Economic expert, and specialist of the sales department of the Dragon Capital

Serhii Fursa

Fair and transparent privatisation leads to a better investment climate

Privatisation is an additional factor in the revival of small and medium-sized businesses. After the war, the privatisation process will play an important role.

Ukraine has a sufficient number of objects for privatisation. I assume that part of the Russian assets will be nationalised and will also be subject to privatisation.

Involvement during Russia’s war against Ukraine

Serhii Fursa touches on a wide range of financial issues, caused by Russia’s war against Ukraine. He covers breaking news, explaining it from an economic point of view and clarifying the key nuances associated with the financial side of every piece of news, including those related to the anti-Russian sanctions imposed by the EU and the USA.

Which objects can be privatised first and how do you see the impact of privatisation on the post-war recovery of the country?

As a rule, privatisation has been an additional factor that facilitated SMEs’ recovery. After the war, the privatisation process will play an important part. Firstly, Ukraine has a sufficient number of objects for privatisation. Secondly, I assume that part of the russian assets will be nationalised and will also be subject to privatisation.

The privatisation procedure is about fighting corruption in the first place. Because the bigger the share of state-owned enterprises within the economy, the higher the corruption levels.

Privatisation is also a positive sign for investors. A fair and transparent privatisation procedure leads to significant improvement in investment climate. Only this way privatisation has a chance of becoming one of Ukrainian economic growth drivers.

Can you think of any mechanisms for ensuring the transparency and accountability of the process of disposing with international partners’ funds?

I find the EBRD1 model of financing construction of roads in Ukraine perfect for any type of a foreign project. It implies that Western partners set up a legal entity that should carry out the distribution of funds, hold tenders, as well as choose what is to be financed and in which way.

As a project owner, the government of Ukraine shall decide on which projects are financially feasible and submit them for consideration of such legal entity (or a fund, whatever). Once the project is financially feasible, the fund is going to approve it, and allocate the resources for it. Such was the EBRD model.

This mechanism will enable Western governments to control the distribution of their taxpayers’ money. For Ukraine, it shall imply an increase in the level of trust by minimising corruption risks.