The Government of Afghanistan operates over 30 active state-owned enterprises (SOEs), almost all of which are wholly-owned.  About 11,000 people are employed in sectors including public security, construction, transport, telecommunications, agriculture, and extractives.  Net income for all the SOEs is around USD 13 million; few are profitable. All SOEs are overseen and regulated by the Ministry of Finance and directly operated by specific ministries depending on the nature of the operations.  The Law on State Owned Enterprises includes specific targets for research and development investment, social development measures, and employee profit sharing, but compliance is negligible.

The Afghan government is also a stakeholder in 13 state-owned corporations (SOCs), entities that have independent boards and are not operated or directly supervised by the government.  SOEs and SOCs make up a small share of overall economic activity, although a few SOCs have significant market share in their sectors, including Afghan Telecom (Aftel), Ariana Afghan Airlines, and the electrical utility DABS (Da Afghanistan Breshna Sherkat).

Afghanistan does not have a centralized ownership entity for SOEs; the Ministry of Finance is responsible for all SOE oversight.

Table 1: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

State-owned enterprises (SOEs) are defined as legal entities, which are entirely state-owned or state-controlled and operate as commercial companies in compliance with the Law on Entrepreneurs and Commercial Companies.  SOEs operate mostly in the generation, distribution, and transmission of electricity, oil and gas, railways, postal services, ports, and water supply. There is no published list of SOEs.

No discrimination exists between public and private companies operating in the same sector.  The government requires SOEs to submit annual reports and undergo independent audits. SOEs are subject to the same tax levels and procedures, and same domestic accounting and international financial reporting standards, as other commercial companies.  The High State Audit is the institution that audits SOE activities. SOEs are also subject to public procurement law.

Albania is yet to become party to the Government Procurement Agreement (GPA) of the World Trade Organization (WTO), but has obtained observer status and is negotiating full accession.  However, private companies can compete openly and under the same terms and conditions with respect to market share, products and services, and incentives.

The SOE operation in Albania is regulated by the Law on Entrepreneurs and Commercial Companies, the Law on State Owned Enterprises, and the Law on the Transformation of State-Owned Enterprises into Commercial Companies.  The Ministry of Economy and Finance and other relevant ministries covering the sector in which the company operates represent the state as the owner of the SOEs. There are no legal binding requirements for the SOEs to adhere to Organization for Economic Cooperation and Development (OECD) guidelines.  However, basic principles of corporate governance are stipulated in the above-mentioned laws and generally accord with OECD guidelines. The corporate governance structure of SOEs includes the supervisory board and the general director (administrator) in the case of joint stock companies. The supervisory board is comprised of 3-9 members, who are not employed by the SOE, two-thirds of whom are appointed by the representative of the Ministry of Economy and Finance, and one-third by the line ministry, local government unit, or institution to which the company reports.  The Supervisory Board is the highest decision making authority and appoints and dismisses the administrator for the SOE through a two-thirds vote.

Privatization Program

The privatization process in Albania is nearing conclusion, with just a few major privatizations remaining.  Such opportunities include OSHEE, the state-run electricity distributor; 16 percent of Albtelekom, the fixed- line telephone company; and state-owned oil company Albpetrol.

The bidding process for privatizations is public and relevant information is published by the Public Procurement Agency at www.app.gov.al  .  Foreign investors may participate in the privatization program.  No public timelines exist for future privatizations.

The privatization process in Albania is nearing conclusion, with just a few major privatizations remaining.  Such opportunities include OSHEE, the state-run electricity distributor; 16 percent of Albtelekom, the fixed- line telephone company; and state-owned oil company Albpetrol.

The bidding process for privatizations is public and relevant information is published by the Public Procurement Agency at www.app.gov.al  .  Foreign investors may participate in the privatization program.  No public timelines exist for future privatizations.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Bank of Albania (http://www.bankofalbania.org/  ), Albanian Institute of Statistics (http://www.instat.gov.al/  ), Albanian Ministry of Finances (http://www.financa.gov.al/  )

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

More than half of the formal Algerian economy is comprised of state-owned enterprises (SOEs), led by the national oil and gas company Sonatrach, although SOEs are present in all sectors of the economy.  SOEs are so prevalent that a comprehensive public list does not exist; rather all SOEs are amalgamated into a single line of the state budget. SOEs are listed in the official business registry. To be defined as an SOE, a company must be at least 51 percent owned by the state.

Algerian SOEs are generally heavily bureaucratic and may be subject to political influence.  There are competing lines of authority at the mid-levels, and contacts report mid- and upper-level managers are reluctant to make decisions because internal accusations of favoritism or corruption are often used to settle political scores.  Senior management teams at SOEs report to their relevant ministries; CEOs of the larger companies such as Sonatrach, electric and gas utility Sonelgaz, and airline Air Algerie report directly to ministers. Boards of directors are appointed by the state, and the allocation of these seats is considered political.  SOEs are not known to adhere to the OECD Guidelines on Corporate Governance.

Legally, public and private companies compete under the same terms with respect to market share, products and services, and incentives.  In reality, private enterprises assert that public companies sometimes receive more favorable treatment. Private enterprises have the same access to financing as SOEs, but they tend to work more with private banks and they are far less bureaucratic than are their public counterparts.  Public companies generally refrain from doing business with private banks. In 2008, a government directive ordered public companies to work only with public banks. The directive was later officially rescinded, but the effect has held as a self-imposed practice by public companies. SOEs are subject to the same tax burden and tax rebate policies as their private sector competitors, but business contacts report that the government favors SOEs over private sector companies in terms of access to land.

SOEs are subject to budget constraints.  Audits of public companies are conducted by the Court of Auditors, a financially autonomous institution.  A Constitutional revision of Article 192 in March 2016 enshrined the independence of the Court. The constitution explicitly charges it with “ex post inspection of the finances of the state, collectivities, public services, and commercial capital of the state,” as well as preparing and submitting an annual report to the President, heads of both chambers of Parliament, and Prime Minister.  The previous constitution of 1996 had not included the state’s commercial capital in the Court’s mandate, nor had it required its annual report be shared with anyone but the President. Now, the Court makes its audits public on its website, for free.

The Court conducts audits simultaneously but independently from the Ministry of Finance’s year-end reports.  The Court makes its reports available online once they are finalized and delivered to the Parliament, whereas the Ministry withholds publishing year-end reports until after the Parliament and President have approved them.  The Court’s audit reports cover the entire implemented national budget by fiscal year and examine each annual planning budget that is passed by Parliament.

The General Inspectorate of Finance (IGF), the public auditing body under the supervision of the Ministry of Finance, can conduct “no-notice” audits of public companies.  The results of these audits are sent directly to the Minister of Finance, and the offices of the President and Prime Minister. They are not made available publicly. The Court of Auditors and IFG previously had joint responsibility for auditing certain accounts, but they are in the process of eliminating this redundancy.

Privatization Program

There has been very limited privatization of certain projects previously managed by SOEs in the water sector and likely other sectors.  However, the privatization of SOEs remains a highly sensitive issue and has been halted.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Algeria Office of National Statistics: http://www.ons.dz/Au-deuxieme-trimestre-2018-les.html  

* National Agency for Investment Development.

Table 3: Sources and Destination of FDI

No information for Algeria is available on the IMF’s Coordinated Direct Investment Survey (CDIS) website.  Neither World Bank nor Algerian sources break down FDI to and from Algeria by individual countries.

Table 4: Sources of Portfolio Investment

No information for Algeria is available on the IMF’s Coordinated Direct Investment Survey (CDIS) website.  Neither World Bank nor Algerian sources break down FDI to and from Algeria by individual countries.

Andorra has 35 state-owned enterprises (SOEs) associated with health, social services, and energy and telecommunication, which are generally allowed to compete with private enterprises without restriction.  The only exception is the government-owned Andorra Telecom, which has enjoyed a monopoly on the telecommunications industry since 2015.

The Andorran public sector is made up of the central Administration and seven local administrations, one for each of the country’s seven parishes.  The public sector employs 11.6 percent of Andorra’s workforce, or approximately 4,377 employees.

Privatization Program

Andorra has no current plans to privatize any of its SOEs.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Data not available.

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

Due to foreign investment limitations up until 2012, FDI statistics are too negligible to be available through the U.S. Bureau of Economic Analysis.  However, ACTUA publishes foreign direct investment information at: http://www.actua.ad/en/foreign-direct-investment-data-andorra    

In Angola, certain state-owned enterprises (SOEs) exercise delegated governmental powers, especially in the mining sector where the government is the sole concessionaire.  Foreign investors may sometimes find demands made by SOEs excessive, and under such conditions, SOEs have easier access to credit and government contracts. There is no law mandating preferential treatment to SOEs, but in practice they have access to inside information and credit.  Currently, SOEs are not subject to budgetary constraints and quite often exceed their capital limits.

SOEs, often benefitting from a government mandate, operate mostly in the extractive, transportation, commerce, banking, and construction sectors.  All SOEs in Angola are required to have boards of directors, and most board members are affiliated with the government. SOEs are not explicitly required to consult with government officials before making decisions.  By law, SOEs must publish annual financial reports for the previous year in the national daily newspaper Jornal de Angola by April 1.  Such reports are not always subject to publically released external audits (though the audit of state oil firm Sonangol is publically released).  The standards used are often questioned. Not all SOEs fulfill their legal obligations, and few are sanctioned.

Angola’s supreme audit institution, Tribunal de Contas, is responsible for auditing SOEs.  However, the Tribunal de Contas does not make its reports publicly available. Angola’s fiscal transparency would be improved by ensuring its supreme audit institution audits SOEs, as well as the government’s annual financial accounts, and makes public its findings within a reasonable period.  Publicly available audit reports would also improve the transparency of contracts between private companies and SOEs.

In November 2016, the Angolan Government revised Law 1/14 “Regime Juridico de Emissão e Gestão da Divida Publica Directa e Indirecta,” which now differentiates between ‘direct’ and ‘indirect’ public debt.  The GRA considers SOE debt as indirect public debt, and only accounts in its state budget for direct government debt, thus effectively not reflecting some substantial obligations in fact owed by the government.  President Lourenço has launched various reforms to improve financial sector transparency, enhance efficiency in the country’s SOEs as part of the National Development plan 2018-2022 and Macroeconomic Stability Plan.  The strategy included the prospective privatization of 74 SOEs that are deemed not profitable to the state. The privatization will possibly include the restructuring of the national air carrier TAAG, Sonangol, and its subsidiaries.  The latter intends to sell off its non- core businesses as part of its restructuring strategy to make the parastatal more efficient.

