Jeffrey Sommers, Arunas Juska, and Michael Hudson, “‘No People, No Problem’: The Baltic Tigers’ False Prophets of Austerity,” Counterpunch, December 6, 2011.In short, the migration effect of austerity and internal devaluation has actually been worse in Lithuania than in Latvia!
Some 83,200 Lithuanians emigrated in 2010, the highest level of emigration since 1945. In 2008, the emigration rate was the highest in the EU countries (2.3 per 1,000), and forecasts predict a population decline of a further 10.9 per cent for 2008–2035.
This can only mean that the fall in official unemployment from 18.3% in summer 2010 to 13.9% in January 2012 must be more the result of the emigration of sectors of the labour force, than of domestic employment growth. Thus any employment “success” in Lithuania is sheer delusion.
As for real GDP, it contracted by 14.8% in 2009 – that is to say, Lithuania was hit by an actual depression in that year. Growth was a mild 1.4% in 2010, which was nothing to boast about.
In 2011, it was 5.9% (for figures, see here). The moderate growth rate for 2011 may well be the result of export-led growth, but the truth is that the price was appallingly high and utterly unnecessary.
Why? The reason is that any export-led growth that Lithuania – or indeed any of the Baltic nations – experienced in 2010–2011 could have been achieved by currency depreciation of their own independent currencies, which would have allowed a space for stimulating the domestic economy by Keynesian fiscal expansion.