities. These include direct fiscal transfers to
CHART 2.9.
support disadvantaged regions, investment in infrastructure,
In the EBRD regions, state enterprises are more likely to be located in
and incentive schemes (such as tax breaks) that encourage smaller cities than private firms
companies to locate themselves in particular regions. At the
same time, measures aimed at improving the local business 100
Breakdown of firms by size of locality, 2020 (per cent)
investment.16 80
70
disadvantaged regions 50
30
economically disadvantaged regions. In the United Kingdom,
20
for example, HM Revenue and Customs has opened offices in
10
Liverpool, the Department for Work and Pensions has offices 0
in Newcastle, the Office for National Statistics has offices in State-owned enterprises Private firms
Newport, and parts of the BBC – a state-owned broadcaster Fewer than 50,000 inhabitants 50,000 to 250,000 inhabitants
250,000 to 1 million inhabitants More than 1 million inhabitants
– moved to Salford in Greater Manchester. Similarly, the
German government moved various public bodies east after
Source: Enterprise Surveys and authors’ calculations.
reunification. More recently, the German state of Bavaria Note: The Enterprise Surveys do not cover firms that are 100 per cent state-owned. In this chart, “state-
launched a large regional development programme, with more owned” is defined as a firm where the state owns more than 50 per cent. These data represent simple
averages. Very similar patterns are observed when using median eligibility sampling weights.
than 50 public bodies either moving to rural parts of the state
or being established from scratch in those areas. Meanwhile,
Denmark has moved thousands of government jobs to scores
of different cities; Norway has moved its competition authority
to Bergen, moved the Norwegian Polar Institute to Tromsø in
44%
OF STATE ENTERPRISES
the far north, and moved the Norwegian peace corps (Norec) to IN THE EBRD REGIONS
the small town of Førde; and South Korea has moved two-thirds ARE IN TOWNS WITH
of its government agencies away from Seoul (many of them FEWER THAN 50,000
to the newly built Sejong City). And in 2012 Georgia moved INHABITANTS
14
ee Salience Consulting (2020).
S 17
ee Alesina et al. (2001), Becker et al. (2018), Faggio (2014), Faggio and Overman (2014), Institute
S
15
See AfDB et al. (2019) and EBRD (2018a). for Government (2020), Schluter (2014), and Swinney and Piazza (2017).
16
See EBRD (2019).
45
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
are located in towns with fewer than 50,000 inhabitants, 0.5 percentage point increase in state employment as a
while only 13 per cent are found in cities of over a million. In percentage of total employment. That relationship is not
contrast, only about a third of private firms are found in towns by construction to the extent that the two ratios have
with populations below 50,000, while 22 per cent are located different denominators.
in cities of over a million. This pattern could, in part, reflect a In regions with fewer private-sector employers, state
legacy of central planning, under which secondary cities were employment (be it in public administration, education or
consciously promoted and some state enterprises were sited healthcare, or in municipal utility companies, railway companies
without due regard for transport costs, as well as the fact that or post offices) becomes relatively more important as a source
private investment is concentrated in large cities, benefiting of local employment. In this sense, public-sector employment
from the presence of a large pool of highly skilled workers and acts as an automatic stabiliser when regions experience adverse
a diverse range of customers and suppliers. economic or technological shocks. Similarly, state-owned banks
Disaggregated data on employment by type of ownership tend to be more important lenders in rural areas (see Chapter
and sector for 380 Polish powiats (roughly equivalent to UK 3). Evidence from the latest round of the Life in Transition Survey
counties) allows for more detailed analysis of the spatial confirms these findings. Residents of rural areas are more likely
distribution of state employment (see Box 2.3). That analysis to work for a state enterprise or another public entity, even when
shows that the regions with higher unemployment in northern, taking into account individual characteristics such as their age,
eastern and south western Poland are also the ones with higher education or sector of employment.
percentages of state employment (see Chart 2.10). Moreover,
regression analysis can be used to link state employment (as Residents of rural areas are more likely to regard
a percentage of total employment) to the unemployment rate the state as having primary responsibility for the
(unemployment as a percentage of the labour force) and various creation of jobs
county-level characteristics (such as the sectoral composition of
In line with those patterns, residents of rural areas also
employment, the ratio of the working-age population to the total
expect more from the state in terms of job creation. A
population, population density and NUTS 2-level regional fixed
survey conducted by the Austrian National Bank (OeNB) in
effects). That analysis reveals that a 1 percentage point increase
10 countries (nine of which are in the EBRD regions) asked
in the county-level unemployment rate is associated with a
respondents who they thought had primary responsibility
CHART 2.10.
