Thirty years ago, Estonia, Latvia, and Lithuania re-emerged onto the world stage after decades of Soviet control. Their regained independence ignited hopes of democracy, prosperity, and secure membership of the broader European family. Today, these hopes have materialised in significant ways: the Baltic states boast membership of the European Union and NATO, modernised industries, and, in some cases, striking digital innovation. Yet a more complicated reality bubbles beneath the surface: decades of neoliberal reforms – rapid privatisation, deregulation, and budget austerity – have yielded high inequality, large-scale emigration, and mistrust in political institutions.

With Russia showing a willingness to redraw borders and engage in hybrid warfare, the Baltic states have understandably prioritised defence. They invest heavily in armies, border controls, and readiness exercises. But if segments of the population feel excluded or left behind, can tanks and fighter jets alone guarantee security?

Some policy experts argue that true resilience requires a different preparedness that balances national defence with social cohesion and collective wellbeing. This broader vision, often described as “comprehensive security”, calls for robust welfare systems, engaged citizenship, and an economy that serves the many, not just the few.

The neoliberal legacy

When the Soviet Union collapsed, the Baltic states became ground zero for experiments in shock therapy: the swift dismantling of state monopolies and the dramatic liberalisation of trade. Overnight, industries once propped up by Soviet planning faced international competition. Foreign investors arrived, ready to acquire newly privatised assets at bargain prices. Meanwhile, a local elite, often well connected to political circles, emerged with controlling stakes in key sectors.

To outsiders, the transformation may have looked dazzling: gleaming new office towers in Tallinn, Riga, and Vilnius, with Western brands beckoning from busy commercial streets. Estonia famously embraced digital governance, earning a reputation for e-solutions in everything from filing taxes to voting online. But these success stories often overshadow deeper fractures. In small towns, factories shut down, leaving workers unemployed and communities struggling for a new sense of purpose. Older adults on modest pensions watched living costs surge, while young professionals weighed the prospects of leaving for higher wages in Western Europe.

This abrupt transition was frequently hailed as the necessary cost of “catching up” with the West. Yet for many families, it felt like being cast adrift in a world of uncertain job prospects and thin social safety nets. The logic of the time was simple, if stark: by slashing regulations and encouraging free markets, the Baltics would attract foreign capital and integrate smoothly into the global economy.

Over the next two decades, inequality in the region deepened. By 2010, Latvia’s Gini coefficient – a metric of income inequality where zero represents perfect equality and 100 extreme inequality – soared to 35.2, the highest in the EU, where the average lies just under 30. Lithuania’s score of 32.9 revealed a similarly daunting wealth gap. At the same time, an alarming 38 per cent of Latvians and 33 per cent of Lithuanians found themselves at risk of poverty or social exclusion, far above the EU average of 23 per cent. While some entrepreneurial individuals thrived, especially in tech or finance, others struggled to keep pace. Income disparities became more visible: newly built apartment blocks or suburban homes next to remnants of older Soviet housing complexes needing renovation. Healthcare and education, once largely state-provided, were not always able to cope with shifting funding models, leaving some rural residents with fewer services.

At the same time, the exodus of youth and skilled workers (often referred to as a “brain drain”) accelerated. Take the story of Kristina, a nurse from rural Lithuania who saw her hospital’s budget cut year after year. Faced with lacklustre wages and dwindling medical supplies, she eventually joined a wave of emigrants heading to Ireland. Such individual choices, multiplied across the region, led to demographic decline and a sense of loss for those who stayed behind. Schools closed in certain villages, and local businesses struggled to find reliable staff.

Another prominent casualty of this rising inequality was public trust. Initially, independence brought euphoria. Multiple political parties, open elections, and alignment with Western institutions signalled a new dawn. But as corruption scandals surfaced and inequalities persisted, cynicism set in. Voter turnout dropped, while populist parties emerged with fiery rhetoric about the ruling elites. Voter participation, once extremely high in places like Latvia (89.9 per cent in 1993), plummeted to 54.6 per cent in recent elections, while Lithuania slipped from 58.2 per cent in 2000 to 47.8 per cent in 2020. This downward trend reveals a deepening civic disengagement and paves the way for the ascendance of populist parties, such as Estonia’s EKRE, which secured 17.8 per cent of the vote in 2019, and Latvia’s KPV LV, surging from obscurity to win 14.25 per cent of ballots cast in 2018. This “democratic fatigue” reflected a more profound disappointment: the freedoms gained in 1991 were fundamental but so were the realities of precarious employment, stagnant wages, and minimal support for those left on the margins.

