Baltic Dawn

Sigrid Rausing: Everything is Wonderful - Memories of a Collective Farm in Estonia

The Weekly Standard, November 10, 2014

Tallinn-Narva road, February 1996 © Andrew Stuttaford

I first visited Estonia—or more specifically, its capital, Tallinn—in August 1993, two years after the small Baltic state regained its independence after nearly half-a-century of Soviet occupation. Tallinn was in the process of uneasy, edgy transformation. The Soviet past was not yet cleanly past. It was still lurking in the dwindling Russian military bases. It was still visible in the general shabbiness, in the rhythms of everyday life, and, above all, in the presence of the large Russian settler population, a minority that Vladimir Putin now eyes hopefully, if not necessarily realistically, for its troublemaking potential.

Totalitarian colonial rule had been replaced by a national democracy, the ruble had been succeeded by the kroon, and free-market reformers were at the helm; but the new government was operating in the rubble of the command economy. There was no spare cash to smooth the transition to capitalism. Inflation had exceeded 1,000 percent during the course of the previous year, savings had been wiped out, the old Soviet enterprises were dying, and the welfare net was fraying.

Yet in Tallinn there was a discernible sense of purpose, buttressed by memories of the prosperous nation prewar Estonia had been. What people wanted, I was told, was a “normal life.” That was a phrase that could be heard all over the former Eastern Bloc in those days, a phrase that damned the Soviet experience as an unwanted, unnatural interruption and resonated with dreams of that elusive Western future. Life was tough in Tallinn, but there were hints of better times to come. If the country was to be rebuilt, this was where the turnaround was taking shape.

But Sigrid Rausing went somewhere else in 1993, to a place far from the hub of national reconstruction, a place where the inhabitants had little idea of what could or should come next, a bleak place—poor, even by the demanding standards of post-Soviet Estonia—where nationhood was misty and visions of the future were still obscured by the wreckage of an alien utopia. Rausing, a scion of one of Sweden’s richest families, was a doctoral student in social anthropology. To gather material for her thesis, she spent a year on the former V. I. Lenin collective farm on Noarootsi, a remote peninsula on the western Estonian coast.

Noarootsi had once been inhabited by members of the country’s tiny Swedish minority, most of whom had been evacuated to the safety of their ancestral homeland by Estonia’s German occupiers shortly before the Red Army returned in 1944. The final minutes before their departure were caught on film: the exiles-to-be assembled on a beach, Red Cross representatives mingling with smiling SS officers. Baltic history is rarely straightforward.

Rausing’s thesis formed the basis of her History, Memory, and Identity in Post-Soviet Estonia: The End of a Collective Farm, an academic work published by Oxford University Press 10 years ago. This was never a book destined to top the bestseller lists, but for anyone able to weather the clouds of jargon that drift by—“the effect was to emphasize the experience of oppositions in the form of a homology”—it offers a sharp, intriguing, and unexpectedly wry portrait of what Rausing refers to as the “particular post-Soviet culture of 1993-94, the culture of transition and reconstruction,” a culture that no longer exists.

Rausing has now reworked the topic of her time in Noarootsi into Everything Is Wonderful, a personal, intimate account of that year in which she largely dispenses with academic analysis—indeed, there are moments when she pokes gentle fun at its absurdities—and gives her considerable lyrical gifts free rein. Graduate-school prose now finds itself transformed into passages of austere beauty. They describe a landscape that reminds her of Sweden, only “deeper, vaster, and sadder”; more than that, they portray a people adrift. There is something of dreaming in her writing, images that haunt. Spring returns, and

the children were outside again, playing and shouting in the long twilight, until there was an almost deafening din echoing between the blocks of flats. One day someone burnt the old brown grass strewn with rubbish between the blocks, and the children kept up their own private fires deep into the night.

There is a subplot too, tense and awkward, sometimes expressed in not much more than a hint, that surrounds the position of Rausing herself, an attractive thirty-something Swedish heiress inserted into this exhausted husk of a community and, for a while, lodging with the heavy-drinking, possibly/probably lecherous Toivo and his long-suffering wife, Inna. Ingmar Bergman, your agent is on the line.

That’s not to say that Rausing neglects the broad themes of her academic research. As she notes, the two books “overlap to some degree,” and they have to. Without repeating some of the background covered in the first volume, isolated, depopulated Noarootsi—with its Soviet dereliction, abandoned watch-towers (the peninsula had been in a restricted border zone), emptied homesteads, and taciturn, enigmatic inhabitants scarred by alcoholism and worse and speaking a language of a complexity Rausing struggled to grasp—would have seemed like nothing so much as the setting for a piece of post-apocalyptic gothic. So Rausing provides a brief, neatly crafted, and necessary guide to Estonia’s difficult and troubled history, neglecting neither the obvious horrors nor the subtler atrocities, such as the attempted cultural annihilation represented by the wholesale destruction of Estonian literature. Tallinn Central Library lost its entire collection of books—some 150,000 of them—between 1946 and 1950.

Sometimes, traces of that history—forbidden for so long—come crashing through the silence. Ruth, 76, a Seventh-Day Adventist, tipped by tyranny into something more unhinged than eccentricity, hands Rausing a handwritten retelling of her life: “Devilish age, sad age. Schoolchildren also spies .  .  . life as leprosy.” But Everything Is Wonderful is a book in which the story lies mainly beneath the surface. Old ways linger on amid new realities. There is a new cooperative store, but the old Soviet shop hangs on, “selling household stuff as well as some food, pots and pans, exercise books, shoes if they got a consignment, and ancient Russian jars of jams and pickles with rusty lids and falling-off labels.”

