-Caveat Lector- . RIGA, TALLINN AND VILNIUS >From The Economist print edition The Baltic states of Latvia, Estonia and Lithuania are close to joining the European Union and, perhaps, NATO too. How ready are they? A COLOSSAL ruined satellite dish and a cluster of derelict antennae deep in the Lithuanian countryside are the only remaining sign of the Linksmakalnis listening station, once one of the Soviet Union's most secret military installations in the Baltic states. The locals say hundreds of people once worked there, scouring the airwaves for secrets from Western Europe. To this day, officials cannot (or will not) say exactly what went on there. A few miles away a new lot of electronic snoopers are hard at work, but in the other direction. Radars all over the Baltic states, looking hundreds of miles deep into Russia and Belarus, beam data to powerful computers housed in a former Soviet nuclear bunker. Projected on to a giant screen in the control room are the results: the movements and identities of every aircraft in or near the region. Not that the watchers can do much about what they see, since the Baltic states have no combat aircraft to scramble against an intruder. But it is a start: it shows that the Balts are not just consumers of western security, but also providers. At a touch of a button the Baltnet system hooks up with similar radars in nominally neutral Finland to the north, and with NATO's own eastern defenses to the south. Even from outside NATO, the Balts can lend a human and electronic hand to the alliance. The Baltic states are hoping that projects like Baltnet will help their cause in the coming months, as NATO decides whether to include them in the next round of enlargement, or keep them waiting. Of late, the argument has shifted a bit in favour of the Balts. But the worriers go on worrying. Latvia, Lithuania and Estonia are three small new democracies, containing between them less than 8m people. Stuck between the Baltic Sea and Russia, they strike sceptics as indefensible. Their armed forces are still weak. Is it worth antagonizing the Kremlin for their sake? The question is what Russia would really do. President Vladimir Putin sounds less hawkish on this than some of his officials. He claims not to understand NATO's thinking, but reacts to talk of enlargement more in sorrow than in anger. Vyacheslav Nikonov, a political analyst close to the Kremlin, says that if expansion went ahead Russia would strengthen its forces in the Baltic region and perhaps even put nuclear weapons in Kaliningrad, the cut-off patch of Russia that lies to the west of the Balts. That would indeed be a show of force; but it would be one the rest of the world could probably live with. The three Baltic governments are eager to join the club. They have shown that they are prepared to spend a big share of their puny budgets on defense: fully 2% of national income. Hundreds of millions of dollars-worth of donated Swedish equipment will add beef in the coming years. The Balts may not be able to afford jet fighters, but they will have runways and hangars that can accommodate NATO ones. The Balts' cause is helped by Russia, which has misplayed its hand. The Kremlin claims at one and the same time that it poses no threat to the Baltic countries (and so NATO membership is unnecessary for them) but that its special interest in this region, as a chunk of the former Soviet Union, should be respected (therefore NATO membership is an insult to Russia). Enforced respect and unwanted influence are exactly the threats from Russia against which the Balts want NATO protection. Indeed, the Russians may hurt themselves by what they are doing. The Lithuanians, who sit next to Russia's outpost of Kaliningrad, say that many of the Russians now running Kaliningrad are far more relaxed about their territory's relations with the surrounding parts of Europe than their predecessors were a few years ago. They want to trade with their neighbors, and to let workers and capital move relatively freely across the region's borders. The government in Moscow is therefore running a large risk. If it stays cold towards the Balts, it may find that Kaliningrad, though still formally part of Russia, is in fact developing closer links with the rest of Europe than those it has with its old motherland. If NATO does take in one or more of the Baltic states, some juicy arms contracts will result. The main contractor for the $100m Baltnet radar was Lockheed Martin, one of whose senior executives also leads the main lobbying group for NATO enlargement. There is growing American enthusiasm for spreading NATO wider. Yet a fair question remains. Is America really prepared to stretch its nuclear guarantee to the Baltics, as it once covered Western Europe? Even if the answer is "probably not", new members so far have not insisted on a specific commitment on this point. They live in hope. Stylish deception Membership of that other club they keenly hope to join, the European Union (EU), is a more pressing issue. Although all three countries have made impressive progress in the past decade compared with other ex-Soviet countries, big problems persist. A few locally managed businesses compete well in international markets (an Estonian firm that makes cross-country skis, for example, and a world-class software company in Latvia). Tallinn, Riga and Vilnius are deceptive showcases for their countries; tourists and visiting officials alike are charmed by the architecture, wowed by the multilingual friendliness, seduced by the good restaurants