Angola is not a party to the WTO’s Government Procurement Agreement (GPA).  Angola does not adhere to the OECD guidelines on corporate governance for SOEs.

Privatization Program

The government has a plan to privatize 74 of 90 public companies by 2022 through the Angola Debt and Securities Exchange market (BODIVA) and under the supervision of the Institute of Management of Assets and State Participations (IGAPE).  The privatization plan is in line with the provisions of the Government’s Interim Macroeconomic Stabilization Program (PEM), which aims to rid the government of unprofitable public institutions. The terms of reference for the privatization program are not yet public, except for seven factories located in the Special Economic Zone (ZEE).  The seven industrial units with full terms of reference are:

UNIVITRO – glassworks industry; JUNTEX – plaster industry; CARTON – carton and packaging industry; ABSOR – absorbent products industry; INDUGIDET – sanitation and detergents industry; COBERLEN – blankets and linens industry; and, SACIANGO – cement bags industry.

The government plans to privatize part of state-owned Angola Telecommunications Company, companies in the oil and energy sector, as well as several textile industries.  The government has stated that the privatization process will be open to interested foreign investors and has guaranteed a transparent bidding process. Proposals from investors for seven industrial units at the ZEE will be given special attention to those who decide to retain local workers in these units. The government created a privatization commission on February 27, 2018 and a website https://igape.minfin.gov.ao/PortalIGAPE/#!/sala-de-imprensa/noticias/5413/anuncio-de-concurso-tender-announcement   for submission of tenders.  Full tender documents can be obtained by visiting the below link:
http://www.ucm.minfin.gov.ao/cs/groups/public/documents/document/zmlu/mdu4/~edisp/minfin058842.zip 

Alternatively, contact igape@minfin.gov.ao.  The tenders are open to local and foreign investors.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Data not available.

State-owned enterprises (SOEs) in Antigua and Barbuda are governed by their respective legislation and do not generally pose a threat to investors, as they are not designed for competition.  The government established many SOEs to create economic activity in areas where the private sector is perceived to have very little interest. A list of SOEs can be found at: http://ab.gov.ag/detail_page.php?page=1 .

SOEs are headed by boards of directors to which senior managers report.  In 2016, the Parliament passed the Statutory Corporations (General Provisions) Act, which specifies the ministerial responsibilities in the appointment and termination of board members, decisions of the board, and employment in these SOEs.  In order to promote diversity and independence on SOE boards, professional associations, non-governmental organizations (NGOs), and civil society may nominate directors for boards.

Privatization Program

Antigua and Barbuda does not currently have a targeted privatization program.

Table 2: Key Macroeconomic Data, U.S. FDI in Antigua and Barbuda

* Source for Host Country Data: Eastern Caribbean Central Bank https://www.eccb-centralbank.org/statistics/dashboard-datas/   . All ECCB GDP figures for 2018 are estimates.

Table 3: Sources and Destination of FDI

Data not available. Antigua and Barbuda does not appear in the IMF’s Coordinated Direct Investment Survey (CDIS).

Table 4: Sources of Portfolio Investment

Data not available. Antigua and Barbuda does not appear the IMF Coordinated Portfolio Investment Survey (CPIS).

The Argentine government has state-owned enterprises (SOEs) or significant stakes in mixed-capital companies in the following sectors: civil commercial aviation, water and sanitation, oil and gas, electricity generation, transport, paper production, satellite, banking, railway, shipyard, and aircraft ground handling services.

By Argentine law, a company is considered a public enterprise if the state owns 100 percent of the company’s shares. The state has majority control over a company if the state owns 51 percent of the company’s shares. The state has minority participation in a company if the state owns less than 51 percent of the company’s shares. Laws regulating state-owned enterprises and enterprises with state participation can be found at http://www.saij.gob.ar/13653-nacional-regimen-empresas-estado-lns0001871-1955-03-23/123456789-0abc-defg-g17-81000scanyel .

Through the government’s social security agency (ANSES), the Argentine government owns stakes ranging from one to 31 percent in 46 publically-listed companies. U.S. investors also own shares in some of these companies. As part of the ANSES takeover of Argentina’s private pension system in 2008, the government agreed to commit itself to being a passive investor in the companies and limit the exercise of its voting rights to 5 percent, regardless of the equity stake the social security agency owned. A list of such enterprises can be found at: http://fgs.anses.gob.ar/participacion .

State-owned enterprises purchase and supply goods and services from the private sector and foreign firms. Private enterprises may compete with SOEs under the same terms and conditions with respect to market share, products/services, and incentives. Private enterprises also have access to financing terms and conditions similar to SOEs. SOEs are subject to the same tax burden and tax rebate policies as their private sector competitors. SOEs are not currently subject to firm budget constraints under the law, and have been subsidized by the central government in the past; however, the Macri administration is reducing subsidies in the energy, water, and transportation sectors. Argentina does not have regulations that differentiate treatment of SOEs and private enterprises. Argentina has observer status under the WTO Agreement on Government Procurement and, as such, SOEs are subject to the conditions of Argentina’s observance.

Argentina does not have a specified ownership policy, guideline or governance code for how the government exercises ownership of SOEs. The country generally adheres to the OECD Guidelines on Corporate Governance of SOEs. The practices for SOEs are mainly in compliance with the policies and practices for transparency and accountability in the OECD Guidelines.

Argentina does not have a centralized ownership entity that exercises ownership rights for each of the SOEs. The general rule in Argentina is that requirements that apply to all listed companies also apply to publicly-listed SOEs.

In 2018, the OECD released a report evaluating the corporate governance framework for the Argentine SOE sector relative to the OECD Guidelines on Corporate Governance of SOEs, which can be viewed here: http://www.oecd.org/countries/argentina/oecd-review-corporate-governance-soe-argentina.htm .

Privatization Program

The current administration has not developed a privatization program.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* https://www.indec.gob.ar/uploads/informesdeprensa/pib_03_19.pdf ;  www.bcra.gov.ar 

Table 3: Sources and Destination of FDI

No information from the IMF’s Coordinated Portfolio Investment Survey (CPIS) for Outward Direct Investment is available for Argentina.

Table 4: Sources of Portfolio Investment

Data not available.

Most of Armenia’s state-owned enterprises (SOEs) were privatized in the 1990s and early 2000s, yet SOEs are still active in a number of sectors.  SOEs in Armenia operate as state-owned closed joint stock companies that are managed by the Department of State Property and state non-commercial organizations.  There are no laws or rules that ensure a primary or leading role for SOEs in any specific industry. Armenia is a party to the WTO’s Government Procurement Agreement and SOEs are covered under that agreement.  SOEs in Armenia are subject to the same tax regime as their private competitors, and private enterprises in Armenia can compete with SOEs under the same terms and conditions. A public list of state-owned closed joint stock companies can be found on the website of the Department of State Property (http://spm.am/am/projects/  ).

Privatization Program

Most of Armenia’s state owned enterprises were privatized in the 1990s and early 2000s.  Many of the privatization processes for Armenia’s large assets were reported to be neither competitive nor transparent, and political considerations in some instances prevailed over fair tender processes.  The current law on privatization, the fifth, is the Law on the 2017–2020 Program for State Property Privatization, which lists 47 entities for privatization, of which 24 are new additions and 23 were noted in earlier laws but not privatized.  The Department of State Property Management is responsible for managing the state’s share of the entities in the privatization program.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data:  Statistical Committee of the Republic of Armenia

Table 3: Sources and Destination of FDI

Source:  IMF Coordinated Direct Investment Survey (CDIS), 2017

A significant portion of outward investment is not disaggregated by destination in the CDIS.

Table 4: Sources of Portfolio Investment

Data not available.

In Australia, the term used for a Commonwealth Government State-Owned Enterprise (SOE) is “government business enterprise” (GBE).  According to the Department of Finance, there are nine GBEs: two corporate Commonwealth entities and seven Commonwealth companies.  (See https://www.finance.gov.au/resource-management/governance/gbe/  )  Private enterprises are generally allowed to compete with public enterprises under the same terms and conditions with respect to markets, credit, and other business operations, such as licenses and supplies.  Public enterprises are not generally accorded material advantages in Australia. Remaining GBEs do not exercise power in a manner that discriminates against or unfairly burdens foreign investors or foreign-owned enterprises.

Privatization Program

Australia does not have a formal and explicit national privatization program.  Individual state and territory governments may have their own privatization programs.  Foreign investors are welcome to participate in any privatization programs subject to the rules and approvals governing foreign investment.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

*Australian Bureau of Statistics, based on most recently available data.  Year-end foreign investment data is published in May of the following year.

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Austria has two major wholly state-owned enterprises (SOEs):  The OeBB (Austrian Federal Railways) and Asfinag (highway financing, building, maintenance and administration).  Other government industry holding companies are bundled in the government holding company OeBAG (new website under construction): http://www.oebib.gv.at/en/ 

The government reformed its holding company in 2018, changing its name from OeBIB to OeBAG, incorporating energy provider Verbund AG and the state-owned real estate holding company BIG into its portfolio and increasing its oversight powers.  Under the new regulation, the government will gain direct representation in the supervisory boards of its companies (commensurate with its ownership stake), and the new holding company will be given the power to buy and sell company shares, as well as purchase minority stakes in strategically relevant companies.  Such purchases will be subject to approval from a newly-established audit committee consisting of government-nominated independent economic experts.

OeBAG holds a 53 percent stake in the Post Office, 51 percent in energy company Verbund, 33 percent in the gambling group Casinos Austria, 31.5 percent in the energy company OMV, 28 percent in the Telekom Austria Group, and a few other minor ventures.  Local governments own the majority of utilities, Vienna International Airport, and more than half of Austria’s 268 hospitals and clinics.

Private enterprises in Austria can generally compete with public enterprises under the same terms and conditions with respect to market access, credit, and other such business operations as licenses and supplies. While most SOEs must finance themselves under terms similar to private enterprises, some large SOEs (such as OeBB) benefit from state-subsidized pension systems.  As a member of the EU, Austria is also a party to the Government Procurement Agreement (GPA) of the WTO, which indirectly also covers the SOEs (since they are entities monitored by the Austrian Court of Auditors).

The five major OeBAG companies (Postal Service, Verbund AG, Casinos Austria, OMV, Telekom Austria), are listed on the Vienna stock exchange. In these cases, senior management does not directly report to a minister, but to an oversight board.  However, the government often appoints management and board members, who usually have strong political affiliations.