Throughout the brutal winter, heating is intermittent. Heating bills are no longer subsidized, but the majority of villagers “patiently” pay them nonetheless. New habits creep in. Empty Western bottles and other packaging are displayed in apartments, demonstrations of “a connection with the West, a way of expressing the new normal”—that word again, that “normal” in which most had yet to find their feet. Meanwhile, Swedes bring hand-me-down help and the suspicion that they might be looking to reclaim a long-lost family home.

Rausing is a participant in this drama. We learn of her fears, her loneliness, of her wondering what she is doing in this distant Baltic corner, and of her small pleasures, too (“the tipsy sweet happiness of strawberry liqueur”). But she is a spectator as well, and a perceptive one, not least when it comes to the profoundly uncomfortable relationship between Estonians and the Russian minority. The latter are resented as colonists, yet caricatured in terms that remind Rausing of the “natives” of the “colonial imagination: happy-go-lucky, hospitable people lacking industry, application, and predictability.” She dines in a restaurant in a nearby town, where “the atmosphere was a little strained between a Russian group of guests and the few Estonians in the room.” Later, Rausing learns that the “only” Russians living in the “comfortable Estonian part of town” are deaf and dumb; they are “outside language,” as she puts it, and thus able (she theorizes) to “assimilate .  .  . through muteness.”

That sounds extreme, but the scars of the past were still very raw back then. Sometime in the mid-1990s, I watched a senior member of the Estonian government bluntly explain the facts of Estonia’s (to borrow a Canadian phrase) twin solitudes to a delegation of Swedish investors. There was, he said, little overt trouble between ethnic Estonians and the country’s Russians, but there was little contact either: “We don’t get on.”

Rausing’s tone is quiet, often wistful, marred only by interludes of limousine liberalism—apparently there was something “liberating” in the way the locals didn’t care too much about their possessions, which is easy enough, I imagine, when those possessions were, for the most part, Soviet junk—including an element of disdain for the market reforms that were to work so well for Estonia. The prim pieties of Western feminism also make an unwelcome appearance. Watching a pole dancer in a rundown resort town summons up concerns over “objectification,” but Rausing’s response to reports of a topless car wash in Tallinn is endearingly puzzled and—so Swedish—practical: “Really strange, particularly given the Estonian climate.”

But this should not detract from Rausing’s wider achievement. Her book is the last harvest yielded up by that old collective farm, and the finest.

Testing The Limits

The Weekly Standard, October 20, 2014

Brāļu Kapi, Riga, March 1994 © Andrew Stuttaford

“I don’t think it’s 1940,” the woman in Riga told me in June, referring to the year the Soviets brought their own variety of hell to Latvia. “But then, I wouldn’t have expected 1940 in 1940 either.” And then she laughed, nervously. With Russia’s ambitions spilling across the borders that the breakup of the Soviet Union left behind, and talk from Vladimir Putin of a broader Russian World (Russkiy Mir), in which the Kremlin has the right to intervene to “protect” ethnic Russian “compatriots” in former Soviet republics, the once bright line that had cut the Baltic states off from the horrors of their past now seems fuzzy.

And in a more literal sense the borders that separated the Baltics from their old oppressor have lately appeared more vulnerable than once believed. Moscow has been pressing and provoking in the Pribaltika for years​—​some subversion here, some denial of history there. There have been maliciously random trade bans (Lithuanian cheese, Latvian sprats, and quite a bit more besides) and carefully planned cyberattacks. But the bullying has been stepped up sharply this year. The saber-rattling has evolved from menacing “training exercises,” such as last year’s Zapad-13 (70,000 Russian and Belarusian troops war-gaming their way through a fight against “Baltic terrorists”), to include too many flights by Russian fighters near or even in Baltic airspace to be anything other than part of a significantly more aggressive strategy.

On September 3, Barack Obama traveled to Tallinn, the Estonian capital, to reaffirm NATO’s commitment to the three Baltic states, all of which have been members of the alliance since 2004. Two days later Eston Kohver, an Estonian intelligence officer investigating smuggling across Estonia’s remote and poorly defended southeastern frontier, was, claims Tallinn, grabbed by a group of gunmen and dragged across the border into Russia. His support team at the Luhamaa frontier post nearby were distracted and disoriented by flash grenades and their communications were jammed: They were in no position to help.

Shortly afterwards, Kohver turned up in Moscow’s notorious Lefortovo prison. According to Russia’s rather different version of events, the Estonian was captured while on a mission on the Russian side of the border. Kohver faces espionage charges that could mean decades behind bars. He has “decided” to drop the lawyer that the Estonian government had arranged for him. Court-appointed lawyers will fill the gap. The stage is being set for a show trial, complete, I would imagine, with confession.

After a year of Russian lies over Ukraine, I’m inclined to believe democratic Estonia over Putin’s Russia. The timing was just too good. Barack Obama descends on Tallinn with fine words and a welcome promise of increased support, and Russia promptly trumps that with a move clearly designed to demonstrate who really rules the Baltic roost. In the immediate aftermath of Kohver’s kidnapping the Estonians signaled that they were prepared to treat the whole incident as an unfortunate misunderstanding. No deal. The power play stands, made all the more pointed by the way that it breaks the conventions of Spy vs. Spy, a breach that comes with the implication that Estonia is not enough of a country to merit such courtesies.

