On the Boundary of Two Worlds: Mapping Lithuanian Identity Abstract Prof. Dr. Leonidas Donskis Professor and Dean of Vytautas Magnus University School of Political Science and Diplomacy, Vytautas Magnus University, Kaunas, Lithuania E-mail: l.donskis@pmdi.vdu.ltInternet: http://www.vdu.lt/staff/PMDI/Donskis_en.htm

Throughout the twentieth century, Lithuania’s self-image as the Athens of the

North has peacefully coexisted with a moderate messianic construct, casting this

small nation as an important bridge between East and West (the former often

reduced to Slavic civilization or Russia). The concept of a synthesis of

civilizations ― East and West ― was elaborated and promoted by the Lithuanian

philosopher Stasys Šalkauskis, particularly in Sur les confins de deux mondes

(1919), a book on Lithuania written in French in Switzerland. This concept would

be repeatedly employed and elaborated in Šalkauskis’s book, Lietuvių tauta ir jos

ugdymas [The Lithuanian People and its Education] (1933).

An examination of several inter-war Lithuanian philosophical texts reveals

just how strongly Lithuanian philosophy was affected by nineteenth- and

twentieth-century Russian philosophy. Two key Lithuanian intellectuals ― Stasys

Šalkauskis and Vincas Mykolaitis-Putinas ― wrote their doctoral dissertations at

the University of Fribourg in Switzerland (both written in French), focusing on the

prominent Russian religious thinker and social philosopher Vladimir Solovyov.

Šalkauskis studied Solovyov’s philosophy of religion, while Putinas analyzed the

Russian thinker’s aesthetics. Šalkauskis’s dissertation was titled L’âme du

monde dans la philosophie de Vl. Soloviev (1920), Putinas’s L’Esthétique de

Vladimir Soloviev (1923). Šalkauskis and Putinas studied philosophy and wrote

their dissertations under the guidance of M. de Munnynck, Professor of

Philosophy at the University of Fribourg, whom they both described as their

mentor.

During that period, in addition to Solovyov, other Russian thinkers ― Nikolai

Berdyaev, Fyodor Dostoevsky, Konstantin Leontyev, Vassily Rozanov, the

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Russian nihilists, among others, influenced many Lithuanian academics and

public intellectuals. In addition to other influences of Russian culture on

Lithuania, these thinkers’ ideas can in part be seen as a principal source of

Lithuanian messianism. Roughly speaking, Šalkauskis’s vision of Lithuania as a

bridge between the civilizations of East and West is nothing but another term for

the specifically Russian notion of Eurasia, though this concept is usually reserved

exclusively for Russia and its historic mission. A devout reader and follower of

Solovyov, Šalkauskis’s concept of a synthesis of civilizations is merely a

Lithuanian variation on a classic theme in nineteenth- and twentieth-century

Russian social philosophy.

“Eurasianism,” both as a philosophical tendency and model of cultural or

civilizational identity, was a central concept in Lev Karsavin’s work and writing ―

he spent several decades lecturing in Lithuania, and fundamentally influenced

the development of Lithuanian philosophy of culture and cultural history. In 1928,

he was offered a professorship at the then newly founded University of Lithuania

in Kaunas where he arrived from Paris. An eminent Russian religious thinker and

an erudite cultural historian, Karsavin soon became a fluent speaker of

Lithuanian and established his reputation as one of the most brilliant lecturers at

the University of Lithuania.

His five-volume magnum opus, Europos kultūros istorija [The Cultural

History of Europe] (1931–1937), written in Lithuanian and published in inter-war

Lithuania, is a work of European significance and has yet to be surpassed among

Lithuanian contributions of the sort. When the Soviet Union repeatedly occupied

Lithuania after World War II, Karsavin was exiled to the Komi ASSR, where he

died in 1952. A man with several planes of identity, and also of multidimensional

spiritual and moral existence, Karsavin converted to Roman Catholicism.

In short, for a long time the philosophy of culture was the only theoretical

framework for the interpretation of the self, the historical essence of the nation,

the nation’s past, present, and future, and the nation’s cultural achievements.

The philosophy of culture has greatly contributed to the building and the mapping

of modern Lithuanian identity by raising problems and questions related to the

vision and project of Lithuanian national culture. The building and upholding of

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Lithuanian identity began changing substantially after World War II. Having been

more or less isolated from major European intellectual and cultural influences,

Lithuania entered this value-and-idea space after 1990. Yet this would pose other

questions and challenges with which Lithuania still has to wrestle.

Bibliography Bauman, Zygmunt. Identity. Conversations with Benedetto Vecchi.

(Cambridge: Polity, 2004).

———. “Making and Unmaking of Strangers,” Stranger or Guest? Racism and

Nationalism in Contemporary Europe. Edited by Sandro Fridlizius and Abby

Peterson. Stockholm: Almqvist & Wiksell International, 1996, pp. 59–79.

Donskis, Leonidas. Identity and Freedom: Mapping Nationalism and Social

Criticism in Twentieth-Century Lithuania. London & New York: Routledge,

2002.

Kavolis, Vytautas. Civilization Analysis as a Sociology of Culture. Lewiston,

N.Y.: Edwin Mellen Press, 1995.

———. “Civilizational Processes in Contemporary Eastern Europe,” Revue

Baltique, 2:1 (1991), pp. 95–107.

———. “Nationalism, Modernization, and the Polylogue of Civilizations,”

Comparative Civilizations Review, 25 (Fall 1991), pp. 124–143.

Shtromas, Aleksandras. “Official Soviet Ideology and the Lithuanian People,”

Mind against the Wall: Essays on Lithuanian Culture under Soviet

Occupation. Edited by Rimvydas Silbajoris. Chicago: Institute of Lithuanian

Studies Press, 1983, pp. 57–73.

Venclova, Tomas. “Ethnic Identity and the Nationality Issue in Contemporary

Soviet Literature,” Studies in Comparative Communism, 21 (1988), pp.

319–329.

———. “A Fifth Year of Independence: Lithuania, 1922 and 1994,” East

European Politics and Societies, 9:2 (1995), pp. 344–367.

———. Forms of Hope: Essays. Riverdale-on-Hudson, N.Y.: Sheep Meadow

Press, 1999.

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Sharing Experience of the First Years of EU Membership: Opportunities and Challenges Abstract Prof. Dr. paed. Žaneta Ozoliņa Head of Department of Political Science, Director of Advanced Institute of Social and Political Research, University of Latvia E-mail: zaneta.ozolina@lu.lvInternet: http://www.lza.lv/scientists/ozolinaZ.htm

Despite the fact that recognition of Baltic independence was a complicated

process, the three countries managed to find future cooperation partners in the

first few weeks of independence. One of the first to recognize the place of the

Baltic States in the international system was the European Community, which did

so on August 27, 1991. This marked the beginning of a rapid development in

relations between the EU and the Baltic States. On May 11, 1992, a trade and

cooperation agreement was concluded, and it took effect in 1993. Also in 1992,

financial assistance was offered to the Baltic countries under the auspices of the

PHARE program. A free trade agreement was signed on July 18, 1994, and it

came into effect in January of the next year. On June 12, 1995, a European

Agreement was concluded with each country. The development of EU-Baltic

relations was completed with the submission of applications for EU membership

by Latvia, Estonia and Lithuania – on October 27, November 24 and December

8, 1995, respectively. The EU accession negotiations process started in 2000

and the membership was acquired in 2004. What are the achievements and

challenges ahead of the Baltic States.

Account of the most important achievements What has been achieved? The answers could be found in domestic and

international realms.

1

International dimension: Joining the EU would helped the BS to move away from the Russian sphere of

influence and make impossible the incorporation of the three countries into the

forced “voluntary” integration of the Eastern sphere of the type which other Post-

Soviet space countries have undergone.

• Incorporation into numerous international organizations (NATO, UN, CoE,

OSCE) offered comprehensive policy tools for increasing prosperity,

security and stability in the BS.

• Harmonization and coordination of international activities with other

international actors raised the profile of the BS in international arena, thus,

increasing autonomy of actions of three countries.

• The BS have contributed to the better understanding of the complexity of

the transition process in Central and Eastern Europe. The accumulated

experience can be transferred to the countries which are still in the search

for their statehood and nationhood.

Domestic dimension: Economic life in the Baltic countries was in complete collapse after the

restoration of independence because of their departure from the Soviet economic

space. The example which had been set by the Western neighbors of the BS

was attractive enough to ensure that all three chose membership in the EU as

the most effective means for overcoming their economic crises and for

establishing modern economic life.

The political transformation manifests itself in several ways. The establishment of

democracy in the BS took place through an adaptation of the experience of

developed Western countries. The distinctly defined goal of moving toward the

EU meant that in just a few years’ time, Estonia, Latvia and Lithuania established

functioning institutions of democracy.

The security dimension is of great importance. Until recently the main focus was

on the “soft-security” dimension of EU membership. The creation of the ESDP in

1999 led to a situation in which membership in the EU is playing an increasingly

important role in the BS.

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Challenges ahead Challenges that the BS are going to face in the future can be divided in two

groups:

1) The first set of challenges involves the reforms which are occurring within

the EU as it adapts to the future enlargement of the Union. The ambitious

growth plan of the EU is attractive and very promising, but its

implementation involves a series of practical issues which touch upon the

lives of all Europeans. This means that in the near future we will face

many contradictory positions and discussions. As with Alice , from "Alice in

Wonderland," not only Latvia but also Europe itself needs to be running

faster just to stay in place. But running faster, completing the process of

institutional reforms and taking in new members, should not mean

"rushing". Quality and speed: both are very important.

2) The second group of challenges is made up of the ability of the BS

themselves to cope with acquired EU membership without losing tempo

and goals. How to cope with new European identity?; how to cope with

short and long term goal?; how to cope without conditionality?; how to

cope with new “commonalities” (CAP; CFSP; ESDP; emerging Energy

policy)? How to cope with bilateralism and multilateralism?

Where Baltic and Swiss relations stand today and what are prospects for the

future?

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Auditing and Monitoring Democracy: the Case of Latvia Abstract Prof. Dr. paed. Žaneta Ozoliņa Head of Department of Political Science, Director of Advanced Institute of Social and Political Research, University of Latvia E-mail: zaneta.ozolina@lu.lvInternet: http://www.lza.lv/scientists/ozolinaZ.htm

One of the most significant achievements of the transformation process that all post-

communist countries underwent is democracy. Democracy is a concept which has

been generously used as explanation, excuse, incentive, and justification for many

economic, social and political cleavages taking place in transitional countries. The

strive for EU and NATO membership of the Baltic states can be explained to large

extent by democracy concept as well. Democracy was a driving force and

democracy was a goal of the Baltic societies on their way to international

community.

There have been a wide variety of studies on democracy carried out in the

Baltic States from legal, economical, political and philosophical aspects. However,

there was a lack of comprehensive qualitative study on the topic. Therefore, a

multidisciplinary group of researchers was gathered in Latvia in order to explore the

state of affairs in democracy realm applying methodology developed by the IDEA.

There were 25 academics involved in the study. The research focused on time

period from 1999 to 2004 when Latvia negotiated EU membership and democracy

was not a concept on its own but a basic principle that fostered necessary

preparations for full membership. In 2008 the same group of academics produced

another study, which is called – Monitoring of Democracy in Latvia 2005-2007. The

aim of the study was to explore the same fields of democracy that have been under

scrutiny in previous period and to identify major achievements, problematic areas

and issues to be addresses in the short-term.

