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. Last Updated: 07/27/2016

Kiev to Hasten Privatization

"This is an extraordinarily important step. This means privatization in Ukraine has truly begun," State Property Fund Chairman Volodymyr Pryadko said after the vote.

The program envisages increasing the number of privatized firms from 2 percent to 28 percent of the economy by the end of the year and 66 percent after three years.

This year, 20,000 small enterprises and 8,000 medium- to large-scale firms are to be turned over to private hands.

The sell-off is calculated to bring into state coffers 21 trillion karbovanets in local currency ($550 million at street rates) and $230 million in convertible currency.

Western experts praised parliament for its approval. But they were less confident Ukraine could implement the program.

"This is a crucial political move and the program is very interesting," said Walter Popiel of the International Finance Corporation. "But it's unrealistic, because the country is not ready to conduct such radical privatization this year."

Barriers to rapid privatization include gaps in legislation and unprepared or unwilling regional officials, he said.

Privatization in Ukraine has proceeded much more slowly than in neighboring Russia, where the majority of small-scale firms have been turned over to private hands.

In two years of independence, Ukrainian deputies had passed none of a series of privatization programs presented by the government. The collapsing economy, hit by 80 percent monthly inflation, remains largely centralized.