THE BALTIC WAY.

• Author: Harrigan, Fiona

THE SOVIET STORY of Estonia, Latvia, and Lithuania begins in August 1939. German Foreign Minister Joachim von Ribbentrop and Soviet Foreign Minister Vyacheslav Molotov came together to sign the Molotov-Ribbentrop Pact, which granted their respective countries partitioning and annexation power over several Eastern European nations. Nazi Germany split Poland with the Soviets, and the Baltic states went to the USSR.

Decades of brutal Soviet rule would follow. On the 50th anniversary of the pact's signing, the nationalist movements of Estonia, Latvia, and Lithuania decided to issue a collective call for independence. They organized the Baltic Way--a continuous human chain comprised of 2 million people, spanning 675 kilometers, traversing the three nations in a display of solidarity and peaceful resistance.

That unity continued as the Soviet Union fell. Where one Baltic state went, the other two soon followed. Lithuania became the first former Soviet republic to declare independence on March 11,1990; Latvia and Estonia did the same just two months later. As Estonia pioneered radical economic reforms in its early post-Soviet days, Lithuania and Latvia would often adopt them with minor adjustments. Rejection of the Soviet Union and its lingering shadow came quickly, decisively, and uniformly in the Baltic states.

FROM THE VERY beginning of the Soviet Union's dissolution, the Baltics were a bloc apart. Their unwavering pursuit of national sovereignty and thorough reiection of the Soviet way of doing business have driven their unrivaled success.

In 1993, the Estonian foreign ministry argued in an internal memo that "the most important lesson is simple: time is short and time will not wait for small nations." Though small, the Baltic states did not shrink from big actions. The three countries snent the '90s completely overhauling their economic systems to recover from Soviet life. They focused on deregulation of trade and prices. Estonia, having done away with all foreign tariffs, was at that point the only truly free trading European country.

Macroeconomic stabilization came in 1992, with the three nations establishing their own currencies that summer. A "ruble zone," using the Soviet currency, persisted in many of the independent republics after 1991-but the Baltic states decisively rejected such ties. Tax reforms were drastic. All three countries implemented flat income tax systems in 1994 and 1995, the first modern nations to do so. According to...