SovRom
Encyclopedia
The SovRoms were economic enterprises established in Romania
following the Communist takeover
at the end of World War II
, in place until 1954-1956 (when they were dissolved by the Romanian authorities).
In theory, SovRoms were joint Romanian-Soviet ventures aimed at generating revenue for reconstruction, and were designed on a half-share basis in respect to the two states; however, they were mainly designed as a means to ensure resources for the Soviet side, and generally contributed to draining Romania's resources (in addition to the war reparations demanded by the armistice convention of 1944 and the Paris Peace Treaties
, which had been set at 300 million United States dollar
s—see Romania during World War II
). The Soviet contribution in creating the SovRoms lay mostly in reselling leftover German
equipment to Romania, which was systematically overvalued.
on May 8, 1945, at a time when Romania found itself in economic isolation.
The first SovRom to be created (on July 17, 1945), was Sovrompetrol, which had as its objective the exploitation of petroleum
in Prahova County
areas and the oil refineries
in Ploieşti
. By 1947, it was responsible for 37% of oil drilling, some 30% of the total production of crude oil, and over 36% of refined oil, controlling 37% of internal oil supplies and 38% of external ones.
Sovrompetrol was followed by Sovromtransport and Tars (transportation), and later by Sovrombanc (bank
ing and commercial monopoly
), Sovromlemn (wood processing
), Sovromgaz (natural gas
), Sovromasigurare (insurance
), Sovromcărbune (coal
exploitation in the Jiu Valley
and other areas), Sovromchim (chemical industry
), Sovromconstrucţii (construction materials), Sovrommetal (iron
extraction — around Reşiţa
), Sovromtractor (future Tractorul, in Braşov
), Sovromfilm (importing Soviet cinema
productions), Sovrom Utilaj Petrolier (producing oil refining equipment), Sovromnaval (shipbuilding
in Constanţa
, Giurgiu
, and Brăila
), and Sovromcuarţ (or Sovromquarţit, officially exploiting quartz
).
Sovromcuarţ started operating in 1950 at the mine in Băiţa in Bihor County
, under a name which was meant to hide its main activity, the extraction of uranium ore. The workforce initially consisted of 15,000 political prisoner
s; after most of them died of radiation poisoning
, they were replaced by local villagers, who did not know what they were mining. In secrecy, Romania delivered 17,288 tons of uranium
ore to the Soviet Union between 1952 and 1960, which was used, at least partly, in the Soviet atomic bomb project
. Uranium mining continued until 1961. All ore was shipped outside Romania for processing, initially to Sillamäe
in Estonia
; the uranium concentrate was then used exclusively by the Soviet Union.
The total value of goods passed by Romania to the Soviet Union surpassed by far the demanded war reparations, being estimated at around 2 billion dollars. By 1952, 85% of Romanian export was directed at the Soviet Union.
Special circumstances also enhanced the negative effects of SovRoms on Romanian economy: the severe drought
and famine
outbreaks of 1946, coupled with the severe devaluation
of the Romanian leu
— culminating in a forced stabilization
through monetary reform
(1947).
's relative emancipation from Soviet control, ran parallel to the De-Stalinization
process; it was approved by Nikita Khrushchev
and carried out by Miron Constantinescu
(head of the Planning Board
).
The first measure was taken in 1954 (through accords signed in March and September): Soviet shares in 12 of the 16 enterprises were taken over by the Romanian state, in exchange for a sum to be paid in installments of merchandise exports (in 1959, the debt was set at over 35 billion lei
). Payments were completed in 1975. The initial sum at which the Soviet side estimated its contribution was 9.6 billion lei, in contrast to the 2.9 billion lei at which it had been valued by Romanian sources; discussions on the matter reduced the sum to a total of 5.3 billion lei, which was construed by the two sides not as a corrected result, but as a concession owing to past irregularities in SovRom activities. At the same time, the Soviet Union announced that it gave up interests in formerly German-owned enterprises and equipment on Romanian soil, for which Romania paid 1.5 billion lei as compensation (deducted from the total 5.3 billion).
The last two remaining SovRoms, Sovrompetrol and Sovromcuarţ, were disbanded in 1956. However, the Romanian government signed an agreement that would replace Sovromcuarţ with a new state-owned company which was to carry on the extraction and processing of uranium ore, delivering its entire output to the Soviet Union. This successor company was itself dissolved in 1961. Soviet investment in Sovromcuarţ was evaluated to a debt of 413 million rubles
, which were to be paid by Romania over a 10-year period (starting with 1961).
