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Lithuania

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  LITHUANIA

REPUBLICAN REFERENCE

Area (sq.km)
65,200 

Population 
3,610,535 

Principal 
ethnic groups 
Lithuanians 81.3%
Russians 8.4%
Poles 7.0%

Capital
Vilnius 

Currency 
Litas

President
Valdas Adamkus

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Background:
Independent between the two World Wars, Lithuania was annexed by the USSR in 1940. On 11 March 1990, Lithuania became the first of the Soviet republics to declare its independence, but this proclamation was not generally recognized until September of 1991 (following the abortive coup in Moscow). The last Russian troops withdrew in 1993. Lithuania subsequently has restructured its economy for eventual integration into Western European institutions. 

Update No: 262 - (22/10/02)

EU responsive
The Lithuanians are eager to join the EU, now on target for 2004, or 2005 at the latest. Poland is renegotiating terms on agricultural quotas and subsidies, which would apply to Lithuania as well, indeed Latvia and Estonia. But the general outlook is positive.
Brussels finds no difficulty in envisaging the Baltic states as members of the EU, indeed is looking forward to having them inside. They offer a natural bridgehead for entry into the huge Russian market and would link up Scandinavia with Poland and Central Europe.

NATO and CFE membership beckons
Lithuania wants to join NATO as well; and full entry for all the Baltic states is now US official policy. President Valdas Adamkus, a US citizen for fifty years, was to meet Bush in Washington on September 9th last year. The cancellation of the meeting was inevitable; but when the two men met later in the year, it was an emotional moment, with Adarnkus pledging full Lithuanian support for the US and Bush full US support for Lithuania coming into NATO.
Lithuania will also join the Conventional Armed Forces in Europe Treaty (CFE) as soon as it becomes open to new signatories. This is being cited by Russia as a precondition for its acceptance of Baltic state adhesion to NATO.
The treaty stipulates ceilings for the deployment of five types of conventional weapons in Europe, namely tanks, armoured vehicles, artillery, warplanes and helicopters.

Kaliningrad now to be settled
One problem in Lithuania's case is that it borders Kaliningrad, the Russian enclave between Russia and Poland. Vilnius and Moscow are now optimistic about striking a deal concerning travel rights for Russian residents of the enclave across Lithuania. Kaliningrad would then be surrounded by EU territory and passes would be needed for Russian travellers.
But a compromise is highly likely to be reached relaxing the full rigour of the Schengen agreement governing these matters.

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DEFENCE INDUSTRY

Denmark transfers US$7.7m worth of weapons to Lithuania


The Danish armed forces transferred to the Lithuanian armed forces artillery armaments and technical equipment worth 27m litas [US$7.7m], BNS News Agency, has reported.
During an official ceremony, the armaments were transferred by the Danish ground forces delegation, headed by the commander of support command, Gen Jens Frandsen, who is currently in Lithuania on an official visit.
The transferred equipment will be used to fully equip the first artillery battalion in Rukla. The rest of the equipment will be distributed amongst the units of the Eastern and Western military regions.
The establishment of the artillery battalion began in 2001 under a joint Danish-Lithuanian project. Currently, the artillery battalion is being developed in accordance with standards and structures of the Danish artillery battalions.
Under the project, Denmark has also committed to train officers and non-commissioned officers serving with the battalion at the artillery school in Denmark.
It is planned that the battalion will operate within the Rapid Reaction Brigade of the Lithuanian armed forces and will be capable of implementing Article 5 operations alongside NATO forces. The battalion will be ready to carry out the assigned tasks by 2004...

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ENERGY

Russian firm sees Lithuania's oil company as gateway to the West

Yukos expects that Mazeikiu Nafta (Mazeikiai Oil), the Lithuanian oil refining and transportation complex, will be one of the companies that will help Russia's oil giant to expand its operations into the Western markets, Mikhail Khodorkovskiy, Yukos president, said on 27th September, BNS Agency has reported.
Khodorkovskiy was speaking after a meeting with Mazeikiu Nafta's staff in Mazeikiai, northwestern Lithuania. The meeting was attended by some 200 employees of the Lithuanian company.
Yukos's president said Mazeikiu Nafta would be modernized and its production would be oriented towards Western markets. He underlined that Yukos had enough crude oil to ensure supplies to Mazeikiu Nafta for decades, Tadas Augustauskas, the head of the Lithuanian company's information office, told BNS.
Khodorkovskiy, Russia's richest man, added, however, that he had never said that Yukos planned to step up oil supplies to Mazeikiai. He said decisions on supplies would be taken after examining Mazeikiu Nafta's plans to determine the most efficient amount of crude to be processed at the plant...

Lithuanian president expects transparency in Russian Yukos oil activities

Lithuanian President Valdas Adamkus has expressed hopes that the Russian oil corporation Yukos will pursue transparent activity in Lithuania BNS News Agency has reported. Adamkus was addressing the participants in the Yukos board meeting. 
Yukos president, Mikhail Khodorkovskiy, some 150 heads of Yukos subsidiaries and high-level managers are attended the meeting. The board meeting discussed Yukos international business projects.
"I expect our partnership will lead to new forms of cooperation, I expect transparent work by the company," the Lithuanian president said.
Adamkus pointed out that lack of information about business severely damaged cooperation with the previous investor - the US energy company Williams. "Our high hopes related to Williams coming to Lithuania were not fulfilled. Their withdrawal from Lithuania worsened the complicated situation in Lithuania's oil sector," Adamkus said.
President Adamkus also expressed Lithuania's readiness to cooperate with Yukos, in order "to make the oil business in Lithuania as profitable as it is in other places of the world".
Yukos acquired Williams' 26.85 per cent equity interest in Mazeikiu Nafta [Lithuanian oil enterprise] and the management rights to the Lithuanian oil refining and transportation complex for a total of US$85m. Williams and Yukos signed a deal that gave Yukos a majority stake (53.7 per cent) and operational control in the Lithuanian oil group Mazeikiu Nafta (Mazeikiai Oil) on 19th September.

Lithuania's oil group set to end distribution deal with UK-controlled firm

The Lithuanian oil group Mazeikiu Nafta (Mazeikiai Oil), controlled by the Russian oil concern Yukos, has warned BP Oil International, controlled by the British oil giant BP, about its plans to terminate an agreement on distribution of oil products, BNS News Agency has reported.
"The agreement may be terminated without legal consequences within 30 days after the warning," Tadas Augustauskas, the head of Mazeikiu Nafta's information service, told BNS.
He could not confirm whether Mazeikiu Nafta was going to sign a distribution agreement with the Switzerland-based subsidiary of Yukos, Petroval.
The US-based Williams International, former operator of Mazeikiu Nafta, had signed an agreement with BP Oil International back in 2000. BP exports Mazeikiu Nafta's production to the West, with these exports accounting for 50 per cent of the overall output of the Mazeikiai refinery...

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FOREIGN INVESTMENT

Foreign direct investment in Lithuania rises 13 per cent in 2002

Foreign direct investment (FDI) in Lithuania grew by 13.2 per cent over the first half of 2002 and totalled 12.067bn litas (3.495bn euros) as of 1 July, the Statistics Department announced on 30th September, BNS News Agency has reported.
FDI per capita amounted to 3,478 litas (1,007 euros) as of early July.

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