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Privatization in Ukraine: Why private management proves disappointment?

Author : Oleksiy Kushch

Source : 112 Ukraine

Why, after mass privatization, Ukraine, the blessed and richest of all Soviet republics, turned into a completely impoverished and backward country?
12:00, 7 September 2020

Open source

Since 1994, I have been helping many Ukrainian entrepreneurs to become big capitalists since I’ve directed the privatization process of about 1,000 state-owned enterprises with the help of companies licensed by the State Property Fund. The type of activity of my business in those years was exceptional, that is, companies and investment funds under my management could only perform an intermediary function in the privatization process. Therefore, I hope my view of what happened and what we got, in the end, is quite objective.

Related: Zelensky expects Ukrainian govt to start preparing Ukrspyrt for privatization

Lately, I have wondered why, after mass (or voucher) privatization, Ukraine, the blessed and richest of all Soviet republics, in subsequent years turned into a completely impoverished and backward country? Why did my friends-businessmen, having acquired the ownership of factories and plants, simply barbarously squeeze profit out of them, which they then took out through offshore laying on the territory of those countries where they decided to equip family nests away from Ukraine?

Now it has become clear that state property cannot be distributed fairly. I think that for a new wave of mass privatization, the corrupt authorities will not create fair rules of the big privatization game, according to which entrepreneurs endowed with intelligence, talent, and hard work could take their rightful place in the civil society of Ukraine.

Of course, it is tempting today, in the most difficult conditions of the coronavirus crisis, to sound the calls of certain politicians, namely to take away the unjustly acquired property from the oligarchs and big capital, but, firstly, most of it is already abroad in offshores. Secondly, something can be taken away only once, and the warped system of stimuli "rob the loot" will remain for a long time.

Related: Ukraine's PM instructs State Property Fund to privatize more than 300 objects in 2020

But what is to be done? I am sure that now it is more important for our ministers and MPs to understand that privatization, investment, and the creation of an investment climate are interconnected, and therefore they must be taken together.

Finally, did we find ourselves in this dead-end by accident or because of the corruption and incompetence of certain top officials and legislators? Does anyone understand why Ukrainians, according to opinion polls, support the Cabinet of Ministers, if everything is so bad in Ukraine? And if everything is so good with us, why more and more people are leaving the country to work and seek asylum, while the West does not stop lending to the allegedly killed Ukrainian economy?

Related: Ukraine’s Cabinet approves list of strategic enterprises that are not subject to privatization

In the meantime, ordinary Ukrainians and foreign investors can observe the following picture at most of the still operating state-owned enterprises: the most attractive assets have long been re-registered in various semi-legal and illegal ways to their commercial structures, and the enterprise itself has only a seal and a sign at the entrance.

So we live in the post-privatization period...

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