The Collapse of the Baltic Tigers: How did Estonia, Latvia and Lithuania escape ruin?

Estonia, Latvia and Lithuania, the so-called Baltic republics, have experienced one of the highest economic growth rates in the world over the last three decades. However, their road to prosperity was not exactly a leisurely stroll in the woods. The Baltic countries had to face one of the biggest bubbles and crises in the old continent in living memory.

A huge crisis that they faced in a completely different way than what we are used to. This is the story of the miracle, collapse and recovery of the so-called Baltic Tigers.

And don't forget to visit our friend’s site, Value School:

[huaiwei]

As a Singaporean, I have always rooted for the three Baltic states since 1991! Hope to visit all three countries one day!

[GKFF]

I remember being assigned Estonia in my economics class back in college and thinking that this little country is so cool and how innovative their new (back then) policies were around taxation and internet adoption. Always somehow read up a lot about Estonia over the years and I’m so happy that their policies worked. Very inspiring for other countries.

[IKEMENOsakaman]

I lived in Estonia about 5 years ago. Their digital system is GREAT! Moved to Germany, and their system is paper, paper, paper...

[lightworker_]

I've just been to Estonia and let me tell you - what a country that is. Efficient, growing, digital, gorgeous. 🇪🇪

[praharshsinh]

I'm going this Christmas to Estonia - Love Baltics from India
🇪🇪 🇱🇹 🇱🇻 ♥️ 🇮🇳

[neymarjunior]

I'm from Brazil, and I have to say the Baltic nations are damn awesome. The way these nations survived Russian oppression to become modern developed countries are sensational.

[buretehudesi]

Go your own way, build wealth and safety. Greetengs from Poland.

[nuucha]

Me walking around my apartment in Riga and watching this. As an 1980s born millenial I lived through all this and have the booms and busts in my living memory. One good thing that was done in Latvia in 2009-10 - while yes public workforce was reduced massively, the state introduced some really easy to understand, easy to manage and cheap, tax friendly forms of enterprise.
Basically the government said - you are fired but here is really cheap and easy way to start your own business.

[kosmicheskiprah]

Was checking their GDP per capita in 2000 and it was approx. €3-4k. 20 years later it is approx. €17-23k. Simply impressive!

[riko]

I am Italian and I lived in Estonia for three months in Summer 2021. It is incredible to see how different two countries can be. Italy is willing to collapse under enormous debts, international pressure, and especially day to day policies (now Draghi is doing exactly what his predecessors did): the very response to covid crisis, which could have been not a disaster but a booster for a country like Italy, is obviously a short-term one, with horrible medium and long-term consequences (I have been in Sweden from Oct 2020 to June 2021, and the response was totally different and much smarter). No one in Italy would cut public workplace, bureaucracy and so on (even now, a non-elected government is not doing it); no one would cut salaries. Estonia is a different world, as China (where I lived for almost ten years) is. But Estonia is in the EU: that is the point. Italy is a beggar, prone to give anything in exchange of funds, while Estonia is a proud he-man: it is the mirror of their own different population, sheep the former, tigers the latter.

[jacintas]

You explain the economic journey of the Baltics so well! In the case of Lithuania, when we finally gained independence from Russia in 1991 and introduced our own currency - Litas - we had to have an American company manufacture the new bills and coins. The company was actually caught cheating Lithuania out of some of the security features on the bills because they thought the currency and our economy would soon collapse. And now look how far we've come and still growing!

[headsuphockeypodcast]

As an American of Lithuanian and Baltic roots it’s great to see these “emerging economies” becoming flourishing economies. They just need to take care of their citizens and help them become more prosperous

[quantumeseboy]

Kudos to Lithuania for officially calling Taiwanese embassy what it is, rather than Chinese Taipei embassy!

[jackliu]

Baltic Tigers showed great guts to challenge the need of public services and kept their commitments economically. They did a great job compared to 99% of countries including all major western ones.

[larshansson]

Beautiful countries. Visited several times and I can't believe how developed they are considering 50 years of communism. Strongly recommend a visit.

[pdecrinis]

Great video! Estonia, Latvia and Lithuania had a huge crisis and a big stockdale moment. And they prevailed.

[Hamsteak]

I love Latvia 🇱🇻 and have family history from there when my grandpa had to flee the Red Army

[doncady]

They did not default, they took responsibility for the economy, doing what any family, facing the same problem, would do.Spend less get out of debt and go forward.

[ycplum]

Basically, the governents exercised a trendous degree of political will and self discipline. It is unlikely to be repeated by other countries anytime soon. Defiunitely not here in the USA.

[ZaltysZ]

Your video misses mentioning one big difference between Latvia and Lithuania: Latvia took help from IMF (got cheaper loans, but also got pushed/dictated reforms) and Lithuania rejected that idea (had to take way more expensive loans, but got more flexibility in reforms). Well, they both survived and outcome wasn't that different on grand scale, but this aspect can be interesting for economy nerds anyway.