Privatization Transitions To Individual Footing

According to SPF number two Yuri Hryshan, privatizable property will be divided into three groups, depending on the degree of their investor attractiveness. The first includes enterprises that can be exposed to advertised bidding (tenders) without any previous SPF arrangements; the second group is made up of entities that require preliminary financial restructuring and detachment of social facilities. Mr. Hryshan believes that these measures will make practically every enterprise investment-attractive within several months. Finally, the third group is "hopeless." Here, Mr. Hryshan says, "drastic steps must taken in terms of the liquidation and sale of assets.

However, he admits that the above categorization is not accepted by all of SPF departments, but fund leadership is determined. In his words, "We will act this way not because the President said we should..."

Meanwhile, IMF and World Bank suggest using privatization as a means of servicing the public debt. World Bank economist John Hansen is confident that to pay its debts over the next several years Ukraine needs approximately $1 billion from privatization, which is five times the amount expected by SPF in 2000. In addition, this money must be obtained by selling public property to foreign investors, since local ones will pay primarily in hryvnias. Most analysts consider that this goal will never be reached.

"Superprivatization? Forget it. It must be started now, because in January it will be too late," Oleksandr Bazarov, Chairman of the Board, Credit Suisse First Boston, writes in The Ukrainian Economy: A Wholesome Commentary.