State employment is higher in Polish regions with high unemployment
Average unemployment rate, per cent, 2012-18 State employment as a percentage of total employment, per cent, 2018
16.1-32.0 33.2-56.0
9.9-16.1 22.7-33.2
2.0-9.9 9.0-22.7
46
CHAPTER 2 STATE-OWNED ENTERPRISES
70
RESPONSIBILITY
60
FOR PROVIDING
50
40
EMPLOYMENT,
COMPARED WITH ONLY
37%
30
20
10
0
Capital city Other cities with a Rural areas
OF THOSE LIVING IN
population of more than 100,000 CAPITAL CITIES
The state has primary responsibility The private sector has primary responsibility
for supplying people with work for supplying people with work
Responsibility is shared between It does not matter as long as jobs are available
the state and the private sector
for providing people with work. In the nine EBRD economies, Public-sector employment responds less to the
almost half of all respondents living in rural areas thought business cycle
the state should have primary responsibility for providing
There is a large body of literature showing that the investment
employment, compared with only 37 per cent of those living in
and employment levels of state enterprises are typically less
capital cities. That difference remains statistically significant
responsive to changing external conditions than those of
when controlling for individual characteristics such as age or
private firms.18 Similarly, Chapter 3 shows that state-owned
education (see Chart 2.11 and Box 2.4).
banks tend to be more stable lenders during crises. During
the global financial crisis, for example, job losses and wage
cuts at state-owned firms were smaller than they were at
Public-sector employment private firms.19 The EBRD’s new survey of the legal frameworks
governing state enterprises, which is discussed in the last
as an automatic stabiliser part of this chapter, reveals that as many as a quarter of all
economies in the EBRD regions explicitly restrict the dismissal
of state enterprises’ employees, over and above the job
Over the longer term, as discussed in Chapter 1, there has protection rules applicable to the private sector.
been an increasing tendency for the state to take on the role of
insurance provider, establishing a safety net to protect against Public-sector employees less affected by the global
things like unemployment, ill health and disability. Recently, financial crisis
however, technological changes have been shifting some
Evidence from the Life in Transition Survey further corroborates
risks back onto individuals, with fewer permanent contracts,
these findings. Only 65 per cent of survey respondents who
more subcontracting, the rise of the gig economy and more
work for private firms in the EBRD regions have permanent
zero-hours contracts. The people who have been most affected
contracts, compared with 82 per cent of people working for
by these developments are actually those who are least willing
state enterprises (see Chart 2.12). Moreover, the crisis module
or able to tolerate risks – those with lower levels of income and
in the 2010 round of the Life in Transition Survey also showed
education. Partly as a reflection of this trend, support for the
that public-sector employees were less likely to lose their
expansion of public ownership has been rising, as public-sector
job or experience delays in the payment of wages during the
employment is commonly regarded as a less risky choice, with
global financial crisis. These differences remain statistically
more risk-averse individuals being more likely to work in the
significant when account is taken of individual characteristics
public sector.
such as age or gender, the size of the firm, and the sector and
country of employment.20 The employees of state enterprises
18
See Boeing-Reicher and Caponi (2016), Chen et al. (2017), Clark and Postel-Vinay (2009), Jaslowitzer et
al. (2016) and O’Toole et al. (2016).
19
ee IMF (2019), Jaslowitzer et al. (2016), Telegdy (2016) and Vladisavljević (2020).
S
20
As one might expect, wage delays are determined primarily by the country and sector of employment,
rather than individual characteristics.
47
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
40
Source: Life in Transition Survey 2016 and authors’ calculations. Source: Life in Transition Survey 2016, Google trends and authors’ calculations.
Note: These estimates are derived from logit or ordered logit models with country fixed effects and country Note: The vertical axis measures changes in the volume of Google searches over the 18 weeks starting on 22
clustered standard errors. The sample is restricted to the EBRD regions. A coefficient larger than 1 suggests March 2020 relative to forecasts based on previous trends. State enterprises’ share of total employment is
that being employed by a state enterprise or another public-sector entity increases the likelihood of the estimated on the basis of the answers given by primary respondents in the Life in Transition Survey.
listed outcome relative to being employed in the private sector. Darker colours denote effects that are
significant at the 5 per cent level. Regressions control for age, gender, marital status, urban/rural location,
education and father’s education.
48
CHAPTER 2 STATE-OWNED ENTERPRISES
Spending on R&D
within the establishment
21
See also Bortolotti et al. (2019), and Kou and Kroll (2018).
22
See Mazzucato (2013).
23
See, for example, Barnes (2019), Bergsager and Korppoo (2013), Hsu et al. (2017), Pan et al. (2020) and
Prag et al. (2018).
49
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
Evidence from the Enterprise Surveys also suggests that CHART 2.16.
while state enterprises are more likely to monitor emissions In the EBRD regions, state enterprises are more likely to monitor
and have emissions-related targets, they are no more likely to emissions and have emissions-related targets
engage in green investment than similar private firms. They are,
for example, significantly less likely to invest in the upgrading 100
Monitoring Targets
70%
specifically at state enterprises in the coal sector.