If anything could make this outrage worse, it is the historical resonances that come with it. There are the obvious ones, the memories of half a century of brutal Soviet occupation, the slaughter, the deportations, the Gulag, and all the rest. But there are also the echoes of a prelude to that: the kidnapping of a number of Estonians in the border region by the Soviets in the days of the country’s interwar independence, intelligence-gathering operations of the crudest type. These days Russia prefers more sophisticated techniques: Earlier this year, it polled people in largely Russian-speaking eastern Latvia for their views of a potential Crimean-type operation there (as it happens, they weren’t too keen).

But whatever the (pretended) ambiguities of the Kohver case, there were none about what came next. Moscow reopened decades-old criminal cases against Lithuanians who acted on their government’s instructions and declined to serve in the Red Army after Lithuania’s unilateral declaration of independence in March 1990. That government may not have won international recognition at that time, but recognition​—​including from Moscow​—​followed within 18 months. To attempt to overturn now what it approved in the interim comes very close to questioning the legitimacy of Lithuanian independence today.

This could turn out to be more than merely symbolic harassment. The Lithuanian government has advised any of its citizens theoretically at risk of Russian prosecution on these grounds not to travel beyond EU or NATO countries. That’s not as paranoid as it sounds​—​Russia has been known to abuse Interpol’s procedures in ways that can make for trying times at the airport for those it regards as its opponents.

As if that was not enough, injury has since been added to insult: A week or so later, Russia detained a Lithuanian fishing boat in waters that are international but within Russia’s exclusive economic zone. Lithuania acknowledges that’s where the vessel was, but argues that it had every right to be there. Russia maintained that the boat had been illegally fishing for crab, and took it back to Murmansk. Such disputes blow up from time to time, but once again the timing is, well .  .  .

And of course these actions are unfolding against a background not only of Russian aggression in Ukraine, but heightened verbal violence against the Baltics. We can be confident that when (as it seems he did) Putin boasted to Ukraine’s president, Petro Poroshenko, last month that Russian troops could be in the Baltic capitals (and, for good measure, Kiev, Bucharest, and Warsaw) “within two days,” he did so safe in the knowledge that his threatening braggadocio would be passed on.

Konstantin Dolgov, the Russian foreign ministry’s Special Representative for Human Rights, Democracy, and the Rule of Law (yes, really), obviously didn’t want to rely on third parties to get the message out: He went straight to Riga to deliver the message that Russia “would not tolerate the creeping offensive against the Russian language that we are seeing in the Baltics.” He pledged Russia’s “most serious” support to its purportedly embattled “compatriots.” No matter that they are, in reality, considerably freer (and generally better off) than Russians in Russia itself.

To be sure, Balts have heard this sort of talk before, but it’s hard not to suspect that this time something wicked might be on its way. A direct assault remains highly unlikely. This is not 1940. But the probing, the baiting, and the bullying will intensify, and so will efforts to foment trouble among the large Russian minorities in Latvia and Estonia. The October 4 election in Latvia passed peacefully, but the fact that “Russian” parties took about a quarter of the vote nationally (out of an electorate that excludes 300,000 mainly Russian “noncitizens”) and over 40 percent in Latgale in eastern Latvia will not, to put it mildly, have been overlooked in Moscow.

As to what Putin might want out of the Baltics in the end, it’s hard to say. If he succeeds in proving that NATO’s shield is nothing more than bluff (with all the consequences elsewhere that such an unmasking would bring in its wake), leaving Latvia, Lithuania, and Estonia with nominal independence​—​flags, folk dancing, presidents, elections, and all that​—​would probably be acceptable so long as real power resided in Moscow. Continued Baltic membership in the EU might still be possible, even desirable: A Trojan horse or three within the EU could come in handy one day. Guesses too far? Maybe, but what we know is that Putin will try to take what he thinks he can get away with.

That’s why deterrence counts. Both Latvia and Lithuania have committed to increase defense spending from current (meager) levels to the NATO minimum target of 2 percent of GDP, a target that Estonia has met for a while. Latvia recently bought 123 secondhand armored combat vehicles from the United Kingdom. Estonia has announced that it will improve the demarcation of the border with Russia and will reinforce its border guard with special response teams. Recruitment is running at much higher levels for volunteer home defense units such as Estonia’s Kaitseliit and the Lithuanian Riflemen’s Union. Again, this is not 1940: This time the Baltics would fight.

That’s all well and good, but it’s important to remember that the Estonian military can boast fewer than 4,000 regulars. Latvia may be getting those combat vehicles, but it only has three tanks. In the end, the security of the Baltic states depends on their membership in NATO and the guarantee that comes with it: An attack on one NATO member, be it France or be it Estonia, is treated as an attack on all. In recent months, NATO has sent a blunt message​—​from tough declarations to an increased and increasing presence in the region​—​that this would indeed be the case, but Moscow’s continued pressure indicates that it is not convinced.

Until it is, this dangerous game will continue.

Baltics on the Edge

National Review Online, September 4, 2014

Hermann Castle, Narva, Estonia (with Ivangorod Castle, Russia, in the background), March 2015 © Andrew Stuttaford

Prisoners of geology, Icelanders make it their business to understand volcanoes. Prisoners of geography, the peoples of the Baltic States do the best they can to understand the unruly, dangerous, and enigmatic superpower next door.

