August 7, 2009


A Community on the Brink and JDC’s Role; The Case of Latvia and the Baltics

Their grandparents survived the holocaust. Their parents survived 50 years of communist dictatorship. While their memories of the collapse of communism are vague (they were around 10 years old), they grew up being taught that the rise of democracy and capitalism would usher in an unprecedented level of opportunity for the well educated and hard working citizens of this brave new world. As they reached their 30’s and started to get married and have families, they knew that their children would enjoy, now more than ever, the freedom of being Jews- and in a climate of rapid economic growth. It is in this very context, on the very brink of an historic shift towards freedom and prosperity, that this young middle generation- the future of their respective communities- has found itself today in a terrible state of fear and disillusionment.

Nowhere has this tragic situation been worse than in Latvia, which has experienced a startling freefall of their economy. For years, a community of 12,000 Jews benefited from a revival through institutions that were built on the JCC’s and camps that JDC helped develop. The advantages that these institutions gave the Jewish community, combined with their own hard work, lead to more opportunities than ever to enjoy the cushy and stable middle class lifestyle that western democracies were providing. Now, everything has changed. Just when their greatest hopes were on the horizon, Latvia has been hit by the steepest decline in the 27 member European Union, and one of the most dramatic meltdowns in the world. So far, their economy has shrunk by a startling 18%. What is even worse news is that experts are unable to see any end in sight. The physical and psychological effects of such a radical change are devastating, and have lead to dozens of suicides since the economic crisis began.

When Latvia jointed the EU in 2004, they not only full heartedly welcomed the psychological exuberance of new democratic hopes; they also literally bought into such hopes by going on a giant lending binge to buy the minimum essentials for a middle class life, such as a car and a small apartment. All of their loans, including small consumer loans to buy essential items such as a refrigerator, were pegged to the Euro. When the global financial crisis began, the bubble burst. Latvia has now seen unemployment skyrocket to 16%, and business and banks closing at an unprecedented rate. IMF and EU assistance has thus far failed to implement any concrete changes on the ground.

The brunt of the burden has fallen on one strata of society in particular- the young middle class. Highly skilled professionals are packing their desks as their companies (many of which are foreign), are closing down. At home, the cost of living has skyrocketed as the government cuts subsidies. Cuts in subsidies for electricity alone have lead to an increase in cost of between 19%-50%. With schools, mortgages, and electricity bills for an entire family to pay, these young families are now in serious distress. Furthermore, while governments around the world are investing millions, if not billions, of dollars into the market in order to stimulate the economy, Latvia is raising taxes in order to balance its deficit. The result is an entire middle class that are now finding themselves in a matter of months with a new identity. They are now called “The New Poor”.

One of JDC’s clients, Elena is a divorced mother of 2 teenagers. Eight months ago, she had a stable position as a manager. She enjoyed an above average salary and a solid middle class lifestyle. However, when the crisis caused her company to downsize, she was let go. While she was able to hold out for a few months, eventually she found herself unable to afford the most basic necessities for herself and her family. She is now a client of JDC’s “supermarket service.” Walking around the supermarket with her two boys, Elena now chooses her food carefully before a trained social worker helps with the payment and moral support. Through shopping “on her own,” Elena feels that she has maintained a part of the routine she had before she became part of the “new poor”- thus maintaining her dignity. As Elena gazed towards the ground though in a failed effort to look the social worker of the program in the eyes when saying goodbye, it’s clear that it’s not always easy. Elena is only one of thousands across Latvia, and the Baltics in general, that have now joined the ranks of the “new poor.” Furthermore, the actual numbers of new poor are difficult to estimate, since many are living off the remainder of their savings and have not come forward yet.

As the economy falters from outside, the Jewish community on the inside is teetering on the brink of a financial meltdown as well. The emerging middle class, which accounted for around 20% of membership fees within the community, are now struggling to cover their most basic needs. Furthermore, while Latvia once lead the way in Eastern Europe in terms of private donations, today we expect a loss of approximately 50% of pledges.

While the “providers” within the community go under, the most vulnerable populations face the greatest danger- children and elderly. In the past the “children in need” programs served only dysfunctional families or the “structural poor.” Today, we are seeing dozens of middle class families asking for support. Many, facing foreclosures and evictions, are requesting housing help. Others need psychological counselling. Bred on the dream that playing by the “new rules” after the collapse of communism would enable them to thrive, and having now tasted the “western lifestyle” only to have the rug pulled from under the feet, they have been driven to high levels of anxiety and depression.

As pensions are cut and their children and grandchildren can no longer help them, the elderly in Latvia and other Baltic countries are the other vulnerable population in danger. “Classic” welfare programs, which provide food and medicine, are now back and in increased demand.
Ida L. (85), for example, was born in the city of Gomel (Belorussia) to a large Jewish family. After a graduation party, she went to Kharkov to visit her aunt. She returned to her home on June 22, 1941 – exactly in a day when the War started. She never met her family again; all of them were killed by the Nazis. She was evacuated to a collective farm, until the liberation of Gomel. When her husband died, she was left as a single mother with one son.

In 1989, when the rebirth of Jewish life in Lithuania started, Ida came to the Jewish community & became the member of Rahamim-Lithuania. As an accountant, she helped the Community as a volunteer. She was very active till 2002, when her son suddenly died. Ida became very sick.
However, the Community did not forget Ida, and immediately came to help her with welfare programs, which today are providing her with home care, meals on wheels, medicines, and winter relief. For Ida, the fact that she has not been forgotten is just as important as the actual food and medicine that she receives.

While this crisis deepens, so must our efforts to aid people like Ida and Elena. The four major categories of need in Latvia are Welfare (food, medicine, housing), Job training and placement, scholarships instead of fee based community participation, and filling in the 10% cuts from the state pension welfare system for the elderly and new poor. Now is the time when we will be tested- when elderly like Ida and the “new poor” like Elena depend on us most. To children in need and the elderly poor like Ida, it is now or never. For the “new poor” like Elena, our efforts towards them now could be the difference between making or breaking the dreams of many in their community, whose future they are an integral part of. They are a temporary caseload, as demonstrated in the Argentinean crisis. When the economy recuperates, so will they; and is so doing, they will regain the hopes and dreams that they believed in and have worked so hard for.

Additional Articles about the Economic Situation in the Baltics and Elsewhere:
"Latvia’s currency crisis is a rerun of Argentina’s" from th Financial Times

"The World's Hardest-Hit Economies" from Forbes Magazine

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