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LITHUANIA


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 18,213 13,796 12,000 74
         
GNI per capita
 US $ 4,490 3,660 3,350 74
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 314 - (22/02/07)

The Lithuanians are immensely proud of their new status as members of both NATO and the EU. It has confirmed their aureole of an incredibly strong growth performance of late. 
However, existing members find it all rather blasé. Indeed, NATO members are in considerable chagrin at the moment, given the parlous goings-on in Iraq and even Afghanistan.
Potential adherents to both organizations are another matter. For them the upside of membership is huge - greater distance from Moscow's unwelcome attentions. There is no former Soviet republic of which this is more true than Georgia.

The Tbilisi-Vilnius axis
High-level Georgian-Lithuanian talks on February 2nd in Tbilisi included the issue of deploying a Georgian military unit and civilian specialists to Afghanistan with NATO forces there. Lithuania's Prime Minister, Gediminas Kirkilas, Minister of Foreign Affairs, Petras Vaitiekunas, Chief of Staff Brig.-General, Vitalijus Vaiksnoras, and Defence Ministry Undersecretary, Renatas Norkus, discussed this issue with their Georgian counterparts during the visit. 
Lithuania operates a Provincial Reconstruction Team (PRT) in Ghor province as part of NATO's International Security Assistance Force (ISAF) in Afghanistan. One option under discussion for the Georgian unit is to join the Lithuanian PRT. Georgian soldiers trained in mountainous terrain in their own country could add value to NATO's multinational contingent in Afghanistan.
Summing up Tbilisi's position, State Minister for Euro-Atlantic Integration, Giorgi Baramidze, expressed readiness to deploy a highly trained military unit to Afghanistan, as soon as the NATO Command determines the size and place of deployment and gives the green light.
Georgia made this offer to the Alliance officially in December 2006, immediately after NATO's summit in Riga, where Secretary-General, Jaap de Hoop Scheffer, urgently appealed for reinforcements to ISAF, amid incomprehension from many "old" allied countries. Already during the summit, Georgia's delegation, led by Parliament Chairwoman, Nino Burjanadze, and including the influential parliamentarians, Giga Bokeria and Nika Rurua, made clear that Georgia would make its contribution to NATO's operations in Afghanistan.
This possible new deployment, as well as Georgia's ongoing contribution to NATO's Kosovo Force, was discussed at NATO headquarters in Brussels on February 1st as part of the NATO-Georgia's Intensified Dialogue on Membership Issues. Tbilisi also proposes to host an air force exercise in the framework of NATO's Individual Partnership Action Plan at one of Georgia's several upgraded airfields this coming summer.
Georgian troops were deployed to Afghanistan for several months in 2004, when ISAF temporarily increased its troops during the general elections there. A platoon-size Georgian unit from the Sachkere battalion operated with a British battalion in Afghanistan at that time.
Meanwhile, Georgia has been deploying more than 1,000 troops at any given time to Iraq and Kosovo. A group of 60 US trainers from the Joint Multinational Training Command is continuing a training program for Georgian troops at the Krtsanisi base. At present, Georgia seems to rank third overall -- behind only the United States and Britain -- in terms of its troop contribution to US- and NATO-led operations, relative to the troop-contributing countries' population. According to Baramidze, any Georgian deployment to Afghanistan would not come at the expense of the Iraq and Kosovo operations.
Lithuania has been in charge of the PRT in Chagcharan, Ghor province, central Afghanistan, since June 2005 as part of ISAF under NATO command. The PRT's currently authorized strength includes 120 Lithuanian soldiers (in the fourth Lithuanian troop rotation) along with symbolic numbers of military and civilian personnel from Denmark, Croatia, and the United States; seven Icelandic civil-affairs specialists have just completed their duty. Currently under the command of Lithuania's Colonel Almantas Leika, the PRT operates through mobile liaison and observation teams in all ten districts of Ghor province. It also oversees civil assistance projects -- most recently a micro-hydroelectric power station, the first of several planned stations of this type. The Lithuanian government has allocated some US$1.7 million of its own funds for development projects in Ghor in 2007.
In addition, Lithuania has decided to deploy a special-operations squad from the elite Aitvaras unit to southern Afghanistan, to operate alongside British forces there. Britain issued the invitation and Lithuania accepted it in December, responding to de Hoop Scheffer's appeal at the NATO summit. On January 26th in Brussels, Vaitiekunas officially informed NATO's ministerial meeting of Lithuania's decision to deploy a platoon-size Aitvaras group and also seconded de Hoop Scheffer's calls to the European Union to understand the importance of funding the PRTs adequately. Lithuania is also inviting the United Nations to set up an assistance office for Afghanistan in Chagcharan, where the Lithuanian-led PRT helps maintain a secure environment.
When the three Baltic states were candidates for NATO membership, they successfully established a record of "behaving as de facto NATO members." The same is currently the case with Georgia. The difference seems to be that certain "old" members de jure tend to contribute less de facto, compared to some new members and certainly to the aspirant country Georgia at the present time.
Georgian President Mikheil Saakashvili and Prime Minister Zurab Nogaideli acknowledged Lithuania's offer at the concluding news conference. 

