Objectives of the reform
For a considerable period since the Restoration of the Independence, state institutions and politicians have neglected the governance of state-owned enterprises. One of the most apparent implications of this neglect is a lack of operating efficiency in this sector.
The reform of state-owned enterprises aims to address these challenges, promote efficiency and transparency in state-owned enterprises and achieve that state becomes a professional and responsible owner of such enterprises actively seeking to increase the asset value. The purpose of the reform of state-owned enterprises is to make corporate governance transparent, based on good governance principles and geared towards clear goals.
Since 2010 state-owned enterprises have been under the obligation to prepare and publish annual and quarterly, and, since the middle of 2016, annual and semi-annual statements, which are to be assessed by the Governance Coordination Centre. The latter has been tasked with preparing quarterly (since the middle of 2016, semi-annual) and annual summary reports that analyse all state-owned enterprises and present the performance of the top companies separately. Such procedure allows weighing corporate financial and other performance in objective terms and setting realistic, yet ambitious goals for the companies.
The key outcome expected out of this reform is better efficiency of state-owned enterprises. More efficient operations bring multiple benefits for the companies themselves as well as the state and its citizens alike. Increased efficiency of state-owned enterprises helps improve the quality of the services provided and products developed by the companies and reduce the price of the services offered.
Greater efficiency of state-owned enterprises would also boost the profitability of the companies and their contribution to the budget, while these funds could be used to finance social security, education, healthcare, culture and other important sectors. The value of dividends and profit contributions paid by the state-owned enterprises to the state budget increased tenfold between 2009 and 2011. For the year 2011, state-owned enterprises transferred EUR 152.1 million to the budget in dividends and profit contributions. It is fair to say though that for 2012 and 2013 the budget had slightly more modest amounts transferred in dividends and profit contributions, i.e. EUR 17.7 and 16.8 million accordingly. Nonetheless, since 2014, the contributions have been growing again and accounted for EUR 74.3 million in 2014, EUR 111.4 million in 2015, EUR 120.5 million in 2016 and as much as EUR 172.9 million in 2017.