Following admission to the European Union, are the Baltic states on course for economic reform? Bea Perks reports

Following admission to the European Union, are the Baltic states on course for economic reform? Bea Perks reports

The Baltic states - Estonia, Latvia and Lithuania - have witnessed tremendous political and economic upheaval for hundreds of years. But the latest move, with all three countries joining the European Union in 2004, is predicted to have set the countries on course for economic reform and industrial development.

Having been dominated variously by Germany, Poland, Denmark, Sweden, and Russia, the three states were absorbed into the Soviet Union in 1940, at which point productivity became dictated centrally from Moscow.

Latvia, with a population today of 2.3 million, developed and manufactured 25 per cent of all new drugs for the USSR market.

Lithuania had a comparatively small pharmaceutical sector but with large reserves of construction materials, including limestone and gravel, and some fossil fuel reserves, developed an industry around mining, construction and petroleum products.

Estonia, the smallest country of the three, has limited natural resources but remains one of the world’s largest producers of oil shale. Positioned at the northernmost tip of the Baltic states, a short hop from Finland (the countries’ capital cities, Tallinn and Helsinki, are just 50 miles apart), the USSR used Estonia as an outlet to the West as well as a military stronghold and energy source. The country enjoyed the highest per capita income in the Soviet Union. Estonia’s economy now rests largely on the services sector, with an industrial base focused on electronics and electrical engineering.

Latvia is making headway in the pharmaceuticals sector. But while membership of the EU has its advantages, say academics, it hasn’t made finding funding any easier. The Latvian government has not been particularly supportive, says Edmunds Lukevics, former director of the Latvian Institute of Organic Synthesis in Riga, currently head of the institute’s laboratory of organometallic chemistry.

’To overcome rising financial difficulties, the institute has intensified its international activities,’ says Lukevics. He helped direct the institute towards industrial collaboration in a number of ways. For example, the licence for a cancer drug developed there, Ftorafur (tegafur), was sold to Japanese drug firm Taiho and became the best-selling synthetic anticancer drug on the Japanese market, he says.

The current director of the institute, Ivars Kalvinsh, has established new contracts with other pharmaceutical companies, organised new laboratories in the institute, and developed new drugs produced by Latvia’s foremost pharmaceutical company Grindex, also in Riga. The institute is involved in contract research projects with Latvian and foreign drug companies and has ongoing projects with 11 companies. New laboratory equipment has been acquired, thanks to the EU, but there is clearly room for improvement.

’The financial problems for science in our country still remain unsolved,’ said Lukevics. ’Twelve of my former co-workers at PhD level are working in the US, UK, Germany, Sweden and Israel, and they will not come back. We are looking for new contracts with foreign companies and hope to see positive changes in the next years.’

The Latvian Institute of Organic Synthesis evolved from the Latvian Academy of Sciences’ Institute of Organic Synthesis, which was founded in 1957. It carries out research in organic, bioorganic, organoelement and physical organic chemistry. Researchers also work on the biological and pharmacological properties of the compounds they have synthesised. The institute has developed 17 novel drugs for treating a range of disorders, notably cancer, and cardiovascular and infectious disease.

The institute has changed considerably since Latvia was released from the Soviet Union. Originally it housed laboratories where drugs were developed and standardised, and it established what it claims were the first production units for manufacturing peptide, prostaglandin and cephalosporin agents in the USSR. It arranged scientific and technical cooperation with pharmaceutical firms in Japan, Germany, France, Finland and the US. There were also plans for a centre for biological studies, where preclinical trials could be carried out.

When Latvia regained independence in 1991, the Latvian Academy of Sciences was reorganised. Some institutes became part of the University of Latvia, others became parts of the ministry of education, culture and science. Unsurprisingly, there were significant staff cuts.

When the Latvian Institute of Organic Synthesis formed, its staff was cut by a third. Its molecular biology department became the University of Latvia’s Biomedical Center. In 1992 the pharmaceutical company Grindex was established on the site of the original institute’s experimental plant, and toxicology and pharmacokinetics units.

Grindex, which was privatised in 1997, achieved good manufacturing practice certification from the UK Medicines Control Agency in 2000, received the environmental management certificate ISO 14001 in 2001, and has US Food and Drug Administration approval for export to the US. The company works closely alongside the Institute of Organic Synthesis, producing many drugs - including Ftorafur.

Grindex products are sold to neighbouring Baltic states, other countries in the former USSR, Japan and central Europe - 37 countries in all. Total sales were $33 million in 2003 and predicted to exceed $43 million in 2004. The joint stock company, which owns a 55 per cent stake in Estonia’s first drug company, the Tallinn Pharmaceutical Plant, claims to be the largest pharmaceutical company in the Baltic states, and plans to expand further.