So, when Janis Berzins of Latvia’s National Defense Academy published a report in April titled “Russia’s New-Generation Warfare in Ukraine,” it was worth paying attention. Since then, Russia’s actions in Ukraine have evolved beyond the deployment of “little green men” and other irregulars of nominally uncertain provenance into an old-fashioned invasion, plain, simple, and bloody, but the West still needs to focus on what Berzins had to say. His subtitle — “Implications for Latvian Defense Policy” — suggests why.

With Putin seemingly set, so far as opportunity will allow, on reconstituting the “Russian World” (Russkiy Mir) that fell apart with the Soviet Union, it’s easy to imagine that Latvia and Estonia might be somewhere on the target list. They are both former Soviet republics. For two centuries, they were part of the Russian Empire. Both have large, imperfectly assimilated Russian minorities, who, Putin reckons, belong within that Russian World, a status that entitles them — lucky “compatriots” — to his “protection.” Each has a major, almost 100 percent Russian-speaking city (Daugavpils, Latvia, and Narva, Estonia) temptingly close to the Russian border.

Both countries are in NATO, and thus theoretically covered by Article V of the NATO Treaty, which provides that all the alliance’s member states “agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all.” But in an age in which war can proceed by half-denied incursions and bogus popular uprisings (“non-traditional combat,” in Berzins’s phrase), who is to say what an “armed attack” really is? Berzins asks what would happen if a “Crimea-like situation” were to erupt in Narva. After all, Russia would undoubtedly insist that this too was the exercise of a “democratic right of self-determination.” And that, Berzins clearly fears, would cloud the picture enough for some Western politicians to claim that Article V should not apply. If that sounds too cynical, recall the lengths that some of them went last month to avoid calling the Russian assault on Ukraine (a country without the benefit of an Article V guarantee) by its right name: invasion.

According to the (anti-Putin) Russian commentator Andrey Piontkovsky, Putin is well aware that many NATO countries would be reluctant to be drawn into conflict by Article V. And even if they did come to Estonia’s aid, “Putin [could] respond with a very limited nuclear strike and destroy for example two European capitals. Not London and not Paris, of course.” Were that to happen, Piontkovsky believes, Putin would calculate that “all progressive and even all reactionary American society” would shout “‘We do not want to die for f***ing Narva, Mr. President!’”

Far-fetched? Probably. Putin is a gambler, but he’s not reckless. That said, it is worth noting, as did Anne Applebaum in a recent article for the Washington Post, that “Vladimir Zhirinovsky — the Russian member of parliament and court jester who sometimes says things that those in power cannot — argued on television that Russia should use nuclear weapons to bomb Poland and the Baltic countries . . . and show the West who really holds power in Europe.” Zhirinovsky is not, thankfully, in a position to shape policy, but he is occasionally used by those in the Kremlin to float ideas that they would like to see in circulation. As (notes Applebaum) Putin has put it, he “gets the party going.”

That this sort of talk is even out there will, as Putin knows, encourage a good number of NATO members to define Article V as narrowly as they can. Psychological pressure has always been a part of warfare, but it has an even larger role to play in Russia’s notion of a “New Generation” war. Within that, writes Berzins, “the main battle-space is the mind. . . . The main objective is to reduce the necessity for deploying hard military power to the minimum necessary, making the opponent’s military and civil[ian] population support the attacker to the detriment of their own government and country,” a strategy (essentially what once might have been called subversion, but taken to a whole new level) peculiarly suited to some of the more fragile countries that emerged from the wreckage of the Soviet Union. In this respect, Berzins’s account of the early months of the Russian onslaught in Ukraine makes depressing reading: “In just three weeks, and without a shot being fired, the morale of the Ukrainian military was broken [in the Crimea] and all of their 190 bases had surrendered.”

But Ukraine, I was repeatedly told during a visit to the Latvian capital, Riga, in June, was a failed state. Latvia is not. Nor is Estonia. Both have made remarkable strides since winning back their freedom from the USSR. They are members of the EU as well as NATO. Their economies have grown fast (if not smoothly), delivering a standard of living far better than that of their Russian neighbor. That is not the case in Ukraine. At their core, Latvia and Estonia have a powerful sense of national identity. Memories of their independent inter-war republics and the nearly half a century of brutal Soviet occupation that followed still sear. In 1940 they were annexed by Moscow without a fight. That would not happen again.

Nevertheless, their political structures are not yet as developed as they could be, and their economies are far from robust. There is a lot of Russian money floating around, particularly in Latvia, and their Russian-speaking populations (30 percent or so of the population in Latvia and approximately 25 percent in Estonia) are not only a cause for Putin, but a potential source of instability that the Kremlin is continually trying to exploit. This should not be overestimated: Most Latvian and Estonian Russians feel at least a degree of loyalty to those countries, and the approval that some of them show for Russian adventurism abroad (in the Crimea, for example) does not necessarily mean that they want Russian troops showing up at their front door.

Looking specifically at Latvia, Berzins cites instances of the early phases of New Generation warfare, including “supporting pseudo human-rights organizations, backing the organization of a referendum for Russian to be the second official language [it failed, but, tellingly, won a majority in Eastern Latvia], and surveying the population of the eastern border to get intelligence on their inclination to support a [Crimean-style] scenario.” Plus, adds Berzins, “in a more subtle way, Russia has been successfully influencing internal politics through some of the political parties.” That may be a reference to, amongst others, Harmony Center, Latvia’s largest, a party that draws most of its support from the country’s Russians, and that has links to Putin’s United Russia party. Its leader is the mayor of Riga, a city in which the population divides roughly evenly between Russian-speakers and ethnic Latvians.

