The team of President of Ukraine Vladimir Zelensky intends to conduct large-scale economic reforms in the country after a new cabinet of ministers is formed. This was said in an interview with Bloomberg by Deputy Head of the Office of the President of Ukraine for Economic Affairs Alexey Goncharuk. According to the Ukrainian media, citing sources surrounded by the head of state, he is the most likely candidate for the post of prime minister in the new government of Ukraine.

According to Goncharuk, Kiev should conclude a new agreement with the International Monetary Fund to replace the loan deal ending this year.

“The IMF is our strategic partner,” Bloomberg Goncharuk quotes.

In addition, Goncharuk said that the team of Vladimir Zelensky intends to launch a large-scale program of privatization of state assets in the country.

“First of all, banks should be sold,” the official said.

  • Deputy Head of the Office of the President of Ukraine on Economic Issues Oleksiy Goncharuk
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  • © aleksey.goncharuk

Then, he said, the privatization program could affect other large state assets, such as railways and mail. Another important direction of the planned reforms is the liberalization of the agricultural land market. It is planned to cancel the moratorium on land purchase and sale transactions in Ukraine until the end of this year, Goncharuk said.

This reform will be discussed with the World Bank. Following the consultations, it will be decided whether foreign citizens will be able to acquire land in Ukraine and whether the amount of sales will be limited.

The office of Zelensky expects that the lifting of the moratorium on the turnover of agricultural land will lead to an increase in GDP from 0.5 to 3%.

According to Goncharuk, the leadership of Ukraine is now looking for the “least painful”, but at the same time effective model. Recall that land reform has many opponents who are confident that the creation of a market for agricultural land will lead to disastrous consequences.

The fact that the new Ukrainian authorities are planning to deploy a large-scale sale of the assets and enterprises remaining in the hands of the state was known before. As the Secretary of the National Investment Council of Ukraine and a member of the Servant of the People Party, David Arakhamia, said in late June, Kiev is ready to “sell the country” to foreign investors, making Ukraine attractive to Western capital.

“If we talk about what we can do today, we can form the process of“ selling ”the country. We need to send signals to investors that there are hidden opportunities here, ”Arakhamia said on the TV channel“ Our ”.

Limited resource

Talk about lifting the moratorium on the sale of land has been going on in Ukraine for a very long time - back in early 2011, Viktor Yanukovych announced the creation of a transparent farmland market and called land reform one of the priorities of the authorities. At the same time, the politician stressed then that in order to carry out reforms, the authorities must first do a tremendous job, in particular, to conduct a full inventory of land.

The reform under Yanukovych was never carried out, this issue remained in the "legacy" of Petro Poroshenko, who also planned to allow transactions for the sale of land, especially since the IMF and the World Bank insist on this.

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  • © Gleb Garanich

“The moratorium on the sale of agricultural land is the main obstacle to attracting investment and increasing productivity in the agricultural sector of Ukraine,” said analysts at the World Bank earlier.

Despite this, Petro Poroshenko did not dare to cancel the ban in force since the beginning of 2002, which was introduced by the authorities for fear of a massive buying up of land by speculators. Since then, the moratorium has been extended several times, in February of this year, Petro Poroshenko extended it for another year.

Speaking about the reasons for the authorities' indecision regarding the lifting of the moratorium on land trade, experts point out the negative attitude of the population towards reform - many fear that all the land in the country will be bought up for nothing and will be in the hands of monopolists.

However, the administration of Vladimir Zelensky will be able to resolve this issue, said Ukrainian political analyst, director of the Institute of Global Strategies Vadim Karasev.

“Zelensky has an electoral mandate for reform, so he will be able to overcome the resistance that will be provided. As for the reasons for Poroshenko’s refusal to implement land reform, he understood that lifting the ban on sale would lead to a fall in the remnants of subjectivity of national capital and open the way for Western oligarchs and their business — he did not need such competition, ”explained the expert in the RT commentary.

According to the president of the Center for Systems Analysis and Forecasting Rostislav Ishchenko, the Zelensky team places excessive hopes for the lifting of the moratorium on the sale of land.

“There is a lot of free agricultural land in the world, no one suffers a shortage of agricultural products, there is hardly a great demand for Ukrainian agricultural land. In any case, the sale of land is a temporary measure, as it is a limited resource, ”the expert explained in an interview with RT.

“Win in the Short Term”

A similar dispute is underway on the privatization of state-owned banks. Now there are five state-owned credit organizations in the country, among them the largest are Ukreximbank, Oschadbank and Privatbank. The latter, before nationalization in 2016, occupied the leading positions in all financial indicators in the industry, accounting for about a quarter of the entire banking system of the country. The bank was founded by entrepreneur Igor Kolomoisky and his partner Gennady Bogolyubov in early 1992.

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However, against the background of a significant cooling of relations between Kolomoisky and Petro Poroshenko, the bank was declared insolvent, and then nationalized by the decision of the National Bank and the government.

This step was approved by the IMF. According to the head of the organization, Christine Lagarde, the decision was made to ensure the smooth operation of the bank, which plays a systematic role for the financial stability of the country.

However, in April of this year, the District Administrative Court of Kiev declared illegal the nationalization of PrivatBank. According to the court, during the nationalization the insolvency of the credit organization was not fully proven.

  • Christine Lagarde
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  • © Kiyoshi Ota / Pool

According to experts, this decision was the first step towards the withdrawal of the largest bank from state ownership. Reforms can complete this initiative - along with other banks, Privatbank will be sold. Most likely, buyers will be foreign investors.

Thus, the entire financial system of Ukraine will be tied to external decision-making centers, experts say.

“Ukraine with the help of these measures will be able to close debt now and win in the short term. However, it is not known how much this will open up new investment opportunities, because capital will be more foreign. Whether he will invest in the development of industry and the real sector of the country is a big question, ”explained Karasev.

Foreign intervention

Speaking about the campaign for the privatization of Ukrainian assets in general, experts warn that it may become a prologue to a new round of redistribution of property in a country in which foreign capital will actively participate. At the same time, the announced reforms will not help Ukraine to get out of the IMF's credit bondage and launch economic growth, experts say.

“Goncharuk proposes just another banking reform. These are technical, external changes, while no one is going to change the management system itself, ”Rostislav Ischenko explained.

Large-scale privatization of assets still remaining in the hands of the state in the current situation threatens Ukraine with dire consequences, the RT source in the Batkivshchyna party believes.

“Ukrainian lands and the largest enterprises are of interest to Western companies, and they will buy them. Naturally, Russian companies will not be able to take part in privatization, and Ukrainian businessmen will not pull such purchases on their own without attracting Western loans. So, soon, Ukrainian workers will serve Western business for a penny, ”summed up the RT interviewee.