tons of freight carried the target is for 166 million metric tons (119) in 1965). As one inevitable consequence of this expansion drive, the volume. of freight carried by foreign ships to and from the U.S.S.R., whether under foreign or Soviet charter, will decline steadily. In one major cargo-carrying sector, the U.S.S.R. expects to expand the current scope of operations by better than 100 percent. The volume of freight to be carried on its regular international cargo lines, which at present engages some 65-70 ships, is slated to increase from approximately 3 million tons in 1965 to more than 6 million tons in 1970. For the most part, these are lines that connect the U.S.S.R. with a number of politically favored, newly developing countries. 61 As large a proportion as 71 percent of the Soviet merchant fleet is scheduled to have speeds above 14 knots by 1970.62 As far as technical support of the fleet is concerned, the Ministry of Sea Transport is planning, by 1970, a 17-percent increase in piers and jetties, and a 40-percent rise in covered pier sheds. B. TOWARD GREATER EARNINGS, PRESTIGE, AND POWER Looking ahead to the end of the current 5-year plan period, that is to 1970, Soviet planners have scheduled an increase of some 30 percent in the aggregate volume of the country's seaborne trade. Inasmuch as the capacity of the fleet is projected to be 50 percent greater than at present, Soviet vessels are expected to raise the proportion of the seaborne foreign trade of the nation carried on Russian-flag ships to 75 percent. Here, economy in the outlay of hard currency is cited as a major operative consideration. New instructions received by the Ministry of the Merchant Fleet require that an all-out effort be made "to provide enough national-flag vessels to carry all merchandise either sold or bought on terms of delivery by the Soviet side (c.i.f.). 1963 Until quite recently, the Soviet Union has been a newcomer in the field of exporting shipping services. But its ambitions in this area are rising, as may be seen reflected in the announced future goals for the merchant fleet. One of the goals, on record under the terms of the 1966-70 plan, is to increase by 100 to 150 percent the volume of cargoes its ships will carry for foreign charterers. The stated purpose of this ambitious goal is to bring into the state treasury of the U.S.S.R. enough foreign exchange to enable it, for the first time, to cover in full by 1970 all Soviet expenditures of hard currency paid out for the chartering of foreign ships.64 Soviet shipping officials are especially attracted to the prospect of attaining a position of special privilege for its merchant fleet with the newly developing countries, as a kind of carrier-at-large for this large and increasingly important group of nation. They begin with the assumption that the present Soviet program of foreign aid for these countries will provide the initial impulse in that direction: "The rendering to them [the newly developing countries] of technical and economic assistance for the strengthening of their national economic independence will require a large volume of maritime shipments, explains a recent editorial. Looking ahead into the future, Soviet author 1 Ibid., p. 14. 62 Izvestia. Apr. 20, 1966, p. 3. 63 Morskoi Flot, No. 4, 1966, p. 2. 27 65 ities have thus declared themselves ready to assume the burden of the well-intentioned "have" nation, and to proceed to widen the market for its own seagoing carriers in the newly developing regions of the world. "Considering that the developing countries possess very small maritime fleets," asserts the official Ministry organ, "and [that] some of them have none at all, the commercial maritime fleet of the Soviet Union should assume upon itself the main volume of shipments between the ports of the Soviet Union and these countries." 86 With a greatly expanded fleet at its disposal, the Soviet Ministry of Sea Transport is evidently seeking ways and means to carve out for itself a larger share of the world market for seagoing cargo haulage. The Ministry already reports being ready and willing to begin to make its ships available, generally on a voyage charter basis, to carry such key bulk commodities as grain, coal, ore petroleum, and sugar to European ports. One large segment of this market, of course, is at present closed to Soviet ships, namely the freight traffic which either originates or terminates in U.S. seaports. Both existing security regulations and the threat of a boycott by U.S. longshoremen at present are keeping Soviet ships out of this uniquely rich, open-charter market for tramp ships. Here, too, the Soviet Government may be expected to continue to forward its own low-key diplomatic campaign for the abolition of U.S. port security regulations currently enforced against U.S.S.R.-flag vessels. CONCLUSION The bare facts of the current urgent drive to the sea, on the part of the Soviet Union, contain the ingredients of a dramatic story of compelling international interest. They deserve our careful attention in their own right, if only as a new entry in the record of growth registered by the U.S.S.R. in the realm of national power. Beyond that, however, we are unmistakably in the presence of a development that reveals an important new dimension of potential worldwide influence on the part of the U.S.S.R. It can indeed be stated unequivocally that the mere fact of the emergence of the Soviet Union as a resourceful competitor on the world maritime market does not, by itself, constitute a cause for serious concern. We would certainly hope that our own faith in the healing power of competition is strong enough to impel us to regard the appearance of any new and vigorous competitor in the shipping field not as a threat but rather as a challenge toward the