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Update No: 257 - (30/05/02)

A new NATO pioneer
The Lithuanians are the inspiration behind the Vilnius 10, the ten candidate countries for NATO membership in Europe. Lithuania makes a natural leader for the group given that the geographical centre of Europe is in its territory just west of Vilnius (showing quite how vast is European Russia west of the Urals and how far north it stretches into the Arctic Circle).
Lithuania is a natural focus for NATO expansion for another very good reason. It involves the only really serious security issue for the organisation and Russia - which is what to do about Kaliningrad, the Russian enclave between Lithuania and Russia, giving NATO an actual border with the Russian Federation for the first time if Lithuanian adhesion goes ahead, as it looks overwhelmingly likely now to do in the aftermath of 9:11.
As is so happens President Vladas Adamkus, himself a citizen and resident of the US for fifty years, was in Washington to see President Bush on that fateful day. The meeting had to be postponed, but when the two men finally did meet, it was a highly emotional moment for them both, as if providence was behind it. NATO membership for the Balts became an inevitability from then on.

NATO means more than just a military alliance
It is clear that the Lithuanians see joining NATO as far more than a military matter. Indeed, they fear a Russian invasion or Russian meddling far less than the Estonians or Latvians, having no common border (apart from Kaliningrad) and having only an 11% minority of Russians in their population.
They instituted a two-day celebration, NATO Days, aiming, not primarily at marking expected entry into it, but to convince sceptics of the worth of membership of NATO. NATO Days began in April on the 53rd anniversary of the Atlantic alliance's foundation.
The Lithuanian parliament passed a resolution by a vote of 48 to three, with four abstentions, reiterating support for NATO membership. The resolution named the non-military reasons for Lithuania to join - developing an investor-friendly economy, combating corruption, strengthening the rule of law, ensuring parliamentary control of the special services and protecting secret information. In other words, NATO membership can provide not just geopolitical security, but political modernity to complement the needed reform of the economy. As Lenin put: "politics is always in charge."

Upbeat on the economy
Although the laggard hitherto among the Baltic states, Lithuania's economy is picking up well. Estonia and Latvia are still both growing faster; but Lithuania's GDP rose by 3.9% in 2000, 5.7% in 2001 and a prospective 3.5% in 2002. That is a good performance compared with most CIS countries and a very good one compared with EU countries, amongst whose ranks Lithuania hopes soon to number itself.
Lithuania is attracting more FDI is absolute terms than either Estonia or Latvia, but then it has a larger population than either. It is still a laggard in reforming its economic structures, but has been making steady progress all the same. It is finally being put on the map.

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ENERGY

Statoil in Shell service stations buy

Norwegian state-owned oil major Statoil is gearing up to expand its downstream network in the Baltic states, reports New Europe. The company announced on March 22nd that it had arranged to buy all of Shell's service stations in Estonia, Latvia and Lithuania. It did not reveal the value of the purchase but noted that the deal involved 61 facilities - 26 filling stations in Estonia, 19 in Latvia and 16 in Lithuania. 
The transaction cannot be finalised until the governments of Estonia, Latvia and Lithuania give their approval, Statoil added. The Norwegian company already operates about 90 service stations in the Baltic states. These facilities operate under the brand name 1-2-3.

YUKOS may purchase 26.85% in Lithuanian oil company 

The possibility of selling a 26.85% stake in Mazeikiu Nafta worth $75m to YUKOS will be discussed at an annual meeting of shareholders of the Lithuanian company on April 30th. This issue is on the agenda of the shareholders meeting, a source in the press service of Mazeikiu Nafta reported in an interview with RosBusinessConsulting, RBC has reported. 
In addition, shareholders will consider the idea of increasing the company's authorized capital by conducting two additional share issues as well as prohibiting its current shareholders from purchasing new shares. The volumes of new share issues are to be determined later. It is worth mentioning that on April 11th, documents were approved concerning the deal between YUKOS and Williams regarding Mazeikiu Nafta and submitted to the government of Lithuania.
The latter is supposed to ratify the deal. According to the deal, the consortium of YUKOS and Williams intend to purchase 26.85% of the Lithuanian company. 40.66% will belong to the government of Lithuania. 33% of the Lithuanian oil company are owned by Williams now. In addition, Mazeikiu Nafta itself is run by managers from Williams. The latter became the shareholder and operator of the Lithuanian company in October 1999.

Lithuanian power exports increase

The power transmission and trade company Lietuvos Energija (Lithuanian Energy) has said it exported a total of 2.642bn kWh of electricity in the first four months of 2002, almost a five-fold increase over the same period a year ago, BNS News Agency has reported.
In May, Lietuvos Energija plans to export 270.7m kWh of electricity, almost a ten-fold increase year-on-year.
Lietuvos Energija exported 562m kWh in the January-to-April period last year. In May, the exports came to 27.8m kWh.
Under the existing contacts, Lietuvos Energija is to export 87m kWh of electricity to Latvia, and 13.7m kWh to Estonia in May. Monthly exports to Russia's Kaliningrad Region should reach 170m kWh.
Lietuvos Energija attributed the growth in exports to successful implementation of the existing contracts and signing of new contracts with the Russian company Inter RAO UES [United Energy Systems of Russia], which has purchased 2.375bn kWh of Lithuanian electricity this year already...

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SHIPPING

Lithuanian premier invites Russian companies to invest in sea port

Lithuanian Prime Minister Algirdas Brazauskas called on companies from Russia and other Eastern countries that are interested in the transit of goods via Lithuania to invest in the Lithuanian seaport Klaipeda, BNS News Agency has reported.
"I am asking myself why there are no Russian investments in Klaipeda, when our seaport is open to them, and cannot find an answer to my question," Brazauskas said in the conference, called "Partneriatas 2002" (Partnership 2002), which has brought together Lithuanian and Russian business people as well as Vilnius and Moscow official representatives in Vilnius on 18th April.
The prime minister said Lithuania also welcomes investments of business people from Kazakhstan and Uzbekistan who are interested in "exit via the Baltic Sea."
He expressed regret about the failure to implement the 2K project on the introduction of uniform rail tariffs for transportation of goods via Klaipeda and the Russian port of Kaliningrad.

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