Volume 39, No.1 - Spring 1993
Editor of this issue: Antanas Klimas, University of Rochester 
ISSN 0024-5089
Copyright © 1993 LITUANUS Foundation, Inc.


WILLIAM URBAN Monmouth College (IL)

The Baltic States of Estonia, Latvia, and Lithuania face a multitude of problems. Because they were more western than most of the former republics of the Soviet Union, they had an above-average share of the educated populace and the technical industries. When the empire collapsed, they were left with large industrial plants designed to supply a large, backward, captive market. Today's managers—even those who can overcome their training and experience as communist bureaucrats—can neither get raw materials to produce goods at an economical rate nor find anyone to pay for what little they do make. The Baltic States also had more productive farms than did the neighboring republics. Now the state farms and collectives have lost their export markets in St. Petersburg and Moscow, because Russia cannot pay for imports, and they have difficulty finding new markets because the quality of the crops and the cost of transportation is competitive in the world market; the private farms are far from being able to produce a surplus for export. To make matters worse, the summer of 1992 will be remembered as one of the most terrible droughts of recent times. Crop production is expected to fall drastically. Estonia and Lithuania have abandoned the hyperinflating ruble, Estonia for its own currency, Lithuania for coupons.

Clearly, the transformation from a command economy to a free market is a difficult process for any people. It is much more difficult when ethnic tensions make achieving a political consensus difficult. Moreover, one must exercise caution in discussing the situation in the Baltic States, because the ethnic composition varies considerably from nation to nation:

Estonia in 1989 had a population of 1,576,000. 61.4% Estonian (87% in rural areas); 30% Russian, 3% Ukrainian, 2% Belarussian.

Latvia in 1989 had a population of 2,667,000. 52% are Latvian, 34% Russian, 4.5% Belarusian, 3.5% Ukrainian, 2.3% Poles, 1.3% Lithuanian. The non-Latvians are concentrated within 70 km of Riga.

Lithuania had a population of 3,924,000. 79% are Lithuanian, 9.4% Russian, 7% Pole, 1.7% Belarusian, 1 .2% Ukrainian, 0.3% Jewish. 90% of Russians live in cities, most of the Poles are in the southeast and speak Russian. Many Vilnius Poles emigrated after World War II, others became Russian-speaking.

In addition to language, Baltic ethnic identification is made through religion (especially in Lithuania with its ties to the Roman Catholic Church), music, family organization, and economic practices. Very important in this is the Baltic awareness of being part of the West, not merely being the westernmost part of an eastern empire.

Specific problems involving ethnicity

1) Determining citizenship.

The Russian government is demanding that all residents (as of August 1991) be granted citizenship unconditionally. Lithuania did so. Latvia is discussing the law, slowly. Estonia has refused, pointing out that it has one of the most liberal citizenship laws in the world: a mastery of 1,500 words of Estonian and application for citizenship. Yet many Russians have refused to learn any Estonian and do not want to learn it; moreover, they want to retain their Russian citizenship. This holdover of a colonial attitude is being joined by fear of unemployment. Estonian law requires bi-lingual abilities for jobs involving the public. Similar laws in South Africa delivered most government posts to the Boers because the English refused to learn Afrikaans. In each of the Baltic states, the

Russian-speaking minority is having to adjust to a new status. No longer a favored ethnic group, they now have to compete with people who feel they must redress former injustices. The Russian willingness to enter into the competition is therefore hampered by a fear that if they compete successfully, they will then face discrimination. Hence, why try? In spite of this, perhaps a third of the Russians voted for independence. As a consequence of this situation, nationalist propaganda from Russia, and western concerns about human rights, the citizenship issue remains under discussion.

2) Restitution.

In theory, all property confiscated by the Soviet Union in 1940 and afterward is to be returned to its owners. In practice, much of this is state property or in the hands of former Communist party officials. Some compromise solutions worked out during the independence struggles, in which the Communist Parties tended to favor nationalist programs, suggested that there would be no retaliation. In other cases, farmland is covered by factories, private houses by apartment buildings. Thus, it is not possible to simply confiscate all confiscated lands and return it to the heirs of the original owners.

3) Privatization.

After the restitution issue is resolved, it will still not be clear who "owns" many of the remaining state industries and farms—the population as a whole or the workers at the site. Moreover, many of the managers are Russian. Privatization strikes unevenly at the newcomers, many of whom do not possess even the dim memories of a capitalist past that Balts have.

4) The Commonwealth Army.

As late as August 1991 the Soviet military was an occupying army, trying to intimidate the independence movement by threats, special units (the Black Berets), and economic blockade. Although Yeltsin immediately recognized the independence of Latvia, Lithuania, and Estonia, he deferred to claims

by the high command that there were no barracks elsewhere for the troops in the Baltic States and therefore, practical reasons prevented withdrawing the naval, air, and ground forces. No strategic reasons exist today for occupying these states as long as they follow Finland's example in foreign policy. Logic suggests that as enlistments expire, the bulk of the forces would practically disappear within two years, leaving only the officers. Consequently, the disputes center on replacements. Estonian requirements that replacements apply for visas is vigorously resisted by the command, since that implies an ability to deny permission to enter the country. To avoid this, since 1991 reinforcements generally come by sea. Until November of 1992, the number of soldiers and sailors stationed in Estonia and Lithuania was declining rapidly, in Latvia less swiftly, then Yeltsin ordered a halt to the process (claiming in addition to the lack of barracks a concern for Russian-speaking citizens in the Baltic States). The early response of Baltic leaders was to perceive Yeltsin's statement as referring to internal Russian politics, not as a willingness to start an international crisis.

