What role will state enterprises play in Ukraine’s post-war reconstruction?

The discussion was organized by the USAID project "Activities within the framework of the reform of state-owned enterprises of Ukraine" (SOERA).

More than 3,200 state-owned and 14,000 communal enterprises work in Ukraine, says Andrii Nesterenko, a senior specialist in USAID project management in Ukraine.

They will be the first to contribute to the recovery of Ukraine at the end of the war, and only later will private businesses join the process.

Due to the full-scale Russian invasion, state-owned enterprises have acquired new roles, said John Tokolish, SOERA’s deputy director.

Ukrposhta, for example, needs the opportunity to provide additional banking services, especially where financial institutions are not ready to offer them, said Ihor Smilyanskyi, SOERA general director.

He added that Ukrposhta is also working on the digitalization of services and the development of logistics that are accessible and effective for all settlements, including those affected by Russian aggression.

The post-war recovery of Ukraine will not be easy. The volume of public procurement will increase significantly, and the perception of the state as a risky customer needs to be changed so that private companies are not afraid to participate in tenders, says Mustafa Nayem, State Agency for Reconstruction and Development of Infrastructure head.

The risks that can hinder this process are already clear.

There is a lack of qualified personnel, which can be helped by optimizing procedures for the re-mobilization of soldiers and the creation of necessary educational programs. Otherwise, Nayem believes, there will be money, but no one to do the work.

Businesses should work more efficiently and transparently, says Andriy Boitsun, an independent consultant on the corporate governance of SOERA and roundtable moderator.

The government has plans for the privatization and implementation of effective corporate governance. These include a section dedicated to state assets, corporate governance, and privatization issues.

A four-year plan for 2024-2027 is currently being prepared, which will be submitted to the European Commission for the development of a large-scale assistance program for Ukraine, said Oleksiy Sobolev, Deputy Economic Minister. The plans include a section dedicated to state assets, corporate governance, and privatization.

The economy of Ukraine will grow thanks to investments, in particular through privatization, said Sokolev. The government is in no hurry to sell corporate rights to all companies, adding that his ministry has developed a list of enterprises that must remain state-owned.

Companies such as Ukrposhta, Ukrenergo, and Ukrzaliznytsia played an important role during the war. Therefore, the government is considering only partial privatization of these enterprises, in particular through an IPO. Corporatization and the creation of independent supervisory boards will allow state-owned enterprises to attract credit funds with lower costs.