The Austrian Foreign Trade Act (FTA) requires advance approval by the Austrian Ministry for Digital and Economic Affairs for foreign acquisitions of a relevant stake (25 percent) in enterprises in certain strategic industries (with sales over EUR 700,000 per year), comprising a wide range of sectors.    Strategic sectors include not only internal and external security services, but also public order and safety, procurement, and crisis services. The latter include hospitals, ambulance and emergency medical services; fire fighters and civil protection services; energy and gas supply; water supply; telecoms; railways; road traffic; universities; schools of various types; and pre-schooling institutions.

Privatization Program

The government has not privatized any public enterprises since 2007.  Austrian public opinion is skeptical regarding further privatization. The current government consisting of the center-right People’s Party (OVP) and right-populist Freedom Party (FPO) is decidedly more pro-market than the previous government, but there is no plan for further privatization.

In prior privatizations, foreign and domestic investors received equal treatment.  Despite a historical government preference for maintaining blocking minority rights for domestic shareholders, foreign investors have successfully gained full control of enterprises in several strategic sectors of the Austrian economy, including in telecommunications, banking, steel, and infrastructure.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

*Statistics Austria (GDP):
http://www.statistik.at/web_de/statistiken/wirtschaft/volkswirtschaftliche_
gesamtrechnungen/bruttoinlandsprodukt_und_hauptaggregate/jahresdaten/019505.html 

Austrian National Bank (Investments)

https://www.oenb.at/isaweb/report.do?lang=EN&report=9.3.31 

Differences between Austrian and U.S. statistics can arise from different allocations of investments to countries (headquarters versus subsidiaries) and different survey methods

Table 3: Sources and Destination of FDI

Austria’s domestic investment figures show significant lower numbers for the Netherlands and Luxembourg. Special Purpose Entities (SPEs) may be used to avoid corporate taxes.

Table 4: Sources of Portfolio Investment

In Azerbaijan, state-owned enterprises (SOEs) are active in the oil and gas, power generation, communications, water supply, railway, and air passenger and cargo sectors, among others.  There is no published list of SOEs. While there are no SOEs that officially have been delegated governmental powers, companies such as the State Oil Company of Azerbaijan (SOCAR), Azerenerji (the national electricity utility), and Azersu (the national water utility) – all of which are closed joint-stock companies with majority state ownership and limited private investment – enjoy quasi-governmental or near-monopoly status in their respective sectors.

SOCAR is wholly-owned by the government of Azerbaijan and takes part in all oil and gas activities in the country.  It publishes regular reports on production volumes, the value of its exports, estimates of investments in exploration and development, production costs, the names of foreign companies operating in the country, production data by company, quasi-fiscal activities, and the government’s portion of production-sharing contracts.  SOCAR’s annual financial reports are audited by an independent external auditor and include the consolidated accounts of all SOCAR’s subsidiaries, although revenue data is incomplete.

There have been instances where state-owned enterprises have used their regulatory authority to block new entrants into the market.  SOEs are, in principle, subject to the same tax burden and tax rebate policies as their private sector competitors.  However, in sectors that are open to both the private and foreign competition, SOEs generally receive a larger percentage of government contracts or business than their private sector competitors.  While SOEs regularly purchase or supply goods or services from private sector firms, domestic and foreign private enterprises have reported problems competing with SOEs under the same terms and conditions with respect to market share, information, products and services, and incentives.  Private enterprises do not have the same access (including terms) to financing as SOEs. SOEs are also afforded material advantages such as preferential access to land and raw materials, advantages that are not available to private enterprises. There is little information available on Azerbaijani SOEs’ budget constraints, due to the limited transparency in their financial accounts.

Privatization Program

A renewed privatization process started with the May 2016 presidential decree implementing additional measures to improve the process of state property privatization and the July 2016 decree on measures to accelerate privatization and improve the management efficiency of state property.  The State Committee on Property Issues launched a portal to provide privatization information, privatization.az  , in July 2016.  The portal contains information about the properties, their addresses, location, and initial costs with the aim of facilitating privatization.  Azerbaijan’s current privatization efforts focus on smaller state-owned properties and there are no active plans to privatize large SOEs.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data:  Azerbaijan State Statistical Committee

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Data not available.

State-Owned Enterprises (SOEs) are active in the utilities and services sectors of the economy.  There is a published list of the 25 SOEs available on www.bahamas.gov.bs  .

Key SOEs include:

• Bahamas Air Holdings Ltd. (National Airline)
• Public Hospitals Authority
• Civil Aviation Authority
• Nassau Airport Development Authority
• University of The Bahamas
• Health Insurance Authority
• Bank of The Bahamas (65 percent Bahamian government)
• Bahamas Power and Light (BPL)
• Water and Sewerage Corporation (WSC)
• Broadcasting Corporation of The Bahamas (ZNS)
• Nassau Flight Services
• Hotel Corporation of The Bahamas

The Bahamian government provides average annual subsidies of USD 400 million to support SOEs.  Within the past decade, none have returned profits or paid dividends. The Public Hospitals Authority is the largest SOE and received USD 214 million in subventions in the 2017/2018 budget.  WSC and BPL are considered essential services and receive significant budgetary support. The government has permitted investment in these sectors and has approved licenses to private suppliers of electrical and water and sewerage services.  These licenses have been issued for private real estate developments or in locations in which there is limited government capacity to provide services. An exception is the city of Freeport on the island of Grand Bahama, which has its own licensing authority and maintains monopolies for the provision of electricity, water, and sanitation services.

The Bahamian government announced plans to find a strategic partner for Nassau Flight Services, but there does not appear to be an immediate plan for the divestment of either company.  Privately owned airlines have complained of the market distortions created by Bahamas Air, claiming the national airline sells key routes below market value and benefits from not remitting licensing and other fees required by private companies.  The airline has recorded annual losses for more than two decades.

Privatization Program

The Bahamian government has not taken definitive steps to implement its proposed privatization plans but has indicated a preference for public-private partnerships as the model for privatizing key sectors.  The government divested 49 percent of the Bahamas Telecommunication Company in 2011, but issued a second license for cellular services and retained 51 percent equity in the new company. In his February 2018 speech, the Deputy Prime Minister serving as Minister of Finance announced the government’s intention to divest additional equity in the Bahamian telecommunications sector.  In February 2109, the Bahamian government selected UK-based Global Ports Holding’s $250 million proposal to redevelop the New Providence cruise terminal.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

Bahrain’s major state-owned enterprises (SOEs) include the Bahrain Petroleum Company (BAPCO), Aluminum Bahrain (ALBA), Gulf Petrochemical Industries Company (GPIC), Gulf Air, Bahrain Telecommunications Company (BATELCO), the National Bank of Bahrain (NBB) Bahrain Flour Mills, Tatweer Petroleum, and the Arab Shipbuilding & Repair Yard (ASRY).  While the GOB maintains full ownership of oil production, refineries, and heavy industries, it allows investment in ALBA, BATELCO, and ASRY, and encourages private sector competition in the banking, manufacturing, telecommunications, shipyard repair, and real estate sectors.

The SOEs are managed by two government-run holding companies: the National Oil and Gas Authority (NOGA) Holding Company, which owns nine energy sector companies, and Mumtalakat, which owns 38 domestic companies in all other sectors.  The full portfolio of the NOGA Holding Company can be viewed at www.nogaholding.com/portfolio/  , while the full portfolio of Mumtalakat companies can be viewed at www.bmhc.bh  .

Bahrain is not a party to the WTO Government Procurement Agreement (GPA), however, in 2008 Bahrain was granted “observer” status in the GPA committee.

Private enterprises can, in theory, compete with SOEs under the same terms and conditions with respect to market share, products/services, and incentives.  In practice, however, given the relatively small size of Bahrain’s economy, large SOEs such as ALBA, BAPCO, GPIC and ASRY have an outsized influence in the market.

In 2002, the GOB instituted guidelines to ensure its SOEs were in line with OECD policies on corporate governance.  SOEs produce quarterly reports. The National Audit Office monitors all SOEs and annually reports any irregularities, mismanagement, and corruption.

To enhance transparency and accountability the government appointed the Minister of Industry, Commerce and Tourism to be responsible for Mumtalakat.  The Minister of Oil and Gas is responsible for NOGA Holding, and all the companies under its umbrella.

All Bahraini SOEs have an independent board of trustees with well-structured management.  The Mumtalakat Holding Company is represented by a Board of Trustees appointed by the Crown Prince, while NOGA Holding’s Board of Trustees is appointed by a Royal Decree.  Each holding company then appoints the Board of Trustees for the SOEs under its authority. In some cases, the appointment of the Board of Trustees is politically driven.

Privatization Program

The GOB has been supportive of privatization as part of its Vision 2030 economic development plan, and it advocates for increased foreign investment as a means of driving private sector growth.  The GOB’s decision to privatize the telecommunications sector in the early 2000s is an example of incentivizing private sector growth in Bahrain. In 2018, the GOB began to privatize some medical services, such as pre-employment screenings that it previously had conducted.  It has also begun the process of privatizing by 2030 certain support services at GOB medical facilities, such as transportation, cleaning, laundry, textiles, maintenance, and security.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

The government privatized 74 state-owned enterprises (SOEs) during the past 20 years, but many SOEs retain an important role in the economy, particularly in the financial and energy sectors.  Out of the 74 SOEs, 54 were privatized through outright sale and 20 through offloading of shares. The Privatization Commission (PC) has slowed its rate of privatization activities and in 2016, the PC merged with the Board of Investment (BOI) to form a new Bangladesh Investment Development Authority (BIDA).  The 54 non-financial public enterprises in the country have been categorized into 7 sectors following the Bangladesh Standard Industrial Classification (BSIC) and their economic and financial performances are analyzed in the government budget.

Bangladesh’s 45 non-financial SOEs are spread among seven sectors – industrial; power, gas and water; transport and communication; trade; agriculture; construction; and services.  The list of non-financial SOEs and relevant budget details are published in Bangla in the Ministry of Finance’s SOE Budget Summary 2017-18: http://www.mof.gov.bd/site/page/5eed2680-c68c-4782-9070-13e129548aac/SOE-Budget  .

The current government has taken steps to restructure several SOEs to improve their competitiveness.  The GOB converted Biman Bangladesh Airline, the national airline, into a public limited company that initiated a rebranding and fleet renewal program, including the purchase of ten aircraft from Boeing, eight of which were delivered as of March 2019.  Three nationalized commercial banks (NCBs)—Sonali, Janata, and Agrani—have been converted to public limited companies. The GOB also liberalized the telecommunications sector in the last decade, which led to the development of a competitive cellular phone market.

