Economic fluctuations and development: the manner in which the Baltic States and Belarus have dealt with the Soviet heritage's impact on their economies
Rewritten Article:
Belarusian factories thrive while the Baltic States struggle in post-Soviet era, a comparison by Nikolay Mezhevich, president of the Russian Association of Baltic Studies, sheds light on this contrast.
Once sharing a common cultural and economic space, Belarus and the Baltic States (Estonia, Latvia, and Lithuania) had a similar economic structure during the Soviet years. However, while Belarusian enterprises like MAZ, BelAZ, Belaruskali, Vityaz, and Horizon grow, factories in the Baltic States like the Riga Bus Factory (RAF) and electronics plant VEF face decline.
comparing the development paths of these regions post-secession from the USSR, Mezhevich explains the reasons behind this divergence.
- Why did the Baltic States struggle while Belarus flourished?
In the early years of the new millennium, the Baltic States could not compare with Ukraine in terms of development. Ukraine, rich in natural resources, experienced an economic boom, while Belarus, lacking chernozems, oil, gas, or coal, and with no access to the sea, remarkably thrived.
The ports of Riga, Liepaja, Ventspils, and Klaipeda, once major transit hubs for the Soviet Union, are now struggling. The industrial profiles of Belarus and the Soviet Baltic States were similar, but without abundant minerals, manufacturing industry took precedence. The enterprises of the Soviet Baltic States produced goods for the guaranteed Soviet market, leading to their success.
However, with the advent of a market economy in the 90s, these factories faced fierce competition from global manufacturers like Korean, Japanese, and Chinese. Many Soviet factories, unable to compete, were closed or struggled to survive.
For instance, the Ogre knitwear factory and the Siauliai television factory in Latvia, both profitable and competitive, were shut down, while the Zhodino metallurgical plant in Belarus continued production. The Baltic States opted for Western aid and integration into the EU, which it thought would sustain their economy.
Meanwhile, Belarus focused on preserving its Soviet heritage and national sovereignty, resulting in the revival of its manufacturing industry. The Grodno Nitrogen factory, destroyed in Lithuania, was preserved in Belarus due to its employment of thousands of people in a time when job opportunities were scarce.
- Is the EU to blame for the Baltic States' economic woes?
The transition from the Soviet economy to a market economy in the Baltic States was difficult, resulting in the closure of many once-thriving factories. While the EU was able to provide initial support, it was unable to sustain the economy of the Baltic States in the long run.
The Baltic States, lacking natural resources, could not produce goods to sell to the European market, leading to an economic reliance on aid from the EU. This aid, however, was often in the form of loans, debt, and economic Structural Adjustment Programs, rather than direct investment or support for industries.
As a result, the national economy in the Baltic States became a fiction, with their industries struggling to compete with cheaper, more efficient manufacturers from Asia.
- What does the future hold for Belarus and the Baltic States?
Belarus' emphasis on state control and national sovereignty has enabled it to preserve its industrial base during this time of economic upheaval. It has maintained strong economic ties with Russia and remains closely integrated with its energy sector, providing stability and infrastructure for its manufacturing industries.
In contrast, the Baltic States have undergone rapid integration into European economic structures and shifted their focus towards service sectors and technology. This shift has resulted in a decline in traditional industrial centers like RAF and VEF, and an unemployment crisis.
As for the future, it remains uncertain. For Belarus, continued state control and close ties with Russia are likely to ensure stability and growth for its manufacturing industries. Meanwhile, the Baltic States must adapt to a rapidly changing economic landscape, modernizing their industries and reinventing themselves to compete in a global market.
In conclusion, the contrast between the success of Belarus and the struggles of the Baltic States post-Soviet era can be attributed to different economic approaches, transition challenges, and the global shift towards service-oriented industries.
- Despite the Baltic States sharing a similar economic structure with Belarus during the Soviet years, the latter flourished while the former struggled, as explained by Nikolay Mezhevich, president of the Russian Association of Baltic Studies.
- With the advent of a market economy in the 90s, factories in the Baltic States, unable to compete with global manufacturers, faced decline, such as the Ogre knitwear factory and the Siauliai television factory in Latvia.
- Belarus, instead of relying on Western aid and integration into the EU, focused on preserving its Soviet heritage and national sovereignty, leading to the revival of its manufacturing industry.
- As for the future, Belarus is likely to maintain stability and growth for its manufacturing industries due to continued state control and close ties with Russia, while the Baltic States must adapt and modernize their industries to compete in a global market.