5) National currencies.

The introduction of a new currency in Estonia (the Mark) has undermined the ability of the occupying army to purchase supplies on the open market, Commonwealth business partners to pay bills, and for Russians to pretend that nothing significant had really changed. Especially hard-hit were pensioners, most prominently retired military officers and bureaucrats, who had literally been the first in line for everything which was available. The national governments are understandably reluctant to underwrite pensions for a foreign power. Latvia and Lithuania have plans to introduce their own currencies.

6) Cooperation among the Baltic States (or lack thereof). 

With only occasional exceptions, each nation thinks of itself first. Cooperation is minimal.1 Efforts by western academics— as at the Baltic Center in Riga supported by the Association for the Advancement of Baltic Studies and by American government agencies such as IREX—emphasize the need for cooperation in educational endeavors. These nations are too small to provide every type of university specialization, every type of technical training center. To give but one example, veterinary training is very expensive and must concentrate on problems unique to the Baltic states. It would be much more practical to have one world-class center, with individual special study centers in each country, than three underfunded programs trying to cover everything for small groups of students. Similarly, while each country will want its own embassy in the countries it considers most important, in other lands it would make sense to share embassy space (perhaps with Finland).

These nations already have a common language. Unfortunately, it is Russian. In Estonia one can get along well in English, in Latvia less so, in Lithuania hardly at all; similarly, almost everyone in Estonia and Latvia speaks Russian, but some Lithuanian clerks just shrug their shoulders. The Russian-language signs have been largely removed in Lithuania;

to the north the change-over is proceeding at a slower pace. Schools are currently teaching English and German; there is reduced demand for Russian outside the schools which use that as the language of instruction.

7) Erosion of the work ethic.

The influence of Russian work habits goes back to the tsarist era. The lack of concern for consumers, for putting in extra hours, for seeking more efficiency is typical of workers in any Soviet republic. Formerly, terror was able to get "volunteers" into the fields, get bureaucrats to increase production (or falsify the records), and shut people up. That has been gone for at least a decade.

Alcoholism, pollution, poor diet are major causes of health problems, especially among the Russian-speaking population. Although Russians are far from being the only heavy drinkers in northern Europe, they have a more severe problem than even the Finns; they live in the most polluted areas; and they

tend to eat too many potatoes and too much fat, too few fresh vegetables and fruits. The Balts share these health problems to varying degrees.

Few Balts have traveled sufficiently to observe western service industries in practice. Until this happens, or until local business colleges can train a new managerial class, service in shops and restaurants will continue to offer abysmal service. Tourist demand will probably have a swifter impact on major cities and seaside resorts.

8) Crime.

The replacement of experienced police officers, customs officials, and border guards came at the same moment that unemployment and inflation encouraged marginal people to consider crime as a means of resolving their personal difficulties. Petty criminality and prostitution flourished, the existing black market ballooned, and mafias expanded their range of activities. The police response has been inadequate: the public fears the use of infiltration tactics to break up criminal syndicates, the police lack training and experience, and police time spent on price control must take away from efforts to deal with more directly criminal behavior.

Foreigners are warned that it is dangerous to walk around alone at night in cities where the average worker receives perhaps $20 a month and where everyone knows that the foreigners carry several hundred dollars in cash. The areas around Russian army bases are notoriously dangerous, since the soldiers are practically unpaid. In any city, on almost any street corner, one can buy enough military gear to equip a small army. Reputedly, anything you want can be gotten. That is not a good sign for military efficiency. Discipline has slipped to the point where desertion is a major problem and banditry has begun.

To date, mafia activity is not directly connected with any one foreign ethnic group, but the very presence of the criminal syndicates is likely to exacerbate anti-foreign sentiments.


It is extremely important to remember that these general problems are not found in every part of the Baltic, not even in every part of any one state. The problems congregate in specific localities. Let us look at some of these in detail:


1) Estonia.

a) The northeastern industrial region has power plants, phosphate mines, and oil shale mining. Almost all the managers and 96-97 percent of the workers are Russian-speaking. Since environmental concerns touched off the Estonian independence movement, we must assume that the independent government will move to end the massive pollution (especially to the groundwater), thereby threatening the livelihood of these Russians. The nuclear reactors at the naval base in Paldiski, west of Tallinn, worry many Estonians and complicate the negotiations for returning the territory to the Estonian government. A much less serious matter is the 1940 border, which was farther to the east than the present one. A handful of Estonians either want the old border re-established or are using this as a bargaining chip for future discussions, but few hold much hope for achieving that goal.

b) The fishing industry was monopolized by Russians, who worried about escapes and contact with the CIA. These fishermen now face competition from the Estonians (especially on the island of Saaramaa). They have been forced to give up some of their vessels.

c) The tourist industry was formerly geared for the Soviet trade. In 1992, wealthy Russians were unhappy that their reservations at the earlier subsidized prices were not honored, the resorts preferring to cater to well-heeled Europeans, especially Finns.

