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Abstract
This article explores the economic policies of Sovrybflot, the Soviet fishing fleet, which was consolidated in 1965 within the USSR Ministry of Fisheries and oriented to a maritime fishing framework of 200-mile exclusive economic zones, implemented by the United Nations. The present study, which draws on accounting records and other primary documents held in the Russian State Archive of the Economy, argues that the Red Multinational Sovrybflot enlarged the USSR’s economic impact on fisheries and helped to create Red Globalisation. However, Sovrybflot acted in the global market under the financial parameters established by Soviet accounting practices, which produced discrepancies (covered by the state) between planned and real losses. The dissolution of the USSR, combined with the privatisation of Sovrybflot and the loss of public financial support, led to a decline in the Soviet maritime and fishing presence worldwide and forced the company into bankruptcy.
Acknowledgements
This research would not be possible without the pre-doctoral contract signed at Las Palmas University (2013-2017) by the former PhD student, as well the direction of the Professor Santiago de Luxán Meléndez. I also thank the anonymous reviewers for their valuable comments. I am responsible for all mistakes.
Disclosure statement
The author reports no potential conflict of interest.
Notes
1 Vneshnetorgovoie Ob´edinenie (A VTO, or ‘Foreign Trade Organisation’ in English, was an authorised enterprise directly answerable to a specific Ministry of the Soviet Union (e.g. maritime transport, finance, or, in this case, fishing); VTOs oversaw export/import operations and provided services in the international market, according to the Ministrýs specialisation. See Hill (Citation1989, 124) and Gardner (Citation1983, pp. 1–4).
2 The most frequently recorded socialist trade organisations, which engaged in overseas commerce and invested in Western companies, were the following: Dal, Ciech, Paged, Animex (Poland), Balkancarimpex (Bulgaria), Hungarotex, Tungsram, Medimpex (Hungary). See: Hill (Citation1989); McMillan (Citation1987, pp. 206–219).
3 A financial term used in capitalist economics to explain a ‘market condition, when capital and other resources are allocated to projects with the highest profitability’, calculated as profits/turnover or profits/total assets. The Soviet Union’s non-orientation to profits (as a consequence of having abolished private property) prevented it from seeking allocational efficiency or reflecting this efficiency in its accounting records. Statements about the allocational inefficiency of the planned economy are rooted in the writings of Friedrich Hayek, an influential liberal economist from the Austrian school of economics. In the early 1920s, it was Ludwig von Mises who predicted the breakdown of the USSR, due to its ‘inability to allocate resources efficiently under the socialist accounting system, as the system could not allow the measurement of the real profits and losses’. Alec Nove, an outstanding Soviet economic historian, definitively denied the allocational efficiency of the Soviet economy. See: Hayek (Citation1935); Mises (Citation1951); Nove (Citation1961 pp. 34–130); Nove (Citation1991).
4 The microeconomic idea that a firm operates on the production frontier, i.e. producing the maximum possible output for a given level of input. See Whitesell (Citation1990).
5 As access to some papers is restricted for 35–40 years, full access may not be allowed until 2030 or later.
6 Hereafter, the following abbreviations will be used in succeeding order when citing documents: fund (f.), opis (op.), tom (t.), delo (d.), list (l.).
7 The Sovrybflot annual reports for 1966–1977, 1979–1986, and 1990 are kept in the RGAE; the 1987, 1988 and 1989 issues are missing.
8 Another name for the Ministry of Fisheries.
9 RGAE, f. 8202, op. 20, d. 108. On approval of the regulations of the Sovrybflot (Order on the establishment of the Sovrybflot dated 14-06-1965 No. 154 of the State Committee for Fisheries [Ob utverzhdenii polozheniya o Sovrybflote. Prikaz o sozdanii Sovrybflota ot 14-06-1965 № 154 Gosudarstvennogo Komiteta po Rybnomu Khoziaistvu].
10 RGAE, f. 8208, op. 25, d. 172. Personal files for 1962–1994; Federal’noie Agentstvo po Rybolovstvu, ‘110 years since the birth of Alexander Ishkov’ [110 let so dnia rozhdenia Aleksandra Ishkova].
