"Big privatization" will be restored in Ukraine in 2024

This was announced at the annual press conference by Prime Minister Shmyhal.

Among the announced objects are the United Mining and Chemical Company, Odesa Port Plant, Centrenergo, coal mines, and some other facilities.

The "big privatization" was formally put on hold after the start of the full-scale invasion in February 2022 (although let's be honest - it was not very lively before, because among the mentioned objects it is not difficult to recognize those that have been "privatized" for ten or fifteen years - but have not reached the finish line).

Large-scale privatization in Ukraine is a saga that has become obscenely long. The market transformations that could have been completed in the first ten years of independence (as the experience of many of our neighbors in the former "socialist camp" has shown) have been going on for four decades.

They are taking place against the backdrop of the harmonious coexistence of two mutually exclusive theses.

The first is: "the state is an inefficient owner". Those who wish can give many arguments in its favor, or we can simply briefly list the objects mentioned in this post. The reasons vary from the enormous technological backwardness of the former "giants of Soviet industry" who suffer from catastrophic resource and energy intensity of production, to the banal long-term "sawing" that has buried not just dozens of enterprises, but entire sectors of the economy.

Second: "large-scale privatization cannot and should not be rushed." The ironclad argument is that "there are no investors (and they are not expected), and the available bidders are able to disassemble everything for a pittance." There have always been plenty of "good" reasons why there are no investors: another crisis (global or local), unstable legislation and frequent changes in the rules of the game, poor investment climate, unwillingness of global companies to enter an opaque market, another election cycle that causes political turbulence and uncertainty, etc.
We could live in this coordinate system for a long time, but in my opinion, it is time to put an end to it.

On the one hand, in the context of war and lack of funds, we can no longer afford the burden of multibillion-dollar "assets" that are actually liabilities, generate very weak (to put it mildly) results, and most importantly, have no prospects if the status quo is maintained. I am not referring here to a small circle of strategically important enterprises where we have more or less managed to improve corporate governance and control...

On the other hand, we really need money to finance our main expenditure item (everyone knows what it is), and if in the course of small-scale privatization we received more than UAH 360 million for just three objects in 2024 (two "design institutes" that have not been "designing" anything for their industries for a long time and one state-owned enterprise with 17 warehouses on its balance sheet), we can count on more as a result of the sale of large-scale privatization objects.

On the third hand, we now have a unique chance. We are in the spotlight, with various high-level international business events taking place (for example, a conference in Tokyo that looks promising, and we are also preparing for a series of similar ones in Europe). We see the willingness of foreign companies already operating in Ukraine to increase their investments, and of those that do not yet have a presence in Ukraine to at least start considering such a possibility.

Partner states and international financial institutions are ready to insure various military risks, provide guarantees, etc.

These opportunities should be seized.