Undermining cohesion

For many people, “security” conjures images of border guards, alliances, or missile defence systems. In the Baltic states, with Russia next door, such images are hardly abstract. Yet security also depends on social cohesion – the intangible bonds that make people willing to cooperate, trust institutions, and work for the common good. If large swaths of the population feel excluded or unheard, social cohesion becomes fragile. This fragility can manifest as diminished civic engagement or vulnerability to disinformation campaigns that exploit existing grievances.

High inequality magnifies these issues. When the gap between winners and losers grows, people question whether the system truly works for them. In Estonia, Latvia, and Lithuania, these suspicions can run deep: are politicians funnelling resources into defence deals that benefit a narrow slice of the economy while leaving social programmes starved of funds? Does a strong military shield the elite while doing little to improve people’s everyday lives? These questions can corrode the unity necessary to respond effectively to external threats.

When the gap between winners and losers grows, people question whether the system truly works for them.

Citizen disenchantment with politics has a profound impact on national security. If you believe your government is either corrupt or incompetent, you are less likely to support its initiatives, whether these consist of tax increases to fund the military or efforts to counteract foreign propaganda. Public trust is crucial in emergencies: it determines whether people comply with civil defence guidelines or volunteer during crises. A population harbouring deep scepticism toward leaders may hesitate to mobilise collectively, creating a vulnerability that adversaries could exploit.

Latvia’s minority Russian-speaking community, for instance, has sometimes felt marginalised by language policies that prioritise Latvian in schools and state institutions. While the overarching intentions behind these policies are complex and stemming from a desire to solidify national identity, this can leave some citizens feeling disaffected. That disaffection can, in turn, be amplified by foreign media narratives eager to stoke discontent, ultimately further eroding the sense of a unified national whole.

Emigration, another consequence of inequality and lack of opportunities, further undermines social cohesion. Families become scattered across borders; grandparents grow distant from grandchildren; villages lose their vibrancy as local shops shutter. This slow-drip erosion of human capital undercuts a country’s resilience. After all, who will become the next generation of doctors, teachers, or civil defence volunteers if a significant share of that talent pool leaves for London, Oslo, or Dublin?

When combined with the region’s low birth rates, the resulting demographic fragility is more than a minor headache – it is a fundamental challenge to national sustainability.

Russia’s annexation of Crimea in 2014 and fullscale invasion of Ukraine in 2022 have underscored the point that aggression can take many forms: cyberattacks, targeted propaganda, and the strategic stirring of ethnic and social tensions. By incessantly broadcasting images of empty Baltic villages and ageing populations, the Russian media regularly portrays the Baltic countries as economic failures to undermine their pro-Western orientation. For example, in Latgale, Latvia’s poorest region that is largely rural, historically underdeveloped, and populated mostly by ethnic Russians, Kremlin propaganda has focused on unemployment, low incomes, and feelings of being neglected by the central government. Moscow has managed to amplify distrust between communities, with ethnic Latvians growing wary of Latgale’s Russian minority, while some ethnic Russians feel increasingly alienated and sympathetic to the Kremlin’s line.

A similar story happened in 2023 in Estonia’s northeastern industrial region, Ida-Virumaa, where one third of voters backed candidates espousing a pro-Kremlin view of the war during parliamentary elections. In this case, the government’s attempts to win over these economically disaffected communities fell flat, as some in the region believed that returning to Russia’s embrace would bring them a sort of prosperity they had been denied.

These examples illustrate that if a populace is already divided by economic inequality or linguistic rifts, it becomes easier for hostile forces to exploit. Therefore, mending social fault lines is just as critical as pouring resources into cybersecurity and intelligence.

Budget dilemmas

The Baltic states have every reason to be vigilant given their geography and history. Joining NATO in 2004 was a watershed moment, anchoring them within a collective defence framework. In the context of Russia’s unpredictability, Estonia, Latvia, and Lithuania have each increased defence budgets, aiming to reach 5 per cent of GDP or higher in the next few years. NATO Enhanced Forward Presence battlegroups stationed in the region add an extra layer of protection.

Since joining the transatlantic military alliance, modernising armies and training local forces for rapid mobilisation have become policy centrepieces in Baltic countries. Estonia has pioneered cyber defence – a natural extension of its digital society. Lithuania reinstated conscription in 2015, while Latvia has studied the best ways to expand its reserve forces. On paper, these measures enhance readiness and deter aggression.

Mending social fault lines is just as critical as pouring resources into cybersecurity and intelligence.

But do they also risk crowding out vital investment in social programmes that might reinforce the very cohesion these states need in a crisis?

Balancing defence and social spending is a classic policy challenge worldwide, yet it feels especially acute in small countries facing big security concerns. If budgets are finite, each euro spent on tanks or drones is one less spent on improving healthcare, closing educational gaps, or funding social housing. Critics argue that prioritising military hardware might yield short-term strategic advantages, but it will deepen social woes in the long run.

