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Ukraine-style privatization: hypermarket with separate entrance 'For Foreigners Only'

July 21, 2015, 18:06 UTC+3 Alexandrova Lyudmila
© ROMAN PILIPEY/EPA/TASS

MOSCOW, July 21. /TASS/. Ukraine is creating privileged conditions for Western countries to participate in the upcoming privatization and has actually excluded both national and Russian capital from it. This is the price paid for the support of the current regime, which may cause grave consequences for the country, experts warn.

"We’re beginning transparent and honest privatization and, therefore, we want exclusively qualitative foreign investors and not former Ukrainian oligarchs to take part in it," Ukraine’s Prime Minister Arseniy Yatsenyuk said in a televised address cited by Ukrainskaya pravda and other Ukrainian media.

In the Ukrainian government’s opinion, the involvement of foreign specialists is the sole and effective method to defeat corruption.

Ukrainian Economic Development and Trade Minister Aivaras Abromavicius earlier said Russian investors would also be barred from Ukraine’s privatization. According to him, non-admission of the "aggressor-state" to privatization will be prescribed in legislation.

The Ukrainian government has already approved the list of enterprises slated for privatization. The list includes Tsentrenergo state-owned power utility, a number of thermal power plants, about 30 coalmines, and also chemical, transport and industrial companies. Overall, slightly over 300 state companies are expected to be privatized.

Meanwhile, the Ukrainian prime minister said on July 17 that privatization must cover all state companies, except facilities related to national security and some infrastructural enterprises.

"Foreign investors are interested only selectively in Ukrainian assets to include ports, land and the remaining part of the military and industrial complex," Svobodnaya Pressa web portal cited political scientist Viktor Pirozhenko as saying.

"They are interested in the assets, which are important from the viewpoint of securing the West’s geo-strategic control of Ukraine and its presence on this territory rather than in the assets that generate profits. First of all, this refers to land, and then to ports in the Odessa region and on the Danube," the expert said.

"This is not just bad. This is disastrous for Ukraine. If Western capital comes here, it will try to fit Ukraine into the labor division system on discriminatory terms from the very outset. This will be an agrarian and raw material appendage or, at best, a country for the cheap assembly of items," he added.

"This is actually the price paid for the support from some large Western countries like the United States, Germany and France," Deputy Dean of the Faculty of World Economy and World Politics at the Higher School of Economics Andrei Suzdaltsev told TASS.

"Some sort of a privatization hypermarket with a separate entrance is being created for them. This is the payment made to masters using the Ukrainian people’s riches and assets," the expert said.

"The Ukrainian government believes it will restructure the country’s entire economy with the support of Western capital and make it innovative while all the existing structures have to be destroyed because production is energy-intensive and, therefore, depends on Russia," he added.

Deindustrialization is already in full swing in Ukraine, the expert said.

It is far from obvious that large foreign companies will take the risk of coming to Ukraine, Professor of the Higher School of Economics Ivan Rodionov said.

"Speculators may come with the intention to resell this property afterwards and this is dangerous," he told TASS.

"In principle, Western capital is interested in transport infrastructure, coal and metals, several hi-tech production facilities and, of course, land," the expert said.

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