In 1991, after several years of negotiations and a whole lot of tension, the Baltic States:
Lithuania, Latvia, and Estonia finally managed to break away from the Soviet Union.
The finally had the freedom that they had wanted for so long.
Since then, 50 years have passed by since the soldiers of the Red Army occupied these
countries.
But during the years under the Soviets, repression and fear were the basic ingredients in the
lives of people in Estonia, Latvia and Lithuania.
Let’s have a look at some pretty alarming data.
In Lithuania alone, a country of little more than 2.5 million people, these numbers were
recorded: (200.000 people were arrested, questioned
and imprisoned, 132.000 people were deported, especially to Siberia.
75.000 prisoners, deportees and partisans were eliminated by the Soviet regime.)
And if all that wasn’t enough, at the time of their independance, poverty and shortages
were every day realities for all the inhabitants of these countries.
“I remember the days, when the counters of the shops in Tallinn were empty and the
people were starving.
The economy more or less had to be rebuilt from scratch".
Since then, dear viewer, things have changed a lot.
More than a lot in fact…
From the very moment these countries regained their independence, they decided to bet it
all on democracy and freedom.
Their economies are today among the freest ones, they are members of the EU and NATO,
and they prosper.
Today these are countries with really high standards of living.
They can really now be considered rich countries.
The transformation has been total and remarkable.
In 2009, they suffered, along with the rest of the world, through the financial crisis
and it really seemed as if their economies were on the verge of collapse...
“Latvia’s economy contracts almost 18 percent in Q4 2009”.
Seekingalpha
But, against all odds, they managed to recover in a very short period of time.
Indeed, they became an example to other countries like Spain, Greece and Portugal.
But that’s a whole different thing that
we’re going to talk about in a future video.
In this video we are going to focus on Lithuania talk about a problem that is shared by a lot
of countries in Eastern Europe.
A problem that, today, is actually one of the biggest threats to their future…
BRAIN DRAIN
The history of Lithuania, and all the Baltic States in general, since their freedom in
1991, is a history of success.
Today they are modern, open countries with
prosperous economies.
But… as with any good story…
not everything is quite so pretty.
Yes, there are issues these countries are facing, and today we are going to particularly
focus on Lithuania.
In this case, the biggest problem is “brain drain”.
Yep, emigration with an “E”!
And this is no small problem for the country…
Since 2004 only, when the country was integrated in the EU, Lithuania has lost more than 10%
of its population.
That is: more than 300,000 people, especially young people, have decided to pack up and
move to a different country.
And, by the way, most of them have chosen the United Kingdom.
Yes, while in Western Europe and the United States they are concerned about immigration,
in Lithuania it is the other way around - they are concerned about people leaving.
They are worried that this might end up decapitalizing the country.
“Since 1990 we have lost about 800,000 people and for a small country this is a huge loss.
We are losing our youngest and brightest so in the future we will just have old people
who will be dying.
We will have a dying society.”
And, as always, the ones who are leaving tend to be the most capable and best prepared young
people.
This, of course, has an significant impact on country’s economy: the number of young
people working decreases, talent leaves the country, and the population ages.
But this isn’t just a problem for Lithuania…
“Since the early 1990s, some 20 million of central and eastern Europe’s most talented
workers have left.
And they have largely headed for Western Europe”.
Foreign Affairs.
So who you think has benefitted the most from all this talent redistribution?
Yes, that’s right, the wealthiest countries…
And that is why we have to be very careful
about the messages being sent by politicians who are attempting to criminalize immigration
in order to get votes.
Yep, we’re looking at you Theresa May and Donald Trump.
But…
I know what you are thinking: If the Baltic countries have been so successful…Why are
people leaving?
Well, because they are looking out for their own personal success...
Look, for one, these countries have managed to develop a well prepared young population
who can also speak English (two must-haves when it comes to look for a future in other
places).
And then we also have the fact that because
of all the growth that has happened since 1991, these people can now leave the country
in a comfortable way.
But, there is still a key question to answer: Why are they leaving if things are going so
well!?
