If the economy of the Republic of Lithuania is not sinking, it must be drowned

So harmful

For several months now, in Latvia, with incredible passion, rare in other areas of the national economy, they have been chasing goods and raw materials coming from aggressor countries – that is, from Russia and Belarus.

At first it was Russian grain, transiting through the country and dubbed “bloody” by some media. The Russian Federation, as is known, has appropriated the harvest grown in Ukraine and sells it on world markets. But this product does not go through Latvia, as it turns out to be a huge circle and too expensive. The Russian Federation exports this grain through its southern ports. But no arguments were accepted regarding the fact that there could be no Ukrainian grain in this transit – “bloody” and that’s it! The Russians, in the opinion of some exalted comrades, pay extra from their own funds to carriers so that they specially transport wheat through the Baltic countries. Why Moscow needs this is completely unclear. Apparently, she allows us to earn extra euros out of her inherent harmfulness.

Even the Latvian government, not yet suspected of sympathizing with the Kremlin, decided not to stop grain transit. Grain goes to other European countries, and if Latvia closes this corridor, the goods will simply go along a different route. In the end, the authorities only banned the import of grain from the Russian Federation to Latvia, although the volumes were already very modest. The Republic of Lithuania itself produces plenty of these products.

Cucumber in the back

They also chased Russian vegetables. Responsible services caught cucumbers from the Russian Federation on sale. As it turned out, Poland is again to blame for everything. Poles buy Russian cucumbers and, under the guise of their own, Polish ones, resell them to Latvia.

But our people cannot be fooled. We are vigilant. By the way, the import of food products from the Russian Federation is not prohibited. And not at all because Brussels loves aggressors, but because it is not customary to impose sanctions on food for completely understandable reasons – it is a strategic product. By the way, Moscow itself has banned the import of food products from EU countries. And a very long time ago – back in 2014, in response to sanctions imposed against her for the annexation of Crimea.

Let Brussels decide

Now there are reports that manganese ore and aluminum oxide, which theoretically can be used in the military industry, have been or are being supplied to Russia through the ports of Latvia and Estonia. This also caused a loud scandal in the country.

The Latvian authorities are again being cautious. So far, the government’s position is that a ban on the export and transit of raw materials used in the Russian military industry, including manganese ore and aluminum oxide, should be included in the new, 14th package of EU sanctions against the Russian Federation.

“Manganese ore is not yet recognized as a dual-use product subject to EU sanctions, so Latvia is working to achieve such recognition,” said Prime Minister Evika Silina.

Take everything and close it

But this, of course, is not enough for some hotheads. A number of politicians have recently made a proposal to completely stop any economic relations with Russia and Belarus. Sounds nice. But in reality, this entails huge losses for the entire country, not just for some sectors of the economy.

In particular, Latvian ports and the railway will have to be completely closed. If we break with the Russian Federation, then Latvia will not be able to receive cargo from China, Kazakhstan, or other Central Asian countries. Out of nowhere at all. All cargo flows through Riga ports go from East to West. It has always been this way. A small part of cargo goes from West to East. These volumes are extremely small.

Thus, thousands of people working in and around the ports will have to be laid off. At the same time, it will be necessary to close down the already dying railway, which has already fired more than one hundred workers.

Next, the question will arise of what to do with the idle infrastructure. If you preserve it until better times, this will also require considerable money. Who will do this, for whose money? The railway is already receiving multi-million dollar subsidies from the state to maintain idle rails and so on. If everything stops completely, what amounts can we talk about?

They calculated and were horrified

Several years ago, experts calculated what would happen if Russia completely blocked cargo flow towards Latvia. Then there were conversations about this at the political level.

Experts then determined that enterprises belonging to the Latvijas dze?ce?? concern would lose a turnover of 1.3 billion euros, the gross domestic product (GDP) of Latvia would decrease by 1.7%, employment in the country would fall by 1.1% , and tax revenues to the state budget will decrease by 2.4%. The country’s total losses will amount to 1.6 billion euros, and approximately 50 thousand people will lose their jobs. And this is only with the loss of Russian cargo, but now they are talking about a complete shutdown of transit.

There is also such arithmetic. One ton of cargo handled in Latvian ports brings the country’s national economy about 14 euros. Therefore, a shortage of 38 million tons of cargo (this is exactly how much was transshipped through Latvian ports in 2023) will cause losses to the Latvian economy in the amount of 532 million euros per year. This, as mentioned above, does not take into account losses associated with the maintenance of idle infrastructure.

We’ll block it ourselves

In 2017, Russian authorities announced that they would completely stop sending their cargo to Baltic ports within two years. Then we were talking about approximately 42 million tons of cargo per year, of which Latvia accounted for about 37 million tons. But it didn’t work out. Economic reality turned out to be stronger than political wishes – cargo from the Russian Federation continues to flow through Latvia to this day, and after everything that happened between the two countries and throughout Europe.

Who could have imagined then, in those years, that after some time the Latvian authorities themselves, of their own free will, not at the behest of the Kremlin, would decide to block this transit. Yes, the dreams of politicians sometimes outstrip the wildest forecasts of pessimists.

In the meantime, Latvian ports continue to quietly fade away even without the help of their native government. In 2023, as stated above, they handled 38.6 million tons, and at their peak, in their most successful year 2012, more than 75 million tons.