The contribution of SOEs to gross domestic product, value-added production, employment generation, and revenue earning is substantial.  SOEs usually report to the ministries, though the government has allowed some enhanced autonomy for certain SOEs, such as Biman Bangladesh Airline.  SOEs maintain control of rail transportation whereas private companies compete freely in air and road transportation. The corporate governance structure of SOEs in Bangladesh has been restructured as per the guidelines published by the Organization for Economic Cooperation and Development (OECD), but the country’s practices are still not up to OECD standards.  There are no guidelines regarding ownership of SOEs, and while SOEs are required to prepare annual reports and make financial disclosures, disclosure documents are often unavailable to the public.  Each SOE has an independent board of directors composed of both government and private sector nominees. The boards report to the relevant regulatory ministry.  Most SOEs have strong ties with the government, and the ruling government party nominates most SOE leaders.  As the government controls most of the SOEs, domestic courts tend to favor the SOEs in investment disputes.

The Bangladesh Petroleum Act of 1974 grants authority for the government to award natural resources contracts and the Bangladesh Oil, Gas and Mineral Corporation Ordinance of 1984 gives Petrobangla, the state-owned oil and gas company, authority to assess and award natural resource contracts and licenses, to both SOEs and private companies.  Currently, oil and gas firms can pursue exploration and production ventures only through production sharing agreements with Petrobangla.

Privatization Program

Since 2010, the government’s privatization drive has slowed.  Previous privatization drives were plagued with allegations of corruption, undervaluation, political favoritism, and unfair competition.  Nonetheless, the government has publicly stated its goal of continuing the privatization drive. SOEs can be privatized through a variety of methods including: sales through international tender; sales of government shares in the capital market; transfers of some portion of the shares to the employees of the enterprises when shares are sold through the stock exchange; sale of government shares to a private equity company (restructuring); mixed sales methods; management contracts; leasing; and direct asset sales (liquidation).  In 2010, 22 SOEs were included in the Privatization Commission’s (now the Bangladesh Investment Development Authority’s) program for privatization. However, a study on privatized industries in Bangladesh conducted by the Privatization Commission in 2010 found that only 59 percent of the entities were in operation after being privatized and 20 percent of them were permanently closed down—implying a lack of planning or business motivation of their private owners. Later, in 2014, the government declared that SOEs would not be privatized via direct selling but instead by the offloading of shares in the SOE.  The government believed this to be a viable way for ensuring greater accountability for the management of the SOEs while minimizing the government’s exposure. However, unless the offloading of shares involves more than 50 percent of the SOE’s shares, the government would not divest control over the SOE. Additional information is available on the BIDA website at: http://bida.gov.bd/?page_id=4771 .

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

State-owned enterprises (SOEs) in Barbados work in partnership with ministries, or under their remit, and carry out certain specific ministerial responsibilities.  There are currently about 60 SOEs in Barbados operating in areas such as tourism, investment services, broadcasting and media, sanitation services, sports, and culture.

SOEs in Barbados are not found in the key areas earmarked for investment.  They are all wholly-owned government entities. They are headed by boards of directors to which their senior management reports.

As part of the ongoing Barbados Economic Recovery and Transformation Program, the government of Barbados is addressing the expenditure position of the SOEs by defining clear objectives for SOE reform, reducing the wage bill of these entities, and implementing other necessary reform measures.

Privatization Program

Barbados does not have a targeted privatization program.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Central Bank of Barbados (CBB) hhttp://data.centralbank.org.bb/GeneralStatistics.aspx   . All CBB GDP figures for 2018 are estimates.

Table 3: Sources and Destination of FDI

Data not available; Barbados does not appear in the IMF’s Coordinated Direct Investment Survey.

Table 4: Sources of Portfolio Investment

Data not available; Barbados does not appear in the IMF’s Coordinated Portfolio Investment Survey for Sources of Portfolio Investment.

Although SOEs are outnumbered by private businesses, SOEs dominate the economy in terms of assets.  According to independent economic experts, the share of Belarus’ GDP derived from SOEs is at least 75 percent.  Belarus does not consider joint stock companies, even those with 100 percent government ownership of the stocks, to be state-owned and generally refers to them as part of the non-state sector, rendering official government statistics regarding the role of SOEs in the economy as misleading.

According to independent economic media reports, SOEs receive preferential access to government contracts, subsidized credits, and debt forgiveness.  While SOEs are generally subject to the same tax burden and tax rebate policies as their private sector competitors, private enterprises do not have the same preferential access to land and raw materials.  Since Belarus is not a WTO member, it is not a party to the Government Procurement Agreement (GPA).

Privatization Program

Belarus’ privatization program is in practice extremely limited.  There was no privatization of state-controlled companies in 2018, one SOE was bought by private investors in 2017, and there were zero companies or shares privatizatized in 2016.  In early 2019, Belarus’ State Property Committee approved a list of 23 joint stock companies for full or partially privatization in 2019.  The GOB is allowing sale of the government share in these companies on the condition that the purchasing investors preserve existing jobs and production lines. For a list of open-joint stock companies whose shares which are available for privatization, as well as a description of the asset and conditions for privatization, visit: http://www.gki.gov.by/ru/auction-auinf-auishares/  .

Investors interested in assets on the published privatization list are encouraged to forward a brief letter of interest to the State Property Committee.  A special commission reviews offers and makes a recommendation to the President on the process of privatization – via tender, auction, or direct sale. Investors may also send a letter of interest regarding assets that are not on the State Property Committee list and the government will examine such offers.

Additionally, the State Property Committee occasionally organizes and holds privatization auctions.  Many of the auctions organized by the State Property Committee have low demand as the government conditions privatizations with strict requirements, including preserving or creating jobs, continuing in the same line of work or production, or launching a successful business project within a limited period of time, etc.

In 2016, Belarusian joint stocks were allowed trans-border placement of their stocks via issuing depositary receipts.  However, to the Embassy’s knowledge, this instrument of attracting investments has not been put to test in Belarus.

According to official statistics, Belarus received USD 1.6 billion in FDI (on a net basis) in 2018, up from USD 1.24 billion in FDI in 2017 and USD 1.3 billion in 2016.  Russia (41.7 percent), Cyprus (13.5 percent), China (9.3 percent), Germany (5.5 percent), UAE (3.6 percent), Poland (3.4 percent), Ireland (2.8 percent), Latvia (2.5 percent), the United Kingdom (2.4 percent) and the United States (2.1 percent) are considered the top ten foreign investors in Belarus.   

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

For detailed statistics on foreign direct investments in and outside Belarus for 2010-2018 see the website of Belarus’ National Bank (http://www.nbrb.by/engl/statistics/ForeignDirectInvestments/  ) and Economy Ministry (https://www.economy.gov.by/ru/pezultat-ru/  ).

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

For the latest available statistics on foreign portfolio investments in Belarus see the website of Belrus’ National Bank:  http://www.nbrb.by/engl/statistics/PortfolioInvestment  

Belgium does not have any State Owned Enterprises (SOEs) that exercise delegated government powers.  Private enterprises are allowed to compete with public enterprises under the same terms and conditions, but since the EU started to liberalize network industries such as electricity, gas, water, telecoms and railways, there have been regular complaints in Belgium about unfair competition from the former state monopolists.  Complaints have ranged from lower salaries (railways) to lower VAT rates (gas and electricity) to regulators with a conflict of interest (telecom). Although these complaints have now largely subsided, many of these former monopolies are now market leaders in their sector, due mainly to their ability to charge high access costs to networks fully amortized years ago. However, former telecom monopolist Proximus still features on the EU’s list of companies receiving state aid.  Belgium has about 80,000 employees working in SOEs, mainly in the railways, telecoms and general utility sectors. There are also several regional-owned enterprises where the regions often have a controlling majority: for a full listing on the companies located in Wallonia, see www.actionnariatwallon.be  .  There is no equivalent website for companies located in Flanders or in Brussels. Details on the shareholders of the Bel20 (benchmark stock market index of Euronext Brussels) can be found on http://www.gresea.be/Qui-sont-les-actionnaires-du-BEL-20  .

Privatization Program

Belgium currently has no ongoing privatization programs.  There are ongoing discussions about the possible privatization of the state-owned bank Belfius and the government share in telecom operator Proximus, in which the government needs to weigh of the benefits of a one-time sale against the recurring stream of dividends generated by these holdings.  There are no indications that foreign investors would be excluded from these eventual privatizations.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data:
GDP: https://stat.nbb.be/Index.aspx?ThemeTreeId=41&lang=fr#  
National Bank of Belgium offers different statistics, but it does not match the BEA stats. https://stat.nbb.be/Index.aspx?DataSetCode=INVDIR  

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

New link: http://data.imf.org/CPIS   

State Owned Enterprises (SOEs) are active in the utilities sectors.  The Government is the majority shareholder in the Belize Water Services Limited, the country’s sole provider of water services, the Belize Electricity Limited, the sole distributor electricity, and the Belize Telemedia Limited, the largest telecommunications provider in the country.

SOEs usually engage senior government officials, and at times include members of local business bureaus and chambers of commerce, labor organizations, and quasi-governmental agencies, as a part of their management and board of directors.  The board guides the direction, policies, and decisions of the SOE that ostensibly is independent, but in practice has included high-ranking government officials as well as close relatives of government officials. Current and previous administrations are accused of nepotism in staffing as well as conflicts of interest when board members or directors are also represented in organizations that do business with the SOEs.

There is no published list of SOEs.  The following are the major SOEs operating in the country. Information relating to their operations are available on their website, including their audited financial reports:

• Belize Telemedia Limited at http://www.belizetelemedia.net ;
• Belize Electricity Limited at http://www.bel.com.bz ;
• Belize Waters Services Limited at http://www.bws.bz .

There are no third party market analysis sources that evaluate whether SOEs receive non-market advantages by the government.  The Belize Electricity Limited and the Belize Water Services Limited are the only service providers in their respective sectors.  The Belize Telemedia Services, on the other hand, competes with one other provider for mobile connectivity and there are multiple players that provide internet and data services.  The Public Utilities Commission regulates all utilities.

Privatization Program

The Government does not currently have a privatization program.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Statistical Institute of Belize, Central Bank of Belize

Table 3: Sources and Destination of FDI

Statistics on foreign direct investments in Belize by country of origin is limited, including the total invested by U.S. investors.  The Central Bank of Belize recorded total inflows of FDI at USD152.48 million in 2018 and outflows at USD32.933 million in the same period.  Major sources of FDI include the United States, Canada and the United Kingdom. FDI inflows are traditionally concentrated primarily in real estate, construction, reinvested earnings and the agriculture sectors.

Table 4: Sources of Portfolio Investment

Data not available.

There are several wholly owned SOEs operating in the country, including mainly public utilities (electricity and water), fixed and mobile telecommunications, postal services, port and airport management, gas distribution, pension funds, agricultural production, and hotel and convention center management.  There are also a number of partially owned SOEs in Benin. Some of these receive subsidies and assistance from the government. There are no available statistics regarding the number of individuals employed by SOEs.

