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. Last Updated: 07/27/2016

Kiev Urges Masses to Claim Coupons

KIEV -- Ukraine, criticized for the slow pace of its privatization program, says it will press ahead with the scheme even though a third of the population has yet to stake its claim in the massive sell-off.


State television has launched a major advertising campaign to urge 16 million people who have yet to pick up their privatization certificates, with which they can buy stakes in firms put up for sale, to collect them by the June 30 deadline.


"This is your portion of the nation's wealth," says one advertisement of the certificates, to which every man, woman and child is entitled.


"It is the position of the State Property Fund to complete everything by June 30," fund adviser Myron Wasylyk said in a recent interview.


Ukraine has been criticized by the International Monetary Fund and other Western financial bodies for slow progress in privatization, which began in 1994 with President Leonid Kuchma's economic reform program.


More than 20,000 small enterprises still remain in state hands. A year ago the parliament imposed a moratorium on privatization. It later exempted many enterprises, but a ban continues on the oil and gas sector.


"The certificates have been available for 18 months. Extending the deadline will not speed up the process," Wasylyk said.


Each certificate is worth 50 million karbovanets ($275) and must be invested by Dec. 31.


Wasylyk said a recent public opinion poll indicated that 82 percent of the 16 million Ukrainians who have not picked up their certificates said they would collect them by the deadline.


"There are long lines at the state savings banks," he said, referring to the banks where certificates are distributed.


The long queues and bureaucracy have been blamed in part for Ukrainians' resistance to participating.


"Some people stood in line for five hours to get their certificates. This elicits negative emotions in people to the very idea of privatization," said Yuri Taratorin of the Ukrainian Auction Center.


Taratorin also blamed a lack of understanding of the certificates' purpose. The radio and television advertising campaign this month has been attempting to reverse this.


"The information we're getting now is the queues at banks are getting longer. Queues are a key indicator," said Andy Bilyk of Gavin Anderson, the U.S. advertising firm running the Western-style campaign. Chiara Clothier, project manager for the International Finance Corp., the private-sector arm of the World Bank that readies enterprises for privatization, said she was optimistic most certificates would be claimed by June 30.


Clothier said many enterprise directors discouraged workers from picking up certificates when they became available for fear of becoming accountable to shareholders as firms once run by the government became joint-stock companies.


"A year ago there was a lot of resistance among the enterprises, but now they're more pragmatic. It's not going really, really fast like it did in Russia, but it is going," she said.


"Mass privatization must be done. Enterprises can't continue hanging around the neck of the government forever," she said.