Then throw the Russian media into the mix. It’s no secret that Russian television has become a pathway to a world of nationalist delirium, a world where two plus two does indeed equal five, a “parallel reality,” in Berzins’s words, “legitimizing . . . Russian actions in the realm of ideas.” And this is the TV that most Baltic Russians watch most of the time (local Russian programming is thin gruel). Its poison may be diluted by the fact that these viewers live in the West, but still . . .

And then there is the constant saber-rattling at the border, the incursions into Latvian or Estonian airspace, military exercises such as, most notoriously, Zapad-2013 (“West 2013”), in which some 70,000 Russian and Belarusian troops massed near the Latvian, Lithuanian, and Polish borders to war-game a scenario in which “Baltic terrorists” were the villains, an exercise designed to demonstrate who was really boss in this part of the world.

But for now, the spying, the probing, the pressing, occasional trade embargoes, cyber-attacks, dirty tricks (check out the way that Interpol was abused in the 2013 mayoral elections in Tallinn, the Estonian capital, for one example), a gnawing at the foundations is “all” that there has been. Polling the inhabitants of the border region is as close as Russia has come to crossing the line that would herald the next phase of a New Generation war — the seizing, maybe, of a building or two in Narva or Daugavpils by a bogus “people’s republic” and the arrival of those “little green men” — a phase that, for now, seems mercifully far off.

Berzins has suggestions as to how Latvia might head off that moment. These include increased funding for economic development in the poorer regions, a boost to military spending (Latvia has since committed to hike its defense spending to 2 percent of GDP, the minimum NATO target that nonetheless hardly any member states hit), and the introduction of something like Swiss-style conscription. But perhaps the most important — and the most optimistic — revolves around securing the revision of Article V to reduce the dangerous ambiguity that New Generation warfare has opened up, an ambiguity that quite a few NATO members might well prefer to keep intact.

It’s an ambiguity that comes with terrible perils — not just for Latvia and Estonia (and, quite probably, Lithuania as well: the third of the Baltic trio has a far smaller Russian-speaking population, but cuts off the Russian exclave of Kaliningrad from Moscow-friendly Belarus), but for NATO too. Standing by our Baltic allies — three democracies that have emerged from Soviet darkness — is the right thing to do, but it is a matter of self-interest too. If Putin prevails over the Baltic countries despite their NATO membership, that would, argues Piontkovsky, “mean the end of NATO, and the end of the U.S. as a world power, and the complete political dominance of Putin’s Russia not only in the area of the Russian World but in the entire European continent.” That may be overstating it, but such a blow to the prestige of Article V would at least risk an unraveling of NATO, with all the nightmares that would come in its wake.

Ambiguity can tempt the aggressor into believing that he get can get away with his next coup at little cost. This can, in turn, lead to catastrophe. Hitler was unconvinced that the British and the French would truly stand by Poland in 1939. The ambiguity over the Baltic guarantee can never be eliminated, but it can be reduced. The symbolism of Obama’s speech in Tallinn this week — and the promise to send additional U.S. Air Force units and aircraft to the Baltics — will have done no harm. The increasing presence of NATO aircraft in Baltic airspace in recent months is a good move, as is the stepped-up pace of joint NATO exercises on Baltic territory. A NATO rapid-response force of several thousand troops, capable of deployment within 48 hours, is now being proposed. Its equipment and supplies would be based in the east. Permanent manned NATO bases would be better still. As Estonia’s President Ilves remarked earlier this week, maintaining a “two-tier” NATO, divided between those countries with permanent bases and those without, sends the “wrong signal” to a “potential aggressor.” We can’t be sure that even bases would be enough to do the trick, but the more the West does now, the less likely it is that Americans will ever be asked whether they are prepared to die for Narva.

Latvia Divided

National Review, August 25, 2014

Riga, Latvia, June 2014 © Andrew Stuttaford

Riga — The cover of the British edition of Anna Arutunyan’s The Putin Mystique features a grainy, somewhat sinister image of the Russian leader, remote, mysterious, distant. In a bookstore on Riga’s Krisjana Valdemara Street, the Latvian edition is on sale; its cover shows Putin at the shooting range, a gun in his hand, a wry smile on his face, close, too close.

The key to understanding Putin, explained one Latvian official, is to think of him as a petulant and badly behaved teenager who likes to provoke, prod, and see what he can get away with. For quite some time now, that’s what Russia has been doing in the Baltic. Planes skim and sometimes cross borders. Military exercises are staged that seem intended to intimidate rather than to train. Last year saw some 70,000 Russian and Belarusian troops war-gaming a scenario in which “Baltic terrorists” were the villains.

Walk into the Latvian foreign ministry and you’ll see three large flags, Latvian, EU, and NATO. The EU is meant to secure Latvia’s economic development, NATO its safety. Article 5 of the NATO treaty provides that an armed attack on one NATO member is to be treated as an attack on all, but in a paper written in April, Janis Berzins of Latvia’s National Defense Academy wondered how NATO’s politicians would react in the event of a Crimea-like assertion of “self-determination” in Narva, an Estonian city on the Russian border where almost all the inhabitants are of Russian descent. It’s a question that’s just as easy to ask about Daugavpils, the overwhelmingly Russian-speaking capital of Latvia’s poorest, easternmost region.

