The Verkhovna Rada of Ukraine in the first reading supported the government's initiative to unblock the "big privatization" in the country.

This was reported by the press service of the Ukrainian Ministry of Economy, Trade and Agriculture.

284 People's Deputies supported the adoption of bill # 4543 with the required minimum of 226 votes.

As the deputy head of the department, Svetlana Panaiotidi, explained, presenting the document to the Rada, the point is to exclude the clause on the suspension of auctions for the period of quarantine and restrictive measures to prevent the spread of coronavirus from the law "On privatization of state and municipal property".

The explanatory note to the bill says that such a step will allow replenishing the state budget with funds received from privatization.

"Kiev is ready to sell everything"

According to the website of the Ministry of Economic Development and Trade, the adoption of the law will prepare for the transfer of a number of enterprises to private ownership.

“First of all, we are talking about the large-scale privatization of such objects: the Bolshevik enterprise, the Odessa Port Plant, the United Mining and Chemical Company, the President Hotel,” the department explained.

According to officials' calculations, the sale of large state-owned enterprises will help replenish the budget by up to UAH 12 billion, as well as attract impressive investments.

  • Verkhovna Rada of Ukraine

  • Reuters

  • © Valentyn Ogirenko

We will remind, when in March 2020 the Ukrainian authorities announced a nationwide quarantine to combat the COVID-19 pandemic, preparations for the "big privatization" also stopped.

This was announced then by the head of the State Property Fund Dmitry Sennichenko on his Facebook page.

He explained that the fund is suspending tenders for privatization until the situation on world markets stabilizes.

“In the context of the global economic turbulence caused by the COVID-19 epidemic, we are still making a decision to refrain from putting large privatization objects and state-owned enterprises at privatization auctions until the situation in financial markets stabilizes,” Sennichenko wrote.

At the same time, he stressed that, in general, the course towards privatization has not changed, and the "excess" property of the state should go into private hands.

Almost a year after the introduction of the moratorium, the situation with the spread of coronavirus in Ukraine remains tense.

Recall that from January 8 to 24, a strict quarantine was in force in the country, and on February 4, Prime Minister Denis Shmygal said that the restrictions would last until the end of April with the possibility of further prolongation.

However, now Kiev no longer considers the current situation an obstacle to launching the sale of state-owned enterprises.

In December 2020, the government approved and submitted to the Rada a bill lifting the ban on privatization during quarantine.

It was this document that the Rada supported at its meeting on February 4.

According to experts, the Ukrainian authorities are forced to return to large-scale privatization at the height of the crisis due to a banal lack of funds.

“The IMF does not issue loans in the promised volumes - thus it is pushing Kiev to resume privatization.

This wave of asset sales, dubbed "big," is essentially no different from other similar campaigns.

In this format, this procedure turns into a sale of cheaply valuable assets, which is done in the interests of Western capital, "political analyst Alexander Dudchak said in a commentary on RT.

Andrei Suzdaltsev, Deputy Dean of the Faculty of World Economy and International Affairs at the Higher School of Economics, shares a similar point of view.

“Big privatization for Ukraine is just a sale of tasty morsels of the Ukrainian economy and enterprises.

In a crisis, prices will be low, but Kiev is ready to sell everything, since the pandemic has completely devastated the treasury, "the interlocutor of RT explained.

"The interests of global capital"

Recall that the privatization of state-owned enterprises is one of the key requirements that the International Monetary Fund (IMF) traditionally imposes on borrowing countries.

This was provided for by a set of measures that were prescribed to be taken by countries wishing to use the fund's loans.

This set of requirements emerged in the late 1980s and was named the Washington Consensus.

Subsequently, this set of rules was revised and somewhat softened by more general wording - the new document was named "Monterrey Consensus".

However, large-scale privatization still remained among the main conditions on the part of the IMF.

  • Ron van Roden, Head of Mission of the International Monetary Fund in Ukraine

  • Reuters

  • © Ukrainian Presidential Press Service / Handout

Ukraine became a member of the IMF in 1992 and has been actively using the fund's credit support over the past decades.

In 2010, Kiev signed a loan agreement with the IMF for $ 15 billion. However, payments were delayed because the Ukrainian authorities were in no hurry to follow the fund's requirements.

Having received a refusal from the IMF to provide a tranche in the fall of 2013, Kiev turned to Moscow for support.

The Russian side promised Ukraine a loan of $ 15 billion. But these agreements were thwarted because of the "Euromaidan" and the coup d'etat in Ukraine. 

Then cooperation between Kiev and the IMF resumed: the new Ukrainian authorities were ready to fulfill unpopular demands.

One of the consequences of this policy was the growth of utility tariffs for the population, as well as the adoption of a law on opening the agricultural land market.

In 2017, the Rada also adopted a draft law on privatization.

Experts emphasize that such conditions of the IMF are part of its comprehensive policy aimed at promoting the interests of large Western corporations operating in the international market.

“The IMF represents the interests of global capital, therefore, putting forward such political demands, it acts like a battering ram.

By its demands, the fund is actually depriving the country of its sovereignty, ”says Alexander Dudchak.

As the leadership of the Ukrainian State Property Fund said earlier, the IMF demanded that "big privatization" begin in 2019.

However, Kiev was unable to fulfill this condition.

In January 2020, the State Property Fund published an updated list of large state-owned companies subject to privatization.

In total, it was planned to put up for sale 1006 enterprises.

According to experts, accelerated privatization could destroy the remnants of the industrial industry in Ukraine.

“Russian investors will not get access to these auctions, China has problems with the United States because of Motor Sich, and European capitals are unlikely to be interested in Ukrainian assets, so the fate of the enterprises is uncertain.

It is unlikely that the new owners will develop them.

So we are talking about the prospects for the accelerated de-industrialization of Ukraine, ”Andrey Suzdaltsev is sure.

  • Vladimir Zelensky

  • Reuters

  • © Valentyn Ogirenko

Alexander Dudchak adheres to a similar point of view.

From his point of view, accelerated privatization may lead to the death of those high-tech enterprises in Ukraine that can still produce something.

“Normal investors will not invest in these assets: the situation in Ukraine is too unstable.

Russian companies will not be allowed to participate in privatization.

Other countries are hardly interested in the development of Ukrainian industry and economy.

So this kind of privatization is more like a “clean-up” of the territory, a deliberate destruction of the industry, ”Dudchak summed up.