Coal still accounts for more than a third of global electricity
generation and remains the second-largest fuel in the
global energy mix after oil and the second-most-traded bulk OF GLOBAL OIL AND GAS
commodity after iron ore.26 In the EBRD regions, coal accounts PRODUCTION ASSETS,
for more than 80 per cent of electricity generation in Kosovo, AND AROUND
Mongolia and Poland (see Chart 2.17). In countries which are
both large consumers and large producers of coal (such as
Kazakhstan, Poland and Turkey), coal is regarded as being
60%
OF THE WORLD’S COAL
important for energy security. Moreover, some countries in MINES AND COAL POWER
the EBRD regions (such as Mongolia and Russia) are major PLANTS
coal exporters.
Despite being a major polluter, the coal sector continues
to receive large subsidies in many countries. When account is
taken of subsidies relating to tax treatment, as well as damage
to public health and the environment, total subsidies can
exceed 30 per cent of GDP (see Chart 2.18).
State enterprises can play an important role in the COAL ACCOUNTS FOR
winding-down of sunset industries, where privatising firms may MORE THAN
be difficult. In most EU member states, there has already been
a clear shift away from coal as a result of the implementation
of stricter emission standards, the rising price of emissions
80%
OF ELECTRICITY
under the EU Emissions Trading System (EU ETS; see Chapter GENERATION IN SOME
4), and growing competition from renewables and, in some EBRD ECONOMIES
24
See CPI (2014).
25
See IEA (2016).
26
See IEA (2020).
50
CHAPTER 2 STATE-OWNED ENTERPRISES
ECONOMIES 60
50
300
250
40 200
30 150
20 100
10 50
0 0
Kosovo
Mongolia
Poland
Kazakhstan
North Macedonia
Serbia
Morocco
Montenegro
Bulgaria
Greece
Ukraine
Slovenia
Turkey
Romania
Croatia
Hungary
Russia
Slovak Rep.
Uzbekistan
Percentage of electricity generated using coal (left-hand scale) Total thermal coal production (Mt) (right-hand scale)
2.5
40
are members of Europe’s Energy Community means that they 35
employment, 2018
2.0
are legally obliged to implement adapted versions of the EU’s 30
1.5 25
energy and environmental legislation. While those economies’ 20
implementation of environmental standards is not as advanced 1.0
15
as it is in the EU, a number of existing mines have been closed, 0.5
10
Bulgaria
Slovenia
Romania
Greece
Slovak Rep.
Hungary
Croatia
Kosovo
Serbia
Montenegro
North Macedonia
Kazakhstan
Ukraine
Mongolia
Turkey
Russia
Morocco
Trading System is introduced.
As a result, the private sector is moving out of coal and other
sunset industries, where state ownership often dominates. Direct employment (left-hand scale) Indirect employment (left-hand scale) Implicit subsidy (right-hand scale)
Thus, the state is left with the task of winding down large
“stranded” assets and managing the decline in employment.
Source: EBRD (2020), ILO, IMF Energy Subsidies Template, national authorities and authors’ calculations.
Globally, companies with no state ownership own 14 per cent Note: “Direct employment” refers to employees working at power plants and mines, as well as on-site
of operational coal power capacity, but account for only 3 per contractors. “Indirect employment” includes off-site contractors, suppliers and their workers, and jobs
created through the distribution of mining products (such as transport and accommodation for mine
cent of the coal power investment pipeline.29 Today, the coal workers). These estimates do not include induced employment resulting from consumption by direct and
indirect employees. Implicit subsidies exceed direct fiscal support and comprise both consumption and
sector is predominantly state-owned in most of central and production-related subsidies (including damage to public health and the environment that is not reflected
south-eastern Europe. At the same time, significant private in the price of coal).
involvement in the coal sector can still be found in economies
where environmental regulations remain less stringent,
making operations more profitable (including countries
such as Kazakhstan, Mongolia, Russia and Turkey). Active state policies can help to deal with the legacy of
The coal sector has traditionally been an important employer, coal mining. In the Netherlands, for instance, state-
both directly and indirectly, accounting for up to 2.5 per cent of owned mines were successfully turned into a diversified
total employment in economies such as Bosnia and Herzegovina petrochemicals multinational in the 1970s. In Germany,
and Kosovo. Furthermore, employment in the coal sector is also meanwhile, public-sector jobs are being created at new
highly concentrated: it accounts for between 10 and 20 per cent agencies in coal-mining areas in the east of the country
of total employment in south-eastern Bulgaria and the region of to compensate for concentrated job losses. Against that
Western Macedonia in Greece (see also Box 2.3 on employment background, Chapter 4 looks at the EBRD’s “just transition
in the mining industry in Polish counties). initiative” in the EBRD regions.
27
ee EBRD (2020).
S
28
See IEA (2019, 2020).
29
See Prag et al. (2018).
