The Baltic Ways of Human Development

Professor Marju Lauristin

Editor of the special Baltic issue of the Estonian Human Development Report 20101/2011

EHDR 2010/2011 :

a special ‘Baltic’ issue

• Comparison of Estonian. Latvian and Lithuanian human developments in the context of EU Baltic Sea strategy: could we discover a common pattern?

• Participation of social scientists from all three countries on personal base

EHDR 20101/2011 content and authors

• Ch 1: General and specific features in human development of Baltic states during transition. Comparative trends. Publc opinion. What kind of capitalism? Impact of economic reforms. Peeter Vihalemm (Tartu), Marju Lauristin (Tartu), Zenonas Norkus (Vilnius), Erik Terk (Tallinn), Alasdair Reid (Brussels)

• Ch 2 : Demographic changes, life expectancy, health care. Mare Ainsaar (Tartu). Juris Krumins (Riga), Valda Stankuniene (Vilnius), Ain Aaviksoo (PRAXIS), Riina Siigur (PRAXIS)

• Ch 3 peatükk: Social policy, labour market, life satisfaction. Mare Ainsaar (Tartu). Jolanta Aidukaite (Vilnius), Raul Eamets (Tartu), Anu Realo (Tartu), Henrik Dobewall (Tartu)

• Ch 4 peatükk: Education. Path of reforms. Present problems, Mati Heidmets (Tallinn). Andris Kangro (Riga), Arvydas Matulionis (Vilnius), Viktoria Zilinskaite (Vilnius), Viive Ruus (Tallinn), Krista Loogma (Tallinn)

• Ch 5 : Language landscape and human capital. Language policy and integration of minorities in Baltic states Triin Vihalemm (Tartu). Anu Masso (Tartu), Maarja Siiner (Tartu), Meilute Ramoniene (Vilnius), Svetlana Djackova (Riga), Ineta Dabašinskiene (Kaunas), Violeta Kaledaite (Kaunas), Gabrielle Hogan-Bruun (UK), Robert Phillipson (Denmark)

• Ch 6 Political developments. Consolidation of democracy. Political culture. Vello Pettai (Tartu). Daunis Auers (Riga), Aine Ramonaite (Vilnius).

• Ch 7: Baltic cooperation; experience of past and scenarios for the future. Erik Terk (Tallinn). Ramunas Vilpišauskas (Vilnius), Veiko Spolitis (Riga)

• Cg 8 Conclusions: Baltic way in XXI century. Marju Lauristin (Tartu)

UNDP Global Human Development map 2011

Value of

HDI

0.900 and over  

0.850–0.899  

0.800–0.849  

0.750–0.799  

0.700–0.749

   0.650–0.699  

0.600–0.649  

0.550–0.599  

0.500–0.549  

0.450–0.499

   0.400–0.449  

0.350–0.399  

0.300–0.349  

under 0.300

Global Human Development Report 2011

• The first five countries with the highest level of HD are Norway, Australia, Netherlands, United States and New Zealand

• According to the 2011 UN rankings Estonia (rank 34), Poland (39), Lithuania (40) and Latvia (43) belong together with Germany (9) and the Nordic countries Sweden (10), Denmark (16), Finland (22) to the first quartile of countries (‘very high level of HD’) among 187 members of UN included in the Report.

• From the EU members only Romania (50) and Bulgaria (55) have hot included in the very high level of HD group. They belong to the second quartile (‘countries with high level of HD’ ) together with Russia (66) and the other former Soviet Union members.

Baltic patterns of human development

Rankings according to components of HDI in the Baltic Sea region (UN HDR 2010)

Red bar- life expectancy, blue – years of schooling, yellow line- GDP per capita

0,970,953 0,951

0,929

0,851

0,887

0,8240,839

0,747

0,8560,878

0,845 0,839

0,878

0,784

0,84

0,805

0,711

0,835 0,828 0,8210,832

0,717 0,722

0,6940,673

0,699

0,5

0,55

0,6

0,65

0,7

0,75

0,8

0,85

0,9

0,95

1

9. R

ootsi

10. S

aksa

maa

16. S

oom

e

19. T

aani

34. E

esti

41. P

oola

44. L

eedu

65. V

enem

aa

Eluea indeks

Hariduse indeks

Rahvamajandusekogutoodanguindeks

Changes in life expectancy 1980-2010: Estonian (blue line) and Latvian (dark red) average LE had increased

during last decade by 4-5 years (UN HDR 2010)

60

65

70

75

80

85

1980 1985 1990 1995 2000 2005 2010

Eesti

Läti

Leedu

Poola

Venemaa

Soome

Rootsi

Saksamaa

Changes in the average years of schooling 1980-2010: Germany and Estonia had overcome the line 12 years (UN

HDI 2010)

5

6

7

8

9

10

11

12

13

1980 1990 2000 2005 2010

Eesti

Läti

Leedu

Poola

Venemaa

Soome

Rootsi

Saksamaa

Baltic Countries are in forfront of EU concerning education

• High level of schooling among the adult population• Higher than EU average participation in pre-school and

higher education• Unsolved problems:

– participation of older age groups, workers, unemployed and minorities in life-long learning

– high level of early leavers– educational inequalities – feminization– quality of vocational training and higher education

Similar dynamics of three Baltuc countries in GDP growth (lines) and differences in life satisfaction (bars) 1990-2009.