The gesture was used by General Secretary
Gheorghe Gheorghiu-Dej
, who had previously ensured the SovRom's efficiency, as a means to gain popularity with Romanian citizens and, in parallel, to advertise the fact that Romania had developed the majority of Marxian requirements for Socialism
after completing nationalization
.
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
following the Communist takeover
Communist Romania
Communist Romania was the period in Romanian history when that country was a Soviet-aligned communist state in the Eastern Bloc, with the dominant role of Romanian Communist Party enshrined in its successive constitutions...
at the end of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, in place until 1954-1956 (when they were dissolved by the Romanian authorities).
In theory, SovRoms were joint Romanian-Soviet ventures aimed at generating revenue for reconstruction, and were designed on a half-share basis in respect to the two states; however, they were mainly designed as a means to ensure resources for the Soviet side, and generally contributed to draining Romania's resources (in addition to the war reparations demanded by the armistice convention of 1944 and the Paris Peace Treaties
Paris Peace Treaties, 1947
The Paris Peace Conference resulted in the Paris Peace Treaties signed on February 10, 1947. The victorious wartime Allied powers negotiated the details of treaties with Italy, Romania, Hungary, Bulgaria, and Finland .The...
, which had been set at 300 million United States dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
s—see Romania during World War II
Romania during World War II
Following the outbreak of World War II on 1 September 1939, the Kingdom of Romania officially adopted a position of neutrality. However, the rapidly changing situation in Europe during 1940, as well as domestic political upheaval, undermined this stance. Fascist political forces such as the Iron...
). The Soviet contribution in creating the SovRoms lay mostly in reselling leftover German
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
equipment to Romania, which was systematically overvalued.
Creation, structure, and effects
An agreement between the two countries regarding the establishment of common enterprises was signed in MoscowMoscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
on May 8, 1945, at a time when Romania found itself in economic isolation.
The first SovRom to be created (on July 17, 1945), was Sovrompetrol, which had as its objective the exploitation of petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
in Prahova County
Prahova County
Prahova is a county of Romania, in the historical region Muntenia, with the capital city at Ploieşti.-Demographics:In 2002, it had a population of 829,945 and the population density was 176/km². It is Romania's most populated county, having a population density double than the country's mean...
areas and the oil refineries
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
in Ploieşti
Ploiesti
Ploiești is the county seat of Prahova County and lies in the historical region of Wallachia in Romania. The city is located north of Bucharest....
. By 1947, it was responsible for 37% of oil drilling, some 30% of the total production of crude oil, and over 36% of refined oil, controlling 37% of internal oil supplies and 38% of external ones.
Sovrompetrol was followed by Sovromtransport and Tars (transportation), and later by Sovrombanc (bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
ing and commercial monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
), Sovromlemn (wood processing
Wood processing
Wood processing is an engineering discipline comprising the production of forest products, such as pulp and paper, construction materials, and tall oil...
), Sovromgaz (natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
), Sovromasigurare (insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
), Sovromcărbune (coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
exploitation in the Jiu Valley
Jiu Valley
The Jiu Valley is a region in southwestern Romania, in Hunedoara county, situated in a valley of the Jiu River between the Retezat Mountains and the Parâng Mountains...
and other areas), Sovromchim (chemical industry
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
), Sovromconstrucţii (construction materials), Sovrommetal (iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
extraction — around Reşiţa
Resita
' is a city in western Romania and the capital of Caraş-Severin County, in the Banat region. Its 2004 population was 83,985.- Etymology :The name of Reşiţa, might comes from the Latin recitia, meaning "cold spring", as the great historian Nicolae Iorga once suggested, presuming that the Romans...
), Sovromtractor (future Tractorul, in Braşov
Brasov
Brașov is a city in Romania and the capital of Brașov County.According to the last Romanian census, from 2002, there were 284,596 people living within the city of Brașov, making it the 8th most populated city in Romania....
), Sovromfilm (importing Soviet cinema
Cinema of the Soviet Union
The cinema of the Soviet Union, not to be confused with "Cinema of Russia" despite Russian language films being predominant in both genres, includes several film contributions of the constituent republics of the Soviet Union reflecting elements of their pre-Soviet culture, language and history,...
productions), Sovrom Utilaj Petrolier (producing oil refining equipment), Sovromnaval (shipbuilding
Shipbuilding
Shipbuilding is the construction of ships and floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to before recorded history.Shipbuilding and ship repairs, both...
in Constanţa
Constanta
Constanța is the oldest extant city in Romania, founded around 600 BC. The city is located in the Dobruja region of Romania, on the Black Sea coast. It is the capital of Constanța County and the largest city in the region....
