Volume 4 – Number 6

Estonia Leads Balts in Business Competitiveness
The World’s Economic Forum’s Global Competitiveness Report (GCR) assesses the comparative strengths and weaknesses of national economies and monitors competitive conditions and effectiveness worldwide. The 2005 report ranks Estonia as number 20 in competitiveness with other economies, Lithuania was ranked 43 and Latvia 44. Finland was ranked as the world’s most competitive nation followed by the U.S. The Russian Federation placed 75th place, a drop of five points from last year. The report is prepared in collaboration with leading academics and a global network of 122 Partner Institutes and nearly 11,000 business leaders. The report examines a range of factors including the levels of judicial independence, protection of property rights, government favoritism and corruption.

Latvia Prepared for Bird Flu Outbreak
Latvia has taken all necessary measures to avoid a bird flu outbreak, according to the Food and Veterinary Services Department Director, Vinets Veldre, reports LETA (10/13). An SOP for handling bird flu cases was prepared several years ago and has been continually updated. The Service held mock exercises the last couple of years to test the instructions and familiarize the participants with the plan. This year it carried out a joint training exercise with poultry farmers on coping with the outbreak. Informative materials and instructions also have been distributed to custom checkpoints at ports and elsewhere.

Representative Kolbe: U.S. Likely to Soon Lift Visa Requirements for Lithuanian Citizens
Representative Jim Kolbe (R-AZ) on his recent trip to Lithuania told reporters (The Baltic Times 10/13) that the U.S. was likely to lift the visa requirement for Lithuanian citizens “quite soon.” A visa free regime is an important goal of all three Baltic countries. In order to accelerate the elimination of the visa requirement, Balts are taking part in the U.S. Visa Waiver Roadmap plan proposed by President George W. Bush during his visit to Slovakia this year. The plan provides for the possibility to apply the current visa waiver program to citizens of Europe who have recently become EU members. The program enables nationals of specific countries to travel to the U.S. for a 90 day stay or less without obtaining a visa. Twenty seven countries participate in the program.

Russian-German Gas Pipeline Deal Worries the Balts and the Poles
The Russian-German deal to build a $5 billion, 550 mile gas pipeline under the Baltic Sea linking Russia and Germany is provoking strong protests from Baltic and Polish leaders. They object to the project citing environmental concerns and the detrimental impacts the project would have on their economies. They also accuse Russia of using its role on the global energy market to influence decision-making in Europe. Latvia’s Foreign Minister, Artis Pabriks, told reporters that the pipeline would be a threat to the safety and the environment of the countries along the Baltic Sea coast (Lv MFA 10/6). [There is a considerable amount of unmarked munitions and mines left from WWII and the Cold War scattered on the bottom of the Baltic that constitute acute danger to the pipeline.] Mr. Pabriks also expressed his disappointment that Germany and Russia did not consult other countries in the Baltic region and the EU. Polish President Aleksander Kwasniewski said it was unfortunate that Germany had decided to “go over the heads of Poland and the EU and make its own decision” (BBC news 9/7). Lithuania’s President Valdas Adamkus expressed similar sentiments. “It was shameful to not take into consideration a [EU’s] family member’s interests, ignore them, and strike a profitable agreement with Russia almost in secret,” he declared. The Balts and the Poles fear that Russia will use the pipeline as a tool for political blackmail by threatening price increases or by limiting, or by shutting off the supplies. (Zycie Warszawy 9/8). Just as it recently threatened Ukraine (Kim Murphy, LA Times 10/16), the Balts and Poles call the deal the Putin-Schroeder Pact, a reference to the 1939 Hitler-Stalin Pact. Russia supplies over two-thirds of Eastern Europe’s natural gas needs and almost half of the EU’s. European demand is expected to double in the next 30 years.

Latvia’s President Vaira Vike-Freiberga Supports World Holocaust Forum
According to The Baltic Times (6/10), Latvia’s President Vaira Vike-Freiberga met with Moshe Kantor, President of the World Holocaust Forum, on his visit to Latvia and expressed Latvia’s support for the Forum and its mission. Both the President and Mr. Kantor stressed the importance of remembering and teaching the lessons of the Holocaust. “Latvia is determined to remember the crimes against humanity committed by the totalitarian regimes on Latvian soil during the 20th century,” said the President. During the visit Mr. Kantor met with leaders of the country’s Jewish community and discussed plans for developing the community’s cultural and historical legacy. President Vike-Freiberga thanked the International Task Force on Holocaust Education and the European Jewish Congress and other Jewish Organizations for support

Estonians Break Ground: Online Nationwide Election
During October local elections, Estonia became the first country in the world to hold an election enabling voters nationwide to cast ballots over the Internet, reports Associated Press (10/14). Nearly 10,000, or one percent of the 1.06 million registered voters, voted online. Election officials said they had received no reports of flaws or hacking attempts. To cast an online ballot, voters need a special ID card, a $24 device that reads the card and a computer with Internet access. Some 80% of Estonian voters have the ID cards, which have been used since 2002 for online access to bank accounts and tax records. Many ID card users, however, still lack the reading device, which explains the low turnout of online voting. If the electronic voting system works well in local elections, the parliament is set to establish online voting for national elections. On line voting has been tried in other countries such has the U.S., France and Great Britain, but Estonia was first to use it in a nationwide election