The presentation will focus on the main findings of the both studies, covering

following aspects of democracy: citizenship, law and rights; representative and

accountable government; civil society and popular participation; international

dimension of democracy.

In Search of State Identity Europeanization, Globalisation and Post-Communism in Political Community Formation: The Case of Estonia

Abstract Dr. Leif Kalev Assistant Professor, Head of the Department of Government of the Faculty of Social Sciences of Tallinn University E-Mail: leif@tlu.ee Internet: http://riigiteadused.tlu.ee/ENG/personal.asp?cmd=details&ID=36&vasak=CV

The paper discusses the public identity aspects of the formation of the political

community in Estonia, one of the Baltic states that are the only European Union

members once part of the Soviet Union. The acuteness of these issues has only been

affirmed by the riots following the removal of the statue of Bronze Soldier last year.

Compared to the Western European counterparts, most of the Central and

Eastern European states have had to go through nation building much more rapidly

during the 20th century (cf. e.g. the four time zones of nation building, Gellner 1997).

Estonia with the other Baltic states has been in an even more sophisticated situation.

Although many important cultural and institutional aspects of nation building were

developed alongside with most of the other CEE countries after World War I, the

Soviet domination between 1940 and 1991 eroded many achievements and created

new problems of post-colonial nature.

Hence, Estonia and the other Baltic states in many aspects (re)started their

nation building from the rather elementary levels. The situation, however, was very

different from both the Western and even Central Eastern European nation building

setting of 19th and early 20th centuries. In addition to nation building the Baltic states

also faced the challenges of de-sovietisation, globalisation and Europeanization. This

offers a valuable possibility to investigate various aspects of nation building.

I will follow a general conceptualisation of the state as a territorial and intellectual

space that the state/public institutions/elites try to organise (cf. Mann 1993, Giddens

1995, Rae 2002, Taylor 2003 et al.). State institutions generally attempt to create

coherence within the territory (cf. Weber 1978: 54–56 and Mann 1993: 54–63) while

the political projects of the other actors may have various results some supportive,

some opposing and some neutral to the public logic of the organisation of state

territory (cf. Jessop 1990). 1

 

In creating coherence in a territory, the state elites try to establish a normative

foundation legitimating their rule and structuring the political community (cf. Walzer

1967, Ruggie 1983, Weber 1995, Rae 2002, Pierson 2004). The other actors and

segments in society interact with state elites resulting in the construction of state

identities as a mutually constitutive relationship in which cultural structures are the

products of the practices and lived experiences of agents and these in turn shape

agents’ identities and expectations as well as the means by which they seek to

achieve their goals (Rae 2002: 46).

We can find the key elements of nation states from the empirical models of the

formation of nation states (cf. i.a. Mann 1993, Flora et al 1999) differentiating i.a. state

making as building up of state machinery and nation building as forming the political

community (Raadschelders 1998). The resulting basic model of the modern state

characterised as the set of power, wealth, cultural and social containers has however

become under the pressures of globalisation (Taylor 2003).

Globalisation may be result in localisation or even peripherisation of politics.

Additionally Europeanization as the influence of EU political, social and economic

dynamics (cf. Ladrech 1994, Radaelli 2000) slowly reshapes member states. De-

sovietisation has largely become the past but the practice has often been

characterised by the term post-communism.

From these theoretical premises many lines of research could be pursued. My

interest remains in examining the state and citizen identity aspects of political

community formation. I will discuss the content of state and citizen identity and

analyse the Estonian experience following a basic model of the interaction of state

elites and citizenry.

After discussing some national data on political culture, participation and

citizenship I will focus to the identity, power and citizenship discourses of the national

elites and to key issues with regard to active citizenship proceeding from national level

to local discourses in the rural municipalities. Also, the citizenship and identity

discourses of minorities will be studied. The qualitative data originates mainly from two

research projects funded by European Commission (DCE and Phare).

Analyzing the tensions between a classical conception of nationhood, not very

participatory power discourses, liberal legislation, economic practices, a more

participatory EU influence and a less developed Estonian active citizenship discourse,

as well as minority discourses provides information for highlighting the more stable

2  

and less developed elements of state and citizen identity in Estonia. On the basis of

the analysis, the concluding discussion draws some generalisations on the key

aspects of state and citizen identity formation in contemporary period.

References DCE = European Union 5th framework research project “Dual Citizenship,

Governance and Education: A Challenge to the European Nation-State (DCE)”, 2002-

2006.

GELLNER, E. 1997. Nationalism. New York: New York University Press.

GIDDENS, A. 1985. The Nation–State and Violence. Cambridge: Polity Press.

LADRECH, R. 1994. Europeanization of Domestic Politics and Institutions: the Case of

France. JCMS 32, p. 69.

MANN, M. 1993. The Sources of Social Power. Volume II. The Rise of Classes and

Nation-States, 1760–1914. Cambridge: Cambridge University Press.

PHARE = Phare CBC 2003/005-875.01-0017 project “Läänemaa ja Hiiumaa kohalike

omavalitsuste suutlikkuse indikaatorid ja ühisarengute analüüs” (Analysis of capacity

and perspectives of joint development of local authorities of Läänemaa and Hiiumaa),

2005-2006.

PIERSON, CH. 2004. The Modern State. London and New York: Routledge.

RAADSCHELDERS, J. C. N. 1998. Handbook of Administrative History. New

Brunswick and London: Transaction Publishers.

RADAELLI, C. 2000. Whither Europeanization? Concept Stretching and Substantive

Change. European Integration Online Papers (EioP) 4,(8), available at:

http://eiop.or.at/eiop/texte/2000-008a.htm (accessed May 2008).

RAE, H. 2002. State Identities and the Homogenisation of Peoples. Cambridge:

Cambridge University Press.

RUGGIE, J. G. 1983. Continuity and Transformation in the World Polity: Towards a

Neorealist Synthesis. – World Politics, 35:2`1983, 261–285.

TAYLOR, P. J. 2003. The State as Container: Territoriality in the Modern World

System. – N. Brenner, B. Jessop, M. Jones, G. MacLeod. State/Space. A Reader.

Malden, Oxford, Carlton, Berlin: Blackwell Publishing, 101–113.

WALTZER, M. 1967. On the Role of Symbolism in Political Thought. – Political

Science Quarterly, 82:2`1967, 191–204.

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WEBER, C. 1995. Simulating Sovereignty: Intervention, the State, and Symbolic

Exchange. Cambridge: Cambridge University Press.

WEBER, M. 1978. Economy and Society. New York: Bedminster.

4  

Party Systems in the Baltic States: Reflections on Systemness and Cleavages Summary of a paper presented at Eastern European Day 2008, “The Baltic States in the 21st Century – Democracy, Integration and Identities”, University of Fribourg, 30 May 2008

Dr. Allan Sikk Lecturer in Baltic Politics, School of Slavonic and East European Studies, University College London E-mail: a.sikk@ucl.ac.uk

DRAFT, PLEASE DO NOT QUOTE WITHOUT PERMISSION

The three Baltic states share many common characteristics that could lead one

to expect similarities in their party systems. They all share much of the recent

history – in terms of being incorporated to the Soviet Union, becoming

independent and democratic virtually at the same time, and concurrently joining

NATO and the EU. All three are both politically and economically fast developing

small young democracies. Latvia and Estonia are very similar in terms of their

ethnic composition and parliamentary form of government with an indirectly

elected president. Both use proportional (PR) electoral systems for electing their

parliaments. Lithuania deviates only a bit on the latter three accounts: it has got

its share of ethnic minorities, Lithuanian political system can at best classified as

semi-presidential, and it mixes PR with single mandate districts in its

parliamentary elections.

However, the party systems in the Baltic states have developed along

different paths. At the core, all have developed into multi-party systems that could

be expected based on the electoral systems used, but the individual parties and

lines of partisan conflict are different. All three have witnessed important changes

in their party systems, coupled with occasional – but often passing – bouts of

stability, but the timing of both has been different. The beginning of the new

century saw the rise of highly successful new parties almost without connections

to the existing political elite in all three countries: 2000 – Lithuanian New Union

(Social Liberals), 2002 – Latvian New Era, 2003 – Estonian Res Publica. At the

time, because of particularities in party system development, the emergence of a

1

new party was much less of a shock in Latvia than in the two other countries,

where some signs of party system stability had been visible.

Such events conform to the “standard knowledge” about post-communist

party systems – they are different from their West European counterparts in being

less stable. Constant change is often argued to be one of the few constants in

Central and East European politics. This view overlooks the fact that in general

the party systems are not that different from the ones of early 1990s – e.g. many

of the key players in the country’s politics were at or near the top already shortly

after independence. Also, the idea of promiscuous voters and easy access to the

political scene fails to appreciate fully the stabilising forces that exist in any

system – political, social or ecosystem. Political parties – the key actors in political

systems – are not there only to leave themselves passively at the mercy of

electorates. Parties change and adapt; they position and re-position themselves;

they form alliances, merge and split up; they reflect “real” social divides and

create advantageous “artificial” political conflicts; they seek public and private

resources, and strive to keep them from competitors old and new; they create

rules and invent ways to circumvent them. The list of success and survival

strategies could go on.

No doubt in the latter respects all political parties in democracies are similar.

All struggle for survival and strive for success. There are no good reasons to

believe the parties of long-standing Western democracies are a lot different from

their Eastern counterparts. However, survival strategies are dependent on a

variety of factors; political culture among voters and political institutions are

among the most important ones. During the golden age of political parties in

Western Europe – if there ever was one – parties relied to great extent on the

loyalty of their electorates, assisted by individual or family legacies of voting

habits and unprecedented social concord during the post-WWII decades. That is

in essence what the freezing of party systems asserted by Lipset and Rokkan was

about. Consequently, the legacy of a long-standing and reasonably stable

democracy had a strong stabilising impact on the West European party systems.

That was not the case with post-communist party politics, for example in the

Baltic states. Late 1980s saw a rapid political thaw that initially resulted in strong

but vague popular movements that already in early parliamentary assemblies

crystallised into initially weak but much better defined political parties. Even

though the parties split up according to “conflicts” – often not about issues but

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personalities – they were a far cry from the grand historical processes that had

given rise to “cleavages” in Western Europe. Furthermore, the newly defined

political parties were not nailed down to any core constituencies among the

electorates – even though they often tried to pretend that and even when political

observers East and West tried to make sense of political parties based on the

socio-demographic profiles of their voters. Vast economic difficulties during mid-

1990s did not facilitate the development of voting habits among post-communist

voters. Governments are always punished for poor economic performance – there

is plenty of evidence on that for Western democracies and there are no reasons

why it should be different in the East – and defection taught the Baltic voters an

early lesson in vote switching. Hence, the higher than Western levels of electoral

volatility both made sense and had the potential of triggering volatility later on.

Interestingly, the volatility levels in Western Europe have been significantly higher

in the past few decades than they had been earlier; high volatility may essentially

be a characteristic of modern democracy everywhere.

Given the low levels of voter loyalty, Baltic political parties had to employ a

somewhat different mixture of survival strategies. Some aspired to become more

akin to their sister parties in the West – assisted by occidental inspiration and

often also by resourceful political foundations or Euro-parties that were taking

shape at the same time. Even when some parties did attempt to mimic Kohl’s

CDU or New Labour that did not automatically imply that they were becoming

increasingly cleavage-based. One has to keep in mind that at least since 1960s,

the Western parties had employed catch-all strategies and become less defined

by the social profiles of their voters than they once were. There was in fact not

much room for other than electoral-professional strategies. Strictly defining core

constituencies may have well been suicidal – alienating other social groups while

losing some of the core constituency to parties employing catch-all strategies.