Daugavpils, Latvia, June 2014 © Andrew Stuttaford

And it’s not a question that can safely be confined to Daugavpils. When Putin speaks about the plight of his “compatriots” cut off from their kin by the collapse of the Soviet Union, it is countries like insultingly independent Latvia that he has in mind. Around 26 percent of Latvia’s 2 million people are of Russian descent (and, more significantly, a higher percentage speak Russian at home). Riga itself is roughly evenly divided between Latvian and Russian speakers. The city’s mayor, Nils Usakovs, an ethnic Russian, heads up the leftish Harmony Centre, a political alliance that draws much of its support from the Russian community and, less than reassuringly, has links to Putin’s United Russia party.

But if Putin is to play his games here, he needs his “compatriots” in Latvia to be not only numerous but unhappy. Ukraine, I am frequently told, was a failed state, but Latvia is not. Latvia’s Russians are freer, and generally richer, than their counterparts in the motherland. And they know it. At the same time, there’s no denying the sense of exclusion that many of them feel, especially the nearly 300,000 who are “non-citizens,” a status that Putin has described as “shameful” and worse.

To talk to Elizabete Krivcova of the Latvian “Non-Citizens” Congress is to hear an echo of Selma, but, to add some proportion to that picture, consider that Latvia’s non-citizens have permanent residency, can travel visa-free through most of the EU and (unlike Latvians) in Russia too, and are eligible for most social benefits. They are excluded from voting and a range of jobs, most of them in the public sector, but the door to citizenship is wide open. Quotas have long since been scrapped, and the citizenship requirements (residency, a language test, some knowledge of Latvian history, and so on) have eased over the years: Some 140,000 (including Krivcova) have now been naturalized.

The House on The Corner, Riga, Latvia, June 2014 © Andrew Stuttaford

But when I suggest to one prominent Latvian politician that it might be time to lance this boil and grant citizenship to all the rest, he flinches, quickly adding that this would mean “losing Riga.” His body language says more than his reply: This is not just an expression of political calculation. In 1989, a future president of Estonia spoke of the “biological and social terror of belonging to a people that is dying out.” That’s a fear evidently shared by a good number of the 1.2 million Latvians who remain in their native land, the last of the last after half a century of Soviet occupation in which Latvians were brutalized, imprisoned, exiled, slaughtered, and denied their right to be. It was a systematic process of national obliteration, and it was reinforced by a continuous inflow of Russian settlers designed to swamp the people whose country Latvia once was.

Many local Russians supported Latvia’s bid for independence, which it finally won in 1991, and most of them thought that they should automatically become citizens of the republic in which they had lived for a good part, or maybe even all, of their lives. Latvians did not agree. From a strictly legal point of view — and during an occupation denied legal recognition by much of the West, strictly legal was all Latvians had had — the restoration of the pre–World War II Latvian republic meant that only its citizens (or their descendants) would be immediately eligible for a Latvian passport: The settlers would have to wait in line.

This bought time for Latvia to reestablish itself as a national republic, time in which the population balance shifted in a direction that favored ethnic Latvians, but not by enough to resolve the demographic impasse that history had left behind. For ethnic Latvians, the way to proceed was with a unitary state, with Latvian as its sole official language: “We are too small to be Canada.” Russian speakers would be slowly assimilated: Indeed, those under 35 can generally now manage pretty well in Latvian. Left (usually) unsaid: The problem of the non-citizens, a significant percentage of whom are elderly, would fade away as the Soviet generations died off.

Riga, Latvia, June 2014 © Andrew Stuttaford

For many Russian speakers, this will not do. What they argue for is integration rather than assimilation, perhaps not formal bilingualism but certainly increased recognition by the state of both the Russian language and a distinct Russian cultural identity. The current generation is, it is maintained, not responsible for the crimes of the past. Maybe, but too many of Latvia’s Russians are still reluctant to acknowledge the full horror of what happened here. Whatever one thinks of criminalizing speech (I’m not a fan), it is still a jolt to see the poster in Krivcova’s office mocking recent legislation banning the denial, justification, or trivialization of both Nazi and Soviet aggression against Latvia. This is not the best way to reassure Latvians nervous about the bully next door and a fifth column within.

Nevertheless, despite occasional bouts of bad feeling — such as that generated by a failed 2012 referendum to introduce Russian as a second official language — the two communities rub along well enough. The difficulty is that there is a third party — Russia — in this mix, and it seems set on contributing all the poison it can. Latvia’s NATO membership means that the likelihood of a direct attack by Russia is very small. What can be expected instead is an intensification of Russia’s longstanding attempts to subvert the country from the inside. For now, a Donetsk- or Crimea-style “uprising” is unlikely: The Russians reportedly took soundings in the Daugavpils area and found, even there, little enthusiasm for a move of that type. Meanwhile, Riga is quiet. Even the polling that showed that most Russian-speaking Latvians supported the annexation of Crimea should not be cause for too much concern: Cheering on the ancestral motherland at a safe distance is very different from wanting it to turn up on the doorstep.