With the exception of public utilities (including electricity and water), pension funds, and landline telephone service for which the public telephone company retains a monopoly, many private enterprises compete with public enterprises on equal terms.

SOE senior management may report directly to a government ministry, a parent agency, or a board of directors comprised of senior government officials along with representatives of civil society and other parastatal constituencies.  SOEs are required by law to publish annual reports and hold regular meetings of their boards of directors. Financial statements of SOEs are reviewed by certified accountants, private auditors, and the government’s Bureau of Analysis and Investigation (BAI).  Though the government audit institution has the authority to conduct a review of SOE financial statements, it has yet to do so.

SOEs are established pursuant to presidential decrees, which define their mission and responsibilities.  The government appoints senior management and members of the Board of Directors. SOEs are generally run like private entities and are subject to the same tax policies as the private sector.  The courts independently process disputes between SOEs and private companies or organizations without government interference.

Benin is not a member of OECD.

Privatization Program

The government has elected to support targeted divestiture programs rather than total privatization of State-Owned Enterprises.  The state-owned telecommunications company, Benin Telecom Infrastructure, is targeted for either a divestiture program or dissolution by 2021.  The state-owned electricity utility, Société Béninoise d’Energie Electrique (SBEE) will soon be managed privately through a management contract, even though the government will retain full ownership.  Through the second MCC compact on power there will be increased opportunities for Independent Power Producers (IPP) to participate in solar power generation.

Foreign investors may participate in privatization programs.  In March 2015, the governments of Benin and Niger jointly signed a document that would dissolve the Benin-Niger Railway Organization (OCBN) parastatal and assign its concession to foreign private investors.

In December 2017, the government authorized the Minister of Infrastructure and Transport to sign a three-year renewable management contract for the Port of Cotonou with the Belgian firm Port of Antwerp International (PAI).  PAI accordingly took over management of the port in May 2018.  The move is intended in part to attract foreign investors to fund updates to and expansion of the port.

The government procurement process is specified by the Beninese procurement code (Code des Marchés Publiques:  http://www.finances.bj/spip.php?article804  ).  Tenders from the central government are announced in major publications, newspapers, and posted on the website of the Ministry of Finance and Economy at www.finances.bj  .  However, in practice the government frequently uses sole sourcing for PAG implementation, and in these cases does not publish procurement requests before selecting a vendor.  Published tenders often include local investor participation requirements.

Beninese procurement law allows for open and closed bid processes.  Contracts are often awarded based on government solicitations to short-listed companies with industry-specific expertise, often identified based on companies’ commercial activities conducted in other overseas markets.  The public procurement process is not always deemed non-discriminatory. Foreign companies have expressed concerns about unfair treatment, biased consideration, and improper practices specific to the process of selecting short-listed companies.

Table 2: Key Macroeconomic Data, U.S. FDI in Benin/Economy

* Source for Host Country Data: Institut National de la Statistique et de l’Analyse Économique

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Data not available.

The Bolivian Government has set up companies in sectors it considers strategic to the national interest and social well-being, and has stated that it plans to do so in every sector it considers strategic or where there is either a monopoly or oligopoly.

The Bolivian Government owns and operates more than 60 businesses including energy and mining companies, a telecommunications company, a satellite company, a bank, a sugar factory, an airline, a packaging plant, paper and cardboard factories, and milk and Brazil nut processing factories, among others.  In 2005, income from state-owned business in Bolivia other than gas exports represented only a fraction of a percent of Gross Domestic Product (GDP).  As of 2015, public sector contribution to GDP (including SOEs, investments, and consumption of goods and services) has risen to over 40 percent of GDP.

The largest SOEs are able to acquire credit from the Central Bank at very low interest rates and convenient terms.  Some private companies complain that it is impossible for them to compete with this financial subsidy.  Moreover, SOEs appear to benefit from easier access to licenses, supplies, materials and land; however, there is no law specifically providing SOEs with preferential treatment in this regard.  In many cases, government entities are directed to do business with SOEs, placing other private companies and investors at a competitive disadvantage.

The government registered budget surpluses from 2006 until 2013, but began experiencing budget deficits in 2014.  Close to 50 percent of the deficit was explained by the performance of SOEs, such as Bolivia’s state-owned oil and gas company.  According to the 2009 Constitution, all SOEs are required to publish an annual report and are subject to financial audits.  Additionally, SOEs are required to present an annual testimony in front of civil society and social movements, a practice known as social control.

Privatization Program

There are currently no privatization programs in Bolivia.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: BEA, UNCTAD, World Bank

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

In BiH, subnational governments own the vast majority of government-owned companies: the two entities and ten cantons.  Private enterprises can compete with state-own enterprises (SOEs) under the same terms and conditions with respect to market share, products/services, and incentives.  In practice, however, SOEs have the advantage over private enterprises, especially in sectors such as telecommunications and electricity, where government-owned enterprises have traditionally held near-monopolies and are able to influence regulators and courts in their favor.  Generally, government-owned companies are controlled by political parties, increasing the possibilities for corruption and inefficient company management. With the exception of SOEs in the telecom, electricity, and defense sectors, many of the remaining public companies are bankrupt or on the verge of insolvency, and represent a growing liability to the government.

The country is not party to the Government Procurement Agreement within the framework of the WTO.

Privatization Program

There have been no significant privatizations in the past few years.  Privatization offerings are scarce and often require unfavorable terms.  Some formerly successful state-owned enterprises have accrued significant debts from unpaid health and pension contributions, and potential investors are required to assume these debts and maintain the existing workforce.  Under the state-level FDI Law, foreign investors may bid on privatization tenders. International financial organizations, such as the European Bank for Reconstruction and Development (EBRD) are seeking to be engaged on privatization and restructuring efforts across the remaining portfolio of state owned enterprises.  Historically, the privatization process in BiH has resulted in economic loss due to corruption. From 1999 to 2015, more than 1,000 companies were fully privatized, while around 100 were partially privatized. The bad privatizations led to the loss of value of state property and many of the privatized companies were weakened or ruined in the privatization process.  The history of corrupt privatizations has resulted in a public view that privatization just leads to unemployment and the enrichment of a few politically-connected individuals. Well-done privatizations and restructurings that improve service delivery, business productivity, and employment would be very beneficial for the BiH economy, could help the image of privatization, and would build support for a long overdue shift away from a government-led economy.

The Federation government is focused on privatizing or restructuring some SOEs based on the Federation Agency for Privatization’s 2018 privatization plan.  The privatization plan includes the fuel retailer Energopetrol dd. Sarajevo, the engineering company Energoinvest, the aluminum smelter Aluminij Mostar and the insurer Sarajevo-Osiguranje.  In 2016, the Federation Government sold its stake in the Sarajevo Tobacco Factory (39.9 percent stake), and BiH’s largest pharmaceutical company, Bosnalijek (19 percent stake). The remaining companies listed in the privatization plan have posted losses and suffered significant declines in their value, while others have only a small amount of government ownership. The Federation government rejected media speculation that it plans to privatize the two majority government-owned telecom companies, BH Telecom (90 percent stake) and HT Mostar (50.1 percent stake).  At the same time, it has completed due diligence on the two telecom companies as part of its arrangement with the IMF.

The privatization process in the RS is carried out by the RS Investment Development Bank (IRBRS).  Many prospective companies have been already privatized, and out of 163 not yet privatized companies, many are being liquidated or undergoing bankruptcy.  In 2016, the RS government announced plans to sell its capital in 22 companies but the plan has not been implemented yet. The plan envisions the privatizations to take place via the sale of government shares on the stock exchange.  Although the RS National Assembly passed a decision that the entity has no plans to privatize the energy sector, the RS government maintains the possibility of joint ventures in the energy sector.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources of FDI

According to the BiH Central Bank, FDI in BiH in 2018 amounted to USD 458 million.  In 2017 total FDI in BiH was USD 445 million. The all-time high for FDI was USD 2.1 billion in 2007.  Most investments in 2013-2018 came from Croatia, Austria, Russia, Serbia, UAE, and the United Kingdom.

Table 4: Sources of Portfolio Investment

There is no data available from the IMF’s Coordinated Portfolio Investment Survey regarding sources of Portfolio Investment in BiH.

State-owned enterprises (SOEs), known as “parastatals,” are majority or 100 percent owned by the GoB.  There is a published list of SOEs at the GoB portal (www.gov.bw  ) with profiles of financial and development SOEs. Some SOEs are state-sanctioned monopolies, including the Botswana Meat Commission, the Water Utilities Corporation, Botswana Railways, and the Botswana Power Corporation.

The same business registration and licensing laws govern private and government-owned enterprises.  No law or regulation prohibits or restricts private enterprises from competing with SOEs. Botswana law requires SOEs to publish annual reports, and private sector accountants or the Auditor General audits SOEs depending on how they are constituted.  GoB ministries together with their respective SOEs are compelled on an annual basis to appear before Parliamentary Public Accounts committee to provide reports and answer questions regarding their performance. Some SOEs are not performing well and have been embroiled in scandals involving alleged fraud and mismanagement.

Botswana is not party to the Government Procurement Agreement within the framework of the WTO.

Privatization Program

The GOB has committed to privatization on paper.  It established a task force in 1997 to privatize all of its state-owned companies and formed a Public Enterprises Evaluation and Privatization Agency (PEEPA) to oversee this process.  Implementation of its privatization commitments has been limited to the January 2016 sale offer of 49 percent of the stock of the state-owned Botswana Telecommunications Corporation to Botswana citizens only.  In February 2017, the GOB issued an Expressions of Interest for the privatization of its national airline, but progress stopped due to the decision to re-fleet the airline before privatization. Conversely, the GoB has created new SOEs such as the Okavango Diamond Company, the Mineral Development Company, and Botswana Oil Limited in recent years.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

According to the Bank of Botswana, investment in Botswana totaled 84.75 billion pula in 2016, of which 31 billion pula were non-FDI investments.  Africa (33.3 percent) and Europe (64.4 percent) accounted for most of the 54 billion pula influx of FDI. Within these regions, South Africa and United Kingdom were the predominant players, accounting for 9.7 and 32.5 billion pula respectively.  Little data on FDI sources is available for countries and regions with limited investments in Botswana. Retail and Wholesale Trade surpassed the mining sector in 2016 to account for 38.9 percent of Foreign Investment inflows.

Table 4: Sources of Portfolio Investment

IMF Coordinated Direct Investment Survey data are not available for Botswana.  Equity securities represent 82 percent of Botswana’s portfolio investment assets abroad.  Information about country destination of these portfolio investments is not available.

