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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
Rolandas Paksas

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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: 268 - (25/04/03)

The Lithuanian president, Rolandas Paksas, has declared his country's readiness to take non-military steps in support of the anti-Saddam coalition. This is in line with its organisation of the Vilnius-10 statement backing the war before full hostilities broke out back in February. Lithuania is likely to make a humanitarian contribution.
The Poles have contributed 200 fighting troops. Their Lithuanian neighbours are as committed to the cause of liberating Iraq from totalitarian tyranny as the Poles, having taken a lead against the rule of the USSR in March 1990, when they declared their independence from Moscow. But, unlike the Poles, the Lithuanians do not have a large army with a long tradition of warfare (the Poles had hundreds of airmen fighting in the Battle of Britain in 1940). Their best assistance can take the form of medical and food aid under the Oil for Food programme of the UN, which Bush and Blair have agreed to be "vital."

NATO and EU membership soon
The war has confirmed the desire of the Lithuanians and other Baltic states' peoples to belong to NATO as soon as possible. It is not that Russia at present is at all likely to engage in aggressive action against any of the Baltic states. But the emergence of an anti-war bloc of France, Germany and Russia has caused ripples of alarm in Vilnius and other Baltic capitals. The fear is that a successor regime to Putin's might become more assertive vis-à-vis Moscow's former geopolitical domain. Even so, that it would assume a hostile military stance is not at all probable. After all, the new troika, whose leaders met in St. Petersburg on April 11th-12th, is against war. Russia's new allies, France and Germany, would never countenance Russian adventurism towards the Baltic states and no Russian government would want to be isolated on the world stage once again.
In February Chirac made an irate outburst linking the foreign policy positions on Iraq of candidate countries to their chances of speedy entry into the EU. But this is not being followed up by obstructive French tactics. EU membership for Lithuania and the other Baltic states is still scheduled for June, 2004. Poland is the stumbling block here, not any Baltic state. Once the Polish hurdles have been surmounted, notably its small-holder agrarian sector, entry for the rest is assured. 

Economy is picking up
The economic situation in Lithuania is improving, admittedly from a decidedly low base. The Economic Intelligence Unit recently rated Lithuania as the Baltic state doing the best economically. It described it as having the "fastest growing Baltic economy despite an unfavourable external context." EU growth, indeed, is sluggish and expected to remain so. But the trade and current accounts are on the rise in Lithuania, indicating a measure of success for its reform-minded Social Democratic-led government under Premier Algirdas Brazauskas, the veteran ex-communist leader of the country. Sales were up 13.5% year-on-year in January-November 2002, the latest months for which figures are available and fixed investment was up by 20.7% in the January-September period of 2002, auguring well for growth in 2003-04.
Even the Ignalina nuclear plant has shown a profit for the first time in four years, although Vilnius has agreed with the EU to phase it out by 2009. This will be a testing time for Lithuania as it provides 75% of its electricity. Oil from Russia and perhaps Iraq will be needed by then to fill the gap.

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ENERGY

Gazprom consortium buys Kaunas Thermal Power Power Plant

A consortium headed by Gazprom signed a purchase agreement recently for 100 per cent of shares in Kaunas Thermal Power Plant, a source in Kauno Energija said, Interfax News Agency reported.
According to the agreement, the consortium will pay 116.5m litas for the shares, of which 90m litas were due to be paid in the near future, and the remainder by the end of the year. Moreover, the investor is obliged to invest not less than 400m litas in the modernisation of the power plant and to keep electricity tariffs stable for five years, regardless of fluctuations in gas prices.
It is planned that by the end of this year the participants in the consortium, which include ZAO Dujotekana (in which Gazprom owns controlling shares) and the US company Clement Power Venture, will split the shares between them in proportion to their financial contribution.
As a result, Gazprom will control 51%, Dujotekana - 24% and Clement Power Venture - 25%. Kaunas Thermal Power Plant produces about 80% of the heat energy required by the city of Kaunas.

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FINANCIAL NEWS

Lithuania sees higher GDP growth for 2002

Lithuania posted GDP of 50.7bn litas in 2002, up 6.7%. according to final figures, the statistics department said. Earlier GDP growth had been reported as 5.9%. the adjustment is due to the recalculation for various indicators for recent years. Per capita GDP in 2002 totalled 14,609 litas, against 13,676 litas in 2001. Added value went up 12.8% in construction, 8.7% in retail and wholesale trade, 12.6% in transport and telecommunications, 10.6% in financial mediation, 5.5% in the manufacturing industry, 6.1% in agriculture and 5.4% in energy. GDP growth reached 6.5% in 2001 by final figures. It had been earlier reported as 5.9%. Lithuania plans 4.9% GDP growth in 2003. In a related development in Lithuania totalled 13.18bn litas in 2002, up 23.7% year-on-year.

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FOREIGN LOANS

EU to allot some 15m Euro for environmental projects


Dalia Grybauskaite, Lithuania's finance minister, and Michel Barnier, the European Commissioner for Regional Policy, have signed agreements on financial assistance for three new regional environmental projects. The funds have been assigned under the EU ISPA programme. The total cost of the projects 24.3m Euro, Interfax News Agency quoted the Finance Ministry's press service as saying recently. 
Some 61.7% of the funds (14.99m Euro) will come from the ISPA programme. The agreements said that the ISPA will help finance the construction of a sewage system in Mazeikiai in north Lithuania. The project's total value is 7.5m Euro, and the ISPA will cover 3.75m Euro of that sum. A sewage system will be reconstructed and a water system will be expanded in Kedainiai in central Lithuania for a total of 10.4m Euro (the ISPA's share is 6.76m Euro). A similar project will be implemented in Radviliskis, central Lithuania at a cost of 6.4m Euro, of which the ISPA will cover 4.48m Euro. Lithuania's state budget will cover 20% of the cost, while local councils will provide the rest with loans. 
The ISPA programme finances environmental and transportation projects in EU candidate countries. Since 2000, the ISPA has been helping to finance eight transportation projects, 14 environmental projects and five technical assistance projects in Lithuania. The total cost of these projects is 489.54m Euro, of which the ISPA provided 252.35m Euro.

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NUCLEAR ENERGY

Lithuania to build new storage facility for spent nuclear fuel


The Lithuanian government has given a green light for the construction of a new storage facility for spent nuclear fuel at the Ignalina nuclear power plant, the government's press service said. A tender for the project will be announced by the end of the summer, reports New Europe. Stage-by-stage construction will begin in 2004 and finish in 2010. The facility will be put into operation in 2005. The project will require €80.5m in investment. This money will be provided by international organisations and foreign governments as part of preparations for the shutdown of the first of Ignalina's two power generating units. The storage facility's construction will coincide with preparations for closing the Ignalina plant. Earlier, Ignalina's Director General, Viktor Shevaldin, said the nuclear power plant couldn't be closed until a storage facility for spent nuclear fuel and a boiler house to provide power for the plant being close and some other related facilities are made available. A few years ago, a storage facility for dry spent nuclear fuel was built and put into operation at the Ignalina plant. At this facility, spent nuclear fuel is stored in special containers and can be kept for up to about 50 years. Lithuania pledged to put Ignalina's first power generating unit out of operation until 2005. The power plant is planned to be closed by 2009.

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