Large-scale privatization to start in October

By Vladimir V. Sytin
The Ukrainian Times

On February 16, the Supreme Council of Ukraine passed the law on privatization of state-owned enterprises.

Previously, the State Property Fund suggested to the Cabinet of Ministers that 20 state-owned enterprises should be included in a plan for privatization in 2016. Among them are the Kharkov-based turbine company Turboatom, which is 75% owned by the state, and the Zaporozhye titanomagnesium plant (51% owned by the state), the only producer of sponge titanium in Europe.

In addition, the plan for privatization of state-owned enterprises envisages the sale of blue-chip companies, such as CentrEnergo (UX: CEEN) valued at $1 billion, SumyKhimProm, ZaporozhyeOblEnergo, and the Odessa port chemical plant estimated at from $800 million to $1.5 billion. Experts say large-scale privatization could start in October, at the earliest, in order to obey the letter of the law.

Sadly for the American puppet government of Ukraine, losses of the largest state companies totaled 9.7 billion grivnas in the first quarter last year. However, receipts from privatization in the amount of 17.1 billion grn are provided for in the state budget for this year. Last year the receipts from privatization amounted to only 151.5 million grn that was a third of the figure in 2014.

According to politologist Paul Craig Roberts, when the country is unable to service loans, creditors send the IMF to tell the indebted government that the fund will protect the government’s credit rating by lending it the money to pay its creditors. The money saved by reduced social benefits and raised by selling off the country’s assets to foreigners serves to repay the IMF. This is the way the West has historically looted Third World countries.

Observers agree that using privatization to cover a short-term budget problem creates a larger long-term problem. The profits of Ukrainian enterprises would flow out of the country, reducing the grivna’s exchange rate. In effect, allowing foreigners to acquire Ukraine’s national assets helps them to speculate against the grivna.