Lithuania has started down the road of political and economic reform. If the government is able to hold its course, improved living standards and personal freedom will result. However, there will be significant obstacles on the road ahead. The most pressing challenge is to complete economic and political reforms in order to join the EU and reap the benefits of participating in the unified European market. These changes may upset ties between economic groups and political elites, particularly in the banking sector. Prime Minister Slezevicius has underscored the sweeping changes necessary in the banking sector as part of this process.
Lithuania's greatest security challenge arises from its often difficult relationship with Russia. Russia's large military presence in neighboring Kaliningrad is a source of tension because these military facilities are resupplied by rail routes that run through Lithuania. Russia and Lithuania currently regulate this transit through a "temporary" arrangement that was set up to expedite the transit of Russian forces withdrawing from Germany. All Russian military forces are now out of Germany, but the temporary arrangement continues until a satisfactory agreement can be negotiated. Russian military personnel have frequently violated Lithuanian regulations governing transit and have occasionally shown a lack of respect for Lithuania's status as a truly independent nation. It remains to be seen whether Lithuania will be able to balance the challenges posed by Russian military transit with its need to maintain good political and economic relations with Russia.
Economic relations with Russia over the near term will gradually diminish in importance as Lithuania reorients its goods and services toward the European market. But in the long run, if Russia respects Lithuania's sovereignty and if Russia continues its process of market reform and democratization, economic relations should begin to increase in importance. This can only occur if the two nations find stability in their bilateral relationship and mutual advantage in joint trade and investment.
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Among the best sources of information concerning the emergence of the Lithuanian state and national identity are Alfred E. Senn's Lithuania Awakening
and The Emergence of Modern Lithuania
. Nations and Politics in the Soviet Successor States
, edited by Ian Bremmer and Ray Taras, includes an excellent essay on Lithuania by Richard Krickus. On Lithuania's transition to a market economy, the World Bank has published a comprehensive study, Lithuania: The Transition to a Market Economy
, based on extensive field work and statistics from 1991. The Economist Intelligence Unit, which published a 1995 Country Profile: Lithuania
, issues quarterly updates in its Country Report: Baltic Republics: Estonia, Latvia, Lithuania
. The Lithuanian government also publishes quarterly statistics that give an in-depth look at the transition to a market economy. (For further information and complete citations, see Bibliography.)
Data as of January 1995