Furthermore, the parties usually did not have a large or active membership that

would have made adaptations necessary to catch all – or at least more – voters

more difficult. And sometimes changes were necessary – for example, parties that

had national independence as their main objective had to find a new niche after

the aim was achieved, or withdraw from the political game. Calling it a day makes

sense if we think about political parties strictly in terms of their profiles and

programs, but there is much else to them. Most prominently, leaders who had

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developed reputation and name-recognition had all the rationale to go on with

their political careers.

In some respects, the East European and Baltic parties may even be more

skilled than their Western counterparts in using other survival and success

strategies, as they had to and were freer to innovate because of weaker voter

loyalties. For example, there is evidence that compared to most Western

democracies electoral campaigns in Baltic countries have been more costly in per

capita terms when taking into account lower levels of economic development.

Expensive campaigns are necessary and useful for mobilising voters with weak

attachment to political parties, but can also be used by the more affluent parties to

keep the ones with more limited resources at bay. Interestingly, parliamentary

parties in Estonia rely increasingly on public financing, while there is as yet no

direct funding of political parties from the state budget in Latvia. Undoubtedly,

money and paid ads are just one factor. New political parties often – although not

always – have to compensate lack of resources with something else, such as a

charismatic leader, more active volunteers or a political program with simple and

popular appeal. The latter may take the form of blunt populism or – as has been

surprisingly often the case – addressing an issue that matters to the voters but

has been ignored by existing political parties. Two examples illustrate the point

well. Firstly, all three above-mentioned successful new parties included fight

against corruption among their priorities. That may sound a convenient anti-

establishment slogan, but if corruption is a pressing matter in a country, the aim is

progressive and at the same time difficult to advocate by incumbents. Secondly,

the established parties’ lack of attention to growing environmental concerns

contributed towards the more recent success of the Green Party in Estonia.

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Becoming Post-modern, Without Being Modern? Interpreting the Development of Welfare State in Estonia, Latvia and Lithuania Abstract Prof. Dr. Anu Toots Professor of Comparative Public Policy Professor, Tallinn University E-mail: anu.toots@tlu.ee

Expansion of the Welfare state to the Mediterranean countries and to the Central and

Eastern Europe has provoked academic interest for various reasons. One of them was

the attempt to use developments in these regions as a testing ground for the existing

theory of welfare regimes. The dominating assumption was that less developed

European peripheries will evolve in the same direction as established Western

European welfare regimes. Therefore the whole process was seen as a transition from

the collapsed authoritarian regime to the one of the Esping-Andersen’s welfare

models.

In early 21.century the need to revise radically traditional understanding of the

welfare state becomes well voiced in research literature (Pierson, Taylor-Gooby,

Bonoli). However, this understanding did not affect studies on post-communist welfare

states. Typical analyses are based on the comparison of social spending statistics,

which clearly show post-communist countries as underdeveloped, lagging behind the

European average indicators. According to the dominant assumption Eastern Europe

has to go through all stages of development to catch up the European Social Model.

Putting it differently, basic characteristics of a modern welfare state like strong labour

market institutions with traditions of social dialogue, solid industrial economy with well

regulated work relations, generous welfare spending and clear social cleavages across

class lines should become obligatory components for a contemporary welfare states in

Eastern Europe.

In my opinion, there are some basic misconceptions: Firstly, mature welfare

states have entered into new era of post- or “second modernity” (Beck). Thus, a

reconceptualisation of main variables is necessary. This has become more common

regarding the western welfare state, but should be extended to the analysis of post-

communist welfare regimes as well, since the post modernity is not a narrow Western

European phenomenon.

1

Secondly, the concept of societal transition seems somewhat too narrow in the

current era of uncertainty and globalization. Adaptation to the various post-industrial

pressures becomes more important today than movement from A to strictly defined B.

Thus, when studying post-communist welfare states one should focus on their

adjustment to the current circumstances rather than measure how far they stand from

Western European welfare models.

Thirdly, Soviet regime of 1980-s was not a pure case of totalitarianism, but a

complex socio-economic system having strong impact on key areas of the welfare

state, for example on employment and family patterns. The heritage of Soviet regime

makes accommodation of some new risks potentially easier (for example with regard

to the female labour market behaviour or egalitarian educational capital). The fact that

the concept of welfare state was in Baltic States never bound to the national identity,

facilitates today radical social reforms and flexibility also.

Current paper challenges some of these misconceptions on the bases of

empirical evidence from three Baltic countries. My central idea is to show that to cope

efficiently with challenges of postmodern “retrenched” welfare state, it is not necessary

to achieve the full modernity. I elaborate my argument by looking firstly, at the level of

welfare spending in conjunction with economic growth, and secondly, by studying

developments in key areas of contemporary welfare state as employment and family

affairs. Adaptation to the post modern conditions can be regarded as successful if the

stability of welfare spending is accompanied by the stabile or decreasing level of

poverty and by expanding and flexible employment.

In the “Golden Age” of the welfare state the share of welfare spending has been

the major variable to evaluate the development of welfare states. Therefore, the main

fear in the era of austerity was that welfare spending will be cut down. Since the focus

of modern welfare state was on ex-post redistribution, decline in funds was explicitly

associated with the potential increase in poverty.

Post-communist countries did not share this path, because their welfare budget

did not increase in concordance with GDP growth. Estonia, Latvia and Lithuania

experienced in 2000-2007 the average GDP growth 8,5%, but social protection

expenditures decreased approximately within the same period by 2,5% reaching just

12,5% of GDP in 2005. Old age pensioners and unemployed never enjoyed generous

benefits in transitional countries, therefore expectations towards governmental support

was not so strong here.

2

However, the fact that Estonia, Latvia and Lithuania spend on social benefits less

than half of the EU average does not say much about their adaptation to the post

modernity.

Here we need to look in depth at employment patterns, especially with regard to

the new social risks. The modern welfare state in Continental Europe was oriented

toward male full time worker. Women with children, part-time workers or persons with

fixed term contracts were in more vulnerable positions both in terms of saving their

jobs and escaping the poverty. With arrival of the post modernity it was understood

that there is a pressing need to increase flexibility of the labour market in order to

facilitate employment among those who cannot take a full time job.

One might expect that post-communist countries, which have not experienced a

true industrial labour market (including strong social partners) will quickly adjust to the

post modern conditions of “liquid modernity”. However, this did not happen. After the

collapse of planned economy women and aged employees loosed their jobs more

often than men; part time jobs were very limited and typically only at the lowest wage

level. The latter features have remained typical for three Baltic States also today,

despite of better balance between jobs and jobseekers. Labour laws are more rigid

and the employment rate lower than in most Western European countries. In result we

have an interesting situation, where despite of the absence of path dependency with

modernity, Estonia, Latvia and Lithuania cannot adapt post modern employment

patterns.

Yet, focusing on family and gender issues we find a different picture. All three

countries inherited from Soviet period a strong reliance on adult worker model, where

employment pattern did not reveal any gender differences. When the worst years of

shocking market reforms were over, female employment rate began to increase fast.

Differently from the mature continental European welfare model, female unemployment

in Baltic States is lower than male unemployment rate. Also, in contrast with

Continental welfare model, female employment growth exceeds in Baltic States male

employment growth. Both trends are in contrast with typical labour market patterns in

EU15. For example, the average female employment growth in BS3 in 2006 was

4,2%, in EU15 – 1,8%. The same figures for female unemployment rate in 2007 were

4,6% in BS3 and 7,7% in EU15. Similar difference can be found in terms of youth

unemployment, which, being higher than the average has in BS3 decreased in a much

greater extent in last 4-5 years than in the EU15.

3

Summing up the employment issue one can argue that Estonia, Latvia and

Lithuania have been more successful in adapting new social risks (NSR) associated

with contemporary family patterns whereas in modernising labour relations. One can

suggest that this was made possible because of adequate family policy measures. All

3 Baltic States (standing in the very bottom of EU27 in terms of total welfare

expenditure) spend to family and children more than the EU average. This argument

can be supported also by the fact that Lithuania, which spends on family policies less

than Latvia and Estonia, has also weakest growth in female employment. However, an

additional study is necessary to control whether increase in female employment

coincides with the introduction of significant family policy measures. At the current

state of my knowledge, this may not be the case.

Let us now turn to the poverty problem. How are Baltic States coping with this

issue that becomes more painful for contemporary Western European welfare states?

Despite of the stabile or even slight decrease in social protection expenditure in BS3

the dynamics of poverty is quite similar to the EU average, i.e. at risk of poverty rate is

increasing by 2-3% in last 5-6 years. Estonia shows even a decrease in poverty rate.

However, there is one basic difference between the Baltic States and Western Europe.

In EU15 social transfers decrease at risk of poverty rate by 10%, in BS3 – by 5-6%.

Consequently, in Estonia, Latvia and Lithuania well-being is less dependent on the

welfare state.

Since poverty indicators do not reveal any remarkable gender difference, one can

suggest that higher female employment does not contribute to the improvement of

personal well-being. Thus, women active participation at labour market affects macro

level indictors (dependency ratio, total social spending) but leaves micro level

performance largely unaffected.

Summing up the discussion one can conclude that post- communist countries

represent interesting, but controversial material for welfare state studies. BS3 were

successful in recovering high female employment; they also succeeded to hold poverty

level under control when decreasing the share of total social spending in GDP. At the

same time, expansion of female employment does not give remarkable financial gains

for women; neither are options for flexible employment satisfactory.

Thus, some aspects of welfare state development in post-communist Baltic

States demonstrate promising adjustment potential. The question is – whether this is

enough for the survival in the era of post modernity?

4

About the author: Anu Toots is a professor of comparative public policy at Tallinn University, Estonia. She has published several research articles on educational policy, social security reforms and public e-services. Among them are: Matthes, C., Kacienskiene, M., Rajevska, F., Toots, A. (2007). Rentenreform im Baltikum: Neue Modelle im Praxistest. Osteuropa 57.jg., 7, S.47-56. Toots, A. (2006) Why do actors vary? A study of the Estonian pension and unemployment insurance legislations. In. Guy Peters,B., Sootla, G., Connaughton, B. (Eds.) Politico-administrative Dilemma: Traditional Problems and New Solutions, NISPAcee, pp 214-223. Toots, A. (2006 ) Explaining Internet Service Quality in Social Security Agencies using Institutional Theory. Information Polity: The International Journal of Government and Democracy in the Information Age.Vol.11(3,4).IOS Press pp.273-282.

5

Foreign Exchange Rate Policies in Baltic States: Current and Future Challenges Abstract Dr. Nerijus Mačiulis Dean of Undergraduate Studies, Department of Undergraduate Studies, University of Management and Economics, Kaunas, Lithuania E-mail: nermac@ism.lt Internet: http://www.ism.lt/index.php/undergraduate_school/desinysis_meniu/contacts/2123

Summary In the last decade Baltic countries have fixed their national currencies against anchor

currency or basket of currencies at a significantly undervalued exchange rate. This

was intentional and justified policy, as real exchange rate was expected to

appreciate (because of relatively higher inflation cause by Balassa-Samuelson effect

and other factors). Recently there have been a lot of talks (both in world famous

papers, like The Economist, and local tabloids) about significant overvaluation of

Baltic currencies and imminent devaluation. Large spreads between interbank

offered rates in euros and national currencies indicated a severe pressure in Baltic

foreign exchange markets. This study aims to estimate whether Baltic currencies are

fundamentally overvalued and what implications this has for prospective Euro

adoption.

