The Baltic Course  

The Baltic Course - Spring 2004
Spring 2004




News & Views  


From rubles to euro
The Baltic states' capital market has been preparing for transition from their previous long-standing currency – rubles – to the incoming euro for already 13 years. On the final stage of transition from one of the world's weakest (in the early 1990s) currencies in the region to one of the most strongest (presently) they may run into some trouble, e.g. the possible growth of inflation after these states' accession to EU.  


Baltic states' energy issues: problems and perspectives  
All sorts of electricity switch-offs have become an unpleasant but quite real part of our daily life. Americans, Italians, some parts of Sweden and Finland have already experienced in 2003 how life without light, heating and water looks like. Will the consolidation of Eastern and Western European power grids help to avoid further threats?   


Dialogue aimed at mutual benefits
During this year's first two months two major events occured, i.e. international conference on January 30th in Moscow: "Russia and the Baltic in Enlarged Europe. Economic Dialogue: Today and Tomorrow", and the 37th meeting of the CIS's Railway Transport Council, the Baltic States and Bulgaria in Riga on February 10-12. Participants of these meetings have shared with the BC their views about integration processes in transportation on the eve of the Baltic States' accession to EU.   


Business incubators to boost Latvian industry
Business innovation support and organisation of industrial, technological and science parks has become a priority under the present Latvian industrial strategy and economic development  


Crooks and trucks
Juris Jekabsons, prosecutor at Latvian Customs Prosecution Office, has revealed some of the secrets behind criminal schemes used by the organized crime groups to import into Latvia cars and trucks stolen in Europe.  


Guess, how much: Confidential Russian oil export
That was a great puzzle for most of the participants at the international conference "New Opportunities and Markets for Russian Oil Exports from Russia and the Caspian Region" held in Moscow early this March; true figures were not very easy to find.  


Baltic IT market – what gives?
Investment bank Prime Investment offers its analysis of the Baltic IT market situation.  


Skyscrapers not honoured in Riga
There is an ancient legend concerning craftsmen building Latvia's capital Riga. According to the legend, the city construction must go on forever. Should the construction stop at any time, the whole city will sink into the river. It seems that this karma hangs over the city up to this day.  

Businesslike Vilnius opts for height
In the middle of February during the whole week more than hundred thousand Vilnius' citizens could get up in the high-speed elevators to the upper-20th floor of the new city's municipality building to cast a glance from such a height onto the native city. Though "cast a glance" would be a mild denoting. On average, almost everyone for approximately forty minutes was caught up by the exciting panorama, curves of the river, recounting cupolas and steeples of tens of churches and chapels.  

Tallinn stops onslaught of high-rise buildings
For now the city is holding out against the onslaught by high-rise buildings. The architects of the old school have pointed out, though, that Tallinn lacks overall architectural strategy therefore one can expect new skyscrapers to rise in the most unexpected places.  


 Siim Kallas: "Our way into the EU was the way of enormous self-education and transformation"
  Exclusive interview of the Estonian Commissioner in the EU.  

Cowards' revenge
 It would probably be more convenient for Neatkariga Rita Avize's editors and me personally to pretend that there is no such problem. But we do not want to live being aware of our civic cowardice, i.e. tacitly supporting political provocation just being afraid to offend the most radical part of our readers.    


Shemi Tzur: "I found real friendship and real independence in the Baltic states"
Shemi Tzur, the new Ambassador of the State of Israel to Finland and Estonia, is a very busy man. For the first time in history of the diplomatic relations between Israel and the Baltic states, Estonia now has got its "own" Israeli ambassador (previously all three Baltic states were under jurisdiction of one Israeli ambassador residing in Riga). From now on, the Israeli ambassador in Finland will also be serving as the Ambassador to Estonia. There can hardly be a better choice for the position requiring double time, double effort, double thinking and double action.  


Lithuanian journalists at war
For several months already Lithuania has been shattered by a political scandal. The polarity of opinions around it in the public was so different and profound that, as MPs threatened, "the mass riots could easily begin". There is one important thing that everyone agrees about, i.e. the press and television played major role in this political scandal. It's just the question of whether the coverage went on intentionally, with certain consequential considerations. In any case, the journalists did the right thing, after all.  