(Estonia blue, Latvia red, Lithuania green)

Sources: World Bank, Eurostat.

0

5000

10000

15000

20000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

GN

I per

cap

ita

(PPT

)

20

30

40

50

60

70

80

90

Elug

a ra

hul (

%)

eluga rahul EE eluga rahul LV eluga rahul LT SKT EE SKT LV SKT LT

Difference of net wages between the new EU member states and old democracies in the Baltic

Sea region (EU 15=100%)

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0

Norway

Sweden

Denmark

Germany

Finland

European Union (15countries)

Estonia

Poland

Latvia

Lithuania

Aastase netopalga erinevus valitud riikides (EL-15 = 100), arvutuste aluseks ametlik euro vahetuskurss, 2010

Low level of social expenditures

2000 2004 2008

Eesti

LätiLeeduEL27

01000200030004000500060007000

Annual social expenditures per capita (EUR)

Eesti

Läti

Leedu

EL27

Eesti 623 933 1808

Läti 547 624 1283

Leedu 559 701 1553

EL27 5034 5870 6603

2000 2004 2008

Main factors of Baltic developments

After restoration of their independence Baltic states had to build up from the scratch the whole

legal, financial, economic and political system and all the institutions of social protection

Common features

• Smallness of the countries• Post-Soviet condition of economy• Social trauma in the 90’s• Ethnic heterogeneity• Low level of social mobilization and weak civil

society • Location on the border between EU and Russia

Factors supporting ‘Baltic way’

• External – Conditionalities of EU integration– Support from the Nordic countries, regional

cooperation– Inflow of the foreign investments– Russian challenge

• Internal– Strong will for ‘catching up’– Economic success internalized as realization of

more general national aspirations– Individualism and competitive orientation

Factors inhibiting human development in Baltic societies

• Deficit of human resources• Small scale of economies• Periferal location• Low capacity for cooperation• Non-sufficient innovativeness and low

enterpreneurial spirit• Lack of strategic coordination• Low level of trust in state institutions • Low level of public participation

Social policy is still underdeveloped in all three countries

Lagging behind the most of EU countries, looking at • inequality of incomes • poverty• level of wages• level of social expenditures • low effectiveness of social protection measures

Economic crisis has tested sustainability of the Baltic

developments

• The Baltic states, in particular, which were new nations, remained concerned about their national sovereignty.—They feared the financial crisis could undermine their sovereignty and they stood up for their nations.

• The political economy of crisis differs greatly from that in the ordinary times, and these nations knew how to handle the crisis. Both people and leaders were prepared to do what was necessary (Aslund 2011, p 88)

Social burden of the the crisis

• The burden of the crisis was put on the working population

• Baltic ‘economy of patience’• Flexibility of the labour market:

– Shrinking employment– Shorter working hours– Cutting wages

• Outflow of labour

Fall and rise of international credibility of the Baltic countries 2008-2011.

Allikas: The Economist, 14.07.2011

Subjective side of human development: life satisfaction

The global map of life-satisfaction 2011

Life satisfaction ranks of the Baltic Sea countries :

1.Denmark, 6.Finland, 7.Sweden, 35.Germany, 99. Poland, 139.Estonia, 154. Latvia, 155. Lithuania, 167. Russia

Public opinion (Baltic survey April 2011)

Are you glad or sad looking at the changes in your country during last 20 years? (EMOR 2011)

50

23 2521

63

40

29

13

35

0

10

20

30

40

50

60

70

Eesti Läti Leedu

Rõõmustavad

Kurvastavad

Raske öelda

Satisfaction with economic situation of the own family (%)

Estonia Latvia LithuaniaEconomic situation of the family now Bad 25 40 27

Satisfactory 45 49 48Good 30 11 24

Economic situation of the family 20 years ago Now is better 30 16 17The same 16 11 1120 years ago was better 41 58 46

How you the situation would be after 5 years from now? Better than now 49 34 34

Would you see yourself and your children’s future related to this

country? (%)

Estonia Latvia LithuaniaRather no 8 16 14Difficult to say 32 39 37Certainly yes 61 44 48

Future challenges• How to overcome the gap in human development level

between Baltic and Nordic countries?• How to turn to the new innovative track of economic

development in order to catch up the high income ‘core’ countries?

• How to increase coherence, integration and participation and offer the opportunities for self-realization to all members of society?

• How to raise hapiness and life satisfaction, stop the outflow of young people from our countries and attract back home those who had left?

• Should we try to follow the Nordic countries or rather to develop an original (and attractive) ‘Baltic way of life’ ?

Opportunities

• Use Nordic-Baltic cooperation– in order to boost human development, raise innovativeness, improve

quality of higher and professional education, develop modern infrastructure and sustainable energy system

– for development and effective usage of intellectual resources in order to create the knowledge based economy

– to find new models for sustainable social protection and health care systems

• Improve democratic participation, develop good governance and build more efficient administrative system

• Develop the ‘Nordic- Baltic’ brand of efficient and innovative society on the global scale

Thank you!

Report is available on the website of the Estonian Cooperation Assembly

www.kogu.ee