51
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
of GDP, 2018
80 0.8
hundreds of thousands of people and make large investments
60 0.6
in infrastructure (see Chart 2.19). A single NOC can account
40 0.4
for more than 1 per cent of a country’s total employment. In
20
some cases (such as SOCAR in Azerbaijan), their revenues even 0.2
0
exceed the country’s GDP. Transfers from NOCs to national 0.0
Azerbaijan
Russia
Kazakhstan
Ukraine
Tunisia
Saudi Arabia
Algeria
Norway
China
Mexico
Brazil
governments in the EBRD regions range from 2 to 18 per
cent of total general government revenue (see Chart 2.20). In
some cases, NOCs are also tasked with achieving public policy NOC revenues as a percentage of GDP (left-hand scale)
NOC employment as a percentage of total employment (right-hand scale)
objectives (with Ukraine’s Naftogaz, for example, providing
subsidised energy to households).31 Source: ILO, National Oil Company Database and authors’ calculations.
At the same time, some NOCs are highly indebted. Their Note: Employment data for Azerbaijan and Mexico relate to 2016 and 2017 respectively.
60
bailout of KazMunayGas in 2015 (which had a total value
Per cent
50
equivalent to 2.2 per cent of Kazakhstan’s GDP) had no bearing
40
on the country’s credit rating, consistent with pre-existing 30
market perceptions of implicit state support for national oil 20
companies. 10
Almost two-thirds of NOCs exhibit “weak” to “failing” 0
performance in the area of public transparency, as measured
Russia
Azerbaijan
Kazakhstan
Ukraine
Tunisia
Saudi Arabia
Algeria
Mexico
Norway
China
Kuwait
30
See World Bank (2011). 35
See Manley et al. (2019).
31
ee Natural Resource Governance Institute (2019).
S
32
See Manley et al. (2019).
33
See Natural Resource Governance Institute (2019).
34
See Bradley (2020), Bradley et al. (2018), and Heller and Mihalyi (2019).
52
CHAPTER 2 STATE-OWNED ENTERPRISES
ownership
OF THE WORLD’S Centralised ownership
State
function
OIL AND GAS AND Separation of ownership function from
regulation and policymaking
CONTROL UP TO Clear mandate and responsibilities
90%
Board responsibilities
assigned to the board
and composition
Structured and merit-based
appointment process for the board
Requirement that the board
include independent directors
OF GLOBAL OIL AND Requirement that appointments
GAS RESERVES be based on qualifications
Definition and budgeting
of policy objectives
support
State
No financial state support that
confers unfair advantages
Transparent cost and
Transparency
revenue structures
Risk-related reporting
0 10 20 30 40 50 60 70
Percentage of EBRD economies that comply with OECD guidelines
enterprises’ governance in 36 economies in the EBRD regions. The assessment of compliance for the purposes of this chart is
loosely based on key recommendations set out in the OECD guidelines, and was prepared after the
aggregation of findings across multiple components within each jurisdiction.
49%
away from more efficient uses, and become conduits for
corruption. Improvements in governance are key to ensuring
that state enterprises are able to deliver value to their ultimate
beneficiaries – the taxpayers.
OF GDP
This section presents detailed analysis of state enterprises’
governance, examining the existing governance frameworks
in the EBRD regions and highlighting areas for improvement
(see also the Structural Reform section). This analysis setting high-level objectives and giving state enterprises a
draws on a comprehensive new review of the country-level clear framework to operate within, while also giving enterprises
legal frameworks that govern state-owned enterprises in sufficient autonomy to draw up their own business strategies
36 economies in the EBRD regions. It is complemented by and pursue those objectives in their preferred manner.36
an in-depth examination of state enterprises’ compliance
with corporate governance rules, drawing on a review of the State ownership policies remain uncommon
corporate governance disclosures of more than 100 state
The OECD Guidelines on Corporate Governance of State-Owned
enterprises in 23 economies in the EBRD regions. Lastly, this
Enterprises encourage countries to draw up state ownership
section looks specifically at the lessons that have been learnt
policies that set out, among other things, the rationale for state
from the EBRD’s work with state enterprises.
ownership and the state’s overall objectives as an owner. In
general, however, the objectives of state ownership are not
Unique governance challenges clearly defined in the economies of the EBRD regions (see
State enterprises face unique governance challenges as a Chart 2.21), with the state’s ownership often simply a legacy of
result of the array of financial and non financial objectives that central planning. Less than a third of all economies in the EBRD
states seek to achieve through their operations – a situation regions have formal documents, policies or laws specifying the
that is further compounded by the complexity of states’ overarching objectives of state ownership, very few of which
administrative structures. As a shareholder, the state aims qualify as a state ownership policy as such (see also Box 2.6,
to run its enterprises in the interests of society as a whole. which looks at the development of a state ownership policy in
In so doing, it should act as an “informed and active owner”, Uzbekistan).
36
See OECD (2015).
