by Emīls Reinis Ābele, University of Latvia
When the economic resilience of a state is considered, it is understood as the capacity of the economy of a state to endure external shocks, such as natural disasters or economic crises, and to rebound from them. The relatively small size, location, and historical backdrop of the Baltic states have presented them with a number of difficulties concerning economic affairs in the post-soviet sphere of Europe since their reclamation of independence. This blog makes the case that boosting regional integration can boost the Baltic states’ economic resilience.
One of the main benefits of regional integration is that trade and investment opportunities would enhanced.
One of the main benefits of regional integration is that trade and investment opportunities would enhanced. By establishing deeper economic ties, the Baltic states can increase their foreign investment and broaden their markets, resulting in a strengthened regional economic union that is much more resilient from foreign actors, especially those outside the European Union. Moreover, regional integration can aid in the distribution of infrastructure development expenditures, like those associated with building roadways, railroads, or energy grids, easing the burdens of cost of any individual Baltic state, instead guaranteeing a collective expenditure and a collective gain from said infrastructure projects, which aids in motivating governments to undertake these projects and investors to invest.
In the Baltic states, there are numerous instances of regional integration. For example, the Baltic Assembly, which was founded in 1991 following the fall of the Soviet Union, is a venue for political cooperation among the Baltic states. The Baltic Assembly has made a substantial contribution to the region’s efforts to advance democracy, human rights, and economic integration. Another illustration is the 1994-created Baltic Free Trade Area, which through lowering trade restrictions and tariffs has aided in boosting trade between the Baltic states. Lastly, the Rail Baltica project is a significant infrastructure undertaking that intends to link the Baltic states with the European rail network. It is anticipated that this will spur economic growth and lower transportation costs. So work is being done in this regard, yet there is still much to be done.
Governments, the commercial sector, and civil society organizations must work together and coordinate in order to boost regional integration.
The requirement for strong political leadership and dedication is one of the obstacles to a satisfactory level of regional integration. Governments, the commercial sector, and civil society organizations must work together and coordinate in order to boost regional integration. Other obstacles such as geopolitical conflicts or economic pressures, which might reduce governments’ willingness to cooperate, can have a significant impact on regional integration and the discourse around it. To ensure the success of regional integration, it is crucial to have a long-term vision, a defined agenda, and a firm commitment not just by governments, but by society as well. This vision can help maintain an understanding that these projects are long-term investments so that they do not fall victim to populistic rhetoric, which may challenge or even tarnish the necessity of regional integration projects.
In conclusion, the Baltic states face a variety of economic difficulties that call for creative ideas and solutions. In order to increase trade and investment opportunities, share the costs of building infrastructure, and promote regional cooperation and stability, regional integration should be strengthened. However, for regional integration to be successful, there must be strong political will, dedication, and leadership. Although the Baltic states have made tremendous strides in regional integration, more work is still needed to fully realize their potential as an economic powerhouse. The Baltic states may become more robust and competitive in the global economy through advancing regional integration.
- This blog is a part of a blog series written by the BAMSE Riga intensive course students. The blog series analyses the concept of resilience from five different viewpoints: democracy in crises, regional responses, social consequences, relevance of history politics and cultural approaches. This blog belongs to the regional responses part of the blog series. Read more about the blog series on Bamse News & Events website.