MPs praise Lithuania for implementation of Lisbon Strategy
When compared to other European Union (EU) countries, Lithuania is successfully implementing the Lisbon Strategy and is even leading in some areas. 
Early in February, Lithuanian parliamentarians took part in an international conference on new directions and implementation of the strategy, which is designed to promote economical competitiveness. Lithuania was mentioned several times in a positive context at the conference. Representatives of the European Parliament, national parliaments and other EU institutions all attended the conference.
Birute Vesaite, leader of the Lithuanian parliament's Economic Committee, said Lithuania was praised for limiting carbon dioxide emissions.
"Since we have a nuclear plant, the discharges of carbon dioxide do not even reach the average of the European Union," Vesaite said at a press conference on Wednesday.
The Chairman of the Lithuanian Labour Committee Algirdas Sysas said that the country was positively evaluated for development of transportation infrastructure, as well as for reformation of the tax system.
Liberal Democrat Ausrine Marija Pavilioniene said that she evaluates the achievements of Lithuania more sceptically and emphasized that the opinion of EU officials about the situation in Lithuania is based on the reports presented, which do not always impartially reflect the reality of the situation.
"We are talented in creating theoretical documents [such as these] and when we send them to Strasbourg we look very good, but it does not reflect the actual implementation of the Lisbon Strategy," Pavilioniene said.
However, in the parliamentarian's words, it is obvious that Lithuania is moving forward despite the fact that there still are some areas in which the country is far behind other EU nations. 
The European Council set a strategic target for the EU in Lisbon in 2000. The target is for the EU to become the most competitive and dynamic economy in the world. This would be achieved by developing a strong scientific and academic base, which would lead to economic expansion and stronger social cohesion.
This target has become the foundation of the Lisbon Strategy. The strategy itself is not formalized in one document, but is rather a collection of different strategic documents and political provisions.

Lithuanian economy expands 7.4 per cent in 2006
Lithuania's gross domestic product surged 7.4 per cent last year on strong performances in the construction, manufacturing, real estate and financial intermediations sectors, the Statistics Department announced, with approximately 50 per cent of gross value added coming from these four sectors. 
Though the numbers are preliminary, they demonstrate that Lithuania's economy is expanding at a relatively safe pace, unlike its Baltic neighbours, where last year's economic growth is certain to be in double-digit territory and has triggered fears of overheating. (See comment on this page.) 
GDP at current prices amounted to 81.5 billion litas (23.6 billion euros), the department said, while fourth quarter GDP in 2006 increased 6.6 per cent compared to the same quarter of the previous year. 
GDP per capita, the most widely used indicator of relative wealth, was 24,028 litas (6,964 euros) at current prices, up 8.1 per cent year-on-year. 
By contrast, Estonia and Latvia's economic growth are projected to reach 11 per cent, perhaps even higher in Latvia's case, a level of expansion that sounds alarm bells in economic circles. Indeed, Estonia and Latvia last year scored the highest annual inflation in the region, at 5.1 and 6.8 per cent respectively. 
In Lithuania, however, the consumer price index rose 4.5 per cent year-on-year in 2006, which, while still robust, is manageable. Average annual inflation was 3.8 per cent. 
Inflation in the eurozone last year amounted to 1.9 per cent, according to preliminary data. 
Looking ahead, Lithuania's Statistics Department said that the overall trend is toward deceleration. "The analysis of GDP changes against the previous quarter - less seasonal and random fluctuations - leads to the observation of a slowing growth trend," the department said. 
Analysts agreed. "The trend toward a slowdown in credit portfolio growth, which began in the second half of 2006, will continue this year," Vadim Titarenko, an advisor at DnB Nord Bank, was quoted as saying.
"The last months showed that the borrowing boom, which was the main driving force of economic growth, is about to end. Real estate prices have stabilized as well, and that has an impact on value-added growth in many other sectors," Titarenko said. 
Analysts have also pointed out the alarming rate of growth of Lithuania's current account deficit. In its weekly overview dated Jan. 23, Hansabank, the largest banking group in the Baltics, wrote that the current account deficit increased 82 per cent year-on-year and amounted to 9.4 billion litas. More importantly, this deficit accounted for 11.6 per cent of GDP increase over the January - November period last year, the bank wrote. 
"Looking at the trend, and due to the continuously increasing foreign trade deficit, we forecast the current account deficit being more than 11 per cent of GDP this year," the bank wrote. 
DnB Nord Bank has forecast GDP growth in 2007 at 5.9 per cent and then 5.5 per cent in 2008. 
SEB Vilniaus Bankas, Lithuania's largest bank, has published a remarkably different set of forecasts, with growth in 2007 amounting to 7 per cent and in 2008 to 6.5 per cent. 
The World Bank, in its latest report issued last week, has estimated that 2007 GDP growth in Lithuania would come in at 6.3 per cent, while it expects inflation to continue charging ahead and reaching 4.7 per cent this year. 