Lithuania, Latvia and Estonia are about to join Economic Monetary Union

(EMU) and adopt Euro. Determining appropriate parities between Litas, Lats, Kroon

and Euro bears long term significance not only for countries’ economic policy, but

also corporate sector and financial markets. Upon joining Euro zone, Baltic countries

will no longer be able to alter their exchange rates and use it as macroeconomic

adjustment tool. If a country adopts Euro at an overvalued exchange rate, its

competitiveness within Euro zone would be seriously restricted. On the other hand,

choosing parity where national currency is undervalued, price convergence with

other EMU members would put a strong pressure on short and long term inflation.

Not surprisingly, finding the equilibrium exchange rate is not an easy task. By

allowing their currencies to float, governments would enable market forces to

determine this equilibrium, however this is not possible, since Lithuania, Latvia and

Estonia are already members of Exchange Rate Mechanism II (ERM-II) and have to

keep their currencies fixed at least two years prior to Euro adoption. It could have

been useful to float the currencies before joining ERM-II and allow the exchange rate

self-adjust towards equilibrium, but all the Baltic currencies have their exchange

rates fixed for more than a decade and this policy was very successful in curbing

inflation and attracting foreign investments. Other Central and Eastern European

countries (Poland, Hungary, Slovakia and Czech Republic) have taken this path and

liberalized their exchange rate policies to a lesser or greater extent, but still face the

prospective decision regarding the parity with Euro.

A few years ago numerous studies (e.g. Schularick and Bialluch [2005]) have

suggested, that most of the Central and Eastern Europe (CEE) currencies are

fundamentally undervalued. This was confirmed by speculative revaluation attack

(coordinated attempt by market participants to force revaluation of currency) against

Hungarian forint in 2003.

There are many ways to estimate equilibrium exchange rate, however none of

them are too reliable. The simplest approach to estimate this rate is based on

purchasing power parity (PPP) theory, which suggests that exchange rate of two

countries should equalize their purchasing power. The issue of appreciating real

exchange rates in CEE was addressed by Coudert and Couharde (2003). Based on

PPP theory, they estimated that Latvian and Lithuanian currencies in 2001 were

overvalued (by 0.8% and 12% respectively), whereas Estonian currency was

undervalued by 4.7%. However, the numerous studies on purchasing power parity

(e.g. Macdonald, 2000) indicate that on its own PPP is not a good vehicle for

defining an equilibrium exchange rate.

Another simplistic approach towards determining equilibrium exchange rates is

based on uncovered interest parity (UIP) theory, which assumes that the ex-ante

risk-adjusted nominal rate of return on domestic and foreign assets should be equal.

In other words, the nominal exchange rate is likely to move based on the interest

rate differential. However the UIP condition does not provide the fundamentals which

determine the real exchange rate equilibrium in longer term, but rather is suitable for

‘explaining the adjustment path of the exchange rate back to it equilibrium’ (Driver

and Westaway, 2005). In addition, the UIP condition seems to have difficulties to be

proved empirically.

Other popular approaches include fundamental equilibrium exchange rate

(FEER) and behavioral equilibrium exchange rate (BEER); however they are of

limited use. Both models define real equilibrium exchange rate as the exchange rate

yielding country’s internal and external balance simultaneously. Internal equilibrium

is conceived to be non-inflationary growth at full employment in line with the growth

potential. External balance (equilibrium) is achieved if the exchange rate brings the

current account in line with long-term capital account. Schularick and Bialluch (2005)

point out, that these equilibrium models depend on three critical assumptions: (1)

current account model with the corresponding exchange rate elasticities can be

specified; (2) potential growth can be estimated with sufficient accuracy; (3) the

optimal capital account position can be identified. However, emerging and transition

countries (such as CEE, including, of course, the Baltics) do not meet these

preconditions. These countries have only short time series available, which are

further complicated by structural breaks. Estimating the real exchange rate elasticity

of individual current account positions is only achievable on a long time series, thus

the results derived using such models depend strongly on underlying assumptions.

This paper takes different approach of estimating over- or undervaluation of

Baltic currencies. Competitive position of Lithuania, Latvia and Estonia in EU Single

Market is examined on the basis of Euro wage levels in manufacturing. If wage costs

are higher than permitted by the level of productivity in the Baltic economies, this

suggests that the national currency is overvalued. In this case unpopular and painful

political decision of either currency devaluation or wage cuts would be required.

References

1. Schularick, M. and Bialluch, L.C. (2005) Are the CEE-4 currencies

fundamentally undervalued? Deutsche Bank Research.

2. Coudert, V. and Couharde, C. (2003) Exchange Rate Regimes and

Sustainable Parities for CEECs in the Run-up to EMU Membership. Revue

économique, Vol. 54, No. 5, Macroeconomics of Exchange Rate Regimes,

p. 983-1012.

3. MacDonald, R. (2000) Exchange rate behavior: are fundamentals important?

Economic Journal, Vol. 109 Issue 459, p. F673-F691.

4. Driver, R. L. and Westaway, P. F. (2005) Concepts of equilibrium exchange

rates. Bank of England Quarterly Bulletin, Vol. 45 Issue 1, p. 49-49.

Transition and Afterwards: Peculiarities of State Economic Policy Abstract Prof. Dr. Jonas Čičinskas Professor and Head of European Studies Department, , Institute of International Relations and Political Science, Vilnius University, Lithuania E-mail: jonas.cicinskas@tspmi.vu.lt

I Collapse and dissolution of the Soviet Union was not just the end of the last empire in

modern times, but also the beginning of systemic changes in the countries of demised

Soviet block. The centralized command economy and autocratic repressive political

system and police state were to be replaced by market economy and system of

democracy. The move towards economic and political freedom was a powerful force

which led to fundamental changes in the whole societal life. During this process the

third component of the same importance came to surface – a civic society which

asked for, as its main precondition, social cohesion.

Subsequently the whole theory of economic and political transformation rested

on three decisive issues – creation of free market economy, democratic political

system and civic society.

Relation between economic growth, democracy and social cohesion (determined

by degree of income inequality and provision of education and health services) has

been widely discussed by economists, politologists and sociologists debating the issue

of transition. The conclusions are mixed, which has, so far, implied some general

finding that the relations and correlations between the three phenomena depends on

many specific circumstances and factors.

Generally all three phenomena are bilaterally and multilaterally linked in one

positive relation – progress of any one means the same move of the other two.

However, this general rule is far from precise and exploratory when dealing with more

concrete cases of transition. The reasons are quite obvious.

First, although unrestricted market forces seem to be best prepared to promote

the highest growth rate (at least according to the liberal economic theory which is built

on the presumption of full use of production factors and unrestricted price mechanism,

which determines the most efficient uses of them), this is not the case, because

economic growth needs rule of law (especially for securing property rights and

1

execution of contracts) and, therefore, asks for at least some degree of institutional

(legal) stability (i.e. some adherence of the law by the government).

The emphasis on economic growth may well lead to deepening of social

differentiation. Market forces always glorify and gratify efficient performers and

severely punish losers.

Generally, economic growth creates basis for and makes positive impact towards

reduction of income inequalities and strengthening democracy. On the other hand, it

asks for political support which, in turn, requires some degree of solidarity in income

distribution, i.e. some extent of social cohesion. „Our analysis highlighted the fact that,

while economic reforms are needed to foster growth, they must be designed in such a

way that they do not undermine political support for reform. Thus, policies reducing

harmful social impacts of economic growth ... form a crucial element of a successful

reform package, even from the efficiency point of view.“1

Second, there is also no explicit link between democracy and economic growth.

To put it more precisely, a link does exist, but, according to one study, , it „... is subtle,

indirect, and contingent on levels of development.“2

Third, democracy positively correlates with social cohesion – both due to its

inclination to use more intensively redistribution mechanism (and, on this basis, to

obtain large public sector) and also to stronger public control in the use of the

expanded public sector funds and other resources. And vice versa: „... higher standard

of living promotes democracy.“3 But again: the correlation is indirect and not causal:

„... the public sector development has both positive and negative effects on income

inequality.“4 As Cheol-Sung Lee points out, the exact nature of such a link is mediated

by the existence of institutionalized democracy, i.e. the institutionalization of public

accountability and alternative political forces.5

1 Bank of Finland. Institute for Economies in Transition BOFIT. Discussion Papers 2003, No. 4. Byung-Yeon Kim and Jukka Pirttilä. The political economy of reforms: Empirical evidence from post-communist transition in the 1990s. p.20. 2 Baum, Matthew A., David A.Lake, The Political Economy of Growth: Democracy and Human Capital. American Journal of Political Science, Vol. 47, No. 21, April 2003, p. 333. 3 Barro, Robert J., Determinants of Democracy. Journal of Political Economy, Vol. 107, No. 6, 1999, p. 182. 4 Cheol-Sung Lee, Income Inequality, Democracy, and Public Sector Size. American Sociological Review, Vol. 70, February 2005, p. 175. 5 Ibidem.

2

Although some of these characteristics have been studied before the last

transition took place, most of them entered the agenda of both scientific research as

well as political practice only when the Soviet empire ceased to exist and the political

and economic transformation begun. What looked as being of the second importance,

now became the top issue of practical political agenda - the sequence of reforms,

causal relations between reforms in different areas of public life, and circumstances

determining the directions and intensity of the causality.

This explains why transition countries, while receiving much of external aid in

their efforts for systemic changes did not receive anything about sequence, relative

importance of different actions and independent factors determining or influencing

success in the efforts. International financial institutions, sponsor countries were able

to explain in details and assist in implementation, separately, free market economy

institutions, democracy institutions, modern legal system – but they could not consult

about the sequence and factors of reforms, since they neither ever did it themselves,

nor there was theoretical knowledge about it.

Thereby investigation of the transition of the Soviet block countries to normal

stance can increment our knowledge about how societal systems are being reformed

and transformed. But it is not the only benefit. Transition studies are capable to deliver

an input to the more general knowledge about the nature and role of state in modern

societies.

II State in transition countries was immediately charged with huge and, perhaps,

paradoxical responsibilities. It had to conduct systemic changes which should lead to

state‘s withdrawal from the economy and reduction its role in society‘s governance

(together with changing the nature of state‘s role in new structures). The experience of

Lithuania allows some generalizations about peculiarities concerning state’s role in

transformation of economic system which was crucial for the whole success.

First, the most difficult thing for state in the first phase of transition was to find

right positioning in solving social problems. Deprived from monopolistic position in the

whole economy state remained charged with social issues (education, health services,

pensions, social care). It tried to mimic expanded social protection schemes from

mature European countries, unable however to provide necessary financing for them.

Schemes fuelled illusory expectations for social protection, and this served as an

obstacle for creation a new system based on social and private insurance.

3

Second, state was forced to engage in activities which in mature societies belong

to the competence of trade unions, NGOs and other civic movements and initiatives.

In Lithuania it was state which took care on salaries, employment terms, collective

agreements, negotiations between representatives of capital and labour. Quite

frequently the Government acted directly as a representative of trade union of

employees in private sector. The same may be said about the duty undertaken by

state in assisting and stimulating small businesses and co-operatives among farmers.

Third, conspicuous feature at first stages of transition was unprofessionalism of

actions. Although large technical assistance in different forms has been provided to

Lithuanian public services, the positive results were not fast to appear. Economy and

public administration were to built anew and this required time, training and learning.

