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: 275 - (01/12/03)
The Lithuanian Republic is in the throes of a political scandal, deemed the Lithuanian Watergate. Economically it is doing very well, having been given the accolade recently by The Economist of being termed 'the Baltic Tiger.' GDP growth is averaging 7% annually and EU membership beckons next year.
But there is the rub. Brussels and the West generally are deeply perturbed at the prospect of bringing into the European fold ex-Soviet states, which despite everything the Baltic states are, because of the entrenched positions of organized crime in them with strong connections to the Russian mafia. These are likely to be 'mediated' by the local Russians in their midst. Lithuania actually has fewer Russians as a proportion of its population than the other Baltic States, some 11% compared to Latvia's 34% and Estonia's 20%. But this is still 400,000 or so in the largest of these states, with a population of 3.8 million. And Lithuania is geographically the southernmost of them, indeed is actually the geographical centre of Europe, showing how vast is Russia's Far North.
Lithuania has long been seen as an ideal base for smuggling and counterfeiting rings between Russia, Belarus and Scandinavia. Its very Catholic religion and culture chimes in well with mafia traditions, absolution even for the most heinous crimes being readily given in exchange for confession and alms to the church.
Lithuanian gangs specialize in: cigarette and amphetamine-smuggling; counterfeiting; burglaries; money-laundering; illegal immigration for prostitution; extortion; kidnapping and stolen cars, in the last instance mainly as a transit point from Kaliningrad, the Russian enclave between Lithuania and Poland, to the West.
The whole issue has become highly topical because of allegations against the newly elected president, Rolandas Paskas, that he and/or members of his entourage were formerly implicated in transactions involving Russia mafia groups. The charges concern events that stretch back to when he was a highly popular mayor of Vilnius, the capital, prior to his becoming prime minister. The affair includes charges against several of his aides at the time and subsequently. Four of his presidential counsellors have resigned. The question is whether he should not do so too, pending further parliamentary investigations.
At first the premier, Algirdas Brazauskas, played down the matter. A political opponent of the conservative Paksas as the head of the Social Democrats, the successors to the communists, Brazauskas is above suspicion of any such dealings himself. A magnanimous approach might have seemed in keeping with the dignity of the presidential office. Paksas tried to shrug the scandal aside in an address to the people on November 3rd. But it will not go away, having been taken up by the security services in parliament.
The affair threatens to tarnish the reputation of Lithuania itself in the EU. Brazauskas has now indicated that legal procedures have to be respected and should continue in order to clear the matter up once and for all. The strong hint is that Paksas should do the decent thing and resign, with the prospect of being re-instated if he successfully clears his name. A parliamentary commission is to prepare a report by December 1st. Paksas may be facing an unfortunate Christmas present.
EU anticipates strong economic growth
The European Union has marked the Baltic states for strong economic growth for the next several years, with Lithuania assuming the star role in the pack, the City Paper in Vilnius has reported.
Lithuania should see GDP growth of 6.6 per cent this year, followed by 5.7 and 6 per cent in the proceeding two years, according to a report released by the European Commission. It said growth for Latvia and Estonia would be only slightly less impressive: Latvia was expected to hit 6 per cent in 2003, followed by 5.2 and 5.7 per cent in 2004 and 2005; for the same three-year period, Estonia was looking at 4.4, 5.6 and 5.1 per cent growth.
EU analysts said conservative budgetary policies in all three Baltics underpinned the strong performances; Lithuania benefited from new tax breaks for reinvested profits as well as from a push to privatise the last large Soviet-era companies.
LUKoil to begin drilling for oil on Curonian Spit by end of year
Russia's giant Lukoil conglomerate will begin drilling for oil near Lithuania's pristine Curonian Spit by the end of this year, despite objections from environmentalists that doing so could endanger this strip of land that has been designated a UNESCO World Heritage Site, The St. Petersburg Times has reported.
The so called D-6 field is on the Baltic Sea shelf in Russian territorial waters, but just 20 kilometres from the Lithuanian side of the Curonian Spit, part of which is in Russia. Lukoil estimates that it could produce as much as 700,000 tons of crude from the site each year.
Lithuanian environmental groups have called on their government to protest at the drilling plans, though Prime Minister Algirdas Brazauskas was quoted as saying in Moscow that Lithuania had no grounds to object since the drilling is to be done in Russian waters, according to The St. Petersburg Times. He said he had been assured that the project would follow EU environmental-protection norms.
The sword-shaped Curonian peninsula, 350 kilometres from Vilnius, runs for some 100 kilometres parallel to the coast. Sometimes called the Baltic Sahara, it was a favourite summer retreat of Nobel Laureate Thomas Mann, who wrote about "the fantastic world of travelling dunes, pine forests filled with moose and birch between the bay and the Baltic Sea."
Depletion of reserves drives down Lithuanian oil output
Oil production in Lithuania in January to September 2003 fell 11.4% year-on-year to 298,800 tonnes, Interfax News Agency reported.
Gediminas Kadunas, chief petro-physicist with the Lithuanian geological service, said recently that the former Soviet republic produced 337,100 tonnes of oil in the first nine months of last year. He said oil production fell in the third quarter this year to 98,100 tonnes compared with 110,100 tonnes in the same period of 2002. Kadunas explained the drop in oil production being due to the fact that Lithuanian oil reserves are depleted and crude is drying up in established fields. According to experts, the country's oil reserves do not exceed 46m tonnes. The geological service calculates these at 60m tonnes. Four companies are involved in oil exploration and production in Lithuania - Minijos Nafta, Genciu Nafta, Manifoldas and also Geonafta, a company with Polish capital.
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