, Giurgiu
Giurgiu
Giurgiu is the capital city of Giurgiu County, Romania, in the Greater Wallachia. It is situated amid mud-flats and marshes on the left bank of the Danube facing the Bulgarian city of Rousse on the opposite bank. Three small islands face the city, and a larger one shelters its port, Smarda...
, and Brăila
Braila
Brăila is a city in Muntenia, eastern Romania, a port on the Danube and the capital of Brăila County, in the close vicinity of Galaţi.According to the 2002 Romanian census there were 216,292 people living within the city of Brăila, making it the 10th most populous city in Romania.-History:A...
), and Sovromcuarţ (or Sovromquarţit, officially exploiting quartz
Quartz
Quartz is the second-most-abundant mineral in the Earth's continental crust, after feldspar. It is made up of a continuous framework of SiO4 silicon–oxygen tetrahedra, with each oxygen being shared between two tetrahedra, giving an overall formula SiO2. There are many different varieties of quartz,...
).
Sovromcuarţ started operating in 1950 at the mine in Băiţa in Bihor County
Bihor County
Bihor is a county of Romania, in Crişana, with capital city at Oradea. Together with Hajdú-Bihar County in Hungary it constitutes the Biharia Euroregion.-Demographics:...
, under a name which was meant to hide its main activity, the extraction of uranium ore. The workforce initially consisted of 15,000 political prisoner
Political prisoner
According to the Longman Dictionary of Contemporary English, a political prisoner is ‘someone who is in prison because they have opposed or criticized the government of their own country’....
s; after most of them died of radiation poisoning
Radiation poisoning
Acute radiation syndrome also known as radiation poisoning, radiation sickness or radiation toxicity, is a constellation of health effects which occur within several months of exposure to high amounts of ionizing radiation...
, they were replaced by local villagers, who did not know what they were mining. In secrecy, Romania delivered 17,288 tons of uranium
Uranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...
ore to the Soviet Union between 1952 and 1960, which was used, at least partly, in the Soviet atomic bomb project
Soviet atomic bomb project
The Soviet project to develop an atomic bomb , was a clandestine research and development program began during and post-World War II, in the wake of the Soviet Union's discovery of the United States' nuclear project...
. Uranium mining continued until 1961. All ore was shipped outside Romania for processing, initially to Sillamäe
Sillamäe
Sillamäe is a town in Ida-Viru County in the northern part of Estonia, on the southern coast of the Gulf of Finland. It has a population of 16,183 and covers an area of 10.54 km²...
in Estonia
Estonia
Estonia , officially the Republic of Estonia , is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia , and to the east by Lake Peipsi and the Russian Federation . Across the Baltic Sea lies...
; the uranium concentrate was then used exclusively by the Soviet Union.
The total value of goods passed by Romania to the Soviet Union surpassed by far the demanded war reparations, being estimated at around 2 billion dollars. By 1952, 85% of Romanian export was directed at the Soviet Union.
Special circumstances also enhanced the negative effects of SovRoms on Romanian economy: the severe drought
Drought
A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...
and famine
Famine
A famine is a widespread scarcity of food, caused by several factors including crop failure, overpopulation, or government policies. This phenomenon is usually accompanied or followed by regional malnutrition, starvation, epidemic, and increased mortality. Every continent in the world has...
outbreaks of 1946, coupled with the severe devaluation
Devaluation
Devaluation is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged....
of the Romanian leu
Romanian leu
The leu is the currency of Romania. It is subdivided into 100 bani . The name of the currency means "lion". On 1 July 2005, Romania underwent a currency reform, switching from the previous leu to a new leu . 1 RON is equal to 10,000 ROL...
— culminating in a forced stabilization
Stabilisation policy
A stabilization policy is a package or set of measures introduced to stabilize a financial system or economy.The term can refer to policies in two distinct sets of circumstances: business cycle stabilization and crisis stabilization....
through monetary reform
Monetary reform
Monetary reform describes any movement or theory that proposes a different system of supplying money and financing the economy from the current system.Monetary reformers may advocate any of the following, among other proposals:...
(1947).
