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Books on Lithuania
REPUBLICAN REFERENCE
Area (sq.km)
65,200
Population
3,607,899
Principal
ethnic groups
Lithuanians 81.3%
Russians 8.4%
Poles 7.0%
Capital
Vilnius
Currency
Litas
President
Valdas Adamkus
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Update No: 311 - (28/11/06)
Lithuania is a Catholic country unlike the two other Baltic
states, the Protestant Estonia and Latvia. While Roman Catholicism is a splendid
religion, it is compatible with a high degree of corruption. One can confess and
be pardoned so long as one makes a due donation to the church.
If the admonition to mend one's ways is ignored, one has to confess again. But
what after all would happen to the confessional and the priests if every
believer became a saint overnight? They would be out of a job and the church out
of new coffers.
Kirkilas pledges to resign if corruption continues
Prime Minister Gediminas Kirkilas has voiced his pledge against corruption,
promising to step down as head-of-government if the problem is not eradicated in
the coming year. During an interview with Ziniu Radijas radio on Nov. 9, a
journalist asked Kirkilas whether he would resign if Lithuania's ranking in the
global anti-corruption index, which is currently 46th among 163 countries, did
not improve in 2007.
"Of course I will," responded the prime minister, who recently
celebrated his first 100 days in power. "I believe it is a matter of honour."
The annual corruption perception list was released in early November by the
non-governmental corruption watchdog, Transparency International. Lithuania was
ranked 46th, together with the Czech Republic and Kuwait.
The anti-corruption index ranks countries according to their degree of
corruption, as seen by business people and professional analysts. The scorecard
ranges from zero, meaning high corruption, to 10, which reflects a transparent
and non-corrupt environment.
In 2006, Lithuania scored 4.8 for the second year in a row. In 2003 and 2004,
the Baltic state scored 4.7 and 4.6, respectively.
Top-ranked in this year's list are Finland, Iceland and New Zealand with 9.6
points, while Haiti was revealed as the world's most corrupt country with 1.8
points. Estonia, with 6.7 points, ranked well above Lithuania in 24th place
while Latvia (4.7 points) shared 49th place with Slovakia but was mentioned
among those countries "with a significant improvement in perceived levels
of corruption."
Unfortunately, the same cannot be said for Lithuania, according to Rytis
Juozapavicius, director of Lithuania's Transparency International bureau.
"This year's index reflects the anti-corruption policy fiasco in Lithuania:
we have not seen any serious anti-corruption reforms since 2004, when Lithuania
joined the European Union and NATO," Juozapavicius said after the 2006
Corruption Perception Index was released.
Responding to Kirkilas' radio announcement, Juozapavicius told The Baltic Times
that the PM had demonstrated superb public relations skills. "We ask for
political will and he demonstrates this. By doing so, Kirkilas will definitely
earn public sympathy. Whether these sympathies disappear if he fails to follow
up on his commitment has yet to be seen," Juozapavicius said.
Yet there is a good chance that Kirkilas won't even be put to the test, he
added. "What is special about the global corruption perception index is
that it is influenced not only by local businessmen and bodies, but also by some
international institutions, whose decision is often influenced by the media. If
fewer corruption scandals are revealed in the media, the index may
improve," Juozapavicius pointed out.
At the same time, the Transparency International director stressed that Kirkilas,
if he really wants to bust corruption, should concentrate on the local
corruption index. "If the prime minister wanted to sign against corruption
in blood, he should make a pledge over Lithuania's corruption map, which looks
very bad, especially when we're speaking about bribery," Juozapavicius
noted. "Only one indicator out of six improved on Lithuania's 2005
corruption map, while bribery by traffic police, vehicle registration employees
and in hospitals increased."
"If Kirkilas promised to change this particular situation, that would be
real commitment," he added.
Vilnius backs Poland's veto on Russia-EU talks on new treaty
Vilnius has poor relations with Moscow at the moment, which is miffed by its
sale of its prime oil refinery to the Poles, with whom the Lithuanians have
rather more of an affinity than the Russians. Moscow responded in typical
fashion by hostile moves on energy.
Lithuania backs Poland's stand on blocking the start of EU-Russia talks on
concluding a new basic partnership treaty, Premier Kirkilas said on November
21st in an interview with national radio. "Poland is Lithuania's strategic
partner, and it would be strange if Vilnius rejected Warsaw in supporting its
veto. The more so, since Lithuania is also interested in this," the premier
noted.
