Financial, Legal Problems Beset Soviet Ventures

More than 1,000 foreign firms have created formal joint ventures with Soviet partners but many of the enterprises have failed to start up and some have gone bankrupt, the official Tass news agency said Friday.

Tass said the Finance Ministry has registered 1,284 joint ventures, with a total charter capital of more than $3 billion.

Half of the Western investment in joint ventures went into light industry and service establishments, it said. Another 20% was invested in industrial services such as marketing, engineering and maintenance and about 15% was committed to heavy industry and machine tools.

But Tass said the ventures were frequently plagued by legal, financial and organizational problems.

“The number of joint enterprises that have not begun operations is very high. There are cases when they go bankrupt or dissolve,” Tass said.

The report gave no details of how much Western capital was actually at work or how many ventures had failed.

The growing trend toward joint ventures, encouraged by recent changes in regulations governing foreign firms, is aimed at improving the Soviet Union’s weak technological base.