Byers to Appoint a New Seller

Oleksandr Bondar’s retirement, although long awaited, caught many people unaware. The Chairman of the State Property Fund tendered his resignation after a cabinet meeting dealing with discipline within state structures. His stepping down obviously indicates that SPF was the target of most criticism, although its performance has had about as many faults as that of any other agencies. It also indicates that his resignation is actually explained by political reasons.

A privatization program for 2003-08 is being prepared for parliamentary hearings. The people’s deputies will determine the rules of global redistribution of state property. Replacing the man in charge of Ukrainian privatization (rather, finding yet another scapegoat) will, of course, make haggling over the six-year program easier. Most likely, financial-political groups as the principal contenders for the state interest in enterprises would prefer a more “loyal” man as Mr. Bondar’s successor, considering that he has of late made no secret of his friction with certain big-time Ukrainian investors. The latter have blocked any more or less attractive tenders by lawsuits. The new SPF chairman will perhaps be considered along with the privatization program. Now it is for the president to propose a replacement.

Pavlo Haidutsky, chairman of the economic policy directorate at the presidential administration, says the main selection criteria will be the support of most parliamentary factions, adding that people not currently involved with SPF stand a somewhat better chance; most likely the new SPF chairman will be “a politician capable of livening up the process.” Mr. Haidutsky believes the new appointment will be made before the end of the week, because drawing out the process would be risky. He also admits that the presidential administration does not have a single candidate for the post.

Meanwhile, unofficial sources indicate that a draft presidential edict proposing a new SPF chairman has been submitted to the head of state, and that the document names people’s deputy Volodymyr Zaplatynsky, member of the SPF board who has until recently shown quite some activity. The said sources also insist that the nominee is in contact with SPF Deputy Chairman Yuri Hryshan. Three other persons are named among Mr. Bondar’s likely successors: First Deputy Chairman of SPF Mykhailo Chechetov, Deputy Chairman of SPF Yuri Hryshan, and Oleksandr Riabchenko, director of the International Institute of Privatization. Mykhailo Chechetov acted as SPF chairman during Mr. Bondar’s frequent sick leaves. Yuri Hryshan was regarded as the most likely successor during the latest hearsay about Bondar’s retirement. Among other things, it is known for a fact that, should Oleksandr Bondar remain in his post, Yuri Hryshan would be fired. Oleksandr Riabchenko proved an expert in his field as chairman of the privatization oversight committee in the previous parliament. In fact, Mr. Riabchenko, when asked to assess the SPF cadre reshuffling, said the new head of SPF would unblock the privatization process in Ukraine. None of the candidates has offered a comment on his chances.

Oleksandr Paskhaver, president of the Economic Reform Center, cuts a matchingly authoritative figure in the privatization domain. However, due to some objective reasons (primarily his own reluctance), his candidacy is practically ruled out. It is very likely that Mr. Bondar’s replacement will be someone heretofore uninvolved with privatization. After all, Pavlo Haidutsky stated that for the new head of SPF at this stage it would be most important to know how to initiate and hold talks, since the procedures of preparation and privatization of property within SPF have long been worked out and rehearsed.

With regard to the privatization process, the replacement of the SPF chairman is most likely good news. Oleksandr Bondar is too well versed in the redistribution of property to unquestioningly agree to a compromise with parliament when it comes to debating the privatization program. His replacement will have to do just that, otherwise he will not be approved by the Verkhovna Rada. He is not likely to represent a specific regional group, as their business interests are too different. However, the financial-political groups, as principal buyers, will in the end appoint the new seller, meaning that property will start being sold at long last.