Lithuania nowadays derives much of its income from tourism, Latvia has made eco-friendliness its priority, and Estonia is on the cutting edge of digital technologies. These are certainly good directions for economic development. The countries themselves are also good directions for travel—especially if you have never visited any of them.
I climb into a hot-air balloon that will take us up over Vilnius. Our mentor and guide, Kęstas, assures us that Lithuania’s capital is the only one in Europe that offers visitors regular balloon flights of this sort. Looking down from the skies, one gets a pretty good view of how Lithuania is changing. Vilnius is full of Baroque and Renaissance palaces, churches, and townhouses, ringed a little farther out by post-Soviet apartment blocks. But if the balloon were to keep drifting—toward the Baltic Sea resort town of Palanga, for instance—we would see more and more new buildings designed in an ascetic Scandinavian style, little different from those in Sweden, Finland, or Norway.
Lithuania: Cats and Wine
However, let’s pause a moment longer over the Lithuanian capital. One of its most interesting districts, clearly visible from up in the air, is called Užupis. This bohemian outpost—once a neglected area of the city thought to be rather dangerous, it was also a Jewish quarter prior to World War II—declared itself an independent republic of artists on April 1, 1997. Užupis took on some of the trappings of an independent country, too: a flag and emblem were invented. A local parliament was formed, “diplomatic relations” with other countries began to be established, and an Užupian currency was even printed. Artistic cafes, clubs, and galleries sprang up all over the neighborhood, much like mushrooms after a summer rain (as happens quite plentifully in Lithuania’s extensive forests). One of those venues today proudly displays photos of the Dalai Lama visiting the “republic,” as well as an official letter sent by Pope Francis’s office in response to a proposal for diplomatic contacts to be established between Užupis and the Vatican.
Those strolling through the streets of the quarter are pleasantly met by some striking wall murals— including one on Paupio Street, with the republic’s constitution inscribed on the nearby walls. The quirky provisions of this constitution are not quite like those of any other “country.” Some of them stipulate: “Everyone has the right to live by the River Vilnelė, and the River Vilnelė has the right to flow by everyone.” “Everyone has the right to die, but this is not an obligation.” “Everyone has the right not to be loved, but not necessarily.” “Everyone has the right to idle.” “Everyone has the right to be undistinguished and unknown.” And perhaps most intriguingly: “A cat is not obliged to love its owner, but must help in time of need.” A little farther away stands a statue of Jesus the Backpacker, and still farther away an egg-monument out of which an angel once hatched.
Today, the performing arts are among the “wares” that Lithuania can truly boast of. There are few places in Europe as intriguing and distinctive as Užupis, and at the same time so little-known. However, modern Vilnius also has much more to offer. There are some notable fine-dining venues offering unconventionally-served dishes packed with unusual flavors. The Amandus restaurant, run by Deivydas Prasipliauškąs, features dishes that represent the very best of Lithuanian national cuisine crossed with Scandinavian influences. Innovative combinations of flavors are also offered by a restaurant called D’Eco—one of the growing number of venues in the Lithuanian capital where vegetarians and vegans will not feel discriminated against. Importantly, Lithuanians are not afraid or ashamed of their traditional peasant cuisine. They boast of their superb dark bread, dumplings, cepelinai (grated potato dumplings stuffed with meat), šaltibarščiai (a cold, borscht-like soup), potato and cabbage dishes. And the phrase “Lithuanian wine” most often refers to a product made not from grapes but from gooseberries, currants, or apples. Everything is of excellent quality, and not infrequently served up in a very exquisite manner.
For those Lithuanians who cannot afford fine dining, earnings and prices are comparable to neighboring countries. However, one doesn’t pay administrative fees for housing—only gas, electricity, water, and garbage bills. Central heating bills are payable only during the heating season: November through April. There are also a lot of social security programs.