Ending
The SovRoms' end, evidence of the Romanian Communist PartyRomanian Communist Party
The Romanian Communist Party was a communist political party in Romania. Successor to the Bolshevik wing of the Socialist Party of Romania, it gave ideological endorsement to communist revolution and the disestablishment of Greater Romania. The PCR was a minor and illegal grouping for much of the...
's relative emancipation from Soviet control, ran parallel to the De-Stalinization
History of the Soviet Union (1953-1985)
In the USSR, the eleven-year period from the death of Joseph Stalin to the political ouster of Nikita Khrushchev , the national politics were dominated by the Cold War; the ideological U.S.–USSR struggle for the planetary domination of their respective socio–economic systems, and the defense of...
process; it was approved by Nikita Khrushchev
Nikita Khrushchev
Nikita Sergeyevich Khrushchev led the Soviet Union during part of the Cold War. He served as First Secretary of the Communist Party of the Soviet Union from 1953 to 1964, and as Chairman of the Council of Ministers, or Premier, from 1958 to 1964...
and carried out by Miron Constantinescu
Miron Constantinescu
Miron Constantinescu was a Romanian communist politician, a leading member of the Romanian Communist Party , as well as a Marxist sociologist, historian, academic, and journalist...
(head of the Planning Board
Five-year plans of Romania
The Five-Year Plans of Romania were economic development projects in Communist Romania, largely inspired by the Soviet model. Starting from 1951, there were 8 five-year plans.-Origins:...
).
The first measure was taken in 1954 (through accords signed in March and September): Soviet shares in 12 of the 16 enterprises were taken over by the Romanian state, in exchange for a sum to be paid in installments of merchandise exports (in 1959, the debt was set at over 35 billion lei
Romanian leu
The leu is the currency of Romania. It is subdivided into 100 bani . The name of the currency means "lion". On 1 July 2005, Romania underwent a currency reform, switching from the previous leu to a new leu . 1 RON is equal to 10,000 ROL...
). Payments were completed in 1975. The initial sum at which the Soviet side estimated its contribution was 9.6 billion lei, in contrast to the 2.9 billion lei at which it had been valued by Romanian sources; discussions on the matter reduced the sum to a total of 5.3 billion lei, which was construed by the two sides not as a corrected result, but as a concession owing to past irregularities in SovRom activities. At the same time, the Soviet Union announced that it gave up interests in formerly German-owned enterprises and equipment on Romanian soil, for which Romania paid 1.5 billion lei as compensation (deducted from the total 5.3 billion).
The last two remaining SovRoms, Sovrompetrol and Sovromcuarţ, were disbanded in 1956. However, the Romanian government signed an agreement that would replace Sovromcuarţ with a new state-owned company which was to carry on the extraction and processing of uranium ore, delivering its entire output to the Soviet Union. This successor company was itself dissolved in 1961. Soviet investment in Sovromcuarţ was evaluated to a debt of 413 million rubles
Soviet ruble
The Soviet ruble or rouble was the currency of the Soviet Union. One ruble is divided into 100 kopeks, ....
, which were to be paid by Romania over a 10-year period (starting with 1961).
The gesture was used by General Secretary
General Secretary
The office of general secretary is staffed by the chief officer of:*The General Secretariat for Macedonia and Thrace, a government agency for the Greek regions of Macedonia and Thrace...
Gheorghe Gheorghiu-Dej
Gheorghe Gheorghiu-Dej
Gheorghe Gheorghiu-Dej was the Communist leader of Romania from 1948 until his death in 1965.-Early life:Gheorghe was the son of a poor worker, Tănase Gheorghiu, and his wife Ana. Gheorghiu-Dej joined the Communist Party of Romania in 1930...
, who had previously ensured the SovRom's efficiency, as a means to gain popularity with Romanian citizens and, in parallel, to advertise the fact that Romania had developed the majority of Marxian requirements for Socialism
Marxian economics
Marxian economics refers to economic theories on the functioning of capitalism based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology and sociological theory, arguing that Marx's approach to understanding the...
after completing nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...
.
External links
Grecu Dan, Salvate de la coşul de gunoi ("Rescued from the Garbage Bin") — Sovroms in postal historyPostage stamps and postal history of Romania
This is a survey of the postage stamps and postal history of Romania.-19th century:The principality of Moldavia issued stamps immediately upon gaining autonomy in 1858, with the first cap de bour stamps being issued in July 1858. These were produced by handstamping on laid paper, and are now quite...