Joint Ventures with Foreign Capital Participation in the Soviet Union: Experiences and Future Outlook

Ranenko, V. & Soloviev, I. (1989). Joint Ventures with Foreign Capital Participation in the Soviet Union: Experiences and Future Outlook. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-89-003

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Abstract

This working paper is one of a series produced by TES-MTC project discussing the problems of East-West Joint Ventures located in the CMEA countries on a country basis.

One of the most interesting and noticeable changes in East-West economic relations over the past years has been the rapidly increasing number of East-West joint ventures hosted in the Soviet Union. At the end of 1987, there were only 19 such joint ventures. In March 1988, the number had almost doubled (36). As of October 1988, the number is now approaching 100 (99 established). The number of East-West joint ventures located in other countries is also increasing at various rates. Many countries which are hosting such joint ventures are now analyzing the current practice as part of a common analysis of their national economic development and in some cases have already introduced changes in their legislation to improve the conditions provided for foreign joint venture partners (e.g., Czechoslovakia and Hungary). Many more joint ventures are being negotiated, and numerous proposals are still to be considered between both Eastern and Western partners.

With such high process dynamics, it is very important to remain up-to-date with the latest legislative changes and also to follow closely new results achieved by national groups and research institutes in analyzing financial and practical aspects of joint ventures.

The Management of Technological Change (MTC) project, part of the Technology, Economy and Society (TES) Program, has developed an international network which is performing an empirical study on practical problems of joint ventures hosted in various CMEA countries. This working paper is an intermediate report from the Soviet national group, headed by the All-Union Institute for External Economic Affairs in Moscow. The working paper highlights the practical situation in the USSR, both as regards legislation and managerial practice of operating joint ventures and also concentrates on certain issues concerning the current practical experience of operating joint ventures in the USSR. The authors are both participants in MTC's international network and close collaborators of the project.

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