According to a Eurobarometer survey, Lithuanians are the most environmentally-conscious nation in the region. The “Local Organic” symbol (Lit. Ekologinis žemės ūkis) and other such markings—denoting eco-friendliness, sustainable agriculture, or sustainable forestry—are well recognized. Recycling programs are well developed in the country; Lithuania was very quick to implement a system of waste segregation and to persuade citizens to adopt sustainable consumer habits. According to international institutions, Lithuania currently has the best infrastructure on the eastern coast of the Baltic Sea for fostering pro-ecological activities. Moreover, many Lithuanians have become vegans or vegetarians in recent years, often specifically for environmental reasons.
Latvia: Farmers and Taromats
A similar path of development has been chosen by Latvia—a country covering almost the same area as Lithuania, chock full of forests and meadows. The country’s leaders took a cue from this ubiquitous greenery; together with their not quite two million citizens they discovered that agriculture was their great opportunity. The climate and the quality of the soils are favorable for the production of fruits and grains, but also for raising animals for meat and milk.
Latvians refer to themselves as the “people of the forest.” And with good reason: forests today cover almost half of the country. Before World War II they occupied just 25%, but the country underwent intensive forestation during the Soviet era, with peat mining and logging becoming the primary sources of state income. Low population density and the concentration of not-terribly-burdensome industry around the capital have made Latvia a tremendously attractive country in terms of nature.
The moniker “people of the forest” is also suggestive of the Latvian people’s strong connection with nature and the Latvian way of life: walking in the woods, picking mushrooms, fishing, spending time on the water, and cherishing local traditions and culture. The rhythm of life is still dictated, as it was centuries ago, by the seasons and cyclically changing nature.
This harmonious coexistence with nature makes itself felt in various facets of life, including the economy. Today’s Latvia wants to be seen as a very eco-friendly country. Fertilizers are increasingly based on compost made from cow dung and vegetable scraps (e.g., pumpkin husks). There is a general move away from artificial fertilizers, and chemical pesticides are also being used less and less for crop protection. Having a 15% share of all its fields being reserved for organic farming puts Latvians among the top EU countries in this respect.
Such concern for nature is also excellently evident in the national parks: both Gauja National Park near Riga and Ķemeri National Park a bit further along the Baltic coast, for example, feature precious plant and geological formations as well as archeological sites. Endangered plant and animal species—listed in Latvia’s Red Book—have been placed under protection. In addition to these two parks, there are also numerous national nature reserves and nature parks.
The sea remains very important for Latvia: its Baltic coast runs 311 miles. The resort of Jūrmala, full of colorful wooden houses and pine forests, with wide access to the water, is especially popular, and not only among Latvian tourists. In addition, the former Hanseatic port of Riga, where as many as one-third of all Latvians live, makes a great impression on visitors. During the Soviet era, Soviet filmmakers came there in large numbers. The city mostly stood in for various metropolises of Western Europe.
The ecological lifestyle is also supported by Latvia’s packaging deposit system. Glass bottles, plastic containers, and cans can all be returned to special vending machines called “taromats,” to receive back a deposit payment. A similar system also operates in Lithuania.
But ecological-mindedness is not the only reason Latvia is getting better and better press abroad. Latvians, like Estonians, can also boast of superfast internet and a trimmed-down bureaucracy. As well as equality in access to education and prestigious positions: executives, politicians, judges here are women much more often than in many other EU countries. Latvia’s other strengths include low prices compared to Western countries and the ease of starting a business. Investors are attracted by a very liberal, transparent tax system with relatively low rates and friendly banking laws. Corporate income tax here is 15%, one of the lowest rates in the entire EU, and the capital-gains tax is the same. The standard VAT rate, in turn, is 21%. A number of bilateral agreements protect foreign business from double taxation. Accounts opened up in Latvian banks are covered by strict confidentiality, with heavy penalties imposed for breaking it. Latvian banking institutions are also rapidly developing remote account-management systems. Foreign investors are further encouraged by the widespread knowledge of foreign languages—of English first and foremost.
