Privatization does not contribute to improving economics – Yushchenko

16:17, 15 February 2008
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"It reminds me how Yekaterina II presented lands in Ukraine to her lovers..."

President of Ukraine Victor Yushchenko is confident that the privatization in Ukraine has not become as yet a basis for improving the economics.

According to an UNIAN correspondent, he claimed this to a National Security and Defense Council session today.

“The privatization processes in Ukraine have not become the necessary basis for improving the structure of the national economics and increasing its efficiency”, Victor Yushchenko stressed.

At the same time, he noted that the weight of branches, producing export production with a low technological level, remains very big in the structure of production, and Ukraine is still one of countries with the highest energy consumption at production.

Victor Yushchenko emphasized that, as of today, more than 108 thousand enterprises have been privatized in Ukraine. However, according to the President, considering the response of the market, one may draw a conclusion that the privatization was not a success, because there are no effective owners, and no serious changes at the production markets, as well as in the branches.

Victor Yushchenko noted that a considerable part of revenues from foreign transactions accumulates, as a rule, in the off-shore zones, “to return in Ukraine for privatization of regular objects”.

At the same time, the President stressed that a fifth of all the foreign investments are so-called investments from Cyprus or British Virgin Islands – up to 5 billion US dollars.

The President believes this situation occurred due to the imperfection of the Ukrainian legislation, which allows carrying out privatization under non-transparent conditions and at understated prices.

As an example, Victor Yushchenko listed the privatization of Luganskteplovoz, when there were 7 bids for the enterprise, but the contest conditions allowed only two of them to remain. Moreover, these two were subsidiaries of the same legal entity. By assessments of the State Property Fund, they expected to receive 1.5 billion hryvnias from the sale of this enterprise. Howover, the object was put for the contest at a price of 295 million hryvnias, and was sold for 295 million 505 thousand hryvnias, the President said.

“Do they call it a privatization? It reminds me how Russian Empress Yekaterina II presented lands in Ukraine to her lovers, this is approximately the same process”, Victor Yushchenko stressed.

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