The exhibition Scarcity invites visitors to explore one of the most complex and interesting periods in Lithuania’s history, revealing how the country transformed itself from the planned economy of the collapsing Soviet Union into the financially self-sustaining economy of an independent state. The period from 1985 to 1995 was special in that there was a shortage of everything: goods, money, trust, and stability. However, it was in this environment of scarcity that new institutions began to emerge, the market took shape, and Lietuvos bankas became one of the key pillars of the reborn state.
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A growing deficit and the crisis of the planned economy, 1985–1990
By the end of the 1970s, goods shortages had become an everyday occurrence in the Soviet Union, as production was based on centralised planning rather than meeting people’s needs. The reforms initiated by Mikhail Gorbachev in 1985, known as perestroika, did not resolve systemic issues. Goods became scarce, with people waiting in long queues, collecting coupons, being forced to pay bribes, and depending on their personal connections.
Farming in collective gardens helped to overcome this environment of scarcity, at least in part.
Paradoxically, although there was a shortage of goods, there was also too much money. People had nowhere to spend it, so unofficial trade, home-based production, and speculative practices flourished. This environment shaped a new entrepreneurial mindset that was widespread in the early years of independence.
Independence, blockade, coupons, and the formation of a market economy, 1990–1992
Lithuania declared independence in 1990 and was soon subjected to an economic blockade by the Soviet Union: energy supplies were cut off, accounts were frozen, and financial ties were severed. The country had no banking system, no international settlement channels, and lacked its own currency – it was in a state of permanent shortage. In order to regulate the distribution of goods and reduce dependence on the rouble, Lithuania introduced the general talonas in 1991 – a provisional means of payment used alongside the rouble. In 1992, the talonas completely replaced roubles and became the sole means of payment.
The transition to a market economy was also not easy: privatisation was chaotic, many enterprises suffered losses, and prices increased. Between 1993 and 1995, half of the newly established banks collapsed, lacking investment, experience, and legal regulation.
The shadow economy also persisted, with continued smuggling and illegal trade, and the rapid and uncontrolled growth of businesses encouraged the activities of criminal groups. Extortion, corruption, and illegal transactions became part of everyday life.
The re-establishment of Lietuvos bankas and the restoration of the litas
The first laws providing for an independent monetary and credit system were passed as early as 1989. On 1 March 1990, Lietuvos bankas was re-established. The early years were particularly difficult, as there was a lack of premises, communications, technology, and experienced staff. In addition, Lithuania was still part of the Soviet financial system.
By the end of 1992, branches of USSR banks in the country had been liquidated and a two-tier banking system had been launched. This meant that Lietuvos bankas performed the functions of the central bank, while commercial banks provided services to the public. On 25 June 1993, the national currency was restored and the litas was reintroduced, becoming not only a practical, but also a symbolic sign of statehood. Lietuvos bankas played the particularly pivotal role of ensuring the stability of the litas, containing inflation, and gaining people’s trust.
From scarcity to stability
Despite numerous challenges, within a decade Lithuania succeeded in creating a functioning financial system, introducing the litas, and separating itself from the collapsing economy of the Soviet Union. The scarcity experienced during this period was not only a test, but also a catalyst for creativity, cooperation, and strategic thinking. The history of the re-establishment of Lietuvos bankas and the re-introduction of the litas shows that even with very limited resources, remarkable results can be achieved.
Curators
Dainius Makauskas, Tomas Vaitkus
Exhibition Architecture
RESH Architects
Dominykas Savickas, Kristijonas Nenartavičius-Šikšnelis
Graphic Design
Sigitas Gužauskas
Implementation
UAB MENŲ KALVĖ
Exhibition brochure