Past and present of the Kaliningrad Amber Conglomerate

A book by Zoya Kostyashova, recently published by the Museum of Amber in Kalinigrad is bilingual: Russian-English. Indeed it constitutes a description and analysis of the reasons of a current situation of a scarce use of an exceptional nature’s gift, that is a concentration of rich and convenient to exploit amber deposits at the Sambia, estimated by geologists as consisting of 1 million tones.

After the demise of the Soviet Union in Russia took place a denationalization of huge mining companies, not only dealing with oil and gas but even with gold and diamonds. And as it comes to amber everything remains the same: it is governed by the administration of a monopolistic state enterprise “The Kalinigrad Amber Conglomerate” in Yantarny on the west coast of Sambia. It is true that two separate joint-stock companies were formally set up: a mining one and a processing one, but both belong solely to the state enterprise, set up exactly 61 years ago, in July 1947, on the basis of a decision signed by Stalin.
The author shows an anachronistic nature of this state in the conditions of a market economy and disastrous results both for the conglomerate which is chronically unprofitable and is subject to depreciation (obsolete, used up machines and devices, debts, low wages) and for cooperators being deprived of an access to the raw material.

The book contains numerical data not known so far, dilligently gathered from archival materials, relating to fluctuations of amber output for the whole period after the Second World War and a comparison of the results achieved at the German times with the Soviet and Russian times. The numbers show a source of perturbations in a development of amber industry in all the countries dealing with processing (especially in Poland and Lithuania) in the previous five years. In comparison with the output results of the conglomerate in the 80’s, when an average annual output amounted to approximately 800 tons of amber and not significantly less in the 90’s, although it was the time of confusion and a mass stealing of output, the undermentioned data since 2003 speak for themselves:

Year     Number of tons
2003     188.2
2004     261.5
2005     201.6
2006     131.9
2007     287.5

The conglomerate’s management created practically a system of making foreign receivers conditional on its particularistic interests despite the existence of a state system of transactions licensing by central governing bodies in Moscow. It is proved by taking in 2007 governmental licences for export to three friendly companies in Poland, Lithuania and Taiwan the raw material in the amount of 955,780 kg, constituting a number several times bigger than a total output. But the conglomerate has its own processing department and supplies over 100 private Russian manufacturing companies.
The foreign companies are owned by Russian citizens originating from the conglomerate: Pajurio Gintaras in Klaipeda – licences for 325,130 kg, Tai-Rus Corporation in Taipei – licences for 397,950 kg and Wikwol in Gdansk – licences for 332,700 kg. All other receivers were buying small or not very precious parts of the raw material and amber wastes.
The numerical data presented by the author show that the conglomerate working on the richest amber deposit in the world was in fact constantly subsidized. During Soviet times a public help had a form of gold assignments to the processing, provided for the fractional prices in comparison with the market value. In the 90’s in post-Communist Russia they granted subsidies for investmenst and waived not paid taxes, fees for an output licence and social insurances, not paid by a whole ten years’ period. Polish mines and dockyards have never reached such level of debts.

The book contains many other interesting premises to analyze economic occurences, having an effect on a current situation in the world amber industry. It is worth translating and publishing in Poland. At present the office of the International Amber Association possesses a dozen or so copies in the Russian-English version. I encourage to buy and read it. I congratulate the author, Zoya Kostyashova, with a successful study of a very important subject.
2008-07-18