Ukrainian government prepares for privatization
The government is preparing for large-scale privatization in 2011, which should partially offset certain holes in the budget and stabilize the local economic situation. The privatization framework is laid out by the draft law “on amending some laws of Ukraine on privatization,” drawn up by the Economy Ministry, which proposes to lift restrictions on the privatization of hundreds of strategic state enterprises. This would open-up sizable opportunities for acquisition in the aviation industry, manufacture of railway equipment, underground facilities, grain storage, port infrastructure facilities, chemical industry complexes, wine plants etc.
Ukraine ranks fifth among the countries with the largest number of emigrants,"
– Viktor Tkachuk
In addition, the government headed by Mykola Azarov plans in the near future to privatize the state monopoly Ukrtelecom, the coal mining industry as well as 15 regional power distribution companies. These announcements appear to indicate that the government‘s financial stability is deteriorating.
Implementing large-scale privatization with the sale of strategic state enterprises shows that government has neither the economic strategy nor the desire to solve budgetary issues. Additionally, the government shows that is has been unable to turn significant profit from these enterprises to cover the gaps in its budget. It is significant that the campaign rhetoric of President Viktor Yanukovych and the Party of Regions did not have a hint of large-scale privatization, and those who voted for them are unlikely to support the total sale of state property. On the other hand, the most likely bidders for the strategic enterprises will be representatives of Ukrainian and Russian big business, which will add further blemishes to Ukraine’s investment attractiveness and blur the transparency of business in the country.
People First Comment: What will be interesting to see in this new round of privatizations will be whether these state assets are going to be sold in the interests of the nation or in the interests of certain members of the Ukrainian financial elite. As we saw with the first auction of Kryvorizhstal in 2004, the price paid by members of the local elite, around $800 million, was only 17 percent of the price finally paid at the second auction by an international bidder. If the privatization sales net the true value, then this will indeed be a welcome boost to the economy and a clear statement by the government that they have the interests of the nation and its people at heart. However, if it is just a process of dividing up state assets between local and Russian oligarchs at nominal value, then it will be tantamount to state-sponsored theft. On that basis, the people would be well within their moral rights to withhold payment of their taxes in a similar proportion to the amount paid against the real value of the assets. After all what is good for the goose is also good for the gander.
Migrant workers from Ukraine sent their families $5.3 billion,"
– Viktor Tkachuk
Constitutional Court continues parliament until 2012
The Constitutional Court of Ukraine again played an important role in determining the political development of the state, by supporting the submission of parliamentary elections in October 2012. The decision was made when 16 of the 18 judges voted to support this submission. Thus, the Constitutional Court continues to play the role of essentially structuring the political system in a format that is favorable to President Viktor Yanukovych.
Following the decision of the Constitutional Court to restore the Constitution of Ukraine to the edition of 1996, parliamentary elections should have been scheduled for March 2011. The Central Election Commission has publicly recommended that this election should take place no later than Nov. 22, 2010. Therefore, due to the recommendation of the Constitutional Court, which is supported in Parliament, this current manifestation of parliament will continue until October 2012, giving the government an additional year to demonstrate its effectiveness and offer practical results, and the opposition more time to form a clear position and mobilize their voters.
People First Comment: One has to question why the government doesn’t come clean and simply disband the Constitutional Court all together; after all it hardly serves constitutional purpose. It has lost all credibility with the national and international communities and is now nothing more than a rubber stamp for those in power. How these so called learned judges can justify their actions is beyond belief? They are supposed to be the guardians of the law, the sentinels of the constitution, there to prevent politicians from usurping the people for their own political and personal ends yet all they do is yelp like scared puppies whenever their real masters call. And why October 2012? Is the election perhaps supposed to cash in on the post Euro 2012 euphoria? What not October 2020 or even 2050? After all, if you are going to ride roughshod over the law you may as well do it in style. These judges are a disgrace to their profession and should be removed from office.
The migration corridor “Ukraine-Russia” ranks as the third busiest in the world after “Mexico-US” and “Russia-Ukraine.”
– Viktor Tkachuk
Ukraine among world leaders in exile population
According to a recent World Bank study “Migration and Remittances,” Ukraine ranks fifth among the countries with the largest number of emigrants. Currently there are nearly 6.6 million Ukrainians abroad, representing 15 percent of the current population. Ukraine is beaten at top place only by Mexico – 11.9 million immigrants, India – 11.4 million and Russia and China with 8.3 million each. In addition, the migration corridor “Ukraine-Russia” ranks as the third busiest in the world after “Mexico-US” and “Russia-Ukraine.”
In 2010, migrant workers from Ukraine sent their families $5.3 billion, a $2 billion rise on the previous year. Overall, according to the World Bank, Ukraine ranks 11th place on immigration, being one of the largest global transit corridors for labor force and human resources. If existing trends in the economic and political spheres continue, along with the lack of democracy in society and the ongoing dilapidation of public welfare, Ukraine will lose its working-age population even more rapidly, as the fit and able are forced to seek better conditions abroad.
People First Comment: These statistics on their own tell a story of the reality of Ukraine today. However, they do not give the whole picture. Economic migrants the world over tend to come from a fairly defined section of the population, ranging in age from 18 to 45 years. It is the same segment that generates most of the income and, therefore, the wealth of the nation. In Ukraine today, this segment of the population accounts for 17 million people. Therefore, these 6.6 million economic migrants working abroad are equal to almost 39 percent of the working population of the country. According to the World Bank, this offshore workforce contributes around 2 percent to national gross domestic product through the money they send back to their families in Ukraine. No wonder Ukraine is not living up to the economic standards of her close neighbours, as nothing more graphically illustrates the failure of successive governments’ economic policies, whereby 39 percent of the working population are only generating 2 percent of gross domestic product. The government need to wake up to the fact that massive Soviet-style enterprises are a thing of the past. The economy today needs businesses that are nimble, lean and able to respond quickly to economic changes and this requires a job-creation policy through the rapid expansion of the small-and-medium business sector… quite the opposite of current government policy.
Viktor Tkachuk is chief executive officer of the People First Foundation, which seeks to strengthen Ukrainian democracy. The organization’s website is: www.peoplefirst.org.ua and the e-mail address is: [email protected]
