Maidan

If we can trust the facts as presented in the two articles, then I dont think you need to hypothesize some sort of dark conspiracy to explain the behavior of the potental investors, the oil suppliers or the world bank. This is just the normal, expected hardball that such organizations are used to playing. They want to buy low now, and sell high later. They are speculators, that is what they do. Given that, it is the Ukrainian Government's responsiblity to play just as tough.

Generally speaking, and knowing nothing about the specific situation with this particular steel plant, it is usually assumed that it is better for an enterprise to be privately and operated rather than to remain in the control of a government, for the following reasons (among others): 1) The presumption that private owners are able to manage a business more effectively than a government can, whose policies have to be driven primarily by a political process, rather than by profitability; 2) Privatization is an opportunity to attract private investment, which is lost if the government retains control; 3) History seems to indicate that in the long run, state-run enterprises are not competitive in the global market, mostly because of rising payroll costs.

Against this are certain costs associated with privatization: 1) The near certainty of lay-offs and/or payroll cuts, negatively impacting local employment and earning rates in the region surrounding the plant 2) Loss of control over the plant and it's investment policies, including the possiblity that most of it's profits could be diverted out of the country.

This would seem to indicate that the privatization of state-run industries should neither be resisted nor pursued as a matter of principle, but that each case should be assessed independently. In theory, there should be a 'deal' in which the Ukrainian people come out ahead, overall. National law must be taken into account, but in general a government has certain ways to leverage the deal.

An independant assessment of the fair market value of the enterprise would seem to be absolutely essential. This includes not only the value of the current assets, but also the expected value of future private investment, which will determine the tax value. The government's goal is to get more in future taxes on private investment than it currently makes running the plant itself.

Once a value has been determined, then certain non-business related questions remain to be addressed. Who is to own the shares of the new company? What percent can be foreign, what percent is to be native? What percent can consist of large investors, what percent small ones? If proper management of the enterprise is considered essential to the public good, then representiatives of the public can be included on the board. The potential buyers can be required to invest some amount of money in local economic development, in ways that will eventually benefit the company itself (supporting higher education is a safe bet even for profit-greedy capitalists). Perhaps the buyers can be requried to set up a non-profit foundation with some amount of seed money for the purpose of supporting social services of various kinds.

Lots of possiblities exist. It's up to the government to take advantage of them.