HOW TO PRIVATIZE STATE-OWNED COMPANIES IN UKRAINE?
Ukraine is preparing a record privatization of state property
According to Prime Minister Oleksiy Honcharuk, some state-owned companies showed losses on paper
KIEV – The government of Ukraine has announced its desire to transfer 431 state objects for privatization. In the government’s message, this figure is called “record” – for six months the government submitted 961 objects for privatization – ten times more than in the last ten years.
“For six months of our work, we have transferred 961 objects for privatization. For comparison, from 2008 to 2018, only 93 objects were transferred. Enterprises that have been generating problems and losses for years will get a new effective owner, new jobs, ”said Prime Minister of Ukraine Oleksiy Honcharuk on March 3, 2020, according to the government portal.
For privatization, “four large state-owned companies” are proposed: the Bolshevik plant, the State Food and Grain Corporation, Bread of Ukraine, Artemsol.
About the “State Food and Grain Corporation of Ukraine” Oleksiy Goncharuk noted that it is “the largest corporation – exporter of grain in Ukraine and the largest producer of flour in the country”.
“On paper, for some reason, it is flawed and ineffective. Thanks to privatization, the enterprise will be able to modernize its facilities, create new jobs and pay more taxes to the state budget of Ukraine, ”the head of the Ukrainian government said..
Waiting for big privatization
As reported by the Russian service of the Voice of America, President Zelensky promised large investors in the Ukrainian economy a personal “guardian” from the state.
The leader of Ukraine said this on January 22, 2020 during a speech at a public session of the World Economic Forum in Davos. According to Volodymyr Zelensky, anyone who invests more than one hundred million dollars in Ukraine will receive a personal “guardian” from the state..
“We have prepared a new program, which will be called investment nanny (investment nanny – TB). What does this mean? Each investor, a large company that will bring $ 100 million or more to Ukraine, we will provide a separate contract with the state. It is the state that will protect you. You will have a manager – investment nanny, who speaks five languages, and this manager will work with you 24/7 – any issue, any problem will be resolved in contact with this manager, and there will be no problems, ”Volodymyr Zelenskyy noted. during the online broadcast of the office of the President of Ukraine on Facebook.
Ukraine, privatization, oligarchs
According to the director of the Center for Public Information Technologies “Forum”
Valeria Dymova, the privatization process in Ukraine is taking place in an “under-oligarchic system”.
“Six months ago, the government announced that it would carry out the privatization of state enterprises. And I think that during this time the list of objects was corrected for a reason. These enterprises from the list are, in one way or another, still managed by some of the oligarchs, some of the industrial or financial clans, ”says Valery Dymov to the correspondent of the Russian service “Voice of America”.
At the same time, he believes that the country needs privatization, but on completely new – transparent, European principles.
“This process should be part of a global strategy and be subordinated to the inflow of foreign investment to Ukraine. And if the IMF demands from the Verkhovna Rada a law that would not allow oligarchs to take banks by courts, this means that not only the International Monetary Fund knows the situation in the judicial system of Ukraine, but also large investors, ”notes Valeriy Dymov.
The political scientist says that the words of the President of Ukraine that every major investor will be accompanied by an “investment nanny”, if desired, can be influenced by the decision of any district court in Ukraine.
“Our courts can resolve more issues than existing laws and decisions of the authorities, they can cross out, if desired, all investments, and this is a significant sign for the international community,” emphasizes Valery Dymov.
He argues that the current government does not have a clear understanding of the economic challenges facing Ukraine. However, according to him, it is not necessary to place all responsibility for privatization on the Prime Minister..
“The authorities have become hostages of the system, and they do not know what to do. Prime Minister Honcharuk is trying to find himself in this coordinate system, but when we see how the president gives him tasks, how Volodymyr Zelensky gives an assignment to the speaker of parliament, I would not place all responsibility on the prime minister. Although the question arises – if you are a leader, what technical tasks are you called to be responsible for? – notes Valery Dymov.
Sell or privatize everything
Political expert, director of the Institute for Analysis and Forecasting Yuri Lesnichy believes that today no one can give guarantees – whether the privatization process will be fair, clear and flawless.
“There is no such feeling yet, but there is a conclusion of the legal department of the Verkhovna Rada that there are no miscalculations about the economic consequences of privatization. This may also mean that state management is signing for its inability to run state business, ”says Yuri Lesnichy to the correspondent of the Russian service “Voice of America”.
The political expert notes the lack of clear information about which coal enterprises should be privatized, since they are not profitable and which are not.
“You can also say about the grandiose process of land privatization, which is planned. It cannot be ruled out that financial and industrial groups have created “shadow” markets for land and enterprises, and the state does not have the institutional capacity to carry out large-scale privatization in the interests of the state, except for the ability to sell everything. But then this is not privatization, but the legalization of the existing semi-criminal monopoly market – land or industry, ”emphasizes Yuri Lesnichy.
As an example – the absence of a state strategy in the field of privatization, he names the process of selling the Odessa Port Plant. He, according to Yuri Lesnichy, was exploited by “oligarchs and driven into debt in order to leave behind a profitable object”.
He notes that the first edition of the law on the privatization of agricultural land – up to two hundred thousand hectares for one buyer, demonstrated the absence of a state strategy in the “land issue”.
“Today we are considering the possibility of privatizing twenty thousand hectares for one person, but this is a lot, given that the average farm in Poland, for example, is three to seven thousand hectares of land, this is a diversified production of vegetables, fruits, berries, processing. It is difficult to imagine even a difficult Ukrainian farmer who could concentrate and efficiently cultivate such an array of land, in size as an administrative unit – any district in one of the regions, ”emphasizes Yuriy Lesnichy.
Land reform: up to 20 thousand hectares in hand
As reported by the Ukrainian National News Agency “Ukrinform” on December 17, 2019, the MPs on November 12 in the first reading supported the bill, which provides for the abolition of the moratorium on the sale of land from October 1, 2020.
This bill, adopted in the first reading, provides for the maximum concentration of land in one person – up to 200 thousand hectares. However, the Servant of the People parliamentary faction plans to limit the maximum concentration of agricultural land after the opening of the market from five to twenty thousand hectares per person, Ukrinform reports..