11 RGAE, f. 8208, op. 25, d. 21, d. 255. Personal files for 1962–1994.
12 According to estimates made by the United States Department of Commerce, in relation to the Soviet Fishing Industry, from 1956 to 1965, USSR investment doubled from 144 million roubles to 290 million roubles a year. During 1966–68, nearly 1.7 million roubles were invested in the fishing industry, including 1.2 million directly in the fleet. During the 1970s, Soviet investment in the fishing fleet surpassed one billion USD. From 1928 to 1975, Soviet investment totalled 1.2 billion roubles; in 1975 alone there was an annual investment of 800 million roubles. See Crone Bilger (Citation2014, pp. 59–61).
13 RGAE, f. 8202, op. 22, d. 441. Published statistics for the internal use of the Soviet fishing industry 1960–1971 [Opublikovannye statisticheskie dannye dlia vnutrennego pol’zovania sovetskoi rybnoi promyshlennosti 1960–1971]; See also: Yányshev Nésterova (Citation2014b).
14 FAO information about world catches has been available since 1964, as reflected in Figure 1. See FAO, Fisheries and Agricultural Department.
15 ‘Inland’ catches are catches from lakes, reservoirs or water courses within USSR territory. See Berka (Citation1989).
16 Taking into consideration the applied terminology, ‘total distant’ catches included both ‘coastal catches’ and catches in other regions.
17 GRT: gross register tonnage.
18 As Sovrybflot statistics are discontinuous, it is impossible to provide full information on destinations for the whole period of the fleet’s activity.
19 RGAE, f. 8202, op.19, d. 145, ll. 15–19, 140–142. Declassified. Report on the width of territorial waters and the positions of different countries [Doklad po voprosu o shirine territorial’nykh vod i pozitsii raznykh stran].
20 Ibid.
21 Ibid.
22 RGAE, f. 8202, op. 20, d. 8637, ll. 32–33. The Sovrybflot Annual Report for 1985.
23 Presumably nearly half of the harvested fish were directed to the Soviet market. This can be deduced from the following calculation: the annual fish consumption per capita for 1955–1990, reported by the Central Statistical Office of the USSR (Central Statistical Office, National Economy of the USSR) was half as much as the result obtained by dividing total annual catches by the population of the USSR. The remaining fish were sold or bartered on the international market to obtain freely convertible currency; the USSR needed this currency to pay, all at once, for technological equipment from Western industrialised countries.
24 Hereafter, the exchange rate (1 US dollar equalled 0.6072 Soviet roubles on 3 January 1990) of the State Bank of the Soviet Union is applied. See the historical rates of the Central Bank of Russia at https://web.archive.org/web/20130203063808/http://www.cbr.ru/currency_base/OldDataFiles/USD.xls, accessed on 20 May 2020. Alternative exchange rates are indicated by Kalabekov (Citation2015, p. 19). This takes into consideration the inflation of the US dollar from January 1990 to 2020 (104.15%). The inflation calculator on the official page of the United States Department of Labor is available at https://www.dol.gov/general/topic/statistics/inflation; it was accessed on 20 May 2020.
25 It should be stressed that, of all Sovrybflot joint ventures, only Sovhispan has been fairly well studied, and the research on other joint ventures is required. In Sovhispan, Sovrybflot maintained 50% of shares and Sovhispan worked as a ship chandler, providing supplies and technical repairs to Soviet vessels at shipyards in the Canary Islands. During the operating period, Sovhispan generated profits and distributed dividends, especially after 1981. Sovhispan carried out fishing activities in the territorial waters of Western Africa, Canada, and Great Britain; exported fishing-related technical equipment to the USSR, sold fish to the Spanish, European and African markets, and was involved in miscellaneous operations. With Spanish and foreign partners, it established its own joint ventures, focusing on Western African countries, such as Togo, Benin, and Cameroon. On the political level, Sovhispan, founded in 1971, played a crucial role in restoring Soviet-Spanish relations in 1977, as its foundation allowed it to negotiate and promote business diplomacy between Spanish and Soviet economic agents, including Sovrybflot proper. Soviet economic activity in the Canary Islands had a positive impact on the backward local economy, while the Soviet Union gained an operational base in the Central Atlantic. See: Yányshev Nésterova and de Luxán Meléndez (Citation2020); Yányshev Nésterova (Citation2019); Yányshev Nésterova (Citation2016); Moseykina and Yányshev Nésterova (Citation2016); Yányshev Nésterova (Citation2014a).
