The Baltic states (Latvia, Lithuania and Estonia) have launched liberal economic policies since independence from the former Soviet Union in 1991. The results have been mixed.

Estonia has led the way: a radical liberalisation programme freed prices overnight. A controversial privatisation programme has put over 70 per cent of large state enterprises into private hands; foreign investment accounted for seven per cent of GDP in 1995. After an initial GDP contraction of eight per cent, one of the largest falls in the region in the immediate post-Communist period, GDP growth is expected to reach six per cent in 1996.

Latvia and Lithuania have taken a more chequered path to growth. For Lithuania, an initial GDP contraction of five per cent ballooned to 38 per cent in 1992 before recovering; Latvia suffered a similar fate. Both countries have faced banking and political upsets. Lithuania's two largest banks collapsed in late 1995, forcing the resignation of the Prime Minister. In Latvia, the collapse of the country's largest institution, Baltija, in 1995 brought down 40 per cent of the sector. The country's reforming efforts are further hampered by a perceived lack of political will to push through necessarily painful measures.

Nevertheless, despite this mixed picture, all three countries have proved that small economies can survive and prosper in the new economic climate.

Mart Siimann, Prime Minister of Estonia
Effective Estonia

Ministry of Finance, Estonia
Economic development in Estonia

Juri Sakkeus, Chair, Estonian Investment Agency
Estonian economy

Helo Meiga, Chair of the Management Board, Tallinn Stock Exchange
Estonia offers high liquidity and transparency

Vaino Sarnet, Director-General, The Estonian Privatisation Agency
Privatisation in Estonia: future perspectives

Baltic Commercial Law Office
Estonia - a secure environment for investment

The Estonian Computer Association
Read first - from A to IT

HF Development Ltd
Description of the Estonian securities market