53
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
Lack of transparency around public service Tax exemptions and tax benefits are rare, being observed in
obligations only 22 per cent of the economies in the EBRD regions. The
majority of the economies in the EBRD regions do not normally
The OECD guidelines also call for public service obligations
allow state guarantees to be provided, although more than
to be clearly mandated and disclosed. Costs relating to their
65 per cent allow exceptions subject to parliamentary
performance should be funded by the state and subject to high
legislation or government approval.
levels of transparency in terms of cost and revenue structures.
Such public service obligations are very common, being
observed in around 90 per cent of the economies in the EBRD
Strengthening the disclosure of information
regions. They typically involve providing a universal service In more than a quarter of all economies in the EBRD regions,
(such as postal or railway services) for less than the total cost information on the loans, grants, subsidies and guarantees
of delivering it, providing services to specific categories of client that are received by state enterprises is not publicly disclosed
at artificially low prices (for instance, supplying electricity or gas in any way. Even in situations where disclosure is legally
to households on the basis of regulated tariffs), or providing required, disclosed information is often limited and difficult to
subsidised services in specific regions (such as transport access. Corporate governance disclosures are only very limited
services in remote areas). It is typically the case, however, that in 63 per cent of state enterprises in the EBRD regions, and
public service obligations are not clearly defined in regulations are especially limited in municipally owned companies. Many
and are not explicitly budgeted for. This is true (with exceptions state enterprises (especially fully state-owned or unlisted
relating to specific enterprises, sectors and services) of enterprises) have no clear audience for this information, so
almost two-thirds of the economies in the EBRD regions. disclosure needs to be a legal requirement. Box 2.7 looks at the
At firm level, more than 85 per cent of state enterprises do successful introduction of a public disclosure system in South
not explicitly disclose the existence of public service obligations Korea, where public institutions are obliged to disclose a range
or associated budgeting. of financial and non-financial information on a regular basis.
Weak or ad hoc budgetary governance creates fiscal risks
and cycles of dependence between state enterprises and Multiple agencies representing the state as owner
governments: state-owned enterprises are used to provide
In general, the state keeps a firm grip on state enterprises,
subsidies, but they incur losses, accumulate debt and need
frequently doing so with multiple hands. The centralised state
to be bailed out.37 Subsidies and grants to state enterprises
ownership function that is recommended by the OECD as a best
can be observed in almost all EBRD economies (being subject
practice – whereby all or most state enterprises are overseen
to EU rules on state aid in EU member states). What is more,
by a single entity – exists in only a quarter of all economies
such subsidies are typically calculated after losses have
in the EBRD regions. A centralised ownership function can
been incurred. Determining the level of subsidies in advance
contribute to the streamlining of oversight efforts in the event
on the basis of objective measures capturing public service
of multiple state enterprises and can help to draw a clear
obligations (for instance, per end-user of the service) could
distinction between the state’s ownership of the enterprise in
strengthen accountability and increase incentives to improve
question and its policymaking and regulatory functions.
the operational efficiency of state enterprises. Subsidised or
Even in the economies where a centralised ownership
targeted loans to state enterprises are slightly less common –
function exists, that entity often lacks the powers that are
and where they are used, they tend to be channelled through
necessary to adequately scrutinise state enterprises. In 36
state-owned banks or development banks (see Chapter 3).
per cent of economies ownership is exercised by means of a
dual model, whereby responsibilities are shared between two
authorities, such as the line ministry and the government, or
the line ministry and the ministry of finance. The remaining
economies operate a decentralised model, whereby multiple
authorities (mainly line ministries) supervise state enterprises
in their own respective areas of competence. In practice,
IN ALMOST state-owned enterprises are heavily influenced by line
45%
ministries. Indeed, in almost half of all economies in the
EBRD regions, line ministries hold shares in at least some –
and in some cases, all – state-owned enterprises. Moreover,
OF ECONOMIES IN firm-level analysis confirms that most key state enterprises
THE EBRD REGIONS, are owned by line ministries. Municipal or regional authorities,
ENTITIES EXERCISING ministries of finance and economic affairs, national holding
OWNERSHIP DUTIES companies or funds, other state enterprises and the cabinet
ARE ALSO RESPONSIBLE or parliament can also play a role when it comes to exercising
FOR SECTORAL POLICY ownership functions.
DECISIONS
37
See IDB (2019).
54
CHAPTER 2 STATE-OWNED ENTERPRISES
MORE THAN HALF out in budgets. Most state enterprises reviewed in the study have
OF ALL STATE ENTERPRISES no risk department, so there is no organisational framework for
IN THE EBRD REGIONS acting on external risk analysis, and more than 50 per cent of the
HAVE BOARDS THAT DO economies in the EBRD regions do not impose any risk-related
NOT HAVE THE AUTHORITY reporting requirements. Those that do only require the disclosure
TO APPROVE THEIR of general risk factors in the context of annual reports, rather than
ENTERPRISES’ STRATEGIES obliging state enterprises to report on the way that they deal with
OR BUDGETS the risks they face in their operations.
38
See IDB (2019).