and hotels. But at the outskirts of the capitals the prosperity fades out in bleak housing estates, tatty factories, bumpy roads. Out in the countryside, particularly in Latvia and Lithuania, things look even worse. As in Russia, villages suffer from poor public services, depopulation and alcoholism. The smallholdings that have replaced Soviet-style farming are picturesque, but mostly unable to provide their owners with more than a subsistence income, $100 a month or less. The powerful pre-war producer co-operatives that made Baltic butter and pork into thriving industries are all but forgotten. Country towns are poor, and offer few jobs. Even in Estonia, the smallest and most prosperous of the three countries, there are big differences of wealth. The average gross monthly wage in Tallinn at the end of last year was $359, compared with $205 in Voru County in the much poorer south-east. Even with fast economic growth, it will be decades before the southern side of the Baltic Sea catches up with the countries on its northern and western shores. To reach even half of the EU average by 2010, Estonia's GDP per person would have to increase by 5-6% every year for the next ten years. At current rates, it would then reach $15,000. Lithuania, on present form, would reach only about $6,000. There is also, in one way, a growing sense of isolation. The number of people who can speak or understand Russian has fallen sharply, and many youngsters do not even try. But little else has arrived to replace Russian. Outside the big cities, English has made only limited inroads. Other foreign languages (even the next-door neighbors') are scarcely spoken at all. This is a pity. Small countries need to be polyglot to prosper. The continuing economic bleakness also creates a political problem. Ten years ago, people were remarkably willing to trust their politicians. Having risked death or deportation to be free of Soviet rule, they were ready to accept wrenching economic changes. But the rulers of all three countries were largely unprepared for the challenges of the post-cold-war world. Ex-dissidents often proved quarrelsome and ineffective in power. Ex-Soviet types brought their own bad habits from the past: greed, bossiness, secrecy. The resulting corruption and incompetence have squandered much public trust. Dodgy privatizations, too much evident self-enrichment and an alarming inability among politicians to communicate with the voters have left many people feeling tired and cynical. Even in Estonia, where to outside eyes the government is talented and reform is successful, many ruling politicians are accused of being arrogant and sleazy. Some Balts are voting with their feet. In Lithuania, one senior government figure reckons that as many as 200,000 of its 3.7m people have emigrated since independence, most of them young. Sloppy government also makes it hard for foreigners to trust the Balts, even when they like them. Finland, for example, has equipped and trained Estonia's border guards well; the radars are so sensitive that they can spot a fox crossing a frozen lake. The relationship between the two countries is, in general, a model for post-communist Europe. But large quantities of heroin and amphetamines still get through to Helsinki from Estonia. Problems like this have to be solved before the Baltic states can become members of the EU. Primping for the EU In theory, joining the EU should solve the Baltic states' internal troubles, just as they hope that joining NATO will settle their external ones. At the moment, Estonia is seen as one of the best-qualified to join the EU, along with Slovenia and Hungary. Latvia is gaining ground. Lithuania is still lagging behind. In GDP per person there is not much of a gap between the three. The striking difference is in trade and investment. In Estonia's open economy, foreign trade as a percentage of GDP is about twice Latvia's and Lithuania's (see table), and its foreign direct investment per person is higher too. Still, it is a fair bet that all three will join the EU together. Drawing a line between the Baltic states, only to remove it a couple of years later, would make no sense. As with other applicant countries such as Hungary and Poland, a slice of EU structural funds (money for roads, bridges and the like) would be welcome. Full access to the single market will help to make companies more competitive. European levels of efficiency in government, particularly in the legal branch, are much needed. The easy negotiations have happened already; the difficult ones are mostly yet to come. Officials in Tallinn are furious that most EU countries are refusing to open their labour markets to even a trickle of Estonian workers. In Estonia, particularly, preparing for EU membership has sometimes meant reducing standards, not raising them. Lamentably, Estonia has had to introduce import tariffs and agricultural subsidies, two bad habits which its zealously free-trading government had scorned in the early years of reform. Estonian officials hope that, once inside the EU, they can add their bit to the lobby for freer trade and less government interference. There is less Euroscepticism among the Balts than among the other applicants, because the alternative is so bleak. If EU membership were delayed, joining NATO would be impossible. However harsh, slow and cumbersome the Euro-accession procedure, few Balts want to risk being in the same boat as Moldova or Morocco. The Russian shadow Another difference from other would-be EU members is that the Baltic states bring