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Alexander Okhrimenko

President of the Ukrainian Analytical Center

24.03.2015
13:26

The raid on Kolomoisky’s business is a big mistake by the government




People may feel differently about Kolomoisky’s business. They may curse it, envy it or praise it. But the fact remains that at present Kolomoisky’s business, along with the business of our other major oligarchs, makes up the foundation of Ukraine’s economy. Whatever our presidents and prime ministers may tell us about mythical “investors”, who are aching to invest money in Ukraine, realistically only Ukrainian investors invest money in Ukraine, including such an odious person as Igor Kolomoisky.

His business empire really is large, and is increasing in size. There is nothing surprising about this – every oligarch wants to be bigger and more important. Most of all, of course, he wants to create a transnational corporation, to have revenue on an international level. And who knows, perhaps Kolomoisky with his international ties among the diaspora will succeed in this. So the question arises: why was there a raid on the Ukrtransnafta companies, and now there is a plan to seize Ukrnafta. What will this give the Ukrainian economy, or the people who work at these companies, or the Ukrainians themselves? Nothing good. It is not hard to take the companies, but to manage them without investments or with established business connections is not realistic.

The state as a manager is the most inefficient manager. So there is nothing good if major oil companies will now be run by state officials, who always complain that they don’t have any money, that they are here temporarily, that they need to solve their narrow official interests. The history of Ukriane has a rich experience of how enterprises were run by state officials. These enterprises were simply looted, and there was no development in them. Without real private investors, nothing will work out. So you can take Ukrtransnafta and Ukrneft away from Kolomoisky, but what will happen to these companies afterwards – that is the question. At best they will be given to another oligarch, or more probably to a “hero” of Maidan, who needs to be paid off for sponsorship.

If this problem is approached seriously, then the privatization of all the companies should be carried out efficiently, and the state’s share in the business should be sold to structures owned by Kolomoisky. In any case, they have long been working with these assets, and know all the pluses and minuses well. They understand where the money is, and where the losses are. And there are more losses than revenue. These are not the oil wells of Western Siberia or the Persian Gulf. You can’t earn much here, and you’ll lose even more if an incompetent manager is put in charge.

So the people who are glad that the oligarchs’ property is been shared are very much mistaken. The division of property of oligarchs after Maidan destroyed Ukraine’s economy and continues to undermine it. For the economy of Ukraine to revive, property should not be carved off, but the right of ownership should be strengthened for once and for all for the objects and assets which are already in private ownership. So that business, above all big business, can start to return money from offshore companies and invest in Ukraine’s economy. Then the economy really will receive foreign investments, $20 billion, $30 billion or even $50 billion. But with populist stunts and constant redistribution of business assets, there will not be any investments in Ukraine. Just as there will not be any work for Ukrainians, or decent salaries – there will be nothing but meaningless slogans from the era of Bolshevism: “Seize and share”.

Source: obozrevatel.com

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