55
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
56
CHAPTER 2 STATE-OWNED ENTERPRISES
39
ee OECD (2013), OECD (2018b) and World Bank (2015).
S 43
See OECD (2013).
40
See World Bank (2015). 44
ee OECD (2013) and Morsy et al. (2018).
S
41
See Morsy et al. (2018) and OECD (2018b).
42
See OECD (2013).
57
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
BOX 2.2.
disconnect, revenues fall and unit costs increase as the distribution
Private-sector involvement in district heating network becomes oversized, exacerbating under-investment and further
in Romania undermining the quality of the service. In many cases, this results in
the service being withdrawn entirely. In Romania, for example, the total
In socialist times, district heating was provided as a public service and
number of district heating systems has fallen from 315 in 1989 to just
treated as a natural monopoly for regulatory purposes. That remains
43 today.
the case in many of the economies in the EBRD regions, although
Most remaining district heating utilities struggle with their cash flow,
some central European countries (such as Poland) have substantially
despite public subsidies. They often accumulate debts to their energy
deregulated their district heating sectors. Unlike water or electricity,
suppliers, unpaid tax bills or other forms of debt and end up receiving
district heating can potentially face some degree of competition
government bailouts. Such soft budget constraints – which are prevalent
from alternative heat sources (such as individual gas boilers, electric
in the district heating sector, but not the water sector – hamper the
heating or individual stoves fuelled by coal or biomass). Customers
planning of investment, as well as the management of government
can, in theory, opt out of district heating, reducing the revenues
budgets. Over time, they may also foster an implicit acceptance of
of service providers and potentially resulting in inefficient
the notion that state enterprises do not need to honour contractual
distribution networks.
agreements.
District heating services are relatively costly and can account for
It is not impossible for state-owned district heating utilities to be
a significant percentage of a household’s income during the heating
financially sound and well-run, with positive examples typically being
season, making the removal of heating subsidies politically difficult.
found in countries with mature commercial and governance frameworks,
Indeed, the results of the latest round of the Life in Transition Survey
such as the Nordic countries. In countries with weaker public governance
indicate that around 30 per cent of households in the EBRD regions’
frameworks, well-defined private-sector participation in the form of
poorest income decile are unable to afford adequate heating of their
public-private partnerships or management contracts may help to clarify
home. This could help to explain why district heating is more likely to
contractual arrangements, achieve an arm’s-length relationship between
be state-owned than other utilities.
the utility’s management and local authorities and do away with soft
At the same time, investment needs in the area of district
budget constraints. The district heating utility in the Romanian city of
heating are particularly large in the EBRD regions following years
Iaşi experienced most of the challenges described above, including a
of under-investment. Those economies’ distribution systems were
persistent failure to pay key suppliers. When it filed for bankruptcy in
not designed for individual metering or user control, making the
April 2012, the city signed a 20-year concession contract with a private
introduction of consumption-based billing costly and difficult. In
operator, Dalkia Termo Iaşi. District heating remains subsidised and
addition, many secondary cities in the EBRD regions have falling
significant investment is still needed, but transfers from the city budget
populations and industries that are in decline. In the past, for instance,
have become predictable. The accumulation of debt has slowed and the
industrial plants were often major consumers of heat, surrounded by
disconnection rate has fallen, reflecting improvements in the quality of
residential neighbourhoods. In such circumstances, heating networks
service – a major step towards breaking the vicious circle of persistent
and production facilities may need to be re-scaled and re-routed, as
underfunding and a shrinking customer base.
oversized systems are unable to operate economically.
Tariffs are typically set below cost-recovery levels to ensure
universal access. Thus, while the poor spend a larger percentage of
their income on utilities, larger percentages of subsidies accrue to
richer households who consume more energy. Under-pricing also
results in excess consumption of heating and under-investment
in energy-efficient buildings, with adverse implications for the
environment.
From a service provider’s perspective, municipal subsidies often
lack predictability. In Romania, for instance, municipal subsidies are
common in the district heating sector, while the water sector only
receives investment grants. At the same time, however, the revenue
stream is often uncertain, hindering long-term investment planning and
encouraging utility companies to spend time lobbying city authorities
rather than focusing on providing a high-quality service for users.
Many district heating utilities in the EBRD regions are effectively
in a downward spiral of managed decline. Those downward spirals
typically start with a heating utility struggling with a legacy of under
investment and poor maintenance, which results in heating being
provided at unpredictable temperatures. As dissatisfied customers
58
CHAPTER 2 STATE-OWNED ENTERPRISES
Agriculture
Financial activities
Construction
Public administration
Administrative activities
Education
Manufacturing
1 per cent of total employment in Poland, that employment is highly Source: National Statistics Poland.
concentrated. In the southern regions of Sląskie and Małopolskie, for Note: “State employment” is defined here as employment by
an entity that is more than 50 per cent state-owned.
example, it accounts for 3 per cent of total employment, and 85 per
cent of the mining employment in those regions is in the public sector.
