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Baltic States' Cooperation - More Myth Than Reality

IN the heady days of the struggle against the Soviet empire, the leaders of the three Baltic republics met frequently to plot strategy against their common enemy. And when independence was finally achieved in the fall of 1991, there was much talk about Baltic cooperation. Common markets, joint economic development projects, and even a single Baltic currency were on the agenda.

These days the rhetoric of cooperation is barely a whisper. And the reality of it is virtually nonexistent. There are three separate currencies, customs posts on the borders, and no joint projects. Trade between them remains a minuscule percentage, by some estimates less than 5 percent, of their overall commerce.

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Even worse for those who talked of pooled efforts, the three Baltic republics are actually emerging as rivals, competing for scarce Western investment and aid.

Lithuanian leaders shrug their shoulders, blaming this reality on their past history of colonial administration from Moscow. "In the West, they are used to saying `the three Baltic states' but in practical conditions, each of us was bound to the center by separate links," says Algirdas Saudargas, a leader of the Christian Democratic Party and foreign minister until the recent elections. "There was little cooperation between the Baltic states during the Soviet time. Now we have to create that from zero."

Baltic officials point to numerous examples of how their economies were built under Soviet rule as integrated cogs in a vertical system leading back to Moscow. Lithuania for example has a huge oil refinery that could meet the needs of a country the size of Poland.

The oil was piped in from Russia and the refined products sent back. The plant could in theory supply Estonia and Latvia, as well as neighboring Belarus but it is almost idle due to the cutoff of Russian oil. There is not even a terminal on the coast to bring oil from elsewhere to the plant.

"The Baltic countries are still victims of the role they played in the Soviet economic structure," says a Western diplomat here. "They don't have much they can supply to each other."

All three Baltic countries offer themselves to potential Western investors as a "gateway" to the markets of the former Soviet Union, trying to capitalize on their former ties. And in so doing they unashamedly compete with each other.

"All of us three are gateways, but we are closer to the center of Europe," says Vytenis Aleskaitas, who served until recently as Lithuanian minister for external economic relations. He suggests that Lithuania offers more "stability" because, of the three, it has the tiniest Russian-speaking minority and is the only Baltic state with a fixed deal for the withdrawal of former Soviet troops.

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"Although we are geopolitically in the same boat, economically we are competitors for the same assistance, even for markets," agrees Estonian Finance Minister Trivimi Velliste.

Estonia, which among the Baltics has been the quickest to develop links to the West, is clearly least interested in Baltic cooperation. "It is just the history of this century which put us together," says Prime Minister Mart Laar. "It is very difficult to have a common market."

The Estonian leader points to differences on monetary policy, trade, and even the lack so far of a working visa system in Lithuania and Latvia. There can be no open borders, given these countries' differing ties to Russia, he says. "Latvia has open borders with Russia. If we open the border with Latvia, it means open borders with Russia as well."

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