Abstract
The economies of the former Soviet republics are all, in early 1993, in a mess. Officially-recorded total output in 1992 was around a third less than in 1989. Inflation across most of the former Soviet Union was being reported at the end of the year at around 30 per cent a month (2230 per cent at an annual rate). The commercial legal framework in most of the successor states is weak, or poorly implemented, or both. The machinery of state was working poorly, and the durability of several of the governments was in doubt. In this situation, the Baltic States appeared in early 1993 to foreign investors to be points of light — albeit small and flickering — in the darkness.
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Notes
Mikhail Glazachev and Aleksandr Yakovlev, ‘Zapadnye investory predpochitayut vkladyvat’ sredstva v Rossiyu, Kazakhstan i strany Baltii’, Finansovye Izvestiya (10 Dec. 1992) p. iv.
UN/ECE, East-West Investment and Joint Venture News, no. 14 (Dec. 1992) p. 25. The ECE also estimated that at the time the cumulative total value of FI capital in Russia was $2970 m, and that in the three Baltic states only $390 m. Russian economists believe that foreign investors’ non-payment (so far) of their full contributions to registered statutory capital of foreign investment projects is so large that the ‘true’ total foreign investment in Russia was only around $1 bn (Aleksei Portanskii, ‘Zolotoi dozhd inostrannogo kapitala poka ne prolilsya nad Rossiei,’ Izvestiya, 29 Dec. 1992, p. 2). Even on this more conservative estimate, it appears that the average size of foreign investment projects is considerably larger in Russia than in the Baltics.
See Hanson, The Baltic States. The economic and political implications of the secession of Estonia, Latvia and Lithuania from the USSR (London: Economist Intelligence Unit, Special Report no. 2033, Mar. 1990, and the historical sources cited there).
See UN/ECE, Economic Survey of Europe in 1991–1992 (New York: United Nations, 1992). Also Hanson, ‘Centre and Periphery: the Baltic States in Search of Economic Independence’, Journal of Interdisciplinary Economics, vol. 4 (1992) pp. 249–67, for details.
Financial Times (9 Sep. 1992).
For more detail, see the sources cited in note 4 above, and Brian van Arkadie and Mats Karlsson, Economic Survey of the Baltic States (London: Pinter, 1992).
Economic Survey of Europe.
Baltic Independent [henceforth BI] (15–21 Jan. 1993 pp. 5; 22–8 Jan. 1993, p. 4).
EBRD, Annual Economic Review1992 (London: EBRD, 1993).
BI (12–18 Feb. 1993) p. 4.
IMF Survey (30 Nov. 1992) p. 364.
BI (19–25 Feb. 1993) p. 4.
EBRD, Annual Economic Review 1992.
BI (24 Dec. 1992–7 Jan. 1993, p. 8; 22–8 Jan. 1993, pp. 4–5; 15–21 Feb. 1993, p. 5).
IMF Survey (30 Nov. 1992) p. 362.
BI (19–25 Feb. 1993) p. 4.
Hansapank (Hansa Bank) Review, Hansapanga Toimetised, III; BI (15–21 Jan. 1993, p. 5; 22–8 January 1993, p. 4).
BI (15–21 Jan. 1993) p. 5.
Hansapank, op. cit.,; BI (19–25 Jun. 1992, pp. 1–5; 26 Jun.-2 Jul. 1992, pp. 1–4).
BI (9–15 Oct. 1992, p. 5; 13–19 Nov. 1992, p. 5; 4–10 Dec. 1992, p. 5); Estonian Radio (7 Jan. 1993); EBRD, Quarterly Economic Review (30 Sep. 1992) pp. 28–30.
From the IMF, World Bank, EBRD and Nordic Investment Bank, Details in BI (13–19 Nov.; 4–10 and 11–17 Dec. 1992; and 15–21 Jan. 1993).
BI (29 Jan.-4 Feb. 1992) p. 5.
BI (19–25 Feb. 1993) p. 6.
Ibid.
BI (19–25 Feb., 1993) p. 4. Employers’ social security costs are of course also important. See the next section.
The material that follows, except where otherwise indicated, is drawn from World Bank, Foreign Direct Investment in the States of the Former USSR (Washington, DC: World Bank, Studies of Economies in Transformation 5, 1992); UN, East-West Investment and Joint Venture News, no. 14 (Dec. 1992), and the texts of the foreign investment laws as translated for the Soviet Business Law Report.
Financial Times (2 Jan. 1992).
BI (27 NOV.–3 Dec. 1991) p. 5.
BI (4–10 Dec. 1992) p. 5.
BI (24 Dec. 1992–7 Jan. 1993) p. 9.
Advertisement in The Economist (21 Nov. 1992) pp. 110–11.
Textile Asia (Aug. 1992) pp. 109–11.
Charalambos Vlachoutsicos and Paul Lawrence, ‘Joint Ventures in Russia — Learning from Experience’, Harvard Business School Working Paper 93–031 (1992).
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© 1996 Patrick Artisien-Maksimenko and Yuri Adjubei
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Hanson, P. (1996). The Baltic States. In: Artisien-Maksimenko, P., Adjubei, Y. (eds) Foreign Investment in Russia and Other Soviet Successor States. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-24892-6_9
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