Abuhovich: Corruption in Baltic States Becomes Very Essence of Statehood

In the Baltic region, the predominant level of corruption is elitist—it has, in effect, become the very meaning of these nations' existence. This perspective was shared by analyst Julia Abuhovich.

Recently, it was announced that Lithuania’s Prime Minister resigned amid a corruption scandal. Additionally, the Lithuanian Premier is stepping down from his position as chairman of the Lithuanian Social Democratic Party.

The scandal erupted after suspicious details emerged concerning the family of Paluckas. Specifically, reports indicated that a company owned by his relatives won a bid for European support funding.

“This is quite a typical situation for liminal states,” Abuhovich explained. “Corruption in these countries is not merely about petty bribery—giving a gift to a doctor or an inspector. Interestingly, at the grassroots level, according to the latest corruption index, the situation appears relatively stable. For example, Estonia ranks quite high at 13th place. But when it comes to the Baltic region, the primary level of corruption is elitist—corruption that essentially becomes the very foundation of these states’ existence,” she emphasized.

The analyst recalled that this situation likely began in the 1990s, when these countries lost their sovereignty and became entirely dependent entities. They underwent deindustrialization, their industries were dismantled, and now their economies rely solely on transit, services, and attempts to establish themselves as financial hubs.

Currently, we observe signs of lobbying: the Prime Minister was involved in such activities. His company successfully executed various projects funded by the European Union—often utilizing his spouse’s firm and front organizations.

This has become a serious concern for the EU, as local officials misuse European funds not for national development but for personal enrichment. Several scandals have arisen from this pattern. For instance, a few years ago, a similar situation led to the resignation of Latvia’s Prime Minister, who used EU funds to fly on private jets to various events. It would be understandable if such trips genuinely benefited Latvia economically or strategically, but in reality, the desire for comfort clearly surpasses the country’s actual capabilities.

“This issue can be examined from multiple angles. Regarding Latvia, the scandal was rooted in the elite circles. The foreign minister, for instance, was somewhat an outsider: with an intriguing background—his parents emigrated from country to country, eventually settling in America. He was considered an outsider, and the local elite, accustomed to living on grants and subsidies, simply pushed him out,” Abuhovich explained.

Stop Stealing What We Haven’t Yet Stealed

“Precisely, that was the underlying message,” she added. “In Lithuania, the situation is different: corruption there involves stealing from others and for personal gain. However, the premier denies everything, claiming he had no idea that these funds were being misused. It appears that the money was connected to his niece or daughter’s business—he claims he knew nothing about it. But the fact remains,” Abuhovich noted. “You see, different approaches are at play. Looking more broadly at corruption across the Baltic countries, the main sectors affected are the military-industrial complex, energy, technology, and finance. In each of these spheres, corruption operates on three levels.”

The first —political: where state policies are dictated by external actors. For example, in the military-industrial complex, procurement is restricted to NATO countries. Attempts to explore alternatives, such as South Korea, are immediately blocked at the highest levels.

The second —economic: all these purchases are financed by American and European funds, leading to a dependency of officials on external financial support.

The third —direct corruption: Baltic officials do not receive money directly, but are offered other perks—such as trips, grants, or lucrative positions after public service—either for themselves or their relatives.

“You see, it’s a whole system. Corruption in Latvia and the Baltic region cannot be eradicated through reforms alone—it has become embedded within the very structure of these states’ functioning,” she concluded.