These (and other) features allow to conclude the description of state’s role in a

transition country by two characteristics: first, at the first stages state in transition

society is relatively more important than in any mature democratic society with market

economy; second, the state itself (its institutions and officials) in such society suffer

from significant shortage of professional capacities. These two characteristics explain

why it was so important for Lithuania as for any other transition country to have most

favourable (a) initial conditions, (b) institutions, and (c) economic (and other)

competence. These three factors made final touches when transition country was

undergoing systemic transformation.

III The process of systemic transformation of the economy in Lithuania, a small country,

was intertwined with the outside economic developments. Due to that the

transformation may be described as a sequence of waves:

1) Free trade with western countries was the first common rush. For the

command economies this was absolutely new occasion and experience.

Reorientation of trade from CIS countries to countries of free market

economy provided powerful force for the restructuring of the economy;

2) After trade growth started the inflow of foreign direct investment began. First

as small joint ventures, established mainly for trade, then, with large scale

privatisation, large foreign companies also establishing in Lithuania, and

bringing many novelties to the local economy;

3) Still later, when privatisation and employment rationalisation led to significant

unemployment, emigration took its place. First – mainly searching for illegal

4

employment, as from 2004 – legally employed (mostly to Ireland, UK and

Spain);

4) With more than decade having passed and the transformation of the

economy was completed, the credit expansion appeared. It came suddenly

(starting from 2005), after the main banks have been privatised,

accommodated and got ready to supply large amount of credits, using funds

coming from their owners and other foreign banks as well. In the community

where the use of bank credits was a rarity, now credit supply was swelling up

by 50-60 per cent annually;

All these waves have been rendering powerful pushes to the national economy.

Some of them stimulated trade, other – upgraded technologies, still other – helped

families to find sources of income or better income. Their intensity created sometimes

rather significant shifts in the economy and society, not necessarily positive, but with

the final result always being modernisation and adaptation to new environment.

Almost in all cases state has been perceiving situation post factum; true, very

often nobody could forecast the shifts. National community – because it did not wish

(and expect) them, outside consultants and analysts – because the cases were not

explored and described by theory. Still some waves may be projected in future. One of

them, the nearest, should be the strengthening of “brain drain”, another one – growing

immigration, up till now very restricted and unpopular, from more remote countries of

Asia and Africa.

Crucial involvement into international exchange of goods, services, labour and

capital creates for the government of small state quite unstable and unreliable niveau,

and charges with quite significant burden of decision-taking. On the other hand, it

comes together with the gradual maturing of the newly created national economic

system. To learn this new role is exactly what the public institutions and the political

elite in Lithuania has now on their agenda.

5

DELOCALISATION OF PRODUCTION: THREATS AND OPPORTUNITIES FOR ESTONIA Abstract Prof. Dr. Kaarel Kilvits Professor and Director of School of Economics and Business, Department of Public Economy, Tallinn University of Technology E-mail: kilvits@tv.ttu.eeInternet: http://www.ttu.ee/?id=1847&otsis6na=&nimi=Kilvits&amet=&yksus

Enterprises operate increasingly more in international networks and value

chains. They locate procurement, production, distribution, marketing, sales and

servicing in different countries across the world. They perform every operation

where the price-quality ratio is the best. The delocalisation of production –

international relocation; the shifting of work to low-cost (low-wage) countries,

including the closing of domestic sites or scaling down their activities – is a

difficult problem for developed states. Increasingly more people (with low

educational level and qualifications) in developed countries „tend to become

redundant”.

The situation became even more complicated after the EU enlargement in

2004. The situation was complicated even more by the fact that the EU

enlargement process took place at the time when global competition became

much fiercer due to the integration of China and India into the world economy.

For Western European companies, the choice was not between producing at

home or abroad. It was between cutting costs or losing market shares. Western

European firms go abroad because they cannot stay competitive in the costly

economic business environment.

Former and current developing countries have invested more and more in

education and R&D in order to catch up with the industrialised countries. They

have proceeded from specialising in basic low-priced products to more

diversified production that covers advanced and internationally competitive

products. Production with higher and higher technological level are leaving

developed countries.

Delocalisation is difficult to quantify statistically since it takes different

forms. Its primary elements are FDI and outsourcing, although it also refers to

all other types of cross-border business interactions: subcontracting; firms that

2

traditionally have bought the intermediate product (i.e. never produced it in-

house and therefore never stopped producing it) and are now outsourcing it;

horizontal FDI, which is very often not considered a component of

delocalisation, since it involves the movement of production abroad.

The turbulent transformation of economy and society looks set to continue.

The main trends are internationalisation, multinationalisation and globalisation.

Economic, technological, political etc. processes change the world into an

integral whole. Processes of globalisation are increasingly making diverse and

distant places, processes and people more interdependent. Geographical

identities are becoming blurred and competitiveness is taking a global

dimension.

The economic unions, countries, regions, enterprises and actually also

individuals have lost any kind of true option whether to participate in

globalisation or evade it. There are increasingly less real possibilities for isolated

existence and development in the contemporary world.

Space is not homogenous. Different economic activities take place in

different locations. The type of business that dominates today’s global economic

system operates on the basis of finding the cheapest production (in particular

labour) cost. Delocalisation and globalisation in general can be a threat or an

opportunity, depending on the country’s trade mix and its economic and

regulatory structure. Economic benefits are evident for the country to which

economic activity is relocated, notably through job creation, investment

spillovers, and technological transfers. But a relocating country can in principle

benefit from relocation too through betterment of economic structure.

Delocalisation from European Union new member states (EU-12) also

started, but Estonia has not yet perceived all the sharpness of delocalisation, as

more productions (jobs) are still coming in here than are going out. Estonia had

received by the end of 2006 more than 9.6 billion euros worth of FDI. Nearly two

thirds of these FDI originate from Sweden (39.5%) and Finland (26.4%),

followed by Great Britain (3.8%), Netherlands (3.4%) and Norway (3.3%). 17.5%

of the total amount of FDI were made directly in manufacturing; however, based

on expert estimates, quite large FDI reached Estonian manufacturing also

through financial intermediation (28.1% of all FDI) and other fields of activity. In

many, even in most of the cases these involved with the help of FDI

delocalisation of manufacturing industries from the donor countries to Estonia.

3

Moreover, manufacturing industries of the same donor countries have been

relocated to Estonia by way of ordering various subcontracting works. In some

commodity groups (in particular manufacture of metals, machinery, equipment

and apparatus) importation for inward processing and re-exportation after

inward processing account for 50-90% of all Estonian imports and exports.

At the same time, several industries with historical traditions (cotton

industry etc.) have already disappeared or are disappearing in Estonia. Many

low-technology, labour-intensive and low capital-intensive productions that

came to Estonia in the early 1990s have by now moved on directly or through

other Baltic states to CIS and Asia. Entrepreneurs whose principal business

idea was to profit from low wages (and taxes) in Estonia face now big difficulties

and are desperately looking for new „hunting grounds”.

FDI made by Estonia (mostly foreign capital owned enterprises located in

Estonia) into other countries have increased. By the end of 2006, the amount of

such FDI reached beyond 2.7 billion euros. Two thirds of such FDI were made

into other Baltic states – Latvia 34.3% and Lithuania 32.3%, followed by Russia

(8.9%), Finland (4.8%), Ukraine (2.4%) and Belarus 81.9%). Only 3.8% of the

FDI outflow from Estonia went into manufacturing. However, based on expert

estimates, FDI reached manufacturing and hence caused its delocalisation from

Estonia to other countries also through financial intermediation (38.0% of all

FDI) and other fields of activity. Moreover, Estonian enterprises are increasingly

ordering subcontracting from foreign countries.

As a result of international relocations of production, the structure of

Estonian economy somewhat improved over 1995–2006. The share of people

employed in labour intensive manufacture of textiles and wearing apparel at the

same time dropped from 4.5% to 3.6%, and in relatively high technology and

great value-added manufacture of metals, machinery, equipment and apparatus

rose from 5.3% to 5.9%. However, the structure of Estonian economy has not

improved so fast as we wish it.

In China and India one can get a subcontract at a better price-quality ratio

than in Estonia. We are lucky that these countries are far away from the

Western large firms. Those who order subcontracts do not like the big time

difference, long air travel, inadequate infrastructure there, different culture and

food. Therefore they have so far preferred closer Estonia where the

infrastructure is satisfactory according to contractors. Our competitive

4

advantage has been accepting of small quantities, operative and flexible

production. It has been easier to deal with Estonian subcontractors and the

fulfilment of orders has been faster. However, time does not work in favour of

Estonia. The price-quality ratio is growing to be more significant.

Many Estonian enterprises have already adapted to the world

developments. For example, in the most critical labour-intensive branch –

wearing apparel industry, Baltika has changed from a sewing industry to a

design and marketing firm. Several other enterprises also react to changes in a

creative way and change their structure. However, many Estonian

entrepreneurs unfortunately cannot change and are only complaining. They do

not understand the transformation of economic environment, are not ready for

changes, clearly panic, feel insulted by the objective development in the world

and blame everybody else but themselves for their troubles.

Enterprise’s success depends on what they produce, how it is produced

and how sold. Attempts have to be made by product, technology and sales

development to move upwards in the value chain, increase value added and

profitability. In case an enterprise cannot succeed in moving upwards in the

value chain, increase value added and profitability for some reason, it has to

terminate production or relocate to a region where production costs (labour

costs) are lower. One must terminate business and leave the market in time.

There are the following main possibilities to do that: selling the enterprise or part

of it; reprofilation; liquidation or bankruptcy; “clean-up” strategy. In the latter

case, enterprise shall be exploited to depreciation, seeking to use as completely

as possible all the available production potential. The profit will not be invested

in the enterprise but somewhere else. Costs are kept on a minimal requisite

level. Fixed assets are not renewed unless it is absolutely necessary; they try to

extend the lifespan of the existing ones. The units dealing with the issues of

perspectives are liquidated, training of the personnel has quitted.

It is costly both to close down an existing enterprise as well as to set up a

new one in another country. However, if this investment will pay back within a

normal period of time, then they undertake to relocate the enterprise in another

country. Local workforce, territory, facilities etc. in Estonia will be hopefully used

by entrepreneurs who have a better business plan.

One of the key issues in keeping up Estonia’s competitiveness and growth

is the labour market flexibility. This should, whenever necessary, facilitate fast

5

relocation of labour from less productive enterprises to more competitve ones.

And this by all means together with relevant training (retraining). Many

international comparisons however confirm that the current legislation that

regulates the Estonian labour market is quite rigid compared with other

European Union member states. Therefore the European Union recommends

Estonia to make the labour market regulation more flexible. It is relevant for the

labour force to move fast enough from loss bearing enterprises to profitable

enterprises. Most of the economists are of the opinion that high dismissal costs

to be covered by enterprises on the basis of the current legislation do not

facilitate creation of permanent jobs and timely re-organisation. And a long

agony of unprofitable enterprises is useful for nobody.

Faster structural changes in the European Union are not only a threat to

Estonia but also an opportunity. Most benefitting from openness are the

countries where capital and labour are moving at smallest possible costs and

influenced by free market prices from vanishing industries to more advanced

spheres. Hence, Estonia’s economic policy should in every way promote

flexibility and openness of ecnomy.

The Estonian economy has been growing since 2000. GDP increased

more than 2.5 times from 2000 to 2007. Recently, some signs have become

visible that imply potential threats to sustainable development and of economic

growth slowing down because of the depletion of previous growth sources

(cheap labour in particular). After accession to the European Union new

opportunities opened up for the Estonian inhabitants to work in other member

states, which reinforced employees’ positions in wage negotiations. Short-term

developments in Estonia are the results of natural cyclical development of the

economy, which is partly amplified by the rising loan costs and contraction of the

too optimistic domestic consumption as well as the deceleration of wage growth.

