Rustem Umerov, Chairman of the SPFU spoke at the International Investment Forum “REBUILDING UKRAINE WITH THE PRIVATE SECTOR: International Investment Fair”
Rustem Umerov, Chairman of the State Property Fund of Ukraine took part in the international forum organized by Ukraine Invest.
During his speech, Rustem Umerov called for investing in Ukraine and noted that the State Property Fund intends to create a Ukrainian Sovereign National Wealth Fund, using the experience of other countries in managing state assets and investing.
Full text of Rustem Umerov's speech:
Ukraine has long been in the focus of the whole world as a new leader, as a nation that wins. We not only withstood the first blow, but we also delivered a series of strikes in response.
After the victory, Ukraine will be the epicenter of economic growth. We are already contributing to the food security of the world, we are already a driver of the global military and industrial industry. And in the coming years, Ukraine will be the main construction site in the world. We, Ukrainians, have a rare asset – courage, ingenuity, creativity.
The world's foreign direct investment sector amounted to $1.6 trillion in 2021. Instead, unfortunately, we have received less than $30 billion in foreign direct investment in as much as 10 years.
Big changes are now taking place in the investment architecture itself. Large capitals have accumulated in the world. However, there is a lack of opportunities for high returns investments. The return on investment in developed countries is now less than it can be in Ukraine.
A significant part of the world capital is concentrated among institutional investors, such as sovereign wealth funds, infrastructure funds and pension funds. These funds manage many trillions of dollars. Previously, these investors have not seen Ukraine. We haven't been on the radar of big players before. Now we are working to ensure that Ukraine is included in the strategies of the largest investment funds in the world.
What can Ukraine offer the world?
Ukraine's recovery after the war will absorb at least a trillion dollars. We have a lot of things destroyed. We will have new cities and industries. We will not build old factories. We will build the latest enterprises. We are in the center of Europe; we are a growing market. Although, unfortunately, so far Ukraine is not only emerging market, but also emergency market.
The valuation of all Ukrainian business is now at a minimum in both the private and public sectors. And we, unfortunately, have very minimal multipliers. On the other hand, it means huge potential for growth.
As for attracting investments and creating the national wealth of Ukraine, there are the following strategic objectives:
1. We must include all available resources in the business process. All means of production should be in the service of the entrepreneur. Nothing can stand idle.
2. We must create production facilities with deep processing of our natural resources within the state. This is the key to an economy with high added value.
3. We must integrate into the global division of labor, opening up new markets, industries and technologies.
What can we, as the State Property Fund of Ukraine, do to integrate Ukraine into the global investment architecture?
Now there is a change in attitude to state property. Ukraine needs a unified center for managing state property. Today, state property is scattered across 96 governing bodies. As a result, the state does not even have an adequate assessment of the real value of what belongs to it.
The best state-owned enterprises, natural resources and licenses to use these riches are a national treasure. On this basis, new leaders of the economy can and should appear. We call them National Champions.
These National Champions should become a model of corporate governance in accordance with international standards as well as become a magnet for talent and a forge of investment and corporate governance personnel. The rest of the state property should be privatized at auctions to provide tools for the activities of small and medium-sized businesses, which, in turn, will provide opportunities for its development.
In general, these decisions will rid the investment sector of unnecessary bureaucracy, allow effective management to emerge, and attract really large capitals.
On the establishment of the National Sovereign Wealth Fund of Ukraine
Consolidation of state assets will allow the creation of the Ukrainian National Sovereign Wealth Fund and cooperation with other sovereign and investment funds.
Cooperation with sovereign funds of our allies is our chance to attract large investments now. Our partners believe in the future of Ukraine and understand the inevitability of our victory and the restoration of Ukraine. Accordingly, they are ready to invest in our state.
The creation and development of a player such as the Ukrainian Sovereign Fund is a magnet for investment.
Currently, the State Property Fund is actively consulting with international partners on the creation of the Ukrainian Sovereign Fund.
Taking this opportunity, I would like to invite everyone to join this initiative. Your ideas are valuable to me. I will be glad to talk about this in detail.
On the issue of privatization
Ukraine restarted privatization in 2022. This is an important step towards the resumption of business activity in Ukraine, strengthening the economic security of our country.
Privatization is needed for the development of the economy, attracting investment. Otherwise, state property will continue to lose value, and the state will lose money.
The first auctions of this year demonstrated the presence of demand in the market, the business is alive, and Ukrainian business is ready to invest. We set ourselves a clear schedule, strive to complete privatization as soon as possible.
All available objects can be found on the website: privatization.gov.ua.