Old lessons not learned: the clash of political and economic nationalism in Latvia

Latvia, a small country on the Baltic Sea, became independent in 1918, but was occupied by the Soviet Union in 1940. Like its neighbours, Estonia and Lithuania, Latvia has a skewed resource pattern, small domestic market, and an export concentration into commodities. Prior to the Soviet occupation, these three countries never managed to form an economic union to overcome the disadvantages of the small size of the domestic markets in the era of assembly line technology. They practiced “Alleingang” in economic and political matters. After gaining independence in 1991, the Baltic countries learned nothing from the past and have continued practicing “Alleingang” in the age of “high tech”.