According to Kirkilas, "Russia discontinued oil deliveries along the
Druzhba pipeline to Mazejkiaj. Therefore, we should act jointly with Poland so
as to convince Moscow to make a compromise. This item should find a place in a
new EU-Russia treaty."
The prime minister emphasized that Lithuania "is interested in signing a
new basic partnership treaty between the EU and Russia and is ready to act as a
mediator in the Moscow-Warsaw dispute". However, Lithuania and Poland
"cannot sacrifice their interests. Therefore, Russia should also adjust its
position," he noted.
Gas Price Hike
It is hardly surprising that Gazprom has summarily announced that it would
raise gas prices for Lithuania by as much as 30 per cent next year, according to
Prime Minister Kirkilas.
State-controlled Gazprom will raise Lithuanian prices in 2008 to a level
consistent with that of Western European countries.
Gazprom now charges Lithuania from US$147 to US$150 per 1,000 cubic meters,
while it charges Germany US$280, Interfax News Agency reports.
Economic boom
If there is one former Soviet republic that can adapt to this situation, it
is Lithuania. It is enjoying a colossal economic boom, GDP growing by nearly 10%
per annum for several years now. The Economist has dubbed it the Baltic Tiger.
The budget situation is positive, with rising economic prosperity and tax
revenues. European Union structural funds have created a situation in which to
choose on what to invest in for the future.
"I think that conditions will not become worse for business, and that the
tax system will remain stable. However, it is important for people to know that
social spending will rise, as will pensions." Prime Minister Kirkilas told
Lithuanian radio on Oct. 10. Kirkilas said that next year will see a rise in pay
for those in the health and education sector, more money for social protection,
and compensation for heating costs.
Estonia and Latvia are both expecting budget surpluses. But with Lithuania's
situation a little tighter, the government's spending priorities are more under
fire.
Critics came out on Oct. 10 with a harsh assessment of Lithuania's 2007 budget
plans. Policymakers assign millions for salaries, cents for the raising of
country's competitiveness and postpone reforms again, the Verslo Zinios business
daily reported.
However, the budget deficit in Lithuania should remain at an acceptable level,
well below the maximum three percent of GDP set out in the Maastricht
convention. Lithuanian finance minister Zigmantas Balcytis, while admitting that
budget expenditures will exceed revenues by almost 1.5 billion litas (434
million euros), stated that the fiscal deficit of the country should decrease by
300,000 million litas and should not exceed one per cent of GDP in 2007.
This makes joining the Euro zone in 2010, the official target date, a perfectly
feasible project.
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MINERALS & METALS
EU approves Mazeikiu Nafta refinery deal
The European Commission approved on November 7th the purchase of Lithuanian oil
refining company Mazeikiu Nafta by Polish refining firm PKN Orlen, New Europe
reported.
"The Commission concluded that the operation would not significantly impede
effective competition in the European Economic Area (EEA) or any substantial
part of it," a press release stated.
The deal - valued at over US$ two billion - is the largest foreign investment in
Lithuania's history. It foresees the purchase of 84.4 per cent of Mazeikiu
shares from the Lithuanian government and a subsidiary of bankrupt Russian oil
giant YUKOS.
It has been dogged with controversy, however. The purchase of the shares from
the YUKOS subsidiary was challenged by a Russian bankruptcy receiver acting on
behalf of YUKOS' creditors, and was only approved on May 25th after a lengthy
court battle.
On July 29th, the pipeline supplying the Mazeikiu refinery with Russian crude
oil was shut down after a leak in Russian territory. It has not yet been
reopened, with some commentators accusing Russia of staging the shut-down for
political reasons. And on October 12th, a fire broke out at Mazeikiu's refinery,
the only one in the Baltic states. It was brought under control within hours,
but caused substantial damage.
Mazeikiu Nafta is the only oil refinery in the Baltic states, built at the end
of a Russian pipeline during Soviet times. It is considered a key strategic
asset by the Lithuanian government. PKN Orlen is one of the largest oil refiners
in Central and Eastern Europe. It operates six refineries in Poland and the
Czech Republic, and 2,700 sales points in the two countries and Germany.
However, commentators suggest that the Lithuanian government favoured Orlen's
bid because it is based in Poland - an ally of Lithuania in the EU and NATO.
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