The business sector and individuals are therefore forced to change. An

essential precondition for economic growth in Estonia as a small country is, due

to its narrow domestic market, to be successful in selling in the world market.

According to Eurostat, Estonia’s GDP per capita on the purchasing power

parity (PPP) basis was 67.9% of the European Union 27 countries’ average in

2006, whereas the labour productivity indices were much lower. Labour

productivity (added value produced per worker) is in Estonia in all branches of

economy much lower than in the more developed member states of the

6

European Union. The labour productivity backwardness is the biggest in

manufacturing and extractive industry, power engineering and construction.

Productivity in manufacturing is only 6.6–17.9% of the level of higher income

member states of the European Union. Previous experiences from other world

exhibit that a high income level has been reached through the stadium where

manufacturing industry turns into a high-productivity sector and works closely

together with providers of science-intensive services.

Low productivity is largely caused by the unfavourable structure of the

Estonian economy. If to assume that all manufacturing branches in Estonia will

achieve equal productivity with the respective manufacturing branch of most

developed EU countries but the division of Estonian workforce between the

branches remains the same, the productivity in Estonia would reach only 56% of

the Irish level, 78% of the German level, 80% of the Finnish and 90% of the

Danish level. Hence, only by raising the technological level of enterprises and

increasing so-called technical productivity it is not possible for Estonia to catch

up in terms of productivity with the developed industrial countries. It is absolutely

necessary to change the structure of manufacturing industry by increasing the

share of high-productivity branches. In Estonia there are a number of

problematic branches where the outputs will be contracting remarkably in the

future (textile industry; wearing apparel industry).

A reason for low productivity in Estonia is largely insufficient capital

investments. Fixed assets per employee in Estonia amounted only to 22% of the

average eurozone level in 2004. Estonia fully acknowledges the need to make a

decisive shift from the cost-based competitiveness towards the knowledge-

based economy.

To promote entrepreneurship, Estonia has developed a national business

support system (Estonian Development Fund, Enterprise Estonia). All

enterprises engaged in business activities in Estonia may apply for state support

for the creation of infrastructure necessary for their operations, training of

personnel, participation in fairs etc.

Summary Enterprises operate in international networks and value chains. They locate

procurement, production, distribution, marketing, sales and servicing in different

countries across the world. They perform every operation where the price-

7

quality ratio is the best. Estonia has not yet perceived all the sharpness of

delocalisation, as more productions (jobs) are still coming in here than are going

out. But many low-technology, labour-intensive, low capital-intensive

productions that came to Estonia in the early 1990s have by now moved on to

CIS and Asia. It is costly both to close down an existing enterprise as well as to

set up a new one in another country. However, if this investment will pay back

within a normal period of time, then they undertake to relocate the enterprise in

another country. Local workforce, territory, facilities etc. in Estonia will be

hopefully used by entrepreneurs who have a better business plan.

JEL Classification numbers: F15; F42; H70; J40.

Keywords: industry, delocalisation, deindustrialisation, public governance.

The Impact of Migration and Social Dialog on Economic Development of Latvia Abstract Prof. Dr. Tatjana Muravska Jean Monnet Chair, Director, Centre for European and Transition Studies, University of Latvia E-mail: Tatjana.Muravska@lu.lvInternet: http://www.lu.lv/cets/EN/chair/mone3.htm

The economic development of the new members states can be characterised in

many ways, however, one of them in particular stands out: the need to increase

economic efficiency and productivity. The task of bringing the economies of the

new members up to par with the economies of the old member states is

formidable. As it has been noted in the Lisbon strategy, a framework for further

development of the EU, including a strategy for increasing employment in the

member states, was set up. To build sustained economic growth is necessary

for long-term employment creation and this involves an unprecedented level of

political, economic, and social cooperation among governments, businesses,

social partners and individuals throughout Europe.

The Baltic States have shown positive and strong economic development.

The most impressive growth rate among the Baltic States was experienced by

Latvia, which was also the fastest in the EU up to recently. Latvia's GDP growth

was more than 10% per year during 2004-2007(2004- 10.4%; 2006- 11.9%; end

of 2007- 10,2%). In Estonia the GDP growth in the same period of 2007 was

4.5% and in Lithuania- 8.1%.1 Experts had repeatedly warned Latvia for the

need to have a strategy to avoid a "hard landing" for its economy. That in

general refers also to the sister states in the Baltics2.

There are already a number of indications regarding an economic

slowdown in Latvia. According to the forecast of the Finance Ministries and

Economy for 2008, the GDP increase is expected of 5.5%3. While the

International Monetary Fund in its latest report on global economic

1Eurostat Flash Estimate 14 February 2008 2Baltic Economy Watch http://balticeconomy.blogspot.com/; Latvia Economy Watch http://latviaeconomy.blogspot.com/ EU's Barroso urges Latvia to deal with economic overheating 15 February 2008; http://www.eubusiness.com/news-eu/1203085026.71; The Economist: Worrying about a crash Jul 5th 2007 http://www.economist.com/world/europe/displaystory.cfm?story_id=9443551; Statement by IMF Mission to Latvia on 2007 Article IV Consultation Discussions Press Release No. 07/87; May 4, 2007 http://www.imf.org/external/np/sec/pr/2007/pr0787.htm3 Statement by the Ministry of Finance and Ministry of Economy http://www.paritate.lv/en/leta/2008/april/news08-04-007/

development4 foresees Latvia's GDP increase to be only 3.6% and the

European Commission estimation is of 3.8%5. A very serious concern,

however, is that despite the slowing of economic growth inflation is on the rise.

In January, 2008, Latvia's 12-month inflation rate hit 15.8 percent, the highest

figure since late 1996. Prices for goods have increased by 15.1% and prices for

services- by 17.5% respectively6. This is currently the highest rate of inflation in

the EU. Another problem is the rise of unemployment in the country. According

to the latest data from the Latvian State Employment Agency since November

2007, the tendency is now up again, and reached 5% of the economically active

population.

Accession to the EU has brought rapid and fundamental changes for

Central and East European countries (CEEC). The CEEC enlarged the internal

market of the EU and as many of the studies in this area show, the process

produces mixed results: free movement of people has introduced difficulties with

regard to cross-national border migration of labour. Latvian experience shows

significant outflow of manpower thus creating labour shortages in crucial

economic sectors. The human capital drain via out-migration is aggravated by

Latvia’s natural population decline; this translates into a low number of young

labour market entrants, which is expected to prevail for the coming decade. In

the last decade the total population decline due to out-migration and natural

decline was 8% of entire Latvian population. Part of the documented population

decline is due to the falling birth rates. In Latvia, for example, the natural 7

reduction in population, according to Eurostat, in the period from 1995 to 2006

amounts to about 6% of the population in Latvia of 2006. This alone is already a

worrisome development, as it confronts the country with a shrinking labour force

in times of needed long-term economic development.

In such situation it is very important to develop a strategy for further

economic development of the country when the economic downturn is combined

with out-migration and natural population decline leading to acute labour

shortages in some sectors of the economy. The negative effects of out-

4 IMF Global Financial Stability report http://www.imf.org/External/Pubs/FT/GFSR/2008/01/pdf/text.pdf5 European Commission Spring 2008 forecast http://ec.europa.eu/economy_finance/pdfs_files/2008/spring-forecasts/statistical-annex.pdf6 Statistical Bureau in Latvia http://www.csb.gov.lv/csp/events/csp/events/?mode=arh&period=02.2008&cc_cat=470&id=55637 The difference between the number of live births and the number of deaths during the year. The natural increase (or natural decrease) is negative when the number of deaths exceeds the number of births.

migration call for policies that promote human capital development and

attractive employment/entrepreneurial opportunities.

The current level of development of financial participation of employees is

low in Latvia. Financial participation of employees in Latvia is very low and

employee share ownership, as well as profit sharing as a scheme does not exist

in practically all the cases of most of companies. In Latvia there is as yet no

legal basis for involving worker representatives in the executive bodies of

companies. Latvian company legislation by and large provides for a two-tier

structure, with a management board and a supervisory board. The conclusion of

collective agreements is mainly limited to the enterprise level as there is still

hardly any dialogue at sectoral level and none at regional level. The number of

collective agreements concluded at enterprise level remains low: they only

cover approximately 20% of Latvian employees. Although the direct election of

“authorised employee representatives” by the workforce has been possible

since 2002, the main channel for employee interest representation at the

workplace remains the trade unions. In practice, workplace social dialogue

mainly takes place where unions are strongly represented, which de facto

leaves a large proportion of Latvian employees without any interest

representation at all. 8 However, financial participation schemes are likely to be

used in new, human capital intensive sectors, like information technologies9.

The same trend is revealed in service industries, especially in real estate

industry, law firms etc. Nevertheless some companies consider profit-sharing as

a motivation scheme and use it in their management systems.

The need to implement the aims of Lisbon strategy in Latvia (increase

productivity, reduce inequalities and out migration) will influence social dialogue

between Employers’ Confederation of Latvia, Free Trade Union Federation of

Latvia and the Government. Development of such trend was and still is not

included in the national programmes on a large scale and does not have strong

government support. Neither the government nor the social partners presently

promote or are planning to promote financial participation schemes. The trade

unions and other political forces which could support such schemes lack

knowledge about methods and advantage of financial participation and thus do

not even address this issue.

8 The European Company - Prospects for worker board-level participation in the enlarged EU (edited by Norbert Kluge and Michael Stollt). Brussels 2006 p.95-96http://www.seeurope-network.org/homepages/seeurope/file_uploads/booklet2006.pdf9 p.186

Participation of employees has not been on the political agenda of Saiema

(Parliament). Political parties and other policy makers have not given any

attention to the issue of employees’ financial participation. Financial participation

as a component of social model development was not included in the economic

sections of parties’ programmes.

While the economic development aspect and its various components are

fully recognized, the social dimension is more diffuse and not always fully

integrated in the development process. Understandably, often different interests

promote economic growth and social development: however social policy is

increasingly accepted as a productive factor. Governments, employers, trade

unions, and in civil society are engaging in discussions on this subject

throughout the industrialized world. After Latvia’s independence in 1991,

however trade unions experienced a sharp fall in influence and membership:

nowadays, they represent roughly 20% of the workforce.

The EU membership might have positive impact on the development of

employee participation, including financial participation, but there is no evidence

of such influence now, with the exception of the statement that practices

introduced by branches of Western European firms in Latvia could be taken

over by domestic companies because of competition for human capital.

Programs of social and economic development have certain elements

which are complementary but which may also come into conflict. This is

reflected in the numerous dialogues and negotiations on how to satisfy the need

for high levels of productivity and growth and also maximize social dialog and

cohesion. Nevertheless a questions arises: how can substantial levels of social

dialog, cohesion and development be balanced with economic growth and

labour market needs; where there is conflict, how can it be resolved and through

what mechanisms?

Summary There are already a number of indications regarding an economic slowdown in

Latvia. In such situation it is very important to develop a strategy for further

economic development of the country. This is the case when the economic

downturn is combined with out-migration and natural population decline leading

to acute labour shortages in some sectors of the economy. While the economic

development aspect and its various components are fully recognized, the social

dimension is more diffuse and not always fully integrated in the development

process. To build sustained economic growth is necessary for long-term

employment creation and this involves an unprecedented level of political,

economic, and social cooperation among governments, businesses, social

partners and individuals.

Keywords: economic development, labour markets, migration, social dialog,

partnership.

