Baltic Reports No 20 / November 11 – 17

  • November 18, 2019


The Benelux countries and the Baltic states agreed to recognise each other’s university diplomas. This means that applying for studies will become much easier for students from Belgium, the Netherlands, Luxembourg, Estonia, Latvia, and Lithuania. All the diplomas, whether Bachelor’s, Master’s or PhD will be automatically recognised for students, without additional procedures. It will hopefully boost the idea of a unified European Higher Education sector. Maybe this will also encourage the Governments of the Baltic States to pay more attention to their own education sector, which is lagging behind in many ways. The biggest recent problem is the precarious position of lecturers and researchers. With Estonia a bit ahead, Latvia and Lithuania doesn’t value its brightest minds and educators, paying them minimum salaries for work. This often includes overtime and no social security. Therefore, sadly, the quality of education Baltic Universities provides is quite low. Only two of them are listed among the top 500 universities in the world by the QS 2020 ranking. Tartu university is taking the 301st and Vilnius University 458th position. They are the two oldest universities still operating in Eastern Europe after Krakow and Prague, so one could expect a better ranking.



One of the reasons behind Lithuania’s success in plastic waste recycling is the peculiar industry of beggar waste collectors. Recently published Eurostat data has named Lithuania the top plastic waste collecting country in Europe. The world endorsed Lithuania’s plastic bottles refund scheme launched in 2016. Then all the supermarket chains got over 1,000 machines where people could exchange packaging waste into money. The results of the scheme exceeded the Government’s expectations and lead to 74 percent of plastic being recycled. Are Lithuanian consumers more eager to protect the environment than anywhere else? Maybe, but interestingly, the new deposit scheme created an opportunity for the poor and homeless. The peculiar precondition for the success of the deposit scheme in Lithuania was the long lasting so to say profession of glass bottle collectors. You could get a refund for glass bottles since soviet era and many individuals struck by poverty  chose collecting glass bottles and delivering them for recycling as their daily work. Since machines refund plastic you can see people in miserable conditions collecting plastic packages in the streets of Lithuania. They perform a kind of sorting function. The people sometimes empty even plastic recycle containers to be able to deliver more plastic and earn more. 11 percent of the population in Lithuania lives below absolute poverty line meaning their monthly income is lower than 245 euros.


Lithuanian and Spanish police jointly busted human trafficking ring, that was recruiting Eastern European women to work as prostitutes in Lithuania. The 15 Lithuanian citizens were arrested on suspicion of human trafficking. Victims are 10 Belarusian, Ukrainian, and Moldovan women, but the list is not final. Buying and selling sex services in Lithuania is illegal, but quite common. Law enforcement often ignores brothels disguised as erotic massage parlors. They do publicly advertise their services. Why does the law enforcement tolerate them? Some would say the reason is police corruption. But, most likely, it just shows the large scale of the problem. In the last 4 years around 800 prostitutes in Lithuania were fined, almost 500 of them twice. Most of them are coming from the countries of the former Soviet union. In the beginning of November a group of Parliamentarians registered a bill seeking to change the situation. According to them, punishing prostitutes locks them in their way of life. Today, the Lithuania’s administrational code lists similar fines both for prostitutes and clients. But clients are fined ten times less often. So women are seen as criminals while men are just thoughtless adventurers, it seems. Pimps are punished very rarely, because they are very difficult to catch. Even more difficult to prove human trafficking. The proposed amendment would abolish the responsibility of prostitutes and would shift the crime towards the clients by including fines or prison sentences into the criminal code. This is how much of the EU countries have solved this issue. Interestingly, Lithuania, so far, has been one of the very few EU countries that considers prostitution completely illegal with no exceptions. Organizations defending the rights of the prostitutes see fining clients and decreasing the demand as the only way to stop human trafficking.



In 2018, when ABLV Bank was closed, the whole Latvian financial sector was shaken. You would think that, after such a scandal, the bank leadership would keep a low profile, but the ABLV Bank’s shareholder Ernests Bernis did the exact opposite. He has spent nearly one million euros in the past half a year to lobby the bank’s interests in Washington DC. According to Latvian Television’s De Facto broadcast, his goal has been to clarify how the bank was liquidated. Just to go back a bit, ABLV bank was closed after the US Treasury Department accused it of money laundering on a huge scale, of violating sanctions imposed on North Korea and of using bribery to influence Latvian officials. The bank later started a process of voluntary liquidation. Bernis, who is ABLV Bank’s Co-owner, then hired Mercury, one of the most influential lobbying firms in Washington. Mercury’s client list also includes Russian billionaire Oleg Deripaska, who lobbied to get U.S. sanctions lifted from his companies. An interesting fact is that Mercury was also mentioned in the fraud and money laundering case against former Trump campaign manager Paul Manafort. For several years Manafort had paid two lobbying firms to represent the Former President of Ukraine Viktor Yanukovych’s interests in the U.S. and one of them was Mercury. So far it’s hard to tell what exactly has ABLV’s shareholder achieved in DC, but he said to Latvian Television that he’s goal to clarify how the bank was liquidated is ongoing and that so far he’s happy with the result of his lobbyist on Capitol Hill.