The GoB maintains ownership interests in a variety of enterprises at both the federal and state levels.  Typically, boards responsible for state-owned enterprise (SOE) corporate governance are comprised of directors elected by the state or federal government with additional directors elected by any non-government shareholders.  Although Brazil, a non-OECD member, has participated in many OECD working groups, it does not follow the OECD Guidelines on Corporate Governance of SOEs. Brazilian SOEs are concentrated in the oil and gas, electricity generation and distribution, transportation, and banking sectors.  A number of these firms also see a portion of their shares publically traded on the Brazilian and other stock exchanges.

In the 1990s and early 2000s, the GoB privatized many state-owned enterprises across a broad spectrum of industries, including mining, steel, aeronautics, banking, and electricity generation and distribution.  While the GoB divested itself from many of its SOEs, it maintained partial control (at both the federal and state level) of some previously wholly state-owned enterprises. This control can include a “golden share” whereby the government can exercise veto power over proposed mergers or acquisitions.  

Notable examples of majority government owned and controlled firms include national oil and gas giant Petrobras and power conglomerate Eletrobras.  Both Petrobras and Eletrobras include non-government shareholders, are listed on both the Brazilian and NYSE stock exchanges, and are subject to the same accounting and audit regulations as all publicly-traded Brazilian companies.  Brazil previously restricted foreign investment in offshore oil and gas development through 2010 legislation that obligated Petrobras to serve as the sole operator and minimum 30 percent investor in any oil and gas exploration and production in Brazil’s prolific offshore pre-salt fields.  As a result of the GoB’s desire to increase foreign investment in Brazil’s hydrocarbon sector, in October 2016 the Brazilian Congress granted foreign companies the right to serve as sole operators in pre-salt exploration and production activities and eliminated Petrobras’ obligation to serve as a minority equity holder in pre-salt oil and gas operations.  Nevertheless, the 2016 law still gives Petrobras right-of-first refusal in developing pre-salt offshore fields before those areas are available for public auction.  Industry estimates project bonuses of USD 26.3 billion by opening the Brazilian oil and gas market to foreign investment.

Privatization Program

Given limited public investment funding, the GoB has focused on privatizing state–owned energy, airport, road, railway, and port assets through long-term (up to 30 year) infrastructure concession agreements.  Eletrobras successfully sold its six principal, highly-indebted power distributors. The SOE is currently working to begin a capitalization process to reduce the GoB’s share holdings in the company to less than 50 percent.  The process cannot move forward, however, until Congress passes a bill authorizing the reduction. In 2018, Petrobras faced criticism over its daily fuel adjustment policy and a major 12-day truckers strike hit Brazil and forced the resignation of Petrobras’ CEO Pedro Parente.  To end the strike, the GoB eliminated the collection of the CIDE tax over diesel and gave a USD 3 billion subsidy to diesel producers (mainly Petrobras) to reduce the prices to consumers (primarily truckers).

In 2016, Brazil launched its newest version of these efforts to promote privatization of primary infrastructure.  The Temer administration created the Investment Partnership Program (PPI) to expand and accelerate the concession of public works projects to private enterprise and the privatization of some state entities.  PPI covers federal concessions in road, rail, ports, airports, municipal water treatment, electricity transmission and distribution, and oil and gas exploration and production contracts. Between 2016 and 2018, PPI auctioned off 124 projects and collected USD 62.5 billion in investments.  The full list of PPI projects is located at: https://www.ppi.gov.br/schedule-of-projects 

While some subsidized financing through BNDES will be available, PPI emphasizes the use of private financing and debentures for projects.  All federal and state-level infrastructure concessions are open to foreign companies with no requirement to work with Brazilian partners. In 2017, Brazil launched the Agora é Avançar initiative for promoting investments in primary infrastructure, and this has supported several projects.  Details can be found at: www.avancar.gov.br .The latest information available about Avançar Parcerias is from September 30, 2018.  From over 7,000 projects, the program has completed 36.5 percent and 92.2 percent are in progress.

In 2008, the Ministry of Health initiated the use of Production Development Partnerships (PDPs) to reduce the increasing dependence of Brazil’s healthcare sector on international drug production and the need to control costs in the public healthcare system, services that are an entitlement enumerated in the constitution.  The healthcare sector accounts for 9 percent of GDP, 10 percent of skilled jobs, and more than 25 percent of research and development nationally. These agreements provide a framework for technology transfer and development of local production by leveraging the volume purchasing power of the Ministry of Health. In the current administration, there is increasing interest in PDPs as a cost saving measure.  U.S. companies have both competed for these procurements and at times raised concerns about the potential for PDPs to be used to subvert intellectual property protections under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* IBGE and BCB data, year-end.

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Brunei’s state-owned enterprises (SOEs), managed by Darussalam Assets under the Ministry of Finance and Economy, lead key sectors of the economy including oil and gas, telecommunications, transport, and energy generation and distribution.  These enterprises also receive preferential treatment when responding to government tenders. Some of the largest SOE’s include the following:

The telecommunications industry is dominated by government-linked companies Telekom Brunei (TelBru), Data Stream Technologies (DST) Communications, and Progresif Cellular.  Telbru is the sole provider of fixed line telephone and internet services. DST, founded in 1995, and Progresif, which took over from failed telecom company B-Mobile in 2014 and is owned by a government investment fund, provides mobile phone and internet services.  In 2019, the government announced the consolidation of all telecommunications infrastructure in Brunei under a state-owned wholesale network operator called Unified National Networks (UNN).

Royal Brunei Technical Services (RBTS), established in 1988 as a government owned corporation, is responsible for managing the acquisition of a wide range of systems and equipment and maintaining those acquired systems and equipment.

Brunei National Petroleum (PB) is the national oil company owned by the Brunei government.  The company was granted all the mineral rights in eight prime onshore and offshore petroleum blocks, totaling 20,552 sq. km. Currently, the company manages contractors, including Shell, Total, and Petronas, which are exploring the onshore and deep water offshore blocks.

Royal Brunei Airlines started operations in 1974 and is the country’s national carrier.  The airline flies a combination of Boeing and Airbus aircraft.

Privatization Program

Brunei’s Ministry of Transportation and Info-Communication has made corporatization and privatization part of its Strategic Plan, which calls for the Ministry to shift its role from a service provider to a regulatory body with policy-setting responsibilities.  In that role, the Ministry will develop specific policies through corporatization and privatization; establish a regulatory framework and business facilitation. Currently, the Ministry is studying initiatives to privatize a number of state-owned agencies: the Postal Services Department and public transportation services.  These services are not yet completely privatized and there is no timeline for privatization, as the Ministry is still in the process of considering the initiative. Guidelines regarding the role of foreign investors and the bidding process are not yet available.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Host country data available at depd.gov.bn  

Table 3: Sources and Destination of FDI

Brunei’s Department of Economic Planning and Development and IMF Coordinated Direct Investment Survey data are not available.

Table 4: Sources of Portfolio Investment

Brunei’s Department of Economic Planning and Development and IMF Coordinated Portfolio Investment Survey data are not available.

Upon EU accession, Bulgaria was recognized as a market economy, in which the majority of the companies are private.  Significant state-owned enterprises (SOEs) remain, however, such as for railways and for the postal service. SOEs also predominate in the healthcare, infrastructure, and energy sectors; many of these are collectively managed by a common holding company (also an SOE).  Bulgaria’s roughly 220 SOEs account for about five percent of employment in the country, and their revenues amount to about 13.5 percent of the GDP. Some of the SOEs receive annual government subsidies for current and capital expenditures, regardless of their actual performance.  SOEs’ budgets and audit reports are posted on the Ministry of Finance website. The list of all SOEs can be found on: http://www.minfin.bg/bg/948   

The law treats equally public and private sector companies vis-à-vis bidding on concessions, taxation, or other government-controlled processes.  Bulgaria became party to the WTO’s Government Procurement Agreement (GPA) upon its entry into the EU in 2007.

Privatization Program

No major privatizations are currently planned.  All majority or minority state-owned properties are eligible for privatization, with the exception of those included in a specific list of public interest companies, including water management companies, state hospitals, and state sports facilities. State-owned military manufacturers can be privatized with Parliamentary approval.

Municipally-owned property can be privatized upon decision by a municipal council, or authorized body and upon publication of the municipal privatization list in the national gazette. Foreign companies may participate in privatization tenders. The 2010 Privatization and Post-Privatization Act created a single Privatization and Post-Privatization Agency http://www.priv.government.bg/   responsible for privatization oversight.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Bulgarian National Bank (BNB). For comparative purposes, data inside the table draws from the U.S./international source provided in the last column.

Table 3: Sources and Destination of FDI

The official FDI data in 2018 is broadly consistent with the IMF dollar-adjusted data.  The data for the Netherlands are heavily influenced by investment by non-Dutch companies (particularly Russian) incorporated in the country.  Distortions such as this substantially overstate the actual role of some countries as sources of FDI and understate that of the United States.  A recent study, based on beneficial owner analysis, placed the United States as historically the sixth-largest source country for FDI in Bulgaria, significantly above its nominal ranking at #13.  According to the same analysis, the United States is historically the largest non-EU source of FDI in Bulgaria.

Table 4: Sources of Portfolio Investment

Bulgarian companies’ tendency to seek tax advantages by using offshore entities impacts the data below, particularly in the case of Luxembourg

Private enterprises are allowed to compete with State-Owned Enterprises (SOEs) on the same terms and conditions.  The bidding process is considered to be open and fair. In practice, SOEs enjoy monopoly control of the segments in which they are active.

SOEs or “strategic companies” are present in several sectors such as public services (health, telecom), energy (hydrocarbon, electricity, water), media (television and press), and social security.

The primary SOEs are in the areas of: oil imports and distribution (SONABHY), water and sanitation (ONEA), lottery (LONAB), mailing services (SONAPOST), rail equipment (SOPAFER-B), electricity (SONABEL), and social security benefits (CNSS and CARFO).

Every year, all of the SOEs meet to report to the Prime Minister.  While this meeting is covered in the press and top-line revenue and profit figures are announced, detailed SOE budgets are in most cases not publicly available.  The government publishes the list of all SOEs with their basic financials.

Privatization Program

GoBF announcements for privatization bids are widely distributed, targeting both local and foreign investors.  Bids are published in local papers, international magazines, mailed to different diplomatic missions, e-mailed to interested foreign investors, and published on the Internet on sites such as http://www.dgmarket.com  .

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

Data not available.

