• 2004-12-22
At the end of each year pundits have a tendency to claim that the past 12 months was the year, the one that changed it all, the one that, in a decade or two from now, we will all look back at and remember distinctly. It is very easy to get sucked into this "significance trap," but still we must ask: was 2004 such a year?

Judging by the memberships in NATO and the European Union, it was. These are, after all, the two things the Baltic states wanted most since achieving independence. Now they have them. Membership in the two organizations was the result of years of negotiations and reform and could, if utilized properly, continue facilitating development and broaden prosperity in countries that are still impoverished by European standards.

Pundits be damned, but 2004 was the beginning of a new era in Baltic history.

Otherwise, it was politics as usual in 2004. Latvia had three governments, Lithuania two and Estonia only one. Estonians stuck behind Mr. Juhan Parts, despite the growing unpopularity of his ruling right-wing party, Res Publica. On the other hand, Lithuania went through three presidents (Paksas-Paulauskas-Adamkus), an undisputed record not only for the Baltics but maybe all of Europe. What's more, its corruption scandals were easily the worst in the Baltics. So stability-wise, Estonia takes the prize.

Socially, 2004 was exemplary in that it demonstrated many of the same frustrating problems for Balts even 13 years after independence. 1) History: the Lihula monument showed that even something as seemingly straightforward as honoring freedom fighters is fraught with controversy and inevitably fractures society. 2) Integration: Latvia's education reform, designed to improve naturalization and minorities' competitiveness, is likely to foment more discontent among non-Latvians. 3) Culture: Drivers in Latvia continue to behave like irresponsible, rambunctious children. Road culture is looking more third-world than first-world. 4) Population: Decline in all three countries, with little hope for a turnaround.

Jumping ahead, 2005 is likely to be less tumultuous than these last 12 months. For one, President Valdas Adamkus has good job security. Second, other than a couple privatizations, there is no hard-boiled issue that could torpedo Latvia's new government. Third, Estonia's Res Publica will fight tooth and nail to become the first government to last an entire term. Finally, many are predicting a rift in Lithuania's schizophrenic Cabinet of center-leftists and populists, but we tend not to believe them. For the deluge of EU funds will begin in 2005, and that is pork no sane politicians would ever walk away from. The Laborites and the SocDems are likely to try extra hard to get along.

Indeed, we believe that EU structural funds will be the thing to watch next year. Membership success depends on how much cash each country can wring out of Brussels, and that in turn largely depends on the degree of organization. We're not placing any bets on which country will receive the most EU funds per capita - what about you?