Ukraine to Resume Asset Sales Soon to Help Sustain Economic Growth

KIEV, Ukraine -- Ukrainian deputy prime minister Oleh Rybachuk said the government will accelerate state-asset sales as soon as the second half of the year after reviewing prior sales under the former administration of President Leonid Kuchma.

‘‘We expect a sharp increase in investments’’ because the government will be selling assets to the highest bidder, Mr Rybachuk said in an interview on Sunday at the annual meeting of the European Bank for Reconstruction and Development in Belgrade. ‘‘It won’t be the same process anymore when in order to participate in Ukraine’s privatisation you’d have to be a member of Mr Kuchma’s family or at least a friend of somebody’s in the government.’’

Ukraine wants to resume state-asset sales to help sustain economic growth and attract foreign direct investment. Its near $60 billion economy is expected to grow at least 8.2% this year, compared with 12.4% in 2004.

‘‘We clearly need a new privatisation programme’’ and the government expects to agree on it by mid-June, when the country holds a so-called ‘mini-Davos’ investment forum in Kiev,’’ Mr Rybachuk said.

The country may overturn the sales of about 30 companies that were sold at discount prices by Mr Kuchma’s administration, he said. Viktor Yushchenko, who won December presidential elections, has said he wants to revise the 2004 sale of VAT Kryvorizhstal, the country’s biggest steel maker, to a company co-owned by Kuchma’s son-in-law.

Once the list of controversial asset sales is issued, the government will ‘‘draw a line’’ under the process to give ‘‘a clear signal it won’t be extended once approved,’’ he said.

Asset sales of state-owned companies have been stalled since before the first round of presidential elections in October 2004 and no foreign investor won tenders to buy Ukrainian assets for at least two years.

The government may sell companies such as VAT Ukrtelecom, the country’s national telephone company, and some electricity companies to investors via open tenders, Mr Rybachuk said.

Ukraine expects to join World Trade Organisation by the year-end, according to an ‘‘optimistic scenario,’’ which would also help to further improve investment climate, Mr Rybachuk said. Ukraine also seeks further integration with Europe, said Rybachuk, who is responsible for integration with Europe.

‘‘I can’t say when I expect to see Ukraine in the EU,’’ Mr Rybachuk said.

‘‘I believe there will be a first opportunity to look at the chances after a’’ summit meeting between Yushchenko and UK Prime Minister Tony Blair ‘‘in Kiev this autumn.’’

Source: Bloomberg