Revenue from SOEs contributes about 42 percent of the total revenue of Burma, while SOEs costs amount to 36 percent of expenditures.  In July 2016, the NLD announced 12 economic policies including to reform SOEs and privatize SOEs to enable the private sector to create employment opportunities.  The disaggregate figures of each SOE under the respective ministries are made public in the Burmese language.

Starting in 2012, the government of Burma began taking steps to reduce SOEs’ reliance on government support and to make them more competitive through joint ventures.  This included reducing budget subsidies for financing the raw material requirements of SOEs. The government of Burma has moved in the direction of public private partnerships, corporatization, and privatization.  Burma is not party to the Government Procurement Agreement (GPA) within the framework of the WTO.

SOEs can secure loans at four percent interest rates from state-owned banks, with approval from the cabinet.  Private enterprises, unlike SOEs, are forced to provide land or other real estate as collateral in order to be considered for a loan.  However, SOEs are now subject to stricter financial discipline, as the government has sharply cut direct subsidies to the SOEs while opening markets for competition with the private sector.  Furthermore, the government is removing the easy credit from state banks. SOEs historically had an advantage over private entities in terms of land access since, according to the Constitution, the State owns all the land.

Privatization Program

According to the government of Burma, the private sector accounts for a majority of the country’s GDP, with the State participating in telecommunication services, social and public administration, energy, forestry, construction, and electricity.  The activities of the two military-owned conglomerates of MEHL and MEC are not included in the budget data; while a common sense understanding of “state-owned” would likely include them, these companies are not considered SOEs under Burmese law.

The NLD government has prioritized the privatization of SOEs, largely because many of these entities cost the government money.  In May 2016, the NLD appointed the new members of the Privatization Commission headed by a Vice-President. The Minister of Planning and Finance is the secretary of the commission.  Privatization can take the form of system-sharing, public-private partnership, private-private partnership, franchise, joint-venture, and sales of assets in line with international standards.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/yearly_country.pdf  . In 2018, Burma changed its fiscal reporting period from an April to March reporting period to an October to September period.  This amount only represents U.S. FDI between April and September 2018
**Accurate statistical data is limited in Burma, although this capacity is also being developed.

Table 3: Sources and Destination of FDI

* According to http://data.imf.org/CDIS  

Table 4: Sources of Portfolio Investment

Data not available.

There are five SOEs in Burundi with 100 percent government ownership:  Regideso (public utility company), Onatel (telecom), Sosumo (sugar), OTB (tea), and Cogerco (cotton).  No statistics on assets are available for these companies as their reports are not available to the public.  Board members for SOEs are appointed by the GoB and report to its ministries. The GoB has a minority (40 percent) share in Brarudi, a branch of the Heineken Group, and in three banking companies.

There is no published list of SOEs.

SOEs have no market-based advantages and compete with other investors under the same terms and conditions; however, Burundi does not adhere to the OECD guidelines on corporate governance for SOEs.

Privatization Program

Burundi’s program for privatizing some SOEs in the agribusiness industry (coffee, tea, sugar) and telecommunications sector has been suspended since 2015 with no clear indication of when it may resume.

The privatization program was open to all potential buyers, including foreigners, and there was no explicit discrimination against foreign investors at any stage of the investment process.  Public bidding was mandatory. The process is transparent and non-discriminatory. When the government intends to sell a business or shares in a business, offers are published in local newspapers.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* BRB (Bank of the Republic of Burundi), 2017 Annual Report (at official exchange rate).

Table 3: Sources and Destination of FDI

No detailed information is available on the IMF’s Coordinated Portfolio Investment Survey (CPIS) website and no information is available on outward direct investment from Burundi.

Table 4: Sources of Portfolio Investment

No detailed information is available on the IMF’s Coordinated Portfolio Investment Survey (CPIS) website and no information is available on outward direct investment from Burundi.

Starting in the mid-1990s, Cabo Verde implemented a series of reforms that have transformed a centrally-planned economy into a market-oriented economy.  The number of major state-owned enterprises (SOEs) to be privatized and where the state owns the majority of the capital has decreased from forty in the 1990s to five today (ENAPOR, ASA, EMPROFAC, ELECTRA, and CABENAVE).

Government interference in state-owned enterprises (SOEs) in Cabo Verde is relatively minor. With the exception of certain industries which remain protected (e.g., freight handling at the airport, port authority, importation of pharmaceutical products, and distribution of electricity), private and state-owned enterprises compete freely and without major government interference. In these liberalized markets, both private and state-owned enterprises have the same access to credit, markets, and business opportunities.  SOEs in Cabo Verde are most active in the transportation sector. SOEs are generally managed by a board of directors which is nominated by the Minister in charge of the respective sector. These boards of directors have anywhere from three to five members. Overall, there is little government interference in the day-to-day management of SOEs, and they are generally evaluated based on their economic or financial performance. All SOEs are required to produce annual reports and must submit their books to independent auditors.  Allegations about the qualifications of the CEOs of SOEs abound; many purport to believe that the importance of political connections outweighs the importance of technical qualifications in leadership of these behemoths. Even though not all directors are politically appointed, they must maintain the confidence and support of the government.

Cabo Verde is not party to the Government Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO).  It tries to adhere to the OECD’s guidelines on Corporate Governance. In general, there is fair competition between SOEs and private sector enterprises, except in the transportation and utilities sectors.

Privatization Program

Privatization comes either through private sector sales or through liquidation. Cabo Verde Airlines, two main utility companies, Electra (electricity and water), Cabo Verde Telecom, three banks, and the main state-owned entities in the tourism sector have all been sold off. All privatization or liquidation processes ran smoothly with the exception of Electra, which reverted to government ownership. The decision to repossess Electra resulted from a breach of contract with the Portuguese investor. Consensual agreement was reached during the negotiations.

The government sold its shares of fuel company Empresa Nacional de Combustíveis (ENACOL) and local bank Banco Comercial do Atlântico (BCA) via the stock exchange. The long-struggling national airline, Cabo Verde Airlines, has been finally privatized after years of bloated payrolls, non-performance, and growing costs to the government.

On March 1, Cabo Verde and Icelandair signed a deal transferring 51 percent ownership of Cabo Verde Airlines (CVA, formerly known as TACV) to Loftleidir Cabo Verde (LCV).  The state will progressively divest itself of its holdings in the company: 10 percent of its equity will be made available to former CVA employees and the diaspora community (with a 15 percent discount rate), and the remaining 39 percent of the shares will be made available to national and international investors in 2019.  Per the terms of the contract, LCV will not be able to sell its shares for a five-year period without prior government consent. After five years, the government will retain pre-emption rights.

Also on hold are the privatizations of the management of the national Port and Airport authorities (ENAPOR and ASA respectively), and the pharmaceutical company EMPROFAC.  The conclusion of the privatization processes of the management of ASA and ENAPOR are expected by the end of 2019.

This privatization agenda is aligned with the current’s government strategic development plan (PEDS 2017 – 2021), looking at privatizations and concessions as tools to bring new dynamics to the economy, through new business and investment opportunities to national and international private sector.  The government hopes to align its progress on the UN’s Sustainable Development Goals to private sector-driven investment rather than international aid or cooperation. It has selected seven big sectors – transportation, tourism, the blue economy, ICT, agriculture, logistics, and energy – as the major drivers.  As the bid for private sector investment advances, the government hopes these key sectors will be see reduced fiscal and budgetary risks and improved performance; it should also diminish the role of certain SOEs and the presence of the government in the economy.

Both foreign and national investors can participate in the public bidding process, which is transparent and non-discriminatory.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data:  Cabo Verde’s National Institute of Statistic (INE).

Table 3: Sources and Destination of FDI

Source:  Cabo Verde’s National Institute of Statistic (INE).   – 2017 Data (estimates)

Table 4: Sources of Portfolio Investment

Data not available.

Cambodia currently has 15 state-owned enterprises (SOEs). Cambodian SOEs include Electricite du Cambodge, Sihanoukville Autonomous Port, Telecom Cambodia, Cambodia Shipping Agency, Cambodia Postal Services, Rural Development Bank, Green Trade Company, Printing House, Siem Reap Water Supply Authority, Construction and Public Work Lab, Phnom Penh Water Supply Authority, Phnom Penh Autonomous Port, Kampcheary Insurance, Cambodia Life Insurance, Cambodia Securities Exchange.

In accordance with the Law on General Stature of Public Enterprises, there are two types of commercial SOEs in Cambodia. One type is that the state company’s capital is 100 percent owned by the Government, and another type is a joint-venture in which a majority of capital is owned by the state and a minority by private investors.

Each SOE is under the supervision of a line ministry or government institution and is overseen by a board of directors drawn from among senior government officials. Private enterprises are generally allowed to compete with state-owned enterprises under equal terms and conditions. These entities are also subject to the same taxes and value-added tax rebate policies as private-sector enterprises. SOEs are covered under the law on public procurement, which was promulgated in January 2012, and their financial reports are audited by the appropriate line ministry, the Ministry of Economy and Finance, and the National Audit Authority.

Privatization Program

There are no ongoing privatization programs, nor has the government announced any plans to privatize existing SOEs.

There has been a surge in FDI inflows to Cambodia in recent years. Though FDI goes primarily to infrastructure, including commercial and residential real estate projects, it has also recently favored investments in manufacturing and agro-processing. Cambodia reports its total stock of FDI reached USD 7.1 billion in 2018, up from USD 6.8 billion in 2017.

Investment into Cambodia is dominated by China, and the level of investment from China has surged especially in the last five years. Cambodia reports that its FDI from China reached USD 1.6 billion (year-end 2018), while fixed asset investment from China reached USD 15.3 billion. Taiwan and Hong Kong are also major sources of investment in Cambodia, accounting for USD 614 million and USD 376 million of FDI, respectively, through 2018.

Cambodian investments into other countries are still quite small. Through 2017, the IMF reports a total of USD 367 million of Cambodian investments, with most going to China and Singapore.

NOTE: Discrepancies exists between IMF counterpart country data and the investment figures reported by Cambodia’s official source, the Council for the Development of Cambodia (CDC). In some cases, counterpart country data reports much larger FDI stocks in Cambodia than reported by CDC. In other cases, the data from the Cambodia government is the only source available. Many of Cambodia’s key FDI partners (notably China, Taiwan and Hong Kong) do not report FDI figures to the IMF.

