History, Politicsand Economics of the Baltic States
-1920 Recognized as independent countries -1939 Soviet Union occupies the Baltic States and installs pro Soviet regimes -1990 Baltic States re-declare their independence Stalin and Hitler signed a Non-aggression Pact (Molotov–Ribbentrop Pact) In the 1980s, due to a weakened central power in the USSR, the Baltic States asserted their autonomy and questioned the legality of their incorporation within the Soviet Union.
Government Structure All three Baltic States are Parliamentary Democracies Latvia and Estonia –President elected by the Parliament Lithuania- President elected by popular vote
Lithuanias Head of State is President Dalia Grybauskaite who resigned as an EU Commissioner when she won Lithuanias Presidential election in May 2009. She is Lithuanias first woman President. Latvias head of state is President Valdis Zatlers who was elected in 2007. The Latvian parliament has one chamber called the Saeima. The Estonian head of state is President Toomas Hendrik Ilves, who represents Estonia in international relations. Political control lies with the Prime Minister, Andrus Ansip, who leads a minority coalition consisting of his centre-right Reform Party and the nationalist Pro Patria and Res Publica Union (PPRP).
Market based economy Early 2000s saw the highest expansion/growth in their economy 2006 Unemployment below European Union average 2008 recession in Estonia and Latvia, 2009 in Lithuania 2011 Estonia adopted euro as its currency The economic and social structure of the Baltic states went through fundamental changes after their joining the USSR. The Soviet Union took over planning and development and there was heavy investment in large projects in Estonia and Latvia and industrialization and urbanization in Lithuania. They had lower living standards than Europe, but higher than the USSR.
Postwar socioeconomic policies transformed all three countries from predominantly rural societies into largely urbanized countries. In 1939 Estonia had been 66 percent rural; Latvia, 65 percent; and Lithuania, 77 percent.
The transition to the market based economy was challenging Throughout the 1990s there was an increase in privatization, national currencies were reintroduced, and foreign investment increased.
An important part of Baltic economy is agriculture. Potatoes Dairy cattle Cereal grains Pigs Fodder crops Fish Timber The Baltic region is not rich in natural resources. Though Estonia is an important producer of oil shale (an organic-rich fine-grained sedimentary rock containing kerogen, a substitute for conventional crude oil), it imports a large share of mineral and energy resources.
Industry in the Baltic states is prominent, especially the production of food and beverages, textiles, wood products, and electronics and the traditional stalwarts of machine building and metal fabricating. The three states have the highest productivity of the former constituent republics of the Soviet Union. The global economic crisis of recent times damaged the economies of the Baltic States. The recession in Latvia was the worst in Europe and this economic crisis led to the fall of its government. Latvia needed a €7.5 billion loan from the International Monetary Fund (IMF) to avoid bankruptcy in 2009.
The Baltic States have a “flat tax” system which is everybody pays one tax rate regardless of income. This has been adopted by several other Eastern European nations and Russia. (A flat tax system was recently proposed by Gingrich and Perry during their campaign).
Education, Youthand Labor Markets in the Era of Globalization
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