Tiny big scandal
It has been a completely unprecedented case in Finnish history: withdrawn in summer 2003 from their positions, former Prime Minister Anneli Jattenmyaki and former President's counsellor Martti Manninen both have been indicted in March 2004 and appeared in the court. After investigation the latter was indicted for the violation of official and professional secrecy. The former leader of presently ruling party, having been the country's Prime Minister just for two months, was indicted for negligence and rendering assistance in committing the said felony. But the major injured party is no doubt the Finish Foreign Office.  


EU Structural Funds and the Baltic region EU: Some reflections on a very important Danish initiative
The Danish Ministry of Foreign Trade and the Danish Trade Council in cooperation with the European Commission organised a meeting on "Structural Funds and Cohesion Fund in the new EU member states". It took place in Copenhagen on the 17th of March 2004, and the BC was invited to participate in the conference.  


Corporate governance
Corporate scandals over the past few years have produced outrage at the greed of top executives and mistrust as the boards of directors (BoD) went along with the company's misdeeds. The questions of BoD's corruption, incompetence or complacency have been asked in criminal investigations and lawsuits. A popular British weekly has dwelled upon the issue.   


Auditing reform in the EU: emulation of the US experience or a genuine approach?
At the time of American financial scandals with such companies as Enron and WorldCom about three years ago Europeans did not show any signs of worry or incoming trouble. All these atrocities have been regarded as a "purely American" phenomenon. Scandals in Ahold, a Dutch food retailer, and Parmalat, an Italian dairy company, have shown that the problem could be European as well. In fact, the problem of due accountancy and corporate auditing is a universal one.  


Exemptions vs. rules
The new member states are usually joining the Union on various reservations' grounds. It has been a common ground since the first waves of enlargement in 1980s. The present enlargement is not exceptional at all.  


Finland as a part of logistics of the "Northern Dimension"* 
It is well known that the expansion of the European Union will have a strong and long-lasting effect on the regions bordering Finland.  

Russian issue within the present EU agenda
Previously hidden sentiments among Russian politicians for losing the most cherished, already disappearing Baltic part of the former Empire have come to the surface of the country's foreign policy. The EU Foreign Ministers' Summit in Brussels predicted in February that Russia's dissatisfaction and negligence could harm its trade and economic relationships with the EU. Moscow so far has showed no intention to apply the existing free-trade agreement with the EU toward the new members from the former Soviet block.     


A new turn in Latvian-Russian relations
Latvian Investment and Development Agency (LIDA) opened a representation office in Moscow this February. For the first time in the history of Latvian-Russian relations, an official body was launched to strengthen trade and economic ties between the two countries.   


The art to see the future!
In March Latvian businessmen in cooperation with the Latvian Investment and Development Agency visited Pskov, where they were received by the Pskov regional governor Mr. Yevgeny Mikhailov. In the interview with the BC the governor shared his views about trans-border cooperation and development with the EU.  


Uzbek "jeans" in America
Until recently, most of cotton grown in Uzbekistan has been exported. During last few years more and more joint ventures make clothes and knitwear, using local resources. Baltic textile producers, actively using Uzbek cotton in their export products in the last decade, ought to give it a good thought.   


Riga gallery scene
The streets of Latvia's capital Riga are often considered a living gallery on their own, with dainty Medieval houses in the Old Town and the up-class and renovated Art Noveau architecture of the 1920's across the centre. Despite newly built constructions often being criticised for their aesthetic qualities, the scene of modern art in Riga is of the highest standards, though sometimes lagging in breadth due to a lack of state support. Art museums in Latvia lack the funds to be stocking up on works of art made in recent days, and the best place to soak up some of the bustling developments of the country's art scene would probably be the art galleries of Riga.  


Investments lay foundation for future
Investments in industry's development is a key precondition for attaining goals defined in the National Transport Development Program and Latvian railways' successful competition within transportation service market in the Baltic region.