President Algirdas Brazauskas argues that his country has
learnt from past mistakes
What are your priorities in the next twelve months?
Twelve months is a rather short period of time and it is hardly possible
to accomplish anything on a large scale. The priority which holds our
main attention is economic and social stability, establishment of
democratic principles and good relations with foreign countries.
Our longer-term priorities are set by circumstances. One of the key
priorities that will require our constant attention is problems that
have accumulated in the energy sector, which determines the functioning
of the entire economy. These problems are: how to use energy resources
in a more rational way, improve the payment system between energy
consumers and suppliers and review energy tariffs. Energy issues are
especially urgent because our country has to import almost all energy
resources: oil, natural gas, coal and nuclear fuel. About one-fifth of
the electricity produced in our country is exported. Another group of
problems or, in other words, another priority that will also require a
lot of time and financial resources, is defusing the banking
crisis. In this regard, we are implementing, together with international
financial organisations, a plan of bank restructuring, following which
commercial banks will be accorded more freedom for manoeuvre so that
they can solve the accumulated problems by themselves. The first
steps show that we have chosen the right direction.
Lithuania has been less successful in attracting foreign investment than
Latvia and Estonia. Why?
It is difficult to evaluate the level of foreign investment in the
Baltic states. Each state applies different evaluation methods and the
presented data do not always reflect the real situation. The situation
in Estonia, which maintains broad economic co-operation with Finland,
is, perhaps, better than in the other two republics. And, in general, if
we lag behind, it is because of the shortcomings of the privatisation
process and the mistakes made in creating a favourable economic climate
for joint and foreign capital ventures. During the first stage of
privatisation, Lithuania applied a system of investment vouchers and
privileges to the employees of enterprises and not to foreign investors.
As a result, privatisation was rather fast, albeit with only modest
foreign participation. Meanwhile, Estonia and Latvia aimed at selling
their enterprises for a real price and did not forget foreigners'
interests. As a result, they succeeded in attracting investment. It is
also obvious today that we should make more effort to inform foreign
entrepreneurs about the existing opportunities for investing funds into
Lithuania's economy on mutually beneficial terms. We are therefore
trying to provide more information to our potential foreign partners.
What are the government's plans to boost levels of foreign investment?
We understand only too well that without foreign capital, new technology
and foreign intellectual assistance, we shall not be able to restructure
our economy and integrate successfully into the European Union. We are
carrying out a broad range of projects in this area. First, we are
trying to introduce fundamental changes in the economic environment to
make it more attractive for foreign investors. Much effort is being put
into the preparation of legislation to conform with EU requirements.
The activity of the Lithuanian Investment Agency is gaining speed. Its
main tasks are to expand relations between Lithuanian and foreign
entrepreneurs and to mediate in preparing economic agreements. We devote
more attention to publishing material to acquaint foreign business
people with the business environment in Lithuania. While creating an
open market economy, our main task is to restructure, without delay, our
production capacity to ensure the competitiveness of our products and
services, lift living standards and ensure the protection of human
Lithuania, along with the other Baltic states, is looking to increase
trade links with the EU. How successful have these moves been? What does
Lithuania have to offer EU countries as a trading partner?
Before the restoration of independence in the Baltic states in 1991, all
three of them were integrated into the Soviet Union; there was
practically no foreign trade to speak of. A marked contraction and even
collapse of the traditional eastern markets forced the Baltic states,
including Lithuania, to take resolute steps and redirect their trade
towards the West, adopt Western know-how and create products that could
be sold in the West. Therefore, although Russia is still Lithuania's
biggest trade partner, its share in Lithuania's foreign trade decreases
from year to year.
Due to constant efforts in redirecting its foreign trade from eastern to
western markets, Lithuania exported more to the west than to the east
(53.3 and 46.7 per cent respectively) for the first time in 1994. The EU
countries are, of course, our biggest trade partners in the West. Trade
with the EU countries has almost doubled since 1993, largely as a result
of the free trade agreement between Lithuania and the EU which came into
force on 1 January 1995.