For example, a high-tech missile system might deter external enemies, but it would do nothing to help a rural mother struggling with rising costs or an unemployed miner from a shuttered Soviet-era plant. Over time, mounting social grievances could sap government legitimacy, reducing overall resilience. It is a classic paradox: a society that is militarily prepared yet socially fragile could be vulnerable to internal instability or external manipulation.

Aware of these tensions, some Baltic policymakers and civil society groups are advocating for a comprehensive security model. This approach weaves national defence, social welfare, and civic engagement under one unifying framework. The idea is to build robust societies that are harder to destabilise, whether via overt invasion or subtler hybrid threats. Treating social welfare as a matter of defence means expanding affordable healthcare, pensions, and social programmes to curb emigration and strengthen national loyalty. It also demonstrates that the government values citizens not merely as potential soldiers but as the backbone of national life.

Civic education and volunteering can also boost resilience. Estonia’s Defence League and Latvia’s Zemessardze (National Guard) serve as reserve forces and as focal points of community involvement. When people learn survival skills, medical first aid, or even digital literacy, they become empowered participants in defence rather than passive spectators.

Comprehensive defence also entails bridging ethnic and linguistic gaps. Policies that foster cultural inclusion – providing language support without stigmatising minority tongues, for instance – can fortify national unity. A society that respects diversity is less prone to internal fragmentation.

Finally, environmental and economic resilience need to be put centre stage in discussions on security. As climate change intensifies, the Baltic region may face ecological disruptions (flooding, temperature shifts, resource pressures) that strain public services. Investing in sustainable infrastructure and diversifying local economies can reduce dependency on external resources, bolstering resilience against natural and geopolitical threats.

The benefits of comprehensive thinking extend beyond the Baltic states. Within the European Union, conversations about “strategic autonomy” and collective defence have gained traction, especially since the invasion of Ukraine in 2022. As the EU debates how best to ensure stability on its eastern flank, Baltic experiences show that resilience is multi-layered. It involves social investment, bridging identity gaps, and providing a sense of common purpose alongside any military build-up.

Resilience is multi-layered: it involves social investment, bridging identity gaps, and providing a sense of common purpose alongside any military build-up.

Redefining resilience

In many ways, the Baltic states stand at a crossroads. For decades, they have been lauded as post-Soviet success stories – digitally savvy, economically nimble, and firmly anchored in Western alliances – yet the next chapter of their story demands more than business-as-usual. The choice is whether to double down on the conventional path that prizes GDP growth and military strength alone or to embrace a more audacious model of national resilience that fuses defence readiness with social equity, environmental sustainability, and civic trust. The logic of comprehensive security already points in this direction, insisting that welfare, cohesion, and ecological foresight be integrated into the national defence equation. Building on that foundation, the Baltic states could push further and redefine what national success means in the 21st century.

An alternative economic paradigm is emerging on the European horizon, one that measures progress beyond the narrow gauge of GDP. Once a fringe idea, this post-GDP perspective has gained traction as economists and policymakers recognise that traditional growth metrics overlook social wellbeing and long-term stability. There is a growing acknowledgement across the EU that a country’s true strength is inseparable from the health of its society and environment. This aligns with broader European debates – from discussions of “strategic autonomy” in the wake of Russia’s invasion of Ukraine to calls for new welfare-focused indicators – all suggesting that sovereignty and security in modern Europe must rest on more than just tanks, treaties, and GDP figures. By investing as much in their people and planet as in their armed forces, Estonia, Latvia, and Lithuania can position themselves as pioneers of this post-GDP development model. Some nations have already begun experimenting with wellbeing indices and sustainability metrics as complements or alternatives to GDP. If the Baltic states join and lead this trend, they could blaze a trail for integrating holistic prosperity into the European security toolkit.

Seizing this role would mean transforming the Baltic narrative from successful integration into Western structures to innovative leadership in reimagining those structures. Their experience with rapid reforms and digital innovation has shown that small states can be agile vanguards of change. That same agility could be applied to forging a new security paradigm that rejects growth-at-all-costs economics and instead balances military vigilance with social justice and sustainable development. In practice, this would make the Baltic states a living laboratory for how a society can be made truly resilient; a region where robust defence and economic vitality do not come at the expense of equality or the environment but are rather mutually reinforcing.

Such a model would represent a profound shift in mindset – from viewing security and prosperity as sometimes competing priorities to understanding that a nation’s strength is most secure when guns and butter are woven into a single, durable shield. By daring to chart this course, the Baltic states can move beyond being post-Soviet success stories and emerge as European leaders pioneering a 21st-century model of sovereignty and security built on inclusive, sustainable, and trust-based resilience.