International donors ready to support the establishment of Ukraine's national wealth fund
It is planned to create a National Wealth Fund in Ukraine, which should deal with unprofitable state-owned companies not subject to privatization and are sovereign. International donors have offered to provide the necessary funds for it.
The Deputy Chairman of the State Property Fund, Oleksandr Fedoryshyn, reported this to Ukrainian Radio.
What is the problem?
Oleksandr Fedoryshyn noted that the current state policy aims to reduce the share of its presence in the economy.
"According to our calculations, today, there are about 3,600 enterprises in the state, and almost 2,400 were transferred to the fund by the government's decision. We conducted an internal analysis of each of these enterprises and saw that the vast majority – 60% – of those transferred to us – these are just empty companies," emphasized the deputy chairman of the State Property Fund of Ukraine.
He says such "empty companies" generate a billion in losses yearly. Therefore, cleaning up the economy by eliminating them is an urgent and key goal of the Fund.
What is the solution?
In Ukraine, they plan to establish a National Wealth Fund to handle state–owned companies that can't make profits and aren't allowed to be privatized. International donors are prepared to provide money for this.
How does it work?
Such enterprises can be divided into three categories:
- those that need to be eliminated
- those where the State Property Fund of Ukraine conducts privatization work (about 300 of them)
- and so-called strategic companies
" When the state ponders what to do with strategic third parties and whether it'll be an effective owner in such a situation, it looks to see what other countries are doing. They also conclude that it is necessary to create an appropriate structure, which is this National Wealth Fund, which manages strategic assets that will never be subject to privatization or liquidation. They will remain in the structure and property of the state," Fedoryshyn explained.
He noted that the strategic directions mean the defense, energy, and medical sectors.
"For the creation of the sovereign wealth fund and the organization of its activities, individual donors agree to allocate funds, for example, the UAE Sovereign Fund. A cooperation agreement has been signed with it, within the limits of which they allocate funds. So, we're now working to construct a new state property policy framework, getting rid of everything that hasn't worked for the past 30 years," Fedoryshyn explained.
According to Fedoryshyn, work is underway on preparing the law, which should "ensure at the legislative level that specific enterprises are state-owned, sovereign and no one should encroach on them."
At the same time, all sovereign assets, remaining state property, must be personified by some state body.
"From our side, there is a proposal that such a body should be the State Property Fund. According to our findings, those sovereign assets that the Fund will account for will be transferred to the management of the sovereign fund, which will create sub-holding companies in the future," explained the deputy head of the State Property Fund of Ukraine.
As reported, on August 11, the government transferred unified property complexes of state-owned enterprises, institutions, and organizations (a total of 30 objects) from the sphere of management of authorized management bodies to the sphere of management of the State Property Fund.
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