Ukraine may privatize some of its defense enterprises, although strategic defense companies are likely to remain in state hands for some time, Prime Minister Mykola Azarov said on Thursday.
"Privatization is needed if we consider the inflow of investment into this [defense] sector," Ukraine's Unian news agency quoted Azarov as saying during a visit to the state-run Progress aircraft engine plant in eastern Ukraine.
The experience of other countries shows that privatizing defense enterprises may be worthwhile, he said.
Ukrainian officials and defense experts have expressed concern over the state of Ukraine's aging defense industry. Anatoliy Gritsenko, the chairman of the parliamentary committee for national defense and security, admitted last year that most of Ukrainian military's hardware was obsolete.
Some experts have warned that the country's defense industry may collapse in a few years if the government does not undertake urgent modernization.
Ukrainian President Viktor Yanukovych signed decrees in December last year to set up the Ukroboronprom state corporation in a bid to centralize the industry and improve the efficiency of the defense sector.