Thursday, February 10, 2005

Yulia gets to Work

Unraveling years of corruption and oligarchy is a big job, but Tymoshenko has added motivation:

The process is being driven by the country's new Prime Minister, Julia Tymoshenko, who suffered at the hands of the old regime when she spent more than a month in jail on what she says were trumped-up embezzlement charges.

So, with that little thorn in her backside, she's rolling up her sleeves and getting to work:

Firstly, one of Mrs Tymoshenko's first acts as Prime Minister was to begin the reversal of the 2004 privatisation of Krivorozhtal, Ukraine's biggest steel producer. The company employs 52,000 people, and has pre-tax profit of about $300m (£161m).

The move, announced at the administration's first cabinet meeting last Saturday, strikes right at the heart of the Kuchma clan. The company is co-owned by Viktor Pinchuk, an MP who is also Mr Kuchma's son-in-law, and by Rinat Akhmetov, Ukraine's richest man, who bankrolled the election campaign of Mr Yushchenko's defeated presidential opponent, Viktor Yanukovych.

Its sale last year took place amid accusations of corruption and nepotism.

The deal was pushed through by Mr Kuchma in the face of vocal opposition. The tough auction rules set out by Ukraine's state property fund meant that foreign bidders, of whom there were many, were barred from bidding.

Mr Kuchma's son-in-law and others snapped up Krivorozhtal for what was regarded as a ludicrously low price of around $800m; a US-UK consortium had offered $1.5bn.

And so, for the first time in my life, I am in favor of nationalization. In the jubilation over the Orange Revolution, and the promise of reform that it brings is lost the fact that the leader of the revolution is an economist by trade. He appears to understand the role that foreign investment and trade can play in creating wealth for a nation. Until this point, whether it be through faulty ideology, irrational fear, or strictly corruption, no CIS country has really opened itself to the market, and allowed the brilliance and resources of it's people to create the kind of economic growth and world status that by all rights should be theirs.

By nationalizing these politically held (stolen?) entities and reselling them on the open market, Ukraine makes a tremendous step in that direction.


Post a Comment

<< Home