Lithuanian Transnationalism: Constructed, Imagined and Contested Identities of Lithuanian Americans Abstract Prof. Dr. Vytis Ciubrinskas Associate Professor, Director, Center of Social Anthropology, Department of Sociology Vytautas Magnus University, Kaunas, Lithuania E-mail: v.ciubrinskas@smf.vdu.lt

The aim of the presentation is to delineate contours of certain social strategies,

images and discourses as well as cultural practices related to the Lithuanianness, as

culture and heritage imagined, constructed and contested in and among different

waves and generations of the Lithuanian-Americans.

The period, the wave of immigration, the way it happened and in particular the

rooted-ness in the American soil are basic markers for a distinct pattern of

Lithuanian-ness to be recognized. Any one of these patterns falls into the ascription

of a certain social strategy, ideology and politics of identity and is motivated and re-

enforced by ‘symbolic capital’ taken from ‘repository’ (Castells 1997) of national or

ethnic heritage. Consequently, the Lithuanian heritage gains its meaning as well as

any item of the national ‘repository’ becomes imagined, (re) constructed and

circulated differently among at least four generations of the Lithuanian descendants,

who started to settle in the United States in 1860’s as economic immigrants,

continued in the late 1940s as political DPs (who have moved from Displaced

Persons’ camps in Germany to the US) and do continue up to the recent wave of

post-Soviet Lithuanian immigration.

Lithuanian-ness as ethnicity and nation-ness constructing strategy can operate

as shelter and aid. This is a strategy of particular importance for the each category

of the Lithuanian immigrants. It is a sort of model for ethnic subsistence, based on

neighborhood ties, as well as on shared language skills and also on an appreciation

of common cultural heritage in terms of ethnic foods and customs. Ethnic

emancipation was a strategy especially evident during the establishment of the

ethnic Lithuanian Catholic Church in the US (in early 1910s ) with service in

Lithuanian. ‘Nationalist mission’ was a strategy of cherishing, perpetuating and

1

retaining nation-ness in terms of culture, language, traditions and heritage, inscribed

in the Lithuanian Charter of 1949. It was and still is implied as the best example of

the nationalist imperative and mission, applicable to any diaspora Lithuanian: “to

pass on the culture to future generations to insure the eternal nature of his/her

nationality’

The parish of the Lithuanian Catholic Church is the most visible ethnic social

network in the case of ethnicity. Its role to shelter and embrace ethnic life, is most

visible through the whole history of the Lithuanian diaspora in the US, in particular in

its early stages. Only one other ethnic organization – the Lithuanian Community,

(Lietuviu bendruomene) founded and maintained by the political immigrants of the

DP wave in late 1940s, primarily for nationalist activities, could be compared in scale

and popularity with the parish. For those who immigrated after the WWII, the

Lithuanian Community was at least of equal importance as was the parish to old-

timers’ wave of immigration.

Social networks of the post- communist immigrants are based on common

social and economic experience of the Communist regime, visible in the immigrant

job market, such as the economy of favors, nepotism and clientalism. Participation in

such social networks or ‘groups of their own’ or ‘groups of friends’ is a source of

higher salaries, more secure jobs, benefits, and finally, means of successful

adaptation, helping immigrants to achieve higher social and economic mobility in

American society.

The most critical issue for diasporic identity construction among the all waves

of immigration is a normative image of home country. Old-timers’ wave of

immigration is overwhelmingly guided by rural and heroic romanticism of the old

underdeveloped country. Their image of the people of this country is that of a

‘strong’ people who founded a medieval empire, the Grand Duchy of Lithuania and

regained independence from Russia twice during the last century, in 1918 and in

1990. It is also the main source of being ‘proud of being Lithuanian’. The DPs’ image

of the home country was constructed from the typical political refuge experience.

The occupied and suffering country, left behind at the end of the WWII, encouraged

them to take on a mission of regaining nation and retaining its culture. For the post-

Communist newcomers, the image of the home country is full of postcolonial

transitional uncertainty, with a clear understanding that Lithuania belongs to the

2

Eastern European region with Russian as lingua franca. They are very self-

conscious, and their image of the home country and Lithuanian people is in many

ways focused on the ‘unique-communist regime - experience’ as shared by the

immigrants themselves and their compatriots in Lithuania.

The socio-cultural attribution of meaning to as well as manipulation of particular

immigrant culture takes place in everyday life practices of diasporas. At least two

Lithuanian cultural and heritage manipulation practices could be defined. The first

involves essentialist reification and codification of it. Discourses on the issue of

‘birthright to glorious Lithuanian heritage’ already appeared in the Lithuanian

newspapers published in the US at the end of the nineteenth century. The issue of

‘the Lithuanian culture’ was altered significantly by DPs. The perpetuation of the

notion of occupied, and thus repressed and deprived, Lithuanian nation and its

culture gained political acceptance within the US government. It gave political

motivation for the Lithuanian culture in the US to become more than one of many

ethnicity cultures within the ‘American dream’, and to acquire a ‘public’ and

‘prestigious’ image. So, despite the predominant ‘Melting Pot’ cultural politics of the

US during the post WWII period, the Lithuanian label held moral and cultural

prestige.

Second the most visible practice invokes a cultural bricolage of retained and

adopted elements. Cultural bricolage is conducted by creating new meanings for

national/ethnic cultural forms of kinship, language, artifacts, visual-virtual materials,

narratives and stereotypes. Ethnic identifications phrased as “Proud to be

Lithuanian” or ‘I am American first and Lithuanian always’ along with a few

catchwords or phrases in Lithuanian are starting point in practicing cultural bricoleur.

The interest in family genealogies is usually strongly related to an interest in finding

ethnic roots and eventually ends up in ethnic pilgrimages.

Generally the issue of Lithuanian-ness belongs to the Lithuanian theme,

manipulated and articulated transnationally in so many ways and meanings. It gives

enough room for evaluation and contest among the different waves and gerations of

Lithuanian-Americans. Particularly, in terms of status and prestige allocated to it in

social strategies and cultural practices as well as in personal carriers of its bearers.

The Lithuanian-ness is a platform for strategies of ethnic cohesion as well as for

identity politics and the politics of identity. It also appears as a repository of symbolic

3

capital, moral motivation and cultural projects. It was and still is contested on the

basis of rooted-ness into American society, education, as well as on the grounds of

purity of ethnic language and cultural inheritance, adherence to the Catholic Church,

and participation in ethnic organizations.

The old-timer category of Lithuanian-Americans is focusing on ethnic heritage.

In their curiosity about their ancestral homelands they tend to be more interested in

discovering about their own ‘roots’. Usually the kinship ties and the local ethnic

culture of their ‘ancestors’ of the period when their kin left the country are under

scrutiny. Often they are interested in finding about Lithuanian folklore and folk

customs as well as in its ancient past and eventually in ethnic pilgrimage to ‘see the

country’.

The generations related to the DPs category of Lithuanian-Americans are

focusing on Lithuanianness as nation-ness and are puzzled by the ambivalence

between idealized construction of it and its reality. As a result of their enculturation

focus on the Lithuanian nation-state culture and heritage of the period of country’s

independence between the two world wars, they are predominantly bearers of an

idealized image of the country and the culture. Such an image goes in contrast with

the picture of modern post-Soviet Lithuania, which has visible inheritance of Soviet

lifestyle and routine, already been seen, even experienced first hand, by many, who

have paid visits to the country. Despite that and despite ‘post-ethnic’ American

reality, the DPs are still the firmest bearers of Lithuanian nationalism in the whole

Lithuanian diaspora. Only in their private lives and homes is there such a large

exposition of symbolic objects and items of national pride. This goes well in

accordance with Lithuanian patriotism, which serves as normative diasporic ideology

of the DPs and to that category related Lithuanian-Americans.

The post-Soviet immigrants into America in their actual understandings of, and

strategies on Lithuanianness, usually put forward two general issues: language and

the Catholic Church as the most important and visible sources of the identity. It is

also remarkable that their shared experiences of the Soviet past, as well as Soviet

Lithuania’s social networking and participation in cultural practices also play a

significant role for distancing them from the rest of Lithuanian diaspora. Even though

they use ethnicity delineated social strategies and networks (in particular the parish

of the ethnic Church) and enjoy ethnic gatherings of bricoleur culture practices, they

4

do adhere to ‘groups of their own’. These groups are created on the grounds of the

shared status of unemployed, and even illegal, immigration. The members of such

‘groups of their own’ usually have strong ties with friends and relatives left behind in

the home country. Many move in between Lithuania and the US, running businesses

here and there. Many of them encompass multiple identities. Their Lithuanianness

seems to be globalized and could be defined as world-Lithuanianness. It is not only

displaced or uprooted but, rather, situational. Challenged by the question of

belonging, the latest diaspora Lithuanians, usually find themselves in frustration and

uncertainty. The uncertainty is actually pronounced on the both sides of the ocean;

in their diasporic life, in the US, and also in the life of their relatives and friends in

Lithuania. Such uncertainty undermines quests for Lithuanian culture and heritage

and puts forward strategies of survival and career. These strategies do not

necessarily go along lines of ethnicity and nation as was the case with the

immigrants of earlier periods who used to orient themselves to the groups of the

same roots (old-timers) or to the nation focused action groups (DPs).

5

Imagining Each Other in the Baltic: “Europe”, “Russia”, and “Russians in New Abroad” in the 1990s-2000s. Abstract Prof. Dr. Irina Novikova Professor, Department of Culture and. Literature, University of Latvia, Riga E-mail: iranovi@lanet.lv

What is/are the image/images of Russia for the Russian-speaking diaspora, and

how is Russia imagined in the diasporic discourses of Russianness? How does the

post-Soviet Russian-speaking diaspora inflect, in many subtle ways, the reading of

Russia by its Baltic neighbors?

1. I will first discuss some ways in which Russia and Russianness have been

imagined through the "Russian", or more precisely, Russians-speaking diaspora

in the Baltic political and public discourses of the 1990s - early 2000s.

2. I will then look into how Russia looks upon the Russian-speaking communities,

and vice versa, in the Baltic countries.

3. I will take the discussion further on, to the concept of Euro-Russian identity, and

its realities.

In the dominant retro-imagination of that period, the major image attached to

‘Baltic Russians’ (although the category was not used in that period) was one of

the “contaminating” demographic and politically hostile mass, alien and retarding

the success of the regional Eurocentrisation. The image of a debilitated,

lumpenized, deskilled mass of “совки”, with the looming image of threatening and

pauperized Russia behind, was activated as an imagological instrument of identity

politics in which ethnic, cultural and political differences were framed as

incompatible. The discursive frameworks of living “with alterity – daily and

permanently”1 needed “a resource, capable to provide the identification and its

functioning”(Lacou-Labarthe, Nancy). The cultural politics of memory was thus

reclaimed as a pool of historical collective evidences of political legitimacy in the

confrontations with Russia after 1991, and ‘boundary-constructions’ with its Soviet

‘leftovers’ in the post-Soviet nation-rebuilding projects.

1 Bauman, Z. 1997. Postmodernity and Its Discontents. Cambridge: Polity Press, 30

1

From the other side of the border, the Russian perceptions of the Baltic Sea

region in the post Cold War era have been contradictory, from the nostalgic

images of the former “Soviet West” to the image of the most hostile enemies at the

Russia-NATO border, in the context of the regional developments as serious

challenges to Russia (NATO and EU enlargements). For the Baltic states of Latvia

and Estonia, their eastern and north-eastern regions were a real ‘headache’ in the

period of intensive nation-, state-rebuilding, centralization of political power, and

‘nationalisation’ of legislation in citizenship, education, language. For Russia,

regionalization turned out to be also a challenge in terms of its traditional concept

of national sovereignty. All parties have been interested – as nation-states and

supranational unities – in securitising politics and sanctifying national interest,

sovereignty and borders over the tendencies of regionalization and

municipalisation of power and authority.