Freedom Monument, Riga, Latvia, June 2014 © Andrew Stuttaford

But the potential for trouble exists, made more dangerous by the fact that a huge majority of Latvia’s Russian speakers get so much of their information from Russian TV. The Russian stations are typically more entertaining than the local offering, but they act as portals into the venomous parallel universe where Kremlin propaganda roams. The loyalty of many of Latvia’s Russians to Latvia is real, but it is not particularly deep. It’s easy to see how Russia could stir the pot. It has the resources, and Latvia’s is a divided society, history is still raw, and there is more than enough resentment to go around. Another risk is that further Russian adventurism, even if well away from the Baltic, creates a heightened climate of mutual distrust within Latvia that rapidly degenerates into something worse. And then there is the general election due in October. Best guess is that Harmony Centre will again come out on top, if less convincingly than in 2011, and will once more be kept out of power by an unwieldy coalition of the weak, often chaotic “Latvian” parties, a result that will only emphasize the divisions that Mr. Putin will undoubtedly still be looking to exploit.

Wilkommen, Bienvenue

The Weekly Standard, December 30, 2013

Riga, Latvia, November 2013 © Andrew Stuttaford

They take austerity seriously in Latvia. After each meeting with a government official he or she would turn off the lights as we walked out of the room. More than five years after the global financial crisis finally burst Latvia’s fragile economic bubble, scrimping is second nature. Given the direction this small, resilient Baltic country took after Lehman fell, that’s no surprise. The usual prescription for cleaning up the mess that overheating leaves behind, particularly in an export-oriented economy (exports amount to some 60 percent of Latvian GDP), centers around a sharp devaluation of the currency to restore international competitiveness. There were quite a few (including within the IMF) who suggested that Latvia should break the peg fixing its currency—the lats—to the euro, leaving the lats to sink to a level that more accurately reflected uncomfortable new market realities.

Riga, Latvia, November 2013 © Andrew Stuttaford

That’s not what Latvia did. The relatively low value added within Latvia to its exports, and the difficulty that it would have faced in satisfying domestic demand with domestic production, meant that a conventional devaluation would have struggled to work its naughty magic, even if the export markets had been there (by no means assured after the slump in the international economy). Tipping the scales further, local business and the nascent middle class—most of whose boom-bloated -borrowing had been in euros—would have faced catastrophe had they had to repay those debts in suddenly depreciated lati. That would have threatened both social disaster and a dangerous breach with the Nordic banks responsible for a large portion of that lending—banks that would now have a vital role to play in maintaining financial liquidity in the country (the only sizable Latvian bank had foundered).

Base of Freedom Monument, Riga, Latvia, November 2013 © Andrew Stuttaford

So Latvia stuck with the peg and opted for “internal devaluation,” shorthand for an attempt to mimic the competitive benefits of a traditional devaluation, but by squeezing costs (primarily labor costs) and excess demand out of the local economy rather than by depreciating the currency. This won Latvia financial backing from a group comprising the World Bank, the IMF, the EU, and the Nordic countries, support that had to sugar some very bitter medicine. Government expenditures were slashed (large numbers of public sector employees were fired and many of those who hung on saw their salaries cut by 20 percent or, indeed, much more) and, to a lesser extent, taxes increased. Between 2008 and 2012 total fiscal consolidation amounted to some 17 percent of GDP.

Most of the pain was front-loaded, both as a matter of practical politics (better to strike before austerity fatigue set in) and a matter of practical economics: Latvian interest rates had soared to damaging heights and confidence had to be rebuilt.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

Seen in that context, the 2009 declaration by Valdis Dombrovskis, the dourly impressive center-right prime minister, that Latvia would continue to seek membership in the eurozone (and, more specifically, get there by 2014) made sense. Whatever the mounting problems in the EU’s gimcrack currency union, it appeared to offer a comparatively safe haven from the Baltic storm. For investors and lenders, the obvious seriousness of this commitment, together with the external support that the government had won, significantly reduced the exchange-rate risk associated with doing business in Latvia. It was no coincidence that with the “devaluation ghost” (as the central bank delightfully puts it) held at bay, lats-denominated interest rates started to tumble.

On top of that, targeting eurozone membership provided a benchmark against which the performance of the Latvian economy could be measured. The country would only be eligible to switch over to the euro if it met the currency union’s “Maastricht criteria.” Its budgetary position would have to be on a sound footing, its inflation subdued, and so on.

Perhaps most important, the march towards the single currency signaled to Latvians that their reconnection with Europe would not be derailed by the economic crisis. Austerity was a means to an end, not just an end in itself. Many Latvians had (and have) their doubts about the wisdom of adopting the single currency (over half are still—to a greater or lesser extent—opposed), but the broader aim of anchoring their state more firmly in the West helped them to stay the course through the brutally tough times that followed the financial collapse.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

There are plenty of dismal statistics to choose from, but unemployment stood at over 20 percent in early 2010 (compared with an average of 6.5 percent in 2007), and GDP shriveled by 18 percent in 2009, after a 4.2 percent decline the previous year. Despite this, Dombrovskis was able to prevail in the October 2010 general election and then weather (albeit precariously) a snap election called in slightly murky circumstances the following September. The fragmented and incomplete development of political parties in Latvia means that general elections are not the best gauge of public opinion, but Dombrovskis’s survival (he went on to become Latvia’s longest-serving democratically elected prime minister) says something. He resigned only in late November, after the deadly collapse of the roof of a Riga supermarket, a tragedy for which he took “moral and political responsibility.”

But by then the economy was well on the mend, bolstered by a revival in global demand partly stimulated, of course, by less austere policies elsewhere. Quite why Latvia was able to resume its pre-boom trajectory as quickly as it did remains the subject of lively academic debate, but a low level of public debt was one crucial advantage: Latvia could persist with its tough approach without falling into the debt-deflationary trap that is crippling recovery in Greece and other grisly corners of the eurozone’s ER.

