Privatization or nationalization – what do Ukrainians stand for?

The Kyiv International Institute of Sociology conducted a study in which, among other things, Ukrainians were asked about their attitude to state policy in the field of property. The results clearly explain why the news about the successful privatization of yet another state facility (in most cases, unprofitable or non-working) causes heated discussions in the comments.

As the research shows, 23.5% of Ukrainians are in favor of broad nationalization, believing that it is the state that should manage enterprises. 18% believe that extensive nationalization is not necessary, but all existing state-owned enterprises should be left in state ownership. We will remind that there are more than 3,000 of these in Ukraine, of which more than 70% do NOT bring income to the state (2021 data).

Regarding privatization, 37% of Ukrainians believe that efficient state enterprises should be left in state ownership, and all others should be privatized. And only 10% are in favor of the widest possible privatization.

Interestingly, according to a Vox Ukraine survey conducted at the beginning of 2023, 81% of Ukrainians consider anti-corruption reform to be key. As we can see from the indicators above, most citizens are not aware of the connection between state-owned enterprises and corruption and the best way to overcome the latter.

A few numbers to demonstrate the magnitude of the problem. According to the Ministry of Economy, Ukraine loses 1% of GDP every year (2019) from corruption at state-owned enterprises. And every 6 proceedings that took place in NABU and SAP in 2020 related to embezzlement at state-owned enterprises.

The most effective way to overcome corruption is to get rid of the assets that are its source, that is, to carry out privatization. Other advantages of privatization include attracting investments, creating new jobs, paying off old debts of state-owned enterprises, economic growth, and indirectly supporting the Armed Forces, because the funds and subsequent taxes received from privatization go to support the Ukrainian army.

However, as we can see, the majority of Ukrainians do not yet understand the benefits of privatization, and a significant part of society (42%) generally supports nationalization in one form or another.