Winnipeg Free Press - ONLINE EDITION

Baltic Republics revelling in their hard-won freedoms

  • Print

VICTORIA — My wife and I were recently invited to visit Russia and the Baltic Republics of Estonia, Latvia and Lithuania.

In Russia, we found depressingly shattered hopes that freedom and capitalism would bring Western style prosperity. Paradoxically, even after enduring terrible treatment at the hands of their Russian oppressors for half a century, we witnessed the remarkable progress that the people of the Baltic republics have made since winning independence in the early 1990’s.

Why has moving from socialism to capitalism proven so disappointing for Russians and so positive for Estonians, Lithuanians and Latvians?

The answers to these questions lie in the two fundamental requirements for the transformation from Socialist repression to a free market Capitalist economy. First, since the government owns virtually everything; a thoughtful, transparent and unbiased privatization process is required. Second, the rule of law must be enforced against corruption.

Russia’s transition from Socialism to Capitalism failed on both counts. In an ill-considered privatization process, vouchers exchangeable for shares in huge oil, mining, and other industrial companies were distributed to citizens who had no concept of private ownership. Chaos reigned as some people even traded vouchers for shots of vodka in bars, resulting in the vouchers being purchased for a pittance by men who instantly became fabulously wealthy.

Several Russians despairingly told us that these so-called oligarchs gained their private jets, mega yachts and international palaces "over the backs of the Russian people"; thus becoming symbols of Capitalism’s failure.

But even if the oligarch enriching privatization debacle had been avoided, the country would have been doomed by entrenched government corruption. Transparency International ranks 183 countries from best to worst for public sector corruption. The 10 best are New Zealand, Denmark, Finland, Sweden, Singapore, Norway, the Netherlands, Australia, Switzerland and Canada. The U.S. ranks a respectable 24th. Near the bottom of the list is Russia at 143rd, in the same league as Africa’s Sierra Leone, Nigeria and Uganda. To get almost anything done in Russia, the palms of crooked government officials must be greased.

No wonder the Russian people are so cynical. They hoped capitalism would bring prosperity, only to become pawns of the same corrupt elite that victimized them for so long under Socialism.

The privatization process in the Baltic Republics was much more carefully thought out. The first privatization priority was home ownership. But people couldn’t afford to buy their apartments from the government. And then there was the problem that Russians transplanted under the Soviet "Russianization" process occupied the most desirable accommodation.

Estonia’s solution was a transfer of home titles based on how long people had lived and worked in the country. And where pre-Soviet ownership of houses and farms could be traced, title was transferred back to the original owners or their descendents. While Estonia’s privatization of other assets and businesses utilized a voucher system similar to that in Russia, a much lengthier, stepwise process yielded better value for the public treasury while generally avoiding the unfair enrichment of individuals.

Lithuania’s transition to free market Capitalism followed a similarly successful process. Latvia’s privatization also followed the same basic template, although many observers believe that sale of the country’s larger base of industrial assets involved corruption that unfairly enriched insiders.

It’s not surprising that the relative post-privatization success of the three Baltic Republics and that of Russia mirror their Transparency International government corruption rankings. Estonia ranks almost the same as the U.S. at 29th, Lithuania ranks 50th and Latvia 61st , all vastly better than Russia’s dismal 143rd.

The people of the Baltic Republics positively revel in their hard-won personal and economic freedoms. And gaining membership in the European Union was a hugely emotional milestone, symbolizing their final step in "rejoining" Europe after decades of Russian repression.

Those many years of enforced Socialism taught them hope and prosperity doesn’t lie in government programs; but rather in their own creativity, determination and work ethic. Comparing her country to its Scandinavian neighbors, one Estonian told me that. "We lost four decades, but will catch up."

I have no doubt that they will.

 

Gwyn Morgan is a Canadian business leader and director of two global corporations.

 

—Troy Media

 

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Blake Wheeler talks about past season

View more like this

Photo Store Gallery

  • MIKE APORIUS/WINNIPEG FREE PRESS STANDUP - pretty sunflower in field off HWY 206 near Bird's Hill Park Thursday August 09/2007
  • RUTH BONNEVILLE / WINNIPEG FREE PRESS June 23, 2011 Local - A Monarch butterfly is perched on a flower  in the newly opened Butterfly Garden in Assiniboine Park Thursday morning.

View More Gallery Photos

Poll

Do you agree with the province’s crackdown on flavoured tobacco products?

View Results

View Related Story

Ads by Google