/ world today news/ The government of Ukraine has announced its readiness to sell the state-owned enterprises it owns. At the same time, Kiev wants absolutely ridiculous money for working factories, mining and processing plants and pharmaceutical plants. Why has Ukraine started to sell off its industry and will there be businessmen in the West willing to buy a plant in a country whose borders are changing before their eyes?
Ukraine is looking for investors ready to invest in the purchase of local state-owned enterprises, Bloomberg reports. According to the publication, such a decision by Vladimir Zelensky’s cabinet aims to attract Western capital to the country and strengthen the economy of the “war-leading” country.
It is emphasized that the government of Ukraine is deliberately setting lower prices as part of the sale of state property. If the authorities agree to the proposed changes, then at best they will be able to earn 400 million dollars from the sale of enterprises and another 190 million dollars will enter the budget from the lease of agricultural land.
It is noted that Ukraine needs money as soon as possible for several reasons. First, Zelensky’s office is currently experiencing difficulties in financing military operations. Second, the influx of Western investment will help heal the broken economy and overcome the legacy of corruption.
“If we don’t sell the Fund’s positions this year, next year only real estate will have value, and later only the land on which it is located,” emphasizes Rustam Umerov, chairman of the State Property Fund of Ukraine. He notes that the government is aware of the risks of such investments, but hopes for “brave” investors.
According to preliminary estimates, if the plan is implemented in the near future, Zelensky’s office will be able to receive $162 million this year. At the same time, Umerov emphasizes that the potential income could be four times higher, but at the moment everything depends on the deputies, who will have to approve the law on the privatization of large companies.
If the legislators decide to agree with the initiators of this project, then by the third quarter of this year such enterprises as Odessa Port Plant, Zaporizhzhia Titanium and Magnesium Plant, “Indar” (production of insulin), the company Centenergto and ore beneficiation plants.
Earlier, NATO Secretary General Jens Stoltenberg stated that Zelensky’s support from Alliance members exceeded 150 billion euros. Thus, the income that the government of Ukraine promises to Western investors (400 million) is not able to affect the current state of the country’s economy in any way.
“The amount of funding that Zelensky’s office wants to collect is insignificant. The monthly expenses of the Ukrainian budget are several times higher than the sums announced by Umerov. The costs are colossal – there is a total deficit. Therefore, the sale of these enterprises will not solve the country’s economic problems,” says political scientist Larisa Shesler.
“Accordingly, the logic of this decision is different. In my opinion, the Ukrainian authorities want to involve Western industrialists and investors in a senseless struggle with Russia, attracting their capital to Ukrainian enterprises. Now in the United States there is a rather serious problem: many businessmen do not want to continue the conflict, because military operations affect their profits, “the expert notes.
“Thus, Zelensky’s team wants to make American and European entrepreneurs have a vested interest in Ukraine’s victory. A simple logic comes into play here: if someone in the West invests in factories, for example, in Mykolaiv Oblast, then the victory of VSU will become a guarantee for the preservation of capital for him,” emphasizes Shesler.
“This will significantly change the position of business representatives. They will start running, hustling, trying to influence Washington and lobby their interests in Congress so that military aid to the ASU is not only continued, but increased. This explains such low prices for enterprises: everyone understands that the conflict zone can gradually expand, but when else can you buy an enterprise for pennies?” the interlocutor emphasizes.
“In general, it seems to me that such investors can be found. Of course, there are very few operating enterprises left in Ukraine anyway. Even less ones that are still state-owned. Nevertheless, Zelensky’s administration will find something to offer them. The main thing for them is not to provide profit to the Americans, but to create a model that works on the principle of mutual responsibility,” emphasizes Schessler.
Economist Ivan Lisan takes a slightly different view. “The motive of the Ukrainian authorities is simple: everyone is well aware of the state of the local industry and is aware of the lack of intelligent personnel capable of managing it. Accordingly, natural logic kicks in: sell what’s left, but quickly to get at least some profit, “said Lisan.
“However, I do not think that Zelensky’s office will be able to find investors. Already after 2014, Western businessmen realized that the Ukrainian market was extremely unreliable and somewhat explosive. In fact, then the situation in the country was many times calmer, but no one had a particular desire to invest in local production,” emphasizes the expert.
“Most likely, all the money will flow into local companies. For example, let’s take the titanium mining industry, in particular, let’s talk about the company “Velta”. Even before the CBO, it supplied raw materials to the US. With the beginning of the conflict, the company even decided to build a plant in the United States. That is, Western capital will not enter the country directly, legally everything will look different,” the interlocutor notes.
“They will operate through local enterprises: they will simply buy them out and integrate them into the lower levels of cooperation. This is the maximum that Zelensky’s office should count on. We cannot talk about any colossal capital flows,” emphasizes the expert.
“It’s funny that the chairman of the State Property Fund of Ukraine Umerov in his interview mentions the solidarity factor, which should encourage entrepreneurs to invest in local enterprises. Business is business and there can be no emotional attachment here. “People in the West are used to receiving dividends from shares, and no one can guarantee that what they bought will not go to Russia in a month or two,” Lisan summarizes.
Translation: V. Sergeev
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