Latvia in the 1990s has taken concrete steps towards a Baltic Union that was unimaginable in the 1920s or 1930s, including a Baltic Parliament, Council of Ministers, Free Trade Union, joint Baltic Battalion and a military college. Latvia, however, sees the Baltic Union as a litmus test for joining the European Union. The economic and political parallels between Latvia in the inter-war years and the present focus on the problems of state building. In both time periods, prior to independence, Latvia was part of an imperial economic system that lacked a democratic political mechanism. With independence, Latvia needed to drastically restructure and reorganize its national economy as well as develop a political democracy.
Economic parallels are more tenuous.
In the 1920s, Latvia's rapid transformation to an overall agriculturally-based economy was successful. Today, agriculture cannot be the driving force behind Latvia's economy. Latvian industry in the 1990s, like in the 1920s, has had to adjust to the collapse of Russian markets and sources of resources. Generally, however, the contemporary adjustment has been much more successful. The Great Depression and the Russian economic crisis of 1998 underscore this parallel.