Privatization in Central and Eastern Europe: Perspectives and Approaches

By Demetrius S. Iatridis; June Gary Hopps | Go to book overview

Chapter 6
Economic Reforms in the Baltics: The Case of Lithuania

VALDAS SAMONIS

By the end of the 1980s, the suppression of free thought in the Soviet Union had diminished appreciably. As a result, various solutions to the multifaceted Soviet crisis were advanced. That the Baltic states of Estonia, Latvia, and Lithuania led the way in proposing and instituting reforms is no surprise, given their political and economic predicament--their illegal occupation by and their economic dependence on the USSR after World War II (Misiunas and Taagepera, 1983)--as well as the prevailing attitudes of their people. This chapter explores the economic transformation of Lithuania, which is a good example of the experiences of the three Baltic states, from 1989 to 1994.


BLUEPRINT FOR ECONOMIC INDEPENDENCE

The scope and direction of the Lithuanian economic reform initiatives are best illustrated by the major document in this regard--the Blueprint for Lithuania's Economic Independence--prepared in 1988 by an ad hoc committee of scholars at the Institute of Economics of the Lithuanian Academy of Sciences, under the auspices of Sajudis, the Lithuanian Movement for Restructuring ( Lietuvos, 1988; "Sajudis," 1990; Samonis, 1990a). This document was a source of inspiration or reference for many initial reform bills developed by about forty governmental task forces ( Aleskaitis, 1990). This section analyzes the blueprint from the macroeconomic and microeconomic perspectives.

From the macroeconomic perspective, the blueprint is based on two premises. First, the economic system of Lithuania should be separate from that of the USSR, which implies the need for Lithuania to disengage itself from the Soviet economy. Second, the very philosophy of macroeconomic management should be changed, which implies that a new target model must be developed. The first

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