Almost half of all state employment in Poland is in entities that
are run or owned by local governments (see Chart 2.3.1), including
STATE EMPLOYMENT
most public-sector employment in the areas of education, healthcare,
AT LOCAL/MUNICIPAL
social work, water supply, sewerage and waste. In contrast, state
GOVERNMENT LEVEL
employment in sectors such as mining, agriculture and manufacturing
ACCOUNTS FOR
is overwhelmingly in entities that are owned or run by the central AROUND HALF
government. OF TOTAL PUBLIC-
State employment tends to be higher in disadvantaged regions, SECTOR EMPLOYMENT
where unemployment rates are higher (for instance, in northern, IN POLAND
eastern and parts of south-western Poland). Indeed, the public sector’s
share of employment is, on average, 3 percentage points higher in
counties with unemployment rates of around 20 per cent
(the 90th percentile of the distribution of unemployment across That relationship is driven by the fact that the public sector
counties) relative to counties where unemployment is around accounts for a larger percentage of total employment in “non-business
6 per cent (the 10th percentile). Those differences are even services” such as public administration, education or healthcare.
more pronounced when account is taken of other county-level In counties with less private-sector employment, post offices, train
characteristics, such as demographics, the sectoral composition of stations, municipal utility companies, hospitals and schools become
the economy or regional effects. Overall, a 1 percentage point increase more important as local sources of employment. Thus, public-sector
in a county’s unemployment rate is associated with a 0.5 percentage employment is able to act as an automatic stabiliser in regions that
point increase in the public sector’s share of employment. experience adverse technological and economic shocks.
59
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
BOX 2.4.
People in poorer regions are also more likely to think that the state
Demand for state-led job creation in should have primary responsibility for job creation – both when looking
economically disadvantaged regions at regional GDP per capita and when data on the intensity of night-time
lights (which are available at a more disaggregated level) are used
This box looks at people’s views on whether employment creation
instead. That effect remains statistically significant when controlling for a
is primarily the responsibility of the state or the private sector and
range of household-level characteristics and the country of residence.
the ways in which those views vary across regions within individual
That effect could be driven by the fact that there are fewer alternative
countries. It is based on the results of the 2018 Euro Survey conducted
(private) employment opportunities in disadvantaged areas, as well as
by the Austrian National Bank, which covered 1,000 randomly selected
demand for the state to get involved in the local economy to help it catch
adults in each of Albania, Bosnia and Herzegovina, Bulgaria, Croatia,
up with the country’s more prosperous regions. Personal exposure to
Hungary, North Macedonia, Poland, Romania and Serbia.45
public-sector jobs may also play a role, since (as shown in Chapter 1)
Those respondents were asked whether responsibility for providing
people in rural areas are more likely to work in the public sector.
people with work should fall primarily to the state, be shared between
As noted elsewhere in this chapter, the direct provision of
the state and the private sector, or fall primarily to the private sector,
employment is just one of various ways that the state can support
or whether it does not matter as long as jobs are available. Around
disadvantaged regions. In line with that, demand for state-led job
46 per cent of respondents across those nine economies believe that
creation in rural areas appears to be lower in EU member states, which
the state should have primary responsibility for providing jobs.
benefit from EU structural and cohesion funds earmarked for low-income
Views vary substantially within individual countries. While only
regions within countries. Conversely, the percentage of respondents who
about 37 per cent of those living in capital cities think that the state
favour increased state spending on regional economic development is
should have primary responsibility for providing jobs, that rises to
significantly higher in the Western Balkans economies (at an average of
around 49 per cent in rural areas (with the difference between the two
64 per cent) than it is in the EU member states in the sample (where it
being statistically significant). Support for state-led job creation in
averages 53 per cent).
rural areas is particularly strong in Albania, Bosnia and Herzegovina,
North Macedonia and Romania, with shares of between 54 and 66 per
cent. Regression analysis taking account of various individual-level
characteristics (such as age or gender) confirms that people living
outside capital cities are more likely to think that the state should
have primary responsibility for job creation.46 People living in rural
areas are also more likely to think that the state should have primary
responsibility for providing education and medical services, building
roads and organising the collection of waste.
45
For country-level results based on this survey, see Box 3.2 in EBRD (2019).
46
See Eller and Scheiber (2020) for details.
60
CHAPTER 2 STATE-OWNED ENTERPRISES
47
This analysis is based on the background work reported in Gamtkitsulashvili et al. (2020).
48
See EBRD (2018b) for a discussion of how the Bank determines which percentage of a proposed
investment will support the transition to a green economy.
49
See, for instance, Rodrik (2005).
50
See also Hsu et al. (2017).
61
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
BOX 2.6.
