The Soviet Union has invited Western capitalists to help modernize its moribund economy, but the ventures seem to be producing more fast-food sizzle than high-stakes technology, Soviet and American officials said.
Only four or five American companies have signed venture
agreements, according to Amtorg, the Soviet trading company
based in New York. Among the deals are fast-food restau-
rants that will add little to Soviet industrial might, a
major Kremlin objective in the program.
"They want to bring in Western equipment and machinery to
make some of the products they have been importing," said Val
Zabijaka, a Soviet-trade expert at the Commerce Department.
"They got mainly small deals. The publicity is way ahead of the
deals."
American and Canadian companies signed two such accords last week.
In one effort, a quick-printing and copying shop will be
opened on Gorky Street, a main shopping avenue in Moscow.
Another shop will be located in the Moscow Expo Center, which
serves foreign companies.
The second agreement is for shops in hotels that will sell souvenirs, computer and audio-visual equipment, as well as advertising and printing services.
Sponsors of the ventures said Soviet citizens would be able to order copying and printing, which would be a sharp break with longstanding state control of devices that could reproduce uncensored texts.
But American executives and Soviet officials said most
customers for the new printing businesses would be foreign
tourists and business people who could pay in hard currency,
which is unavailable to ordinary Soviet citizens.
The number of ventures between the United States and the Soviet Union may double soon, to 8 or 10. "I know of four or five United States companies that are close to signing agreements," said the Amtorg employee, who asked that his name not be used. "About 50 agreements are in different stages of negotiations with United States companies."
Mr. Zabijaka of the Commerce Department said that the
program had attracted "200 to 300 applications worldwide."
Some United States-Soviet ventures will provide technology. Combustion Engineering Inc., which is based in Stamford, Conn., has agreed to help modernize oil and petrochemical plants. The Minneapolis-based Honeywell Inc. will provide computerized controls to operate fertilizer plants.
The Occidental Petroleum Corporation has joined in a consortium with Italian and Japanese companies to build a Soviet petrochemical plant near the Caspian Sea.
But other projects are more consumer-oriented. Pepsico Inc., the soft-drink maker, has a deal with a Moscow city agency to open two Pizza Hut restaurants.
And McDonald's Restaurants of Canada Ltd., the
Toronto-based unit of the McDonald's Corporation, is also
planning a restaurant, on Gorky Street.
A Soviet official said that he had heard that the McDonald's agreement had encountered bureaucratic delays amid disagreements concerning the quality of Soviet ingredients available for McDonald's Big Mac sandwiches. But Peter Beresford, a spokesman for the McDonald's unit, said the restaurant and a food-distribution center that would supply it were "progressing on schedule" and might open late next year.
In the printing shop deal, Phargo Management and Consulting Ltd., also of Toronto, is the Western partner. It is under license from Alphagraphics Printshops of the Future, a chain of 250 high-tech copy shops based in Tucson, Ariz.
Rodger Ford, the president and chief executive of
Alphagraphics, said the Westerners would invest $470,000. The
Soviet book-trading agency, Mezhdunarodnaya Kniga, will own 51
percent of the venture, and Phargo 49 percent. The shops will
offer international electronic transmission of materials
prepared for printing, using the Macintosh computers of Apple
Computer Inc.
A separate venture for shops in Soviet hotels was announced last week in San Francisco by Martin B. Lopata, the chief executive of Unicorn Investments International.
Mr. Ford said some ordinary Soviet citizens would have access to the copy shops. "We can serve virtually anybody, and they can pay in rubles," he said.
But he added, "The question is: can we spend them?" Rubles cannot be converted into hard currencies. The venture is aiming at $1 million in sales the first year, of which no more than 25 percent would be in rubles, he said.
(text of September 26, 1988 New York Times article)
DON'T THINK THE WISDOM OF THOMAS JEFFERSON IS PASSÉ YET IN WHAT YOU ARE ENTITLED TO FROM YOUR GOVERNMENT? LET YOUR VOICE BE HEARD: TAKE A BRIEF SIDESTEP HERE TO SIGN MY GUESTBOOK.