This says it all:-

GDP growth - Lithuania

2001 6.6%
2002 6.9%
2003 10.3%
2004 7.3%
2005 7.6%
2006 7.4%

Source: Lithuanian Statistics Department

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AVIATION

Siemens modernises runway of Palanga Airport in Lithuania


A consortium consisting of the Siemens Industrial Solutions and Services Group and the Lithuanian company, Lemminkainen Lietuva, recently received an order to modernise Palanga Airport in Lithuania, reports New Europe.
The airport's runway is to be widened, lengthened and equipped with new airfield lighting. All the airfield lighting equipment for Palanga Airport would be provided and installed by a Siemens subsidiary, according to a statement from the company. Modernisation of the airport is expected to be completed before the end of 2007. The volume of the project is 6.5 million Euro.

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ENERGY

Energy tops agenda of Polish, Lithuanian presidents 

Talks between the Polish and Lithuanian presidents in Warsaw on January 17 focused on energy security, diversification and plans by Poland's top Orlen refiner to enter the Lithuanian fuels market, a spokesman for the Polish president confirmed. Lithuanian President Valdas Adamkus paid a whirlwind working visit to the Polish capital on January 17 for talks with Poland's President Lech Kaczynski. 
Lithuania and Poland agreed in December to construct an "energy bridge" linking the electrical power grids of the two EU states. The project also aims to create a vital energy link between Baltic states and the rest of the EU. Cost is estimated at nearly 300 million euro. 
Poland is also considering investing in a planned new reactor at Lithuania's Ignalina Soviet-era nuclear energy plant, a key energy provider for the Baltic region.

Tbilisi, Vilnius discuss energy diversification

Lithuanian Prime Minister, Gediminas Kirkilas, met with Georgia's President, Mikhail Saakashvili, during a three-day official visit to Georgia on February 1ST, the Lithuanian Government's press office reported. During the visit, Kirkilas also met with Georgian Prime Minister, Zurab Nogaideli, Parliamentary Chairperson, Nino Burjanadze, and other officials. 
Lithuania supports Georgia's plans to diversify energy sources, Kirkilas told a news conference after a meeting with his Georgian counterpart Nogaideli in Tbilisi on February 2ND, Interfax News Agency reported. 
"Projects related to the transit of energy sources across the territory of Georgia are increasingly important from the point of view of energy security. We all know how important it is to diversify sources of energy supplies. It is highly important for Europe that Europe-bound energy sources will begin transiting the territory of Georgia and Turkey," he said. 
Lithuania and Georgia "will actively work on the issue because it meets the interests of both countries," he added. Georgia is going to receive gas from Azeri fields in 2007, Nogaideli said at the same news conference. "We are expanding cooperation with Azerbaijan in this area in order to receive the largest possible amounts of energy sources from this country that will then go to other European countries via Turkey," he said.
Asked about energy supplies from Iran, the Georgian prime minister said Iran and Georgia have a treaty on electricity exchange. "This treaty will be put to use, should it prove necessary. We will take advantage of it," he said. "On the other hand, Russia has been the main electricity supplier for Georgia, including last year," Nogaideli said. Russia acted as Georgia's major gas supplier in 2006 as well, the prime minister said. "But we hope to receive a large amount of natural gas needed for Georgia from Azerbaijan, from Caspian deposits," he said.
Finally, the Lithuanian prime minister's diplomatic visit to Georgia came to a surprise end as Georgia's president drove him to the airport in person. Kirkilas was attending a banquet hosted by Georgia's prime and foreign ministers when Saakashvili made an unexpected appearance. "I have a car, I can give you a lift to the airport," Saakashvili told his guest, before telling the security services that he wanted to drive without them so that the statesmen could "talk personally." 
The president then drove Kirkilas and his wife, together with Lithuanian Foreign Minister Petras Vaitiekunas, 20 kilometres to Tbilisi airport, Baltic News Service BNS reported.

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