Baltic countries must stop silly cock-fighting

10.09.2012, 11:23

Tõnis Tamme, attorney and a partner of pan-Baltic alliance of commercial law firms  TRINITI writes about how the Baltic countries could and should cooperate better for the common good.

One can often hear ambitious words in Estonia – that the real opportunities of our enterprises for the next decades are related to China, India, South-East Asia and other far-away markets. Indeed, the global economic crisis made Baltic enterprises adopt a wider view of export markets than before. It was a positive change for the small economy of the economic boom period, as it had been too focussed on domestic consumption. On the other hand it’s not probable that the exotic markets would be the driving force carrier of the economies of Lithuania, Latvia or Estonia in near future. Rather, the much-discussed globalisation stage entails regionalisation, resulting in widening those mental borders that we perceive to determine “our” home market.

No ground for snobbism
The competition among the Baltic States for the name of the “best port” for foreign investments is growing. All three countries have their own perceivable and developed advantages – Lithuania has the largest domestic market, Latvia is logistically in the centre of the region and Estonia has pulled somewhat ahead of others with the structure of its economy and key figures.

Estonians have worked hard and we have made good progress, but we have to keep in mind that every success could turn out to be short-lived. Let’s recall e.g. the 1990s where the development of the tourism and services sector of Tallinn was clearly ahead of its southern neighbours. Back then, our services sector was pushed ahead by the Finnish marks that our northern neighbours brought into our shops and cafés as well as by the higher expectations of the Nordic clients who didn’t accept a slow and Soviet-type quality of service. By now that difference is long gone; it’s rather that the staff in the cafes of Riga is more eager to please and the price-to-quality ratio of Vilnius restaurants is better.

Competition - necessary but not sufficient
Competition will naturally remain and it will push us to excel, but cooperation is far more important. The Estonian politics regarding the Baltic co-operation is characterised by its inconstancy and lack of public discussion. It’s also a fact that we could have significantly more supranational and supraelectional agreements with our neighbours showing some serious and sincere initiative. The number of actual fields and needs for cooperation today is growing. For example, the joining of the electricity market of the Baltic States with the Nordic electricity market has been prepared for a long time. This means additional integration of the economic space of the Baltic States with that of the Nordic Countries. By this I mean both the new undersea connection cable between Estonia and Finland and the similar project between Lithuania and Sweden. And there are many other big things in joint development in the field of energy.

Yes, the Visaginas Nuclear Power Plant project has to be implemented without the help of Poland now, but this should motivate the Baltic States as the three remaining parties of that project to co-operate even more seriously. Another challenge of the near future will be the Rail Baltica project. And there are other worthy cooperation ideas around. Take for example the idea of a joint Baltic system of medical procurements, the idea of cost-effective and information-promoting establishment and management of joint embassies similar to the Nordic Countries, the idea of actual defence cooperation in order to avoid historical mistakes, etc.

Learning from each other instead of silly cock fights
When looking and listening at the diplomatic and political “information exchange” between the Baltic States that goes on lately, it could give an impression of rather a complex game of relationships chess than any sincere neighbourhood politics. Latvian journalists seemed suspiciously organised when they arrived in Estonia a couple of days before the visit of the Estonian Minister of Economy, just to ask a question in the style of “if we agreed to the Rail Baltic, would you agree to the Latvian regional LNG terminal?”. The tactical move of the Estonian President to go to Riga by train, and the media coverage that it got, highlighting that about a hundred years ago that distance took almost the same time to pass by train – it was self-explanatory. And the less and less informative releases of the Estonian and Latvian representatives regarding the Visaginas NPP are a cause for a head-scratch and a question whether the balance between national interests and interests common to all three countries is really in balance at all.

I would say that the common interests of the Baltic States need a more rational wording than they have been given until now. I believe this to be in the interest of majority of enterprises because most of the foreign investors arriving in our region will still see all three countries as a tiny speck on the global map of geography and economy, let alone looking at each of those three separately.