Business Analysis: Here’s to 2011!

  • 2010-12-16
  • By Charles Cormack

A former British prime minister famously said “A week is a long time in politics.” The last year in the Baltics will have seemed like a lifetime to many. As we move towards the end of 2010 it is worth pausing and reflecting on the last tumultuous 12 months. We should use that reflection as the basis of some resolutions for next year.

In December 2009 it felt like the economic roof had fallen in over the heads of the Balts. In Latvia things were particularly hard. The Baltic States, and again Latvia in particular, had become a laughing stock throughout Europe, with more established economies castigating Baltic politicians for their foolish mismanagement of the economy. The IMF was putting terrible pressure on the Latvian government to cut, cut and cut again.

As I sit down to write this in 2010, things have changed; yes, we have had a very tough time in the Baltics, and the personal suffering of business people who have lost businesses, and ordinary people who have lost jobs, should not be underestimated. Now, however, the Baltic States are being held up as examples of how best to deal with financial meltdown. Many international observers, including the editorial staffs of The Wall Street Journal and The Economist, have urged other countries to learn from the actions taken here.

I saw this sudden increase in respect myself when I attended a Latvian event in London, when Ilmars Rimsevics, the governor of the Latvian central bank, was due to speak. Just prior to his address the room filled with UK civil servants keen to hear about, and understand, the actions taken. As soon as he finished, they left.
I have no comment to make on the Latvian election except to say that the re-election of Prime Minister Dombrovskis, with a good majority, further increased the growing respect felt for the Latvians in the world at large. The fact that Latvian voters returned to government a politician who had been forced to take the necessary crisis measures (i.e. cuts) highlighted the new maturity of the Latvian electorate.

So, in 12 months, the Baltic States have gone from being seen as economic pariahs to the workers of economic and political miracles (the right sort of “economic miracle” this time). It seems a good time to see what lessons can be learnt from the crisis, and from doing business here during this time, and make some resolutions for the coming 12 months.
I need to make my own resolutions, but I would, with the greatest respect and affection, like to suggest some resolutions for my Baltic colleagues:

1. Try and treat the glass as half full, not half empty. A more positive mindset when faced with problems of any sort, or life in general, would make doing business here a lot more fun.
2. Don’t talk down your own nations to foreigners. We all know things can be frustrating here, but there is no need to tell every foreigner you meet that the country is finished, all your politicians are corrupt, and you want to leave. Most foreigners fall in love with the Baltics when they arrive, so try to keep that positive “vibe” in their head as long as possible. It will lead to more investment and jobs.
3. Don’t just complain about your politicians, get involved and try and change things. You live in a democracy with a free press. If you don’t like things, try to change them, don’t disengage from the process.
4. Use your troubled recent history to your advantage, Europe needs to work closely and trade with Russia, so make the Baltic States the place this happens. You are unique in having the ability to be “Western,” yet really understand the mindset of your big neighbor. International businesses will pay a premium for that.
5. Be a bit more trusting and take a few more risks; not everybody is out to rip you off, and in business taking risks to grow your business is the way to real success.
6. Finally, be proud of what the Baltic States have achieved since the collapse of the Soviet Union, and what you are continuing to achieve. For all the challenges and trials after 10 years of working here (thank you all for putting up with me!), I am still as convinced as I was at the beginning that the Baltics have a bright and exciting future.

So lets all strive to make 2011 a great year for the Baltic States, and build on the lessons learnt over the past few years.