On its “western front”, the diaspora politics of the Russian Federation, until

the late 1990s, was ranging from complete disattachment from the former Soviet

citizens to sporadic outbursts of “taking care” of political rights of “our Russian

compatriots” in Estonia and Latvia. Diaspora politics has obviously become a

visible dimension on Russian foreign policy from 2000 onwards, in terms of the

role of the Russian-speaking communities on the north-western borders of Russia,

Europeanization and securitization as European agenda in its relations with

Russia. The conceptualization of Baltic Russians as a compatriot community

started with Putin’s coming to power was presented in Russia’s 1999 Law on

Compatriots Abroad.

The Russian-speaking communities of the three Baltic societies, partially, the

offspring of “old” minorities, and partially, the ones who moved to the Baltics after

1940, found themselves since 1995 between:

1. Retro-imagination – an issue of history, historiography and collective memories

2. Futuro-Europeanisation, in other words, the access to the EU was perceived as a

potential and positive re-identificatory space for a new Euro-Russian identity2

and possibly, resolution with a number of issues around their political status in

Estonia and Latvia.

2 "Мы - часть всемирной русской глобальности и мы - национальное меньшинство в стране, в которой живем": Интервью заместителя председателя Союза славянских просветительских и благотворительных обществ Эстонии Игоря Ермакова. http://www.marinews.ru/allnews/224632

2

The European Alliance of Russians as a transnational subject of the

European political space has recently been established, and sent its delegation,

together with the Baltic delegations, to the Second Russian Diaspora Congress in

October (Moscow). First, the very fact of the Alliance, and its initiative started from

the Baltics, indicates to a relative and growing political, economic and social self-

sufficiency of “in-betweenness” of the Russian-speaking communities in the region.

Baltic Russian-speaking communities as economic and social benefit and value for

Russia (and also Baltics of the 2000s) as well as model of enterpreneuship and

mobility, thus, are drawing a new type of relationship, which, of course is and will

be subjected to renewed stereotypes and images from the former “curtain” legacy.

Furthermore, the condition of “in-betweeness” is likely to be reclaimed by the

“Russian world” discourse. However, the established European Russian Alliance

(Miroslav Mitrofanov), partially reflecting the marginality of ‘pro-Russian’ parties

and Russian-speaking constituencies at the national levels, sees its mission more

as an autonomous diasporic subject of transnational and supra-national European

politics also vis-a-vis the Russian federation, and much less in the capacity of one

of the instruments in the Russian diaspora politics, as the participation in the

Russian Compatriots’ Congress in Moscow clearly showed. The European

dimension is perceived as a multi-centred formation in which the multilateralisation

of ethnic and cultural identification is seen as a social and economic value.

The European dimension itself is a parameter of belonging and of difference.

Europe is considered to be much more attractive as an image and a destination

point of the desire to belong, or a much ‘friendlier’ version of the parameter of

‘one’s own place’ than the ‘national’ dimensions. It can be said that currently there

are certain communities in the Baltic states that may be referred to as multi-

centred formations embodying certain elements of thought characteristic of a

transnational community. In these communities, the model of ‘finding work in

Europe or America, or in Russia, while living in Latvia, having relatives in Estonia,

friends in Germany’ is gradually becoming characteristic of the thinking of younger

generations. The ‘Euro-identity’ is becoming a transnational dimension in the

formation of individual and family attitudes favourable to remaining in Latvia,

Lithuania or Estonia and, on the other hand, remaining very sensitive to the

changes happening to Russia as their “motherland”, today..

3

Integration Programme of Estonian Society 2000-2007 Abstract Prof. Dr. Raivo Vetik Professor in Comparative Politics, Director, Institute of International and Social Studies, Tallinn University, Estonia E-mail: vetik@iiss.ee

The purpose of this paper is to discuss conceptual grounding of the ‘Integration

Programme of Estonian Society 2000-2007’ and state policies based on it during

the same period. Traditional liberal-democratic model of democracy, based on

individualism, does not address the issues of growing multiculturalism of

European traditional nation states well enough. The idea of multicultural

democracy, bringing in the notion of group rights as an element of social

organization, is one of the possible answers to the challenge.

The paper first discusses two forms of liberalism – procedural and

substantive. Immanuel Kant’s concept of individual’s autonomy is the basis of

procedural theory of society.

Substantive definition of social good is represented, for example, by Charles

Taylor who distinguishes between monologic and dialogic ideal of culture

Procedural model can be found in the US as an immigrant country, strongly based

on the idea of individualism and individual assimilation. Substantive model is

represented, for example, by Quebec, with its strong collective goals combined

with liberal values. Taylor, ‘such a pursuit is not impossible, and the problems are

not in principle greater than those encountered by any liberal society that has to

combine, for example, liberty and equality, or prosperity and justice’

Many ethnic Estonians feel very strongly about their language and culture as

goods the state should stand for. Such a substantive understanding of society has

been written into the Estonian constitution as well as several laws like the

language law. The question, however, is what group rights exactly the state should

support? Heidmets and Lauristin differentiate between political multiculturalism and

such kind of integration of that takes place through individual and free cultural

1

identification. Juan Linz and Alfred Stepan claim with regard Estonia and Latvia,

that democracy and the logic of a their nation state are in conflict.

A pair of analytic categories unity/difference can be taken as the starting

point for defining the notion of integration of society. John Rex – in order to grasp

the idea of multiculturalism one needs to look how homogeneous or different are

the main ethno-cultural groups in public and private spheres and what kind of

policies the state implement in these realms. So, juxtaposing these two dimensions

with two possibilities one will arrive at the following four options:

a) society that is unitary in public sphere but tolerant regarding differences in

private sphere;

b) society that is unitary in public sphere and promotes unity also in private

sphere;

c) society that promotes difference and differential rights both in public and

private sphere;

d) society that promotes difference and differential rights in public sphere but

unity in private sphere (Rex 1996).

The Estonian Integration Programme follows the first option and defines

integration as follows: ‘Two processes shape the essence of integration of

Estonian society: on one hand, social homogenization of the society based on

knowledge of Estonian language and acquiring Estonian citizenship, and on the

other, opportunity to preserving ethnic differences through recognizing minority

cultural rights. Homogenization of the society is a two-sided process – the

integration of both Estonians and non-Estonians around a strong common ground

in Estonian society. Enabling the preservation of ethnic differences means creating

conditions in society that promote ethnic identity by individuals who belong to

ethnic minorities and are interested in it’.

Further the integration programme outlines the Estonian model of a

multicultural society. Its consists of the principles of strong common ground,

cultural pluralism and preserving the Estonian cultural space. The first element of

the model presumes that a multicultural society can function effectively only if its

2

members share a sufficient common ground in public sphere, which forms a basis

for mutually meaningful communication and apprehension of common interests.

Strong common ground is territorially defined with Estonia and rests upon a

common language – Estonian language that is the language of functioning of the

institutions of the public sphere. Besides language, democratic values, common

social institutions, common education system and mutual tolerance are elements

of the strong common ground.

Figure 1. The Estonian model of multiculturalism

State

Strong common ground 1. Social institutions 2. Democratic values 3. Language 4. Educational system 5. Mutual tolerance

Other ethnic groups

Titular ethnic group

Individual

3

In order to explain the Estonian model of multiculturalism comparison of four

models of democracy, based on the issue of recognition of group rights, will be

discussed in the paper.

Recognition of general principles of democracy

Recognition of group rights

Political institutionali-zation of group rights

Recognition of political privileges of one group

Liberal

democracy + - - -

Multicultural

democracy + + - -

Consociational

democracy + + + -

Ethnic

democracy + + + +

4

Emerging New Transnational Diasporas in Lithuania: The Case of the Chinese Community Abstract Dr. Alina Zvinkliene Senior Researcher, Institute for Social Research, Department of Theory and Methodology, University of Lithuania E-mail: alinazvin@gmail.com

The main idea of the presentation is to map a situation of Chinese in Lithuania.

The interest to Chinese in Lithuania is caused by their “invisible visibility” in

comparison to other EU countries.

The main aim of the presentation is discussion on How is possible to define

the “local” legal Chinese either community or Diaspora? May we speak about

Chinese parallel society in Lithuania? The second aim of the presentation is

analysis of the issues of citizenship and intercultural communication. Analysis of

the situation of Chinese in Lithuania is based on a multimethod approach using the

most recent available quantitative data and qualitative data gathered in 2008 in

Vilnius.

Lithuania was often considered as a kind of “waiting room” for hundreds of

foreign citizens on the way to their final destination - the EU countries.

Readmission agreements between Lithuania and non-EU countries is a major

element in the fight against illegal migration helping stabilize immigration. In spite

of quite a modest economic situation Lithuania becomes more attractive to

immigration due to entry into the EU. The Law on the Legal status of Aliens (2004)

regulates the issues relating to the legal status of immigrants in the Republic of

Lithuania.

At present here are very small groups of legal immigrants from such “exotic”

to Lithuania continents as Africa, Oceania, Asia. Besides migration of

representatives from Asiatic republics of the former USSR, official statistics register

immigration to and emigration from Lithuania citizens of China, Lebanon, Pakistan

and others.

Soon or later the ‘critical mass’ of the newcomers, mainly economic

immigrants, will constitute the ‘new’ parallel societies in multinational Lithuania. It

seems that alongside the ‘foreign’ Russian-speaking space Lithuania will be

compelled to integrate at least an English-speaking space whose ethno-cultural

structure will be significantly distinct from the traditional Baltic ethno-national

cultures.

In 1991 China recognized Lithuania de jure, and diplomatic relations has

been established. In 1992 the embassy of China was founded in Vilnius. Since that

time first Chinese restaurants have been opened in Vilnius, and a myth of Chinese

expansion and a future Chinetown began. It is difficult to say how many Chinese

citizens live in Lithuania (about 300 persons have a residence permit), and which

economic niche they really occupy. However it is obviously, that besides diplomatic

corpus and some Chinese students, most of them traditionally are employed in

Chinese restaurant service. It seems that at present Lithuania is not very open

country for the Chinese that is mainly caused by formal and informal difficulties to

settle here down for a long-term. For instance, a resent Chinese net migration is

negative (- 23). In 2004, 28 Chinese immigrated to Lithuania, and 51 Chinese

emigrated from Lithuania, in 2005, respectively, 14 and 37.

In spite of a short-term stay in Lithuania of the most Chinese (one or two

years, according to a job contract), some of them try to take such benefits from it

as getting a legal document issued in the EU country, for instance, a driving

license; the driving license actually corresponds to the identity card in many cases.

At present marriage and establishment of the private enterprise with a

Lithuanian citizen is the easiest way legally to settle down in Lithuania, to be more

or less integrated to Lithuanian society and, finally to claim for citizenship. It is

known that migration does not always result in the formation of a Diaspora

community. At present Lithuanian Chinese are few in numbers that is the main

obstacle to claim authorities for permission to found a Chinetown in Vilnius. The

Chinese embassy is the main actor to support migrants’ distinctive identity and ties

to homeland by uniting local Chinese for celebrations together of Chinese New

Year, the Moon festival and the National day at least. In case of Lithuania

emerging of Chinese Diaspora is rather a question of time.