Ukraine has taken another step towards privatizing state assets as it seeks to attract investment and reach lofty economic goals set by the new administration.
President Volodymyr Zelenskiy on October 28 signed a law abolishing a two-decade-old list of state enterprises that were barred from privatization. The list contained over 1,000 state-run businesses.
Zelenskiy won in a landslide victory in April on promises to end endemic corruption and boost living standards, which had fallen behind most East European countries.
His administration is targeting economic growth of 40 percent over the next five years and $50 billion in investment, figures that will likely only be achieved with large-scale privatization.
Western governments and financial institutions like the International Monetary Fund have for years called on Ukraine to privatize state assets, which are often ripe for corruption.
The state will sell the small businesses on the list through its online procurement platform ProZorro, where the highest bidder will win. The larger state enterprises will be sold in auctions that take into account other aspects, such as investment and job creation.
Representatives of a dozen large-scale American companies will travel to Ukraine at the end of October to study investment opportunities, including buying state-owned companies, according to a Ukrainian government statement on October 25.
Not all of the assets on the list will be completely sold off. The Cabinet of Ministers will have to select companies over which the state should maintain control. The cabinet will have to submit that list to parliament within three months.
The state must restructure or resolve problems at some of the companies before they can be privatized, U.S.-Ukraine Business Council President Morgan Williams said.
Some of the companies have significant environmental problems, lawsuits, or oligarchs as minority owners, all issues that could keep foreign investors away, he said.
The state will soon sell off about a dozen assets, including hotels and resorts. The government has said it will use the money in part to pay down debt.