While Lithuania’s relations with Belarus are only getting worse, Latvia is seeking closer cooperation with their neighbouring country. To give you some context, Belarusian President Alexander Lukashenko has long been criticized in the West and has been isolated for more than a decade. But last week he made his first official visit to the European Union in Austria. He said that “Austria, Latvia and other countries are the window in the fence that has been built around us”, meaning his country Belarus. Lukashenko believes he can improve the relations with its Western neighbors and is looking for economic and political contacts in the West after rising tensions with its ancient ally, Russia, which is seeking to force Minsk into closer integration and economic dependence on Moscow. The date has not yet been set, but it is sure that Lukashenko is also planning a visit to Latvia. Earlier this year, the minister of foreign affairs of Latvia already met with the Belarusian president and said that the two countries are gearing for closer and better cooperation and are ready to discuss regional security among other topics. An important component of the talks was the preparations for the International Ice Hockey Federation World Championship which Belarus and Latvia will co-host in 2021. Such topics as facilitating border crossing procedures for fans will need to be further discussed. At the same time, Lithuania’s government has long kept a close eye on Belarus due to the dangerous Astravets nuclear power plant, which is less than 50 kilometers from Lithuania’s capital Vilnius. They say that the power plant will not meet Western safety standards and poses a huge threat to Lithuania’s security. In a sign of the growing concern, the government recently ordered millions of iodine pills in case of a nuclear accident at the plant. So it looks like Latvia is juggling between Lithuania and Belarus. On the one hand, solidarity with the Baltic sister Lithuania is important, but on the other hand, Latvia has long wanted to improve its relations with Belarus. 



Turkish pro-government newspaper Daily Sabah boasted about improved economic relations between Estonia and Turkey. As a result, the ruling party’s mouthpiece writes, that more than 2200 Turks have applied for Estonia’s e-residency. This is an Estonian program that allows anyone that passes the police check, to have access to Estonia’s digital business environment. It’s often a first step to starting your own business in Estonia. 2200 people is a relatively high number, it’s true. But the real reasons why Turks are looking towards Estonia, might not only be money, but also – safety. In fact, there is a small, but significant group of people living in Estonia, who are part of Turkish resistance, the Gülen movement. Turkish president sees them as the biggest threat to his power. Gülenists speak rarely in public, because Turkey is constantly asking different countries to hand them over to Turkey. Not to award them, of course, but to most probably imprison them without a fair trial. The head of the Gülen movement in Estonia has once admitted to Estonian newspaper Eesti Ekspress that he actually encourages other Turkish businessmen to move to Estonia. For example, he helps them in getting e-residency. So essentially, he helps them to escape from the Turkish president Erdogan’s regime. Estonia has quite a conflicting relation with Turkey. Both countries are NATO members. But at the same time, Turkey is also in warm relations with Russia, Estonia’s biggest threat. So maybe it’s for the best that the Turkish government believes that e-residents are a sign of good relations, and don’t consider it a secret way out from Turkey for its entrepreneurs.


Estonia’s capital Tallinn is becoming more expensive than its Northern neighbour’s capital, Helsinki. A new analysis from the Estonian Institute for Economic research shows that some products are now actually cheaper the capital of Finland. For example, it makes sense to buy diapers, D vitamin and tea in Helsinki, rather than Tallinn. This is odd, because only a few years ago Finns would flock Estonia’s harbours with carts full of alcohol and food. In the old town and harbour supermarkets, hearing Finnish language would be more common than Estonian. Especially when it comes to alcohol. It has historically been the number one attraction for Finns heading south. Some Finnish websites even closely followed price movements at Tallinn’s large alcohol retailers. Estonian salaries are still much lower though. Finnish average gross monthly salary is around 3,400 euros, but Estonia’s is only around 1,400 euros. This still keeps most of the prices lower, because the workforce, of course, is cheaper. Therefore, many Finns still come to Tallinn to get their teeth fixed, hair cut, or for a night out. I guess, in return, Estonians will soon be going to Helsinki for some tea and diapers.


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