Latvia’s GDP growth began to turn positive during 2010, coming in at a total nicely above 5 percent for both 2011 and 2012, and is on schedule to be comfortably over 4 percent in 2013, the fastest growth in the EU. The current account deficit is again at a manageable level, the unemployment rate has shrunk to a number marginally below 12 percent, inflation is running at less than 1 percent (as opposed to nearly 18 percent in May 2008), and the budget deficit has returned to respectability after coming close to 10 percent of GDP in 2009. In 2012 it was only a little above 1 percent, while government debt stood at around a modest 40 percent of GDP, easily below the Maastricht requirement of 60 percent.

It is no surprise that Latvia’s formal application to join the euro in March was approved by the relevant EU authorities within a few months. Ordinary Latvians were not given an equivalent say. Calls for a referendum were rejected, not least on the grounds that the matter had long been decided. Any country joining the EU after the Maastricht Treaty came into force in 1993 (Latvia became a member in 2004 after—it is fair to note—a referendum) is obliged to sign up for the euro as soon as it meets the Maastricht tests, a proviso that the Swedes (joined 1995)—who wisely retain their krona—have ignored. Some seats at the EU’s table are more equal than others.

Central Market, Riga, Latvia, November 2013 © Andrew Stuttaford

In any event, Latvia will swap the lats for the euro on January 1 at the rate, to be precise about it, of 0.702804 lati per euro, although it will still be possible to pay for goods and services in lati for another two weeks thereafter. The conversion process within the public and private sector is well under way, as is an extensive program of public education (meetings, leaflets, advertising). Most visibly to the visitor, all prices now have to be given in both lati and euros, and from what I could see in Riga, that was happening everywhere. Even in the converted zeppelin hangars (history here is complicated) of the capital’s picturesque (and somewhat law-unto-itself) central market, everything was properly priced: I had been issued a nifty lenticular currency conversion card and could check that that was so. Watchdogs are in place to stop the changeover being used to hike prices (a common, if exaggerated, fear that has accompanied the introduction of the euro in other countries). To reinforce this, dual pricing will be mandatory until the end of June.

After the changeover, lati will be convertible into euros (at the fixed rate) at rural post offices for three months, at commercial banks for six months, and at the central bank in perpetuity. This matters. Ask officials why there is still so much opposition to the switch, and—perhaps a little condescendingly—they cite folk-memories of the damage caused by previous currency conversions, especially the abrupt introduction of a “new ruble” in 1961 during the Soviet era.

But there is more to it than that. Geopolitical realities (yes, we are talking about Russia), the size—and open nature—of the Latvian economy, and inadequate domestic capital formation all make a decent, if downbeat, case for Latvia to enter the eurozone, despite that currency union’s profound problems. Its flaws (to use a gentle word) have not escaped the attention of the man in the Latvian street. He also does not appreciate the fact that if there is another eurozone bailout (Greece, yet again?), frugal, hardscrabble, post-Soviet Latvia, one of the poorest countries in the EU, will have to chip in.

For a country to abandon its own money is to throw away an essential attribute of sovereignty. In a lovely but manipulative gesture, Latvian 1 and 2 euro coins will bear the image of Milda, the “Latvian maiden” who adorned prewar Latvia’s gorgeous—and emotionally resonant—5 lati piece. This time she is decorating a symbol not of hard-won independence but of a sadly withered autonomy.

And the eurozone’s long agony may bring with it another twist of the knife. The convenient fiction that made it politically possible to establish the euro in the first place was that this was a shared currency that could work with a minimum of pooled sovereignty, a stretch at the best of times, an impossibility in the case of a monetary union that is very far from being an optimal currency area; Germany is not Greece, Finland is not Portugal. If the euro is to survive in its current form, the eurozone will require much deeper fiscal and budgetary integration. Quite what will be left of Latvia’s low tax, fiscally responsible regime or, in any real sense, its self-determination, by the time this process is finished is anyone’s guess.

And what is to remain of Latvia itself? It emerged from nearly half a century of cruel Soviet occupation with its identity savagely battered—not least by the presence of a large Russian settler population (even today ethnic Latvians account for only some 62 percent of the country’s two million inhabitants)—but its heart intact. Membership in the EU has represented a kinder, subtler challenge. The opportunities it has brought to live in lusher lands to the west has led to a steady stream of emigration, a stream that became a torrent during the slump before dwindling again today. All told, the population has shrunk by over 10 percent since 2000. Exporting surplus labor helped Latvia manage the crisis, but at what longer-term cost?

Riga Castle, Latvia, November 2013 © Andrew Stuttaford

I spent the evening of November 11 down by Riga Castle. It was Lacplesis Day, the anniversary of the victory in 1919 by freshly cobbled-together Latvian forces (helped by Royal Navy guns) over a Russo-German army (as I said, history is complicated here) in the battle that effectively secured the new state’s independence after centuries of foreign rule. An ever-swelling crowd, talking quietly, proud to be there, had gathered, lighting row upon row of candles that flickered against the old castle walls, a tribute to the men who had fought so courageously for their country’s right to be. Bonfires did their best against the cold, clear northern night; once-banned flags—carmine and white like the ribbons everyone seemed to be wearing—waved in the chill breeze. A group of children sang folk songs of simple, crystalline beauty.

Behind us a series of tiny vessels had been launched into the River Daugava. Each bore a candle and some a miniature flag, too. They formed a brave, bright, glowing flotilla that sailed off into the dark, its destination unknown.