In all three Baltic states, the transportation sector is a major contributor to economic performance. In Estonia, the transportation and communication sector accounted for 11.8 percent of GDP last year, in Latvia the share was 14.0 percent, and in Lithuania 10.1 percent. In 2000, because of growth in industrial output and exports and robust increases in transit trade from a booming Russian economy, carriage of goods increased strongly in all three countries. In the first part of 2001, results have been more mixed. Part of the reason for that development is clearly base effects, but a slowdown in transit trade is also taking its toll.
The Port of Tallinn’s handling of liquid freight, which accounted for two-thirds of total freight volume, was up 11.2 percent year-on-year in the first seven months of 2001 (BNS, August 15). But Estonian Railway carried only 23.3 million tons of cargo in January-July, a decline of 3.7 percent (BNS, August 6). The ten Latvian ports reloaded 35.0 million tons of cargo in January-July 2001, up 13.0 percent (BNS, August 22). Latvian Railways transported 23.5 million tons of cargo through July, or 10.4 percent more year-on-year (BNS, August 7). The volume of goods going through the Lithuanian port of Klaipeda dropped by 17.2 percent in the first seven months of 2001, to 10.4 million tons (BNS, August 13). Transit of oil products and ferrous metals fell particularly sharply. But the decline also reflects a return to more normal patterns after last year’s extraordinary performance, when freight volume was up 29.6 percent. Similarly, freight flow on Lithuanian Railway declined by 12.5 percent in the first half of the year (BNS, August 1).
The performance of all these sectors depends greatly on transit trade, primarily Russian exports and imports. Because of the Baltic states’ location, their ports served the entire USSR during Soviet times, and the central authorities intentionally built up Baltic transport infrastructure to a size that is now excessively large for domestic purposes. in the first seven months of this year, transit shipments accounted for 85 percent of the turnover of Latvian Railways (BNS, August 7) and 76 percent of Estonian Railway’s turnover (BNS, August 6). Transit trade accounts for over three-fourths of turnover at the Port of Tallinn. Ventspils Port, the largest Baltic port, reloaded 34.8 million tons of cargo in 2000, of which 26.4 million tons were oil and oil products, primarily from Russia. Ventspils handles around 11 percent of Russia’s total oil exports. The Port of Tallinn, which was a grain port in Soviet times, now reports that oil and oil products account for four-fifths of turnover. Last year, Baltic ports handled 56.5 million tons of Russian cargo (BNS, June 7).
…AS RUSSIA AIMS TO REDIRECT ITS TRADE.