26 Additional research on other joint ventures, especially Sovam and Marissco, is needed to expand our knowledge of the Red Multinational Sovrybflot and to complete the bigger picture.
27 RGAE, f. 8202, op. 23, d. 1794. The Sovrybflot Annual Report for 1991.
28 Vertical analysis = fixed assets/total assets, debtors/total assets, own sources/total liabilities, bank loans/total liabilities.
29 Working capital (current assets/current liabilities) is a tool of the capitalist economy, providing a modern evaluation of Sovrybflot’s performance.
30 E.g. from the sale of fish products of mixed Soviet-foreign companies and leased vessels: ‘the Sovrybflot was provisioned a loss in the amount of 700,000 roubles in a balance of losses and profits.’ RGAE, f. 8202, op. 20, d. 3633, l. 34. The Sovrybflot Annual Report for 1973.
31 It is thought that the difference between planned and real losses was aggravated by double-digit inflation in the 1970s and early 1980s (See: World Bank Data), given the international activities of Sovrybflot and payments in different currencies, the rates for which were subject to fluctuations, hardly foreseeable even by the Gosplan.
32 RGAE, f. 8202, op. 20, d. 4603, l. 4. Sovrybflot Annual Report for 1975.
33 RGAE, f. 8292, op. 20, d. 4603, ll. 1–6. The Sovrybflot Annual Report for 1975.
34 RGAE, f. 8202, op. 20, d. 4603, l. 39. The Sovrybflot Annual Report for 1975.
35 In 1975, Sovhispan (Sovrybflot’s 50% share), showed a profit of 94.41 million pesetas and dividends of 25 million pesetas. See Yányshev Nésterova and de Luxán Meléndez (Citation2020, p. 13).
36 RGAE, f. 8202, op. 23, d. 1794. The Sovrybflot Annual Report for 1990.
37 Based on the available documents, the non-payment management problem of 1975 was considerably foreseen by the planners. Presumably, the double-digit inflation affected the national currencies of the host countries where Sovrybflot operated, distorting the calculations of planovye ubytki, previously realised and expressed in roubles.
38 In the USSR, foreign currencies were divided into three main groups: (1) freely convertible currencies: US dollars, Federal Republic of Germany marks, Japanese yen, British pounds sterling, French francs, and other currencies identified by the International Monetary Fund; (2) ‘closed’ currencies for capitalist countries, currencies with limited conversion possibilities, and currencies for developing countries; and (3) currencies used for transactions between socialist countries, involving the conversion of roubles and clearing operations. Despite the presence of these different foreign currencies, all plans were calculated in Soviet roubles; the conversion of all currencies to Soviet roubles was performed in accordance with the official mandate of the State Bank of the USSR. See Rotleider (Citation1985, p. 316).
39 The declassified document, ‘Report on the implementation of the foreign exchange plan’ for 1969–1972 is available; it displays the same typology: the planned outcomes surpass the incomes.
40 Vsesoiuznoie eksportno-importnoie ob’iedinenie po prodovol’stvennym tovaram, All-Union Export-Import Association for Food Products, in English.
41 Additional research into the bookkeeping of Prodintorg and/or the Ministry of Foreign Trade is needed to fill the ‘structural’ gaps in their interconnections.
42 Postanovlenie TSK KPSS, Sovmina SSSR ot 19.08.1986 N 991 (red. ot 06.05.1989) ‘O merakh po sovershenstvovaniu upravlenia vneshneekonomicheskimi sviaziami’.
43 Ukaz Prezidiuma Verkhovnogo Soveta SSSR ot 13 yanvarya 1987 goda ‘O voprosakh, svyazannykh s sozdaniem na territorii SSSR i deiatel’nost’iu sovmestnykh predpriatii, mezhdunarodnykh ob’iedinenii i organizatsii s uchastiem sovetskikh i inostrannykh organizatsiy, firm i organov upravleniia’.
44 Zakon RSFSR ot 24.12.1990 N 443-1 (red. ot 24.06.1992, s izm. ot 01.07.1994) ‘O sobstvennosti v RSFSR’.
45 RGAE, f. 8202, op. 23, d. 2024, l. 1.
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Irina Yányshev-Nésterova
Irina Yányshev Nésterova, PhD in History (2017), Postdoctoral Researcher at the University of Las Palmas de Gran Canaria, Spain.