Privatization processes during 1991–2000 years and they after – effects in the Baltic states


  • Stasys Vaitkevičius



Privatization, management of privatization processes, efficiency of privatization, ownership reform


The processes of privatization state property, which were executed in the Baltic States during 1991–2000, were very important not only for employees of privatized and technologically related companies but also for branches of economy, in which investors were attracted, as well as for social and economic progress of each Baltic State and for the strategic development direction of Lithuania, Latvia and Estonia in long perspective. At the beginning of the analyzed period, when the state ownership in the Baltic States was absolutely dominant, and dependence on former USSR (particularly on Russia – the successor of duties and rights of USSR) in economic-commercial areas was over 90 per cent, and they were obliged to use ruble as the only means of payments and settlements, the Baltic States started to implement complex of reforms in legal, social and economic areas. The Baltic States implemented these reforms as quickly as possible (except for Lithuania in 1993–1996), reducing their dependence on the emerging corruption-oligarchic system in Russia, which became much stronger by Russia’s choice of a faulty privatization model, the results of which had impact on the economic-commercial processes of the Baltic States.

Having no analogs in the world practice, the Baltic States implemented reforms in their economic-commercial and social areas, enacted both general laws governing the activities of the state and specific laws regulating management of enterprises, and within a minimum time period prepared for the privatization of state property. The author of this article tried to take into account new aspects of the main features of the privatization management methods in Lithuania, Latvia and Estonia, advantages and disadvantages of these methods, as well as basic factors (usage of the investments certificates, preferences for employees and attraction of strategic investors), which in the first stage of privatization considerably influenced this process. The implementation of the German privatization management model in the later stage of state property privatization revealed a formula of the success of the Baltic States, which achieved particularly good results in attracting investors. These investors not only modernized privatized companies but also significantly improved the management and salary levels in these companies. In addition, the activities of such investors reduced public spending on private business subsidies, increased tax payments to state and municipal budgets as well as salaries of employees paid from these budgets. Specific facts demonstrated that functioning of strategic investors, which created high additional value, stimulated establishment and successful development of the companies, whose activities were based on the innovations. Such companies easily found their markets in Europe and other countries.

A comparativelegal and management process analysisof the privatization of houses, apartments and their appurtenances in Lithuania, Latvia and Estonia revealed the success and weaknesses of privatization of such objects, as well as social, financial and psychological subsequences for majority population of these states. The basic problems (environmental, veterinary, etc.) are disclosed in very problematic processes of privatization of land, agricultural enterprises and restitution of nationalized property as well as the achievements and shortcomings in the individual Baltic States by applying different methods of privatization management of this kind of state property.

The large scale privatization and creation of the favorable conditions for the development of private businesses in the Baltic States enabled these countries to direct the flows of goods and services to the markets of the western countries, to reduce dependence on the Russian market up to 20–27%, and to take a clearly leading position among the republics of the former USSR, according to the generally accepted packetof indicators, and even to surpass some Eastern European countries.


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How to Cite

Vaitkevičius, S. (2022). Privatization processes during 1991–2000 years and they after – effects in the Baltic states. Law Review, 1(25).