Baltic Real Estate Europe’s New Hot Spot for Investment
The Wall Street Journal (10/20) reports that as competition in popular European real estate market areas intensifies, investors are turning to emerging markets such as the Baltics for potentially lucrative opportunities. The capitals—Tallinn, Riga, Vilnius—are especially attractive to investors because they offer the best quality buildings. Scandinavian investors are most active in the Baltic region because of their proximity and close trade links. The size of the Baltics makes the region a target for small to midsize business, said Peter Morris, managing director of restate firm Ober-Haus in Warsaw.

Baltic Countries in Top Third of the Least Corrupt Nations List, Russia Bottom Third
In its annual study of the corruption in government and business, Berlin based Transparency International ranked Estonia, Latvia and Lithuania in the top third of countries least corrupted, out of 159 countries. The countries are ranked on a scale of one to ten, with ten being the least corrupt. On the world wide scale, Estonia with 6.4 points placed 27th, Lithuania with 4.8 moved into 44th place and Latvia with 4.2 points came in 51st. Russia with 2.4 points fell into 126th place, the same as Niger and Sierra-Leone. U.S. ranked 17th. Iceland with 9.7 points topped the world list. Nearly half of the surveyed nations scored less than three points. The report credits Estonia with making “noteworthy improvement” from previous years and considers it as one of the least corrupt members of the EU. Latvia, on the other hand, placed second from the bottom with Poland being on the bottom on the EU list. All three Baltic countries showed improvement from last year. In the last six years Latvia has improved the most, from 2.1 to 4.2, Lithuania from 4.1 to 4.8, Estonia from 5.7 to 6.4. The study is based on 16 different polls from 10 institutions, including Freedom House, and The Economist Intelligence Unit.

Lithuania Completes Investigation on Russian Military Plane Crash in Lithuania
Lithuania has completed a three-week investigation into the Russian SU-27 jet fighter’s intrusion and crash in Lithuania. On September 15, the aircraft flew for about 20 minutes over Lithuania continuously changing altitude and direction, until it crashed about 120 miles inside the border. The pilot ejected. The investigating commission, in which Russia participated, concluded that the incursion of the SU fighter and crash was caused by “technical, organizational and human actions” (Lit Emb Wsh 10/14). The report laid to rest the hypothesis that the plane was on an intelligence mission to test NATO air defenses. The plane’s pilot has been released, and the wreckage will be returned to Russia. Lithuanian officials claim that the top secret device used by Russian pilots to identify friendly and enemy aircraft has been found in the wreckage (The Moscow Times 10/5). Russians dismiss the claim. They maintain that the device is designed to self-destruct when the pilot ejects or the plane crashes. Writing in EDM (10/14), Vladimir Socor concludes that NATO air defense systems require urgent reorganization and improvements. He points out that the incident exposed surveillance gaps, and technical and organizational flaws, and that the radars used by Balts are obsolete, and in need of replacement by three-dimensional radars. He recommends that NATO assume greater responsibility for deploying adequate radar.

Representative John Shimkus (IL-19) Addresses Latvia’s Parliament (Saeima)
Congressman John Shimkus (IL) Cochairman of the House Baltic Caucus, recently participated in a Congressional delegation to Lithuania, Ukraine and Austria. At the request of House Speaker Hastert, Mr. Shimkus made a side trip to Latvia where he addressed the Saeima. This is the first time in the history of the Saeima that a non-head of state or non-Parliamentary leader was invited to do so. In his speech, Mr. Shimkus urged Latvia to keep its troops in Iraq. “If we give up defending freedom in Iraq, then we will abandon millions of Iraqis who are working hard to bring Iraq into the community of nations,” said the Congressman. Baltic officials thanked Mr. Shimkus and Congress for passing HCR 128 condemning the Molotov-Ribbentrop Pact of 1939 and urging Russia to acknowledge the crimes it committed against the Baltic people. They also expressed support for US missions in Iraq and Afghanistan. The delegation was led by Rep. Jim Kolbe (AZ), Chairman of the House Appropriations Subcommittee on Foreign Operations. Other members of the delegation included Rep. Martin Sabo (MN), John Carter (TX), James Moran (VA) and Dennis Rehberg (MT). The purpose of the visit was to review U.S. foreign assistance programs in Lithuania, Ukraine and Austria. In Lithuania, the group met with Lithuanian officials and Belarus opposition leaders. The Congressmen noted the rapid economic progress of Lithuania and thanked the government for its contribution to advance democracy in Ukraine and Belarus (Lv MFA 10/12-13, Copley News Service 10/13).