Post‐Soviet Reform in Latvia: Early Progress and Future Prospects

After the rapid and dramatic demise of the Soviet Union in 1991, 15 newly autonomous republics are restructuring their economies after decades of central Communist planning. The three Baltic states of Latvia, Lithuania and Estonia had successful market‐oriented economies during more than two decades of independence between World Wars I and II and were comparatively strong performers within the USSR after being occupied in 1940. A case study of Latvia looks at the historic factors and political issues which are shaping the current reform process. A contrast of state‐run, collective and private enterprises is used to illustrate the rapid changes which now place Latvia at the forefront among post‐Soviet reformers. This analysis of the early progress and problems forms a foundation for considering the reform prospects across the former Soviet Union and leads to a suggestion that the results in Latvia will play a bell‐wether role.