11:57 07.08.2023

State-owned companies to play key role in restoring Ukrainian economy after war ends – Deputy Economy Minister

4 min read
State-owned companies to play key role in restoring Ukrainian economy after war ends – Deputy Economy Minister

The role of state-owned companies (SOE) during the war increased substantially, and it will remain key in the post-war reconstruction, Deputy Economy Minister Oleksiy Sobolev said at a roundtable entitled "The Role of State-Owned Enterprises in Post-War Reconstruction," which was held recently with the support of the USAID State-Owned Enterprises Reform Activity in Ukraine  (SOERA).

"During the discussion, the participants repeatedly noted that the role of Ukrainian state-owned enterprises increased significantly during the period of full-scale Russian invasion, as well as their substantial contribution to the post-war reconstruction process. At the same time, the need to create conditions for involving the private sector in the recovery was also emphasized," the press release following the discussion says.

USAID Ukraine Senior Project Management Specialist Andriy Nesterenko said that Ukraine has more than 3,200 state-owned and more than 14,000 municipal enterprises. In his opinion, after the end of the war and the beginning of the economic recovery, state-owned companies will be the first to make their contribution to the recovery, and they will definitely be followed by private businesses.

Sobolev said that the Ministry of Economy has developed a list of enterprises that should remain in state ownership, but some of them may be partially privatized.

"Some enterprises played an important role during the war and will play a key role in the recovery of the Ukrainian economy after it ends, so the government is considering only partial privatization of them, in particular through IPOs, to attract investment," the deputy minister was quoted as saying in the press release.

He also announced the preparation of a four-year plan for 2024-2027 by the government, which will be submitted to the European Commission for the development of a program of large-scale assistance to Ukraine. The plan contains a section on state-owned assets and issues of corporate governance and privatization, the deputy minister said.

Project Manager of the OECD Global Relations Secretariat Gabriela Miranda announced the OECD's support for Ukraine in its efforts to rebuild after the war, formalized in a four-year Country Programme that will support Ukraine's agenda for reform, recovery and reconstruction under the partnership agreement that Ukraine entered into with the OECD on June 7, 2023. According to Miranda, within its framework, the OECD will work with the government to continue the SOE reform, privatization, the development of financial markets and the fight against corruption.

Head of the State Agency for Rehabilitation and Infrastructure Development of Ukraine Mustafa Nayyem predicted that during the recovery period, the volume of public procurement will increase significantly, but the perception of the state as a risky customer should be changed so that private companies are not afraid to participate in tenders.

CEO of the state-owned Ukrposhta Igor Smelyansky, who also took part in the roundtable, spoke about how the company is actively working on digitalization and the development of logistics to make its services accessible and efficient for all settlements, in particular those affected by Russian aggression. He reiterated the importance of Ukrposhta obtaining the right to provide banking services, since they are currently unavailable for almost one third of Ukrainians.

Smelyansky also pointed out the need to adapt procedures by international partners to speed up the provision of urgently needed assistance to Ukraine.

At the end of the roundtable, Deputy Chief of Party of SOERA John Tokolish offered the program assistance in various areas of state-owned and municipal enterprises, and also promised continued support of reforms by the SOERA project.

About 100 experts and specialists from various fields of activity, mainly C-level managers (general directors, owners, heads of staff), representatives of international organizations (OECD, EBRD, IFC, IMF), international partners (EU Delegation and European Commission), members of the supervisory boards of state-owned enterprises, and partners from private companies attended the event.