with them a number of unsolved questions about Russia. One concerns potentially disputed borders. This is a particularly prickly issue for Estonia, which, like Latvia, lost some of its eastern territory to Russia during the Soviet era. Estonia has given up any claim to these slivers of land, now mainly filled with Russians, but the Kremlin will not ratify the border treaty. Lithuania's position is different. Whereas Latvia and Estonia lost territory under Soviet occupation, Lithuania gained a lot, chiefly the historic capital, Vilnius (under Polish rule until 1939), and the main port, Klaipeda (formerly Germany's Memel). When the Lithuanian parliament last year voted to demand compensation from Russia for losses during the Soviet occupation, some politicians in Moscow were quick to suggest that Lithuania should give back what it had been given. These are not live issues at the moment. But in a few years' time� perhaps as soon as 2004�the Balts' eastern borders will also be the EU's. Kaliningrad will then be entirely surrounded by EU (and perhaps NATO) territory. That raises big and unanswered questions about visas, trade and security. So far, Russia seems to see Kaliningrad not as a way of building a bridge for itself into Europe, but as a bargaining chip over the future of the Baltic states: which could prove a big mistake. Unlike any of the other applicants, the Baltic countries will bring a large number of ethnic Russians�about 1.5m, a fifth of their total population�into the EU. Around 150,000 of these are citizens of Russia itself; about half are citizens of the Baltic states, either because their families were citizens before 1940 or because they have acquired citizenship by marriage, or through naturalisation. In Latvia and Estonia, naturalisation mainly involves passing a language test; in Lithuania, where the Russian population was less than 10% at the time of independence, citizenship was granted automatically. The remaining 700,000-odd people are, in effect, stateless. They lost citizenship of the Soviet Union when it collapsed, but either from apathy or out of principle have not tried to become either Russians or citizens of their new countries. They and the citizens of Russia are barred from some occupations, and cannot vote in national elections. The Kremlin calls this unfair. Estonia and Latvia (and, mutedly, the West) argue that giving Soviet-era migrants the same rights as the people they had colonised would be even more unfair. On paper, these look like serious problems. The Baltic states are ethnically divided. Groups of people stranded when empires collapse, especially if they lack full economic and political rights, bring ominous historical echoes�like the Germans in Czechoslovakia's Sudetenland, whose supposed plight was a pretext for Nazi aggression. In fact, Russia's stranded Baltic colonists are no great cause for concern at the moment. For all the economic problems in the Baltic states, living standards are much higher there than in Russia. Some Russians who left after independence are now trying to come back. Political conditions are improving, too. Estonia and Latvia have softened their language and citizenship laws to the point where the Organization for Security and Co-operation in Europe, the main body dealing with the issue, is getting ready to close its local offices. Attitudes have changed as well. As memories of the forced migration of the Soviet era fade, Estonians and Latvians have stopped assuming that the "Russian occupiers" will "go home". For their part, the local Russians seem willing to accept Baltic independence as a fact. There is much more readiness, especially in Latvia and among young Russians in Estonia, to learn and speak the local language. Nationalist tub-thumpers from Moscow find almost no local echo. To the extent that Russians living in the Baltic countries look for outside help, they look to Brussels, not Moscow. Integration could go a lot faster, but, for the most part, time is solving the problem. Some of the Baltic Russians call themselves Yevrorussky, Euro-Russians. If only Russia itself would think along those lines a bit more. The biggest problem for all the Baltic states is a different one: tackling the Soviet legacy. No other country likely to join the EU in the near future has suffered the trauma of full-strength Stalinism. These three were part of the Soviet Union itself, not just the region it controlled. "Estonia will soon be ready for Europe as a state, but it is far from being ready as a society," a perceptive journalist, Andres Langemets, wrote last year. Egidijus Aleksandravicius, who runs a Lithuanian foundation, says of final-year university students that "80% are still socialist-minded...For them, the state is extremely important and responsible for everything; personal responsibility is very weak." Working that out of the system will be tough. But it will be a lot easier if the Baltic states are safely anchored in a democratic, prosperous West while they get on with the job. They are close to being so; and, given their battered history and precarious geography, that is more than most people hoped a mere ten years ago. Copyright � 2001 The Economist Newspaper and The Economist Group. All rights reserved. __________________________________________________ Terrorist Attacks on U.S. - How can you help? Donate cash, emergency relief information http://dailynews.yahoo.com/fc/US/Emergency_Information/ <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. 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