But despite positive signs, there are hundreds of scientists originally from the Baltic states living and working overseas. Olafs Daugulis, currently assistant professor of chemistry at the University of Houston, US, left Latvia after gaining his first degree from Riga Technical University in 1991. He has a PhD from the University of Wisconsin-Madison, and spent three years as a postdoc at the University of North Carolina at Chapel Hill.

’With respect to going back to Latvia, I would be very happy to do that,’ said Daugulis. ’However, I feel that the Latvian government has no interest at all in promoting science or education, and the only thing they do is generate a lot of hot air about these things, while doing nothing or next to nothing. I do not see an opportunity of going back to Latvia any time soon.’

His opinion is not shared by everyone. Grindex, for example, has encouraged staff back from the US. The standard of living, for professionals at least, is high in Riga. And even Daugulis is not happy with the ’cultural adjustment’ of living in the US. ’In Latvia I am able to say whatever I think, while in the US "political correctness" requires self-censorship.’ Not what a Westerner might expect to hear from someone who grew up in the USSR.

The future of chemists and chemistry in the Baltic states is the focus of an organisation started by a group of chemists of Baltic stock, now working in academe and industry in the West.

’There are excellent chemists [in the Baltic states] working under less than normal conditions,’ says Victor Snieckus, professor of chemistry at Queen’s University, Ontario, Canada. Snieckus, who is half Estonian and half Lithuanian, disagrees with Daugulis’ view that there is little reason for optimism among Baltic scientists. ’Since their entrance into the EU and NATO, there will be rapid and enormous modernisations which will place them into a competitive and recognisable position,’ he said.

Snieckus was born in Lithuania, but has spent most of his life in Canada. He was awarded his first degree from the University of Alberta in 1959, and didn’t return to Lithuania until 1996. ’The first return was overwhelming,’ he says. ’So then I began to think maybe I can contribute more.’ And it wasn’t just him thinking that way.

Within a few years he had got together with three other chemists with roots in the Baltic states: Jaan Pesti, an Estonian working at Bristol-Myers Squibb in Princeton, New Jersey, US; John Duncia, a Lithuanian also working for Bristol-Myers Squibb in Princeton; and Eugenijus Butkus, professor of chemistry at Vilnius University, Lithuania. They were subsequently joined by Janis Upeslacis, a Latvian working at Wyeth Research in New York, US, thus completing the Baltic picture.

’Imagine yourself being isolated [overseas] and not being able to return to your home town for 50 years because of occupation,’ said Snieckus. ’This was the status of all of us here in the West who left the Baltic states.’

Together, the four founded Balticum Organicum Syntheticum (BOS), a biennial conference series to highlight cutting-edge synthetic chemistry worldwide; provide a window on Baltic chemistry; and foster collaboration between chemists in the Baltic states and the West. The first two conferences were held in 2000 and 2002 in the Lithuanian capital, Vilnius. The third was held in 2004 in the Latvian capital, Riga (see Chemistry World, July 2004, p8). Plans are underway for a 2006 meeting in the Estonian capital, Tallinn.

In Riga, delegates were also treated to a concert in a hall closely associated with Richard Wagner’s two-season spell in the city (1837-1839). The Wagner Hall was recently reinstated to its original use, having been used as a library where Peteris Trapencieris, president of the Latvian Chemical Society who led the conference’s local organising committee, had studied during Communist times.

Balticum Organicum Syntheticum is a scientific foundation, with the aim that surplus funds are used to support Baltic research. One of its greatest triumphs on this front was the shipment of NMR equipment to Lithuania.

’It is tough to do chemistry in Lithuania where there is little government support,’ says BOS committee member Duncia. His employers, BMS, had no further need for a ’rather new’ 300 MHz NMR spectrometer, he recalls. BOS funds were sufficient to have this shipped from BMS in the US to Vilnius University in Lithuania.

’The machine is now up and running,’ says Duncia. ’Before that they were using an antiquated 90 MHz Tesla machine; you should see it - it’s amazing they could keep it running that long!’

With two successful BOS meetings in Vilnius, and the publicity they attracted, Butkus at Vilnius University was able to secure a grant from the government to fund the start-up and maintenance of the machine. ’That is the only machine of that calibre in the whole country and that gift has really helped elevate the level of chemistry there,’ said Duncia.

The question of whether entry to the EU will improve conditions and attract people back to the Baltic states remains open. Figures released by the UK Home Office in February 2005 reveal that more than 130 000 people from eastern Europe had registered to work in the UK since joining in May 2004. Ranking countries according to the number of registrants, Lithuania and Latvia are in the top three.

Further Reading

Government sites (English versions available):




UK Home Office:


CountryArea, km2Population
(UN 2004)
CapitalGross national
income per capita, $
(World Bank 2003)
Estonia45 2271.3mTallinn4960
Latvia64 5892.3mRiga4070
Lithuania65 3003.4mVilnius4490