Many of the national projects took years to prepare. Matters were greatly accelerated when Latvia acceded to the EU in 2004, then joined the eurozone ten years later. To date, the country has received more than ten billion euros from European funds. As a result, citizens’ income and standard of living have increased significantly. Today they are at 68% of the European average, while before 2004 the figure was 48%. The national minimum salary has also increased significantly, to 380 euros.
Estonia: Country of Unicorns
Estonians joke that the only two administrative actions or state services that can’t be handled remotely in their country are getting married and getting divorced. And in fact, that’s not really even a joke. A recent study ranked Estonia world leader in terms of the digitization of public services and easy access to high-speed internet. Bureaucracy has been trimmed down to a minimum, which definitely makes life there more convenient. A citizen enters their personal data into the system only once, then it takes care of everything. Residents of this small country have been using electronic signatures for nearly twenty years. Many matters, including filing taxes, can be done online in just a few minutes.
It all started in 1996, when—just five years after declaring independence—the Estonian government decided to take the Tiigrihüpe, or Tiger Leap. At that time, just 2% of people on the planet had internet access. Not everyone believed in the internet revolution, but the Estonians quite quickly and accurately diagnosed the situation. The youthful Estonian government (with an average age of less than thirty-five) laid out a vision for the emergence of a new, digital society, and was the first in the world to boldly invest in it.
Under the program, schools had modern computers and software packages purchased for them, fast internet connections installed, and teachers were given intensive IT courses. The multifunctional educational portal Teachers Net-Gate was launched to assist educators. Soon 97% of the country’s schools had access to the network. In 2000, there were twenty-five students per school computer—an excellent result by the standards of the time. Private internet connections were also promoted. Later that year, the Estonian parliament included network access as one of the basic rights.
Tangible results of these big-scale efforts made themselves manifest surprisingly quickly. In 2003, a group of Estonian programmers—with the support of a Swede and a Dane, Niklas Zennström and Janus Friis—created the Skype telecommunications app; eight years later, the firm was sold to Microsoft for huge sums of money.
In the following years, Estonia prioritized start-ups even more—especially those in the healthcare industry. Estonian e-business is developing at a dizzying pace. The country has as many as eight hundred start-ups per million inhabitants. In addition, it is home to the world’s largest number, per capita, of so-called “unicorn companies”—privately-held start-ups valued at more than $1 billion. With a population of just 1.3 million, Estonia has as many as seven companies of this type.
The Estonian government estimates that the digitization of public services saves the country 1,400 years of working time annually—that’s how long it would take a single public official to fill out paper versions of all the forms that citizens complete on their own via online platforms—and that this represents a gain of as much as 2% of GDP per year. The digital workflow is not only faster and more convenient, but also safer for citizens than the traditional methods. It likewise makes it easier to keep tabs on potential economic crime. Every citizen has a digital ID card and decides for themself which data to reveal—including to public officials. And those officials have no right to look into this sensitive data without solid justification. Any unauthorized accessing of data can be deemed a crime.
Moreover, work is already underway on integrating data across various digital channels—state services, banking services, and social media (such as Skype, Facebook, Instagram, WhatsApp)—to make the authentication process easier. The integrated system is supposed to help citizens in cases where they do not know who they should turn to on a particular issue, using artificial intelligence to direct them to the right addressee.
Having digital identities offers unlimited opportunities, including many we have yet to imagine, Estonians say. They themselves are certainly on the very vanguard in this respect. For instance, the country recently piloted a court digitization program. In cases where the value of a dispute does not exceed €7,000, human judges are sometimes being replaced by computer algorithms. However, appeals are still being heard, at least for now, by a human judge.
For a decade and a half, Estonia has also been among the world’s top performers in the PISA ranking, a prestigious international survey evaluating the skills and knowledge of fifteen-year-old students. Teenage Estonians excel at reading comprehension, mathematics, and science—performing the best in Europe in all these areas, only being surpassed globally by a few Asian nations. Such brilliantly educated, creative young Estonians have opportunities to find employment all over the world—working, of course, mostly online.
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