“First, don’t keep money in banks”

As an undergraduate, my parents lived in Riga. It’s a lovely city (if you’re looking for a friendly travel destination largely untouched by American tourists, the Baltics are a good place to start) and Latvia’s bumpy transition from the Eastern Bloc to the European Union is one of the bright spots of the early 21st century. But it seems the economic crisis is hitting small countries particularly hard, and the latest from Clay Risen suggests the Baltics are still vulnerable to political backsliding:

In the United States, we put economists in the cabinet. In India, they make them prime ministers. In Latvia, they put them in jail–the pessimistic ones, at least. According to the Wall Street Journal, Latvian security agents recently detained university lecturer Dmitrijs Smirnovs after he told an audience, “All I can advise is this: First, don’t keep money in banks. Second, don’t keep money in lats,” the national currency. Smirnovs was released, but agents seized his computer and told him not to leave the country. Turns out that it’s illegal to speak ill of the Latvian economy–or, in Soviet-speak, spreading “untruthful information.” He’s not the first, and despite a press uproar, he’s unlikely to be the last.

Read the whole thing. In a broader sense, I think this episode demonstrates the inherent fragility of democratic governance. After the Berlin Wall fell, the Baltic States were among the most inviting targets for political and economic liberalization. Entry into NATO and later, the EU, ratified and reinforced their impressive national progress. Today, visiting Riga or Tallinn or Vilnius is much like visiting any other Northern European capital. Everyone speaks English; everyone’s friendly; the beer is fantastic, and the local McDonalds is cleaner and better staffed than any American franchise I’ve encountered.

For all our flaws, the thought of the United States imprisoning someone like Paul Krugman is beyond absurd. And yet arresting an economic pessimist was the option of first resort for the Latvian government. This degree of political insecurity is all the more surprising when one considers the Baltic States’ pro-Western orientation – Lutherans and Catholics outnumber members of the Eastern Orthodox Church, Germany’s cultural influence is inescapable, and the region’s recent entry into the Euro-American economic and security framework was widely described as a “Return to the West.”

So if Latvia – the proverbial “low hanging fruit” of democracy promotion – is in danger of lapsing into authoritarianism every time the stock market takes a dive, I’m genuinely baffled by people who still support promoting democracy in less hospitable environments. Even with all the right cultural precursors in place, things can still go wrong. We should keep that in mind the next time we’re leturing some hapless Third World parliament on the need for transparent elections.

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1 Comment

Filed under Culture, Economics, Foreign Policy, History

One response to ““First, don’t keep money in banks”

  1. Pingback: Latvia Free Speech Blogging «

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