2) Latvia

a) Riga used to be a commercial center dominated by Germans and Scandinavians; now it is an industrial city populated by immigrants who speak Russian. Many of the 90,000 retired Soviet officers resident in Latvia live here. If Latvians take control of their own economic destiny, they will supplant Russians who have been appointed for political party affiliation and ethnic identity as much as for skill and education. The Latvians will end (or upend) the system of preferential benefits for the foreign officers and managers, the reservation of jobs for Russians.

b) Eastern Latvia. Most of the workers at the thermal power stations are Russians. The plants are outmoded and produce tremendous pollution, but for the time being Moscow needs the electricity and Latvia needs the foreign exchange. In the near future, something will have to be done. This may affect Russians more than Latvians.

3) Lithuania.

a) Jewish immigration. Relying on the traditional Lithuanian tolerance for outsiders who respected the majority's rights, Jews have been returning to Lithuania; indeed, many fear that pogroms will reappear in the ex-Soviet Union. This presents numerous problems, one being linguistic: the returning Jews tend to speak Russian. They also move to the cities, where there is a memory of their long association with the Polish culture.

b) Poles. 19th century Vilnius was a Polish-speaking city. In 1920, Poland annexed this region and attempted to Polonize it. The action was the culmination of increasingly hostile relations which had developed during the 19th century. Today, Poland and Lithuania find cooperation more difficult than western powers would like.

4) Kaliningrad Oblast.

Until recently, foreigners were excluded from this region on the grounds that it teemed with naval and air facilities. Today, its strategic function is questioned, but nobody knows what to do with it. If it remains part of Russia, what means of access must be guaranteed?

Conflicts with the Russian Republic

There are a wide range of matters which the Balts must negotiate with their occupiers: reparations for death and destruction v/s reimbursement for capital investments; sharing the Soviet debt v/s sharing the gold supply and strategic reserves;

who owns the military equipment and bases in the Baltic States; what is the status of trade agreements and contracts. This is not an impossible list: Finland was able to come to an agreement. However, Finland had to concede a significant part of its national territory and accept a massive resettlement of people. That is not a practical part of any arrangement between the Baltic States and the Commonwealth of Independent States.

The Commonwealth military maintains a presence in the Baltic States. No longer having a strategic justification for its presence, it proclaims now to need to "protect" the Russian-speaking minorities. By a Time magazine estimate in August 1992, this force represented 1.1 Russian soldier for each square mile in Estonia, 1.4 for Lithuania, and 3.25 soldiers in Latvia. By comparison, 0.3 soldiers are in each square mile of Russia.2 To be sure, we should discount the huge expanses of Siberia from the calculations, but we cannot forget the activities of the special Interior Department forces, the Black Berets, before the August coup—their numbers were small, but their efforts at intimidation went as far as murder, the occupation of strategic buildings, and the parade of armored vehicles through the cities was designed to demonstrate that nobody should dare to oppose their bosses' wishes.

Yeltsin has promised to withdraw the Commonwealth troops from Lithuania by August 31, 1993, but it remains to be seen whether he survives that long and whether he has any more command over the army there than he does in Moldova and the Caucasian states.3 Everyone worries more about the revival of Russian nationalism than a return of Communism. That would increase the difficulty of resolving the ethnic problems in the Baltic States—too many Russians would call for a return to "natural order of things" as established by Peter the Great and Joseph Stalin.

To summarize, every proposed solution to the economic, environmental, and political problems of the Baltic States is constrained by ethnic considerations. Unless Estonia, Latvia, and Lithuania find ways to fulfill the goals of national statehood without alienating their large Russian minorities, they may well fail. If they cannot move toward the economic and social success they see in Finland and Sweden, the high hopes of the independence movement will dissolve into cynicism and despair; if the Russian minority feels itself oppressed or excluded, the Commonwealth army may choose to intervene. Apathy and disillusionment at home, threats and harassment from abroad—these rarely contribute to the success of liberal democracies.

In spite of the daunting problems and the general lack of foreign assistance (which goes almost to the point of no interest), the general prognosis is that the Baltic States will overcome the short-term problems in 10 or 20 years. In short, since they do not suffer the usual problems of third-world countries (illiteracy, lack of organization, lack of any industrial base) and share the same culture and climate of demonstrably successful Scandinavian states, their longterm future is bright.

1 William Urban, "The Implications of the Past for the Future of the Baltic States," Lituanus, (1992); reprinted in Lithuania in 1991 (Sandy Bay, Australia, 1992), 144-154.
2 U.S. News and World Report. August 1992, p. 12
3 The number has fallen from perhaps 200,000 to less than 50,000 in Lithuania. Reliable figures are not easy to obtain.