UCL School of Slavonic and East European Studies, University College London, 7th Annual International Postgraduate Conference

Inclusion Exclusion

16-18th February 2006

Friday 17 February 10:00 – 11:30: Panel D1: Enterprising to survive: Informal networks in South Eastern Europe

Akvile Motiejunaite (South Stockholm University College): ‘Capital cities prosper, villages perish?: urban and rural inequalities in the Baltic states’

The paper explores recent economic and labour market developments in the Baltic States with relation to growing inequalities between the capital cities and rural areas. The transition from a centrally planned to a market economy in the Baltic States has brought enormous changes in economic situation and living conditions of the population. Significant progress has been made since the collapse of the Soviet system, but the process involved some negative consequences. In the former Soviet Union citizens enjoyed basic equality, even though accompanied with relatively low standard of living. Transition granted different opportunities for different groups of people and increased level of inequality in society.

One of the negative consequences is growing asymmetry between capital cities and other parts of the countries, especially rural areas. For the 50 years the capitals of the Baltic Republics in the Soviet Union functioned more as an administrative regional centres. Unlike other Central and East European countries, Baltic States together with major political and economic transformation had to transform or even create the state apparatus including the most of the state administrative, legislative and governmental bodies. The shift of political power made an important contribution to the economic growth of the capital cities, accompanied by asymmetrical distribution of the state budgets and creation of new work places.

The paper focuses on the major changes in rural-urban labour markets divisions from the beginning of economic transition till recent years. In the former Soviet Union rural population was the most deprived stratum of the society and transition sharpened the imbalance. Agricultural privatisation in the Baltic States mostly resulted in complete dismantling of the former soviet collective farms into small family farms. Fragmentation of agricultural holdings generated excessive amounts of small-scale farms that were usually too small to be commercially viable. On the other hand capital cities became the most rapidly developing areas with the leading rates of foreign investments and low levels of unemployment.

Labour market transformation has been a widely discussed topic, however distinctions between the capital city and the rest of the country are seldom analysed. In order to understand the changes in labour markets and living conditions I will use different sources and the material of my previous studies. There are at least several questions that I would like to highlight in my paper discussing new economic developments:

  1. What are the general patterns of labour markets in the Baltic States and what are the trajectories of their developments during the transition? How does recent economic growth influence the rural-urban division in the labour market?
  2. What were the major patterns of rural-urban migration?
  3. Did the Baltic States undergone similar transformation or should differences in ethnic composition be given more importance?
  4. What possible future developments may be forecasted? Are there prospects for more equality after joining the European Union?

This paper will contribute to the understanding of growing regional inequalities in labour markets in the former soviet states.

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