There are also discrepancies in the reported total stock of U.S. FDI in Cambodia. For FDI through 2017, the U.S. government (BEA) reports USD 151 million, the IMF reports USD 110 million, and Cambodia reports only USD 100 million.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: The Council for the Development of Cambodia (CDC) provides official government data on investment in Cambodia, but not all data is published online. See:  www.cambodiainvestment.gov.kh/why-invest-in-cambodia/investment-environment/investment-trend.html 

Table 3: Sources and Destination of FDI

Data retrieved from IMF’s Coordinated Direct Investment Survey database (mirror data, as reported by counterpart economies) presents a much different picture of FDI into Cambodia as compared to that provided by the Cambodian government. For example, Cambodia reports USD 6.8 billion total FDI through year-end 2017 (USD 7.1 through year-end 2018), while the IMF reports only USD 2.8 billion.

Table 4: Sources of Portfolio Investment

N/A – IMF CPIS Data for Cambodia is not available.

Roughly 70 percent of Cameroon’s 130 SOEs are profit-oriented, though most are a net negative to government finances.  Some provide public services.  Many SOEs are so dominant in their markets that they act as de facto regulators, specifically in telecommunications and media.  The Government of Cameroon has over 130 state-owned companies in which it has majority ownership, and which operate in key sectors of the economy including agribusiness, energy, and mining.  SOEs are also present in real estate, transportation, services, information & communication, finance and travel.

In 2017, the Parliament voted into law a new regulation to govern SOEs.  The government says that the objective of this reform is to improve the services offered and the competitiveness of public companies, in line with the development objectives of the country.  Some of the innovations of this law include the diversification of the investment universe of SOEs, modern control through reporting requirements, and compliance with modern governance principles.  As of 2019, it does not appear that any of these objectives have been completed.

The Embassy is not aware of any published list of SOEs.

SOEs competing in the domestic market receive non-market based advantages from the host government.  They receive taxpayer subsidies and in many markets serve as de facto regulators.  They also have a history of accumulating unpaid tax arrears while at the same time benefitting from preferential access to land and to public funds through State subventions.

The Chambers of the Supreme Auditor of Cameroon indicates in its yearly reports that SOEs are not financially transparent.  Only about 22 percent of these structures publish financial accounts.  Media reports have highlighted corruption cases involving managers of SOEs and unveiled inefficiencies, severe dysfunctions, and opacity of the management of SOEs.  These problems are exacerbated by the fact that over the past years, the government has not imposed any performance targets, productivity requirements, quality of service standards, or any significant budget constraints on SOEs.  The governing boards and senior executive teams are political appointees and connected individuals, and thus have the means to avoid tax burdens levied on private enterprises, receive specialized consideration for subsidies and enhanced operating budgets, and obtain generally preferential treatment from the government (including courts).

Privatization Program

Cameroon enacted major privatization policies in the 1990s and early 2000 under the purview of international donors such as the International Monetary Fund and the World Bank.  The process has been stalled for over a decade, but market pressures continue to mount for additional privatization efforts.  We estimate that 30 companies have undergone some form of privatization since 2004, though the government has stakes in at least 100 more companies.  The government has openly discussed privatization of the national airline, the telecommunications company, the oil sector, and agribusinesses, but little has occurred.

In general, privatization appears to be on hold.  The government favors Public Private Partnership (PPP) or some variations of outsourcing and contractual management, with the State retaining some ownership of assets or of the business rather than outright privatization.  In some cases, the State prefers to participate in joint ventures, such as with mining companies, rather than creating a state-owned company.

Foreign investors can participate in privatization programs.  According to some analysts, of the 30 State-owned companies privatized before 2004, foreign bidders won the majority (22).

The public bidding on tender offers is transparent.  They are advertised in the media, but the actual process of awarding contracts may still be tainted by corruption, particularly for large projects.  The listing of public tenders in the Cameroon Tribune newspaper and publication of which firms received the contract do not guarantee a fully transparent process of awards.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Cameroon is not included in the IMF’s Coordinated Direct Investment Survey.

Table 4: Sources of Portfolio Investment

Cameroon is not included in the IMF’s Coordinated Portfolio Investment Survey, as the nascent Douala Stock exchange has minimal opportunities for outside portfolio investment.

Canada has more than 40 state-owned enterprises (SOEs) at the federal level, with the majority of assets held by three federal crown corporations: Export Development Canada, Farm Credit Canada, and Business Development Bank of Canada. Canada also has over 100 SOEs at the provincial level that contribute to a variety of sectors including finance; power, electricity and utilities; and transportation. The Treasury Board Secretariat provides an annual report to Parliament regarding the governance and performance of Canada’s federal crown corporations and other corporate interests.

The Canadian government lists SOEs as “Government Business Enterprises” (GBE). A list is available at http://www.osfi-bsif.gc.ca/Eng/fi-if/rtn-rlv/fr-rf/dti-id/Pages/GBE.aspx   and includes both federal and provincial enterprises.

There are no restrictions on the ability of private enterprises to compete with SOEs. The functions of most Canadian crown corporations have limited appeal to the private sector. The activities of some SOEs such as VIA Rail and Canada Post do overlap with private enterprise. As such, they are subject to the rules of the Competition Act to prevent abuse of dominance and other anti-competitive practices. Foreign investors are also able to challenge SOEs under the NAFTA and WTO.

Privatization Program

Federal and provincial privatizations are considered on a case-by-case basis, and there are no overall limitations with regard to foreign ownership. As an example, the federal Ministry of Transport did not impose any limitations in the 1995 privatization of Canadian National Railway, whose majority shareholders are now U.S. persons.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

*Host Country Source, Office of the Chief Economist, 2017 FDI Stats, Global Affairs Canada.

Note: Data converted to U.S. dollars using yearly average currency conversions from IRS

Table 3: Sources and Destination of FDI

Table 4: Sources of Portfolio Investment

All Chadian SOEs operate under the umbrella of government ministries.  SOE senior management reports to the minister responsible for the relevant sector, as well as a board of directors and an executive board.  The President of the Republic appoints SOE boards of directors, executive boards, and CEOs. The boards of directors give general directives over the year, while the executive boards manage general guidelines set by the boards of directors.  Some executive directors consult with their respective ministries before making business decisions.

The GOC operates SOEs in a number of sectors, including Energy and Mining; Agriculture, Construction, Building and Heavy Equipment, Information and Communication, in water supply and cement production.  The percentage SOEs allocate to research and development (R&D) is unknown.

There were no reports of discriminatory action taken by SOEs against the interests of foreign investors in 2018, and some foreign companies operated in direct competition with SOEs.  Chad’s Public Tender Code (PTC) provides preferential treatment for domestic competitors, including SOEs. 

SOEs are not subject to the same tax burden and tax rebate policies as their private sector competitors, and are often afforded material advantages such as preferential access to land and raw materials.  SOEs receive government subsidies under the national budget; however, in practice they do not respect the budget. State and company funds are often commingled. 

Chad is not a party to the Agreement on Government Procurement within the framework of the WTO.  Chadian practices are not consistent with the OECD Guidelines on Corporate Governance for SOEs. 

The GOC privatized two SOEs  in 2018, but wishes to remain a major player in extractive industries.

Privatization Program

Foreign investors are permitted and encouraged to participate in the privatization process.  There is a public, non-discriminatory bidding process. Having a local contact in Chad to assist with the bidding process is important.  To combat corruption, the GOC has recently hired private international companies to oversee the bidding process for government tenders. Despite the GOC’s willingness to privatize loss-making SOEs, there remain several obstacles to privatization. 

 The Chamber of Commerce submitted a ‘white paper’ (livre blanc) in fall 2018 with recommendations for the Government to facilitate and simplify private sector operations, including establishing a Business Observatory and a Presidential Council, which would implement the over 70 recommendations to improve the investment climate in Chad.

In April 2018, the GoC sold 60% of its stake in the cotton producer CotonTchad Societe Nouvelle (CotonTchad SN) to the Singaporean Olam International.

In October 2018 the GoC launched a new airline, Tchadia airlines, a joint venture owned 51 percent by the GoC and 49 percent by Ethiopian Airlines.

Chad is considering privatization in the following sectors:

• Information & Communication (SOTEL Tchad)
• Food Processing & Packaging (juice, meat processing)

The GOC has not published a timeline for these privatizations.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

Chile had 28 state-owned enterprises (SOEs) in operation as of 2017.  They are all commercial companies. Twenty-five SOEs are not listed on any stock exchange and are fully owned by the government. The remaining three are majority government owned.  Ten Chilean SOEs operate in the port management sector; seven in the services sector, three in the defense sector, three in the mining sector (including CODELCO, the world’s largest copper producer); two in transportation; one in the water sector; one TV station; one is an oil and gas company –ENAP-; and one state-owned bank (Banco Estado).  The state also holds a minority stake in four water companies as a result of a privatization process. Total assets of SOEs amounted to USD 73.7 billion in 2017. Total net income of SOEs in 2017 was USD 2.2 billion. SOEs employed 51,564 people in 2017.

Twenty SOEs in Chile fall under the supervision of the Public Enterprises System (SEP), a state holding in charge of overseeing SOE governance, as well as exercising minority rights in four water companies.  The rest – including CODELCO, ENAP and Banco Estado – have their own supervisory structures outside of SEP jurisdiction, but report to government ministries. All 28 SOEs are accountable to Congress, the President and the General Comptroller Office.  Allocation of seats on the boards of Chilean SOEs is determined by the SEP, as described above, or outlined by the laws that regulate them. In CODELCO’s corporate governance, there is a mix between seats appointed by recommendation from an independent high-level civil service committee, and seats allocated by political authorities in the government.

A list of SOEs made by the Budget Directorate, including their financial management information, is available at the following link:  http://www.dipres.gob.cl/599/w3-propertyvalue-20890.html .

In general, Chilean SOEs work under hard budget constraints and compete under the same regulatory and tax frameworks than private firms.  For instance, CODELCO and Banco Estado compete with many private copper mines and private banks, respectively. However, there are specific areas where SOEs enjoy special advantages.  For example, ENAP is the only company allowed to refine oil in Chile. As an OECD member, Chile adheres to the OECD Guidelines on Corporate Governance for SOEs.

Privatization Program

Chile does not have a privatization program in place at this time.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

* Source for Host Country Data: Central Bank of Chile.

Table 3: Sources and Destination of FDI

According to the IMF’s Coordinated Direct Investment Survey (CDIS), total stock of FDI in Chile in 2017 amounted to USD 274.7 billion, compared to USD 248.6 billion in 2016.  The United States remains the main source of FDI to Chile with USD 31.7 billion, representing 12 percent of the total. The following top sources (Canada, Spain and the Netherlands) accounted for 25 percent of Chile’s inward FDI stock.  Cayman Islands, a tax haven, is Chile’s fifth source of FDI. Chile’s outward direct investment stock in 2017 remains concentrated in South America, where Brazil, Peru and Argentina together represented 31 percent of total Chilean outward FDI.  The United States accounted for 9 percent of the total.