Historian: Gatis Krūmiņš: “Research in Latvian economic history is incomplete, because no one is writing about it.”
During the entire Soviet occupation, there was only one year in which Latvia received more from the Soviet budget than it put in. In fact, the total amount Latvia overpaid into the Soviet budget from 1946 to 1990 reaches 15.9 billion rubles (1961 ruble equivalent), calculates historian Gatis Krūmiņš.
Krūmiņš’ calculation of the balance of payments between the Latvian SSR and the USSR during this period is the result of five years’ work. These estimates could be made in large part because of the existence of archival documents found at the Bank of Latvia. The historian and Vidzeme Augstskola rector is preparing to publish his research findings in Latvijas tautsaimniecībai 100 [Latvian Economics 100], scheduled to be published next November. It will be an interdisciplinary compilation of the work of ten authors – economists and historians – dedicated to Latvia’s centenary that will present aspects of Latvian economic history from the 19th century to modern day.
“When we consider the Soviet era, you will actually see transfers of many millions of rubles from the USSR budget to the Latvian SSR budget. This is the reason Soviet historiography stresses that the USSR invested heavily in Latvian industry in the post-war years. Yet, a 1950 document inadvertently found in the Latvian SSR Ministry of Finance archives paints a completely different picture,” says Krūmiņš. Specifically, the information contains precise reports that the LSSR bank sent to Moscow annually. The secret documents that were preserved in Bank of Latvia archives contained data on Latvian SSR income, amounts spent in the LSSR, and how the funds were to be split between the LSSR and USSR budgets. Of importance is the fact that there are hidden military expenses for maintaining the Soviet Army and the KGB in Latvia. Summary of annual results reveals that from 1946 to 1990, the LSSR transferred 40.6 billion rubles to the USSR. Moscow returned 24.7 billion for factories and infrastructure, as noted by forces currently still loyal to Moscow, as well as for the Soviet Army and the KGB. The difference, 15.9 billion, was clearly transferred to various Soviet programs, including space exploration, supporting “friendly” regimes in the Third World, and the war in Afghanistan. It is precisely the use of these billions that is hard to determine. “In reality, it was a colonial policy and the reason the USSR was so determined to build new factories here. Not just to Russify, but mainly because it was quite economically advantageous. It was better to invest in Latvia, rather than central Asia, because it offered great profits. That was a tradition from the 19th century and early 20th century. Even then, Russia had only three provinces that brought in more than they received – Kurzeme, Vidzeme, Estonia. Soviet historiography assertions about the substantial Soviet investments in Latvia’s economy are just not true,” concludes the researcher. The fact the all the profits from the LSSR were “shoveled” to the centre, along with exaggerated immigration and industrialization led to social crisis, particularly in housing and food supplies. Krūmiņš states that if even some part of the profits earned in the LSSR would have remained in Latvia, the standard of living could have been approximately that of one of the other “Eastern European socialist countries”. Only once, in 1954, did Latvia receive more than it transferred to the USSR budget. At the time, that was listed as compensation for transferred agricultural goods, but it probably was a reflection of the power struggle that occurred after Stalin’s death when Stalin’s heir, Lavrentia Beria, tried to curry favour with the republics. True, that is only one story, yet after Beria’s fall, things returned as they were.
Gatis Krūmiņš agrees that his calculations show only the overall picture; in order to determine modern day values, each year would have to be calculated separately using various formulas.
The amount of research on the post-war Soviet period, particularly the economy, is just a snippet, which cannot give an accurate overall picture of this complicated, yet very interesting time: “This entire system must be viewed from various points of reference. There were many nuances in the economic mechanism, and the understanding of economics during the Soviet era was “interesting”. For example, how could kolkhozes be considered viable with the existing milk and crop yields? How could the state pay the kolkhoz 60 kopeks a liter, but the price for a liter in the shops, not including bottle deposit, was 22 kopeks? There are many holes in economic history research, because there no one is actually writing about it.”
http://www.la.lv/vesturnieks-psrs-politika-latvija-bija-koloniala/