Advertising: Motive Force of Privatization

This thesis was put forth by Oleksandr Bondar, head of the State Property Fund at a briefing, adding, “We plan an active advertising campaign for enterprises all the time the tenders go on. And this is insisted upon by the President and Premier. Our objectives are: first, to attract investors and, second, to demonstrate the transparency and openness of the tenders. This week I will have an Internet press conference. Let’s see how it works.” When asked what was the reason for the experiment, Mr. Bondar explained, “We believe that the Internet is used by people of whohave money and are interested in privatization, so we should direct our advertising at them. What’s the use of adverting on Ukrainian radio, considering that most listeners are pensioners who react only with irritation?” Advertising costs money, so SPF will promote only certain enterprises, including Mykolayiv Alumina and Linos primarily for the purpose of information rather than promotion (SPF believes that there will be enough bidders anyway).

Such SPF activity is understandable. Almost half the first quarter of the year is past and only UAH 125 million has been collected compared to the UAH 500 million planned. “Without nonstandard options (eurobonds and bank advances) getting this amount will be very hard. We are making every effort to organize transparent tenders, but what can we do in the absence of bidders?” Mr. Bondar noted.

UAH 2.7 billion will be hard to get, yet the SPF head says they have prepared proposals for the Cabinet to repeal the earlier Pustovoitenko government resolution suspending the auctioning of energy company shares on the stock exchanges. “I hope this issue will be solved and next week we will resume publications informing about energy companies’ stock quotations,” Mr. Bondar stressed.

The situation with UAH 275 million in terms of government stock dividends expected to be not only received in 2000, but also channeled into payments on the national debt. “The amount as such is not that large, but we managed to get only UAH 80 million in dividends last year. This money is directly dependent on enterprises’ official revenues, yet is generally known that most enterprises have none,” Mr. Bondar complained.

To somehow mitigate the disheartening impression such statistics and comments make, the SPF head summed it all up with a smile, “Last week the main topic was Bondar’s resignation. This time no one has asked a question on the subject. I already have something to be happy about.”