All three Baltic nations lack deposits of raw materials, but Lithuania remained an agricultural country the longest. Since 1795, when the Russian Czars annexed it into their empire following the collapse of the Polish-Lithuanian union, Lithuania produced primarily food. Scarcely any manufactories were established. But the agricultural sector was underdeveloped and great tracts of land remained in the hands of large landowners even after the formal abolition of serfdom in 1861. The rural population suffered under high unemployment.
In the same year, 1861, the first trains rolled through Lithuania when Kaunas and Wirbalis were connected to the railway from Saint Petersburg to Warsaw. 1873 saw the opening of the King Wilhelm Canal, which linked the Memel with the port of Klaipėda and allowed mariners to circumvent the Curonian Lagoon. The first industrial enterprises were formed toward the end of the century, mainly for the processing of agricultural and forestry products: paper mills, breweries and Chayim Frenkel’s great tannery in Šiauliai. Metal works were also established, but even in Vilnius, trade operations such as tanneries and furriers predominated. The representative power plant went into operation there in 1902; this building houses the Museum of Energy and Technology today.
After Lithuania became independent of Russia in 1918, the government focused on developing agriculture in an effort to stimulate exports. It carried out further land reform and encouraged the founding of agricultural cooperatives. Much as in Denmark, the farmers succeeded in transitioning from grain exports to the production of milk products and ham, which were in demand in the West and generated greater profits. The electrification of the country was promoted with new power stations in Klaipėda and Telšiai. However, the capital needed to establish larger enterprises, such as heavy industry, was lacking. Food and textile production remained dominant, followed by metal and wood processing operations.
After the Second World War, with its widespread devastation, Lithuania once again fell under Russian rule. Unlike in the other socialist countries, the Soviet government did not initially force the construction of giant heavy industrial plants, but instead began to expand the established food and light industries. Lithuania did not experience a massive industrialisation until the end of the 1950s. The chemical plant in Kėdainiai was founded in 1959, and is still in operation today under the name “Lifosa”; a factory for artificial fertilizer opened in Jonava in 1962, and is now operated by the company Achema. The gigantic Elektrėnai power station went into operation that same year, and still supplies Lithuania with electricity today. Construction of the Ignalina nuclear reactor, intended to be the world’s largest, commenced in 1970; today, the plant is no longer operational. Docks for ocean-going fishing trawlers were constructed in the port of Klaipėda.
The systematic integration of the republics of the Union and the allied nations was a key element of the economic policy of the USSR. The countries were assigned specific production tasks, largely without regard to the prerequisites available on site. Raw materials and labour were imported from other republics where necessary, and the products exported to yet other destinations. Thus, the Lithuanian refinery in Mažeikiai was supplied from the faraway oil fields near Ufa. On account of the great scarcity of raw materials, Moscow located many labour-intensive industries in the Balkans, which resulted in a massive influx of Russian workers. As a consequence, the Baltic republics felt threatened in their ethnic identity. Lithuania did not suffer from this as much, because it was possible to recruit factory workers from the country’s rural unemployed. When this country’s industrialisation was completed, it supplied the USSR with a significant proportion of highly specialised technical products such as machine tools, televisions and computers for military and civilian use.