Well, that isn’t hard to explain…
Even though the salaries have improved a lot in the last years, the difference with the
wealthiest countries is still quite big.
As an example, while the average salary in Lithuania is about 800€, in the United Kingdom
it is almost 2,500€, three times more.
All of this might leave you wondering whether this impressive economic development was actually
good for the Baltic countries.
Well, we’d say that yes it’s still worth it, but it does leave us with a couple of
very important questions: First, “What is the cost of this?” and second “How can
they stop the brain drain?”
PUTTING AN END TO EMIGRATION
So, stopping this brain drain has become a major priority for Eastern European countries.
In some of these countries like Poland, Latvia and Hungary they have started a return campaign
in order to persuade emigrants to come back home.
"I would welcome all Polish people who went abroad.
If only they could come back, it would be a great day for Poland".
Mateusz Morawiecki, Polish deputy Prime Minister.
However, while this is a nice sentiment, it
is definitely in Lithuania, where there is a larger concern about the brain drain, that
there has been more significant support from society.
(In the last parliamentary elections celebrated in October, the Lithuanian Greens and Farmers
Union won the elections and took control of the government.
This pintoresque party had only had one MP in the previous elections.
Their main promise: putting an end on emigration.)
But, of course, it is easier said than done.
So the question is: How is this party going to succeed - a party led, by the way, by Ramunas
Karbauskis one of the most important businessmen in the country?
Well, apparently their top priority is to
stop emigration by attracting much more foreign investment.
They claim that, if they can succeed in getting more foreign money for investment, they will
be able to provide more jobs with higher salaries...
So, how are they planning to do this?
Well, by reducing bureaucracy, chasing corruption and, also, by making adjustments to the labour
market.
And the truth is that this does make a ton
of sense.
We could say that, once again, the Baltic countries really seem to know how to get things
done.
But… hold on for just a second… because this isn't the end of the story.
There are some other things that…
well…
they don’t look quite so good…
THE SHADOWS OF THE LITHUANIAN PLAN
On the one hand, at the same time as the government promised foreign investment, they have also
committed to raise taxes by eliminating what is known as a “Flat-Tax.”
Look, in Lithuania, as well as in Estonia and Latvia, the tax systems are really simple.
In Lithuania's case there is a flat tax, a flat tax rate of 15% for people and companies.
That is to say that a Lithuanian who makes 10,000€ pays 1,500€ in taxes and the one
who makes ten times more, 100,000€, also pays 10 times more: 15,000€.
Raising taxes in this way sort of goes against the foreign investment and higher salaries
plan, and this raise will directly harm both of these things.
And by the way, corporate taxes aren't as low as they may seem:
If we add up the social security contributions and other taxes, companies pay up more than
40% of their gross profits in taxes, according to the World Bank.
And now we have to point out the issue of Russia and NATO.
The previous Lithuanian governments (and the current is no exception) have insisted on
scaring the population, and also the rest of the world, with the Russian threat, saying
the country is constantly in danger...
OK, while it is true these threats are real, it’s not really a brilliant way to instil
confidence in potential investors in the country…
And finally, and maybe the most important of all, there is a cultural matter that affects
the entire country.
So, if there is this brain drain doing on… wouldn't it be logical to try to compensate
that loss by bringing young professionals from other countries?
Well, that’s a bit of a problem because
this country is also a bit suspicious about immigration.
Most of these countries are a bit nationalist…
Anyway, if anything is for certain, it is
that Lithuania as well as Estonia and Latvia have done their homework and their policies
are certainly much more efficient that the ones that predominate in the rest of Europe.
Remember, in just 25 years they have managed to become rich countries with high standards
of living.
Well, now we’d like to know what you think: Do you think these countries will finally
be able to stop this brain drain?
We are looking forward to hearing what you think in the commenst section below.
And as always, if you liked the video, please do hit that like button and don’t forget
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And don’t forget to check out the Reconsider Media podcast - they provided the vocals in
this episode that aren’t mind.
And as always, I’ll see you in the next video.