Relations with Russia are a key foreign policy issue. To what extent
does the issue of the Kaliningrad enclave hamper the development of
Relations with Russia are one of the priorities of our foreign policy.
Integration into the West should be accompanied by good relations with
our neighbours. Lithuania seeks to maintain friendly relations with all
its neighbours, and it is especially important to us that Lithuania and
Russia succeed in sorting out a number of difficult issues. Relations
between our two states are business-like and constructive. Despite
tragic historical events, there are no clearly expressed anti-Russian
tendencies in our society.
The Kaliningrad region has played an especially significant role in
Russian/Lithuanian relations. This region - our immediate neighbour - is
an important economic and trade partner. New forms of co-operation have
evolved in the spheres of culture, science and education. Direct
relations between people, cultural and arts figures and entrepreneurs
have always been and should remain a sound foundation for relations
between Lithuania and the Kaliningrad region.
We could prepare and implement a number of joint projects in different
spheres: transport, tourism, communications or environmental protection.
Mutual confidence and interest as well as goodwill are the essential
Under the Treaty On the Basis For Relations Between States, Lithuania
and Russia have recognised each other's territorial integrity. Lithuania
does not raise the question of the independence of the Kaliningrad
region. The ideas harboured by individual Lithuanian politicians
concerning the revision of the status of the Kaliningrad region are
personal opinions and have nothing to do with Lithuania's official
position. I believe that all people are interested in rapid social and
economic development of the region, its openness to new ideas and
initiatives and co-operation among neighbours. The active participation
of the region in economic co-operation, favourable conditions for
investment and business activity, modern communications and political
stability fully correspond with Lithuania's interests. We all wish
Kaliningrad to became a zone of active international entrepreneurship.
We hold regular meetings with the authorities of the Kaliningrad region
at which we try to find solutions to emerging problems and to increase
mutual confidence. We would like to see the Kaliningrad region become an
integrating force in the Baltic Sea region, and not a centre of tension.
I believe that this is exactly what is meant by those who speak about
the necessity to ensure demilitarisation and confidence-building
Are you concerned that the outcome of Russian presidential elections
could see a serious deterioration in relations with Russia?
Lithuania supports democratic reform in Russia. However, the elections
should not affect the interstate relations which I can describe as
stable and good. During the last five years, Russia has learnt lessons
of democracy which have resulted in irreversible changes. This gives
hope with regard to its further foreign policy direction.
It is understandable that the presidential elections are a very
important geopolitical factor and stir up great interest in Lithuania.
Lithuania will always respect the choice of the Russian people and
preserve good relations with this country based on mutual benefit.
Lithuania, like the Western states, does not want to isolate Russia. We
strive for co-operation and try to forge our relations with Russia by
including it in all European processes. This is how we visualise the
future of our relations against the backdrop of building a stable,
secure and prosperous Europe.
Where do you see Lithuania at the turn of the century?
Lithuania's independence on March 11 1991 returned the country to the
world community of democratic states. It became a member of the UN and
accepted, by a unanimous vote, into the Council of Europe. In their
efforts to create the institutions of a free and democratic state, our
people and all political parties and movements seek to transform the
formerly centralised economy into a free and modern market economy.
We believe that at the turn of the century all the principles of a
democratic state will be firmly established, with a reviving industry
and agriculture and a developing economy. All this will facilitate
integration into the political and economic life of Europe. We hope
that, during the last four years of this century, GDP will grow by at
least 17 per cent, and the private sector will grow to 70 per cent of
the total economy.
We are convinced that during the last years of this century we shall
make considerable progress towards harmonising Lithuania's legislation
with that of the EU and, having exploited the opportunities of the
six-year transition period, we shall be ready to join the Union.
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©Kensington Publications 1996