Lituania
 With
a territory roughly the size
of West Virginia and a
population of 3.6 million,
Lithuania is the largest of
the three Baltic States.
Lithuania shares borders with
Latvia, Poland, Belarus, and
the Russian region of
Kaliningrad. Upon regaining
its independence, Lithuania,
like the other two Baltic
nations, faced the daunting
task of transforming its
economy. Combined with some
genuine political resiliency
and some assistance from
international organizations
like the International
Monetary Fund, Lithuania
successfully put itself on
track with the rest of the
Baltic region and is forging
ahead with a strong economic
agenda.
Today,
Lithuania's economy is one of
the fastest-growing economies
in Central and Eastern Europe.
In the first half of 2002, GDP
grew 5.7 percent, and the
growth projections for the
coming year are strong. The
industry sector experienced a
17-percent growth spurt in
2001. Despite the global
economic slowdown, retail
sales increased 14 percent in
the first seven months of
2002.
Successful
Policy
In 1992,
Lithuania adopted a strict
fiscal plan, with the help of
the IMF and other
international institutions, to
lower the budget deficit,
restrain inflation, reduce
price controls, and privatize
the economy. The local
currency (the Litas, which is
pegged to the Euro) has
maintained a stable rate
against the U.S. dollar and
other major currencies since
1994. The government's
privatization efforts are
essentially complete, and more
than 80 percent of the economy
is privately owned. The
banking sector has been
completely privatized, with 90
percent owned by major Western
banks. In light of these
accomplishments, trade for
Lithuania in 2001 exceeded $10
billion, with exports of $4.8
billion and imports of $5.7
billion.
One also
must not discount the role
that FDI has played in
Lithuania's success. Overall
FDI in 2000 amounted to almost
$300 million, and within the
first nine months of 200I FDI
approached $450 million.
Without the inflow of foreign
capital, major infrastructure
improvements would not have
been possible. As the country
moves toward full integration
into the European Union and
adopts the acquis communitaire,
the common body of EU law, FDI
will continue to play a
crucial role in major
infrastructure projects in the
environmental and
transportation sectors.
Promising Sectors
Lithuania
has several areas in which it
has a natural competitive
advantage, and the country
wishes to capitalize on those
strengths by increasing
activity and attracting
investors in these areas. The
most attractive sectors for
U.S. companies are IT/computer
hardware and software
development, pollution control
equipment/environmental
services, and maritime
transportation. The IT sector
in Lithuania is growing at an
annual rate of 30 percent and
has a total value of
approximately $2 billion.
By
implementing programs for
e-government, a
knowledge-based economy, and a
knowledge-based society, the
Lithuanian government has
clearly made IT development a
priority. In fact, Lithuania
was the first of the Baltic
States to adopt a law on
electronic signatures. The IT
sector employs 10,000
qualified specialists in
Lithuania, and the government
plans to implement programs
aimed at increasing that
number.
The
environmental sector is an
area of growing concern in
Lithuania. Having signed an
association agreement with the
European Union in 1996,
Lithuania must now pass
legislation conforming to EU
environmental laws. Some
estimates call for spending
$50 million annually in order
to meet EU requirements by
2015. The bulk of these funds
would be used to improve
wastewater treatment, sewage
networks, and waste
management. With new
legislation and regulations,
opportunities will abound in
fields ranging from protection
and prevention, to
remediation, monitoring, and
waste disposal.
As
mentioned above, maritime
transportation and port
development are key points of
development for each of the
Baltic States. The Port of
Klaipeda is one of its jewels
on the Baltic Sea. The
Lithuanian port, located
approximately 315 kilometers
from Vilnius and 1,150
kilometers from Moscow,
handled approximately 17,236
metric sons of cargo and
101,000 passengers in 2001.
With more than 200 private
port and shipping companies
operating in Klaipeda's state
seaport, the Lithuanian
government seeks to increase
its capacity and entice more
exporters and investors to use
Klaipeda as a point of entry
for their goods into the
European Union and northwest
Russia. As the port expands
its capabilities, increased
opportunities exist in the
transport and logistics sector
here.
Please see
our companion WebGuide
for further information about
Lithuania.
Date Updated: March 27, 2007
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