Currently, supervisory boards often consist of civil servants
Developing a state ownership policy representing the various government bodies that regulate the relevant
in Uzbekistan sectors. The strategy aims to improve state firms’ overall governance
structures, with an objective of having independent members make up
State-owned enterprises play an important role in the Uzbek economy,
at least 30 per cent of state enterprises’ supervisory boards by 2025, as
with 100 per cent state-owned firms accounting for 19 per cent of
well as establishing audit, appointment and remuneration committees,
GDP. At the same time, establishing effective governance structures
and introducing appropriate risk management and internal control
and privatising state firms are seen as key objectives in Uzbekistan’s
systems. Moreover, civil servants will no longer be able to serve as the
economic reform programme. A new strategy drawn up by the country’s
chief executives of state firms.
State Assets Management Agency – a government body with a mandate
The strategy also aims to introduce transparency and disclosure
to manage state-owned assets and execute privatisations – sets out
obligations for state enterprises. While many state firms have websites,
the main principles governing the management of state assets, in line
these typically contain little information. State enterprises will be
with the OECD Guidelines on Corporate Governance of State-Owned
required to publish their company charters, their organisational
Enterprises, and is expected to become law.
structures, quarterly business plans, annual financial reports
That strategy stipulates that state ownership of enterprises is only
(with the aim of reporting in line with the International Financial
appropriate for (i) natural monopolies, (ii) the provision of essential
Reporting Standards (IFRS) by 2024), risk reports and information
infrastructure services or public services that are not commercially
on large transactions with affiliates, as well as details of the CVs and
viable, and (iii) areas of strategic interest such as defence and other
remuneration of supervisory and executive board members. The website
specific industries (including precious metals and nuclear power
of the State Assets Management Agency will, in turn, provide annual
plants). Other enterprises should be earmarked for either privatisation,
reports on the performance of state enterprises.
liquidation or conversion into government agencies.
State-owned firms are also expected to set out their commercial
and non-commercial objectives (in their company charters and annual
business plans, for example). This is expected to lead to increased
transparency when it comes to the provision of government subsidies,
which are widely used to compensate state enterprises for delivering
on their non-commercial objectives.
The strategy also aims to reduce conflicts of interest by separating
the state’s ownership and regulatory functions by 2023, since it is
often the case that government bodies both own and regulate state
firms. At present, Uzbekistan’s Cabinet of Ministers is the central
STATE-OWNED
decision-making body as regards state enterprises. It represents
ENTERPRISES PLAY
state interests at annual meetings, decides on restructuring
AN IMPORTANT ROLE
and privatisation, appoints the members of supervisory boards,
IN THE UZBEK
and approves the appointment of senior managers. The strategy
ECONOMY, WITH 100%
essentially intends to transfer those powers to a stronger State Assets
STATE-OWNED FIRMS
Management Agency, adopting a more decentralised approach to
ACCOUNTING FOR
19%
state ownership. In order to create a level playing field, state unitary
enterprises – which are not subject to bankruptcy procedures – will
be converted into either joint-stock companies or limited liability
companies. OF GDP
62
CHAPTER 2 STATE-OWNED ENTERPRISES
2004
2005
2006
2007
2008
2009
2010
2012
2013
2014
2015
51
See Bussolo et al. (2018) for details.
63
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
CHART 2.8.1.
The networks in Russia and Romania differ substantially
Russia Romania
Politician
Other individual
Political party
State-owned enterprise
Private-sector firm
t
institutions, the formation of networks is often impeded so as to
ensure that the political sphere – and thus potential opposition – is
fragmented. As a result, power tends to be concentrated in clusters,
and network connections mostly run to and from those clusters.52
What are the consequences of these networks of connections?
Connected firms, including state-owned ones, are unequivocally larger
than non-connected firms, whether in terms of revenue or employment.
This difference tends to be even greater if they have a more central
position in the network. Although connections may provide access to
cheap finance or preferential contracts, and may even increase market
power, they may also dilute incentives to invest and raise productivity.
Indeed, when looking at firms’ performance, as measured by the
return on the assets or capital employed, connected firms perform
relatively poorly. This is true of both state-owned and private firms,
and the finding holds when a binary approach is used instead of one
where network features are included. This effect is even stronger when
looking specifically at the firms with the most connections. Where firms
have large numbers of connections – including a connection with a
politician – their return on capital is around 85 per cent lower than that
of a non-connected firm. In this case, the difference is substantially
smaller if it is measured on a binary basis that does not take account
of network features.
Such networks of connections have proven to be highly resilient,
despite major changes to the political and economic regimes of
transition countries in recent decades. State-owned enterprises
continue to occupy prominent positions in most networks, with a high
degree of centrality but poor performance. When combined with the
presence of newer – but highly potent – politically connected private
firms, this raises concerns not only about productive inefficiencies, but
also, more generally, about inequality and the integrity of political and
institutional frameworks.
52
See Commander and Poupakis (2020).
64
CHAPTER 2 STATE-OWNED ENTERPRISES
65
TRANSITION REPORT 2020-21 THE STATE STRIKES BACK
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