exertion of the best efforts of all concerned in the direction of a further improvement in the quality, as well as a further reduction in the cost, of the services provided by the maritime industry to the world community. We have learned from our own past experience, national as well as international, that there is nothing quite as stimulating as a periodic exposure to the fresh air of competition to help discourage featherbedding, to eliminate rigid practices, and to prevent stagnation in any field of economic enterprise. The merchant fleet of the U.S.S.R., however, is anything but an ordinary profit-motivated economic enterprise. In a general way, to be sure, it is engaged in international competition for seaborne freight. But this is a competition with a difference. What makes this fleet distinctive, basically, is the character of its ownership. It happens to be a most valuable economic asset owned by a powerful political party. Ibid. This party excercises effective control over a great nation-state which, in turn, is impelled by great global power ambitions. In such a setting, the danger is ever present that these extraordinary owners of a large and growing merchant fleet would be inclined to manage their property in a way designed primarily to advance their own political interests. As happened so often in the past, the leaders of the U.S.S.R. are engaged in a compulsive search for avenues along which to exploit the "innate advantages of socialism" in the international economic competition. They continue to be beguiled by the idea that a highly centralized, politically guided, economy should be able to maneuver more effectively on the international chessboard than the traditional market-oriented economies of the world. They are quite convinced, as might by expected, that there must be a vast potential payoff in the exercise of the power of monoply. The Soviet Government, as we know, enjoys a dual monoply in this particular realm of competition; first, as the sole owner of the nation's maritime fleet; and second, as the only legally authorized shipper of goods exported from and imported into the country. No other carrier, no other shipper, comes into the marketplace of the world equipped with so much economic power. Hence, the usual economic constraints to which the private shipping companies are subject do not operate as far as the U.S.S.R. is concerned. The Soviet fleet is free of the compulsion to earn a profit on every transaction. The operators of the Soviet fleet evidently work on the assumption that they can more easily afford, whenever necessary, to sacrifice current profits in order to expand their future share of the market. This enables them, when such occasions present themselves, to use political pressure to derive economic gain, and economic power to extract political advantage. And if such a policy should incur certain economic difficulties for individual ship operators, or for private commercial firms, the risk involved is not great. These firms or individuals are not in a strong position to retaliate effectively against the multiple monopoly power of the Soviet Government. The manner in which the Soviet Government has used its monopoly power to date has already given rise to considerable alarm in the world of trade and shipping. These eminently self-serving practices of the past have tended to arouse serious apprehension for the future of the world shipping market. It has been quite clear to most regular observers that the Soviet fleet has been expanded without reference to the current supply situation in shipping. Rather, the present campaign of tonnage expansion has been oriented, from the beginning, toward expanding the freedom of the politicians of the Soviet Union to use their growing fleet to maneuver in the turbulent waters of international politics. Soviet officials, for example, have never complained that the shipping services now available in the world market are too costly or inadequate, or unsatisfactory for any other reason. Nor have they provided evidence to show that they could supply these services cheaper with their tonnage. The Soviet leaders have simply concluded that a greatly expanded fleet of ships sailing under their flag, regardless of the internal cost. or the consequences to other suppliers of such services, would provide them with an opportunity to dictate terms to trading partners, as well as to competitors in the shipping field-in accordance with the changing political interests or economic needs of the political authorities of the U.S.S.R. It is thus hard to escape the conclusion that by following a policy of administrative fiat and economic opportunism, without regard to the consequences abroad, the Soviet leaders are prepared to sacrifice the vital economic interests, as well as the fleets, not only of the trading nations of the West but also of the newly developing nations in the various parts of the world. The outlook for the future is not likely to improve as long as the shipping nations of the world continue to pursue their present policies and remain narrowly oriented toward the short-term needs of the trade. In this field there is an immediate and urgent need for cooperative action. What is assuredly not needed is the kind of action that will end in an empty gesture of writing a new set of rules aimed at any type of exclusion. What is needed instead is a common approach designed to affirm the tested historic rules of world shipping and to persuade the U.S.S.R. and its allies in Eastern Europe that opportunism, however promising in the short run, only breeds counteropportunism, and that honorable cooperation is the best long-term policy for nations with a serious concern for the economically vital and essentially peaceful pursuit of international commerce and navigation. |