Financial Crisis: Lithuania Looks to High-Tech

Prime Minister Andrius Kubilius speaks at the Bertelsmann Foundation

Lithuanian Prime Minister Andrius Kubilius concluded a five-day visit to the United States on February 5, 2010 by speaking to a select gathering of World Bank, International Monetary Fund (IMF), corporate and media representatives at the Bertelsmann Foundation North America. The prime minister, accompanied by Finance Minister Ingrida Simonyte, stressed his government's goal to create in Lithuania and throughout the Baltic region a high-tech service hub.

This "ambitious vision," which would be realized within a decade, is designed to help Lithuania emerge from the current financial crisis and contribute to the country's long-term competitiveness. The prime minister said Lithuania was an ideal location for such a hub, citing his country's modern infrastructure, high Internet penetration and skilled labor force.

The prime minister also addressed the current economic situation. He acknowledged that the financial crisis had hit Lithuania hard, causing a 15-percent economic contraction in 2009. But he said that a national dialogue with economic stakeholders that he launched helped reduce social tensions and lay the base for social stability. As evidence of this, Mr. Kubilius noted that public discontent had been limited to several small demonstrations. Finance Minister Simonyte added that the Lithuanian public is beginning to be rewarded for their earlier sacrifices. She said the economy is now improving. Both ministers cited the recent raising by Standard & Poor's of its outlook for Lithuania from "negative" to "stable." S&P said the government's efforts to curb the budget deficit was behind the improved outlook.

The prime minister also stressed the importance of his country's European Union membership as it confronts the challenges of the financial crisis. Mr. Kubilius noted that EU solidarity helped his government avoid turning to the IMF or any other organization for financial assistance. EU membership, he conceded, gave his country greater security had economic conditions deteriorated precipitously.

On the political front, the prime minister described energy as a "very sensitive" topic, as are all issues involving relations with Russia. The 2008 conflict between Moscow and Tbilisi unleashed fears in Lithuania that Russia's other neighbors might soon become the object of Kremlin anger. Mr. Kubilius urged the EU to have one policy regarding Russia and its western neighbors. He said the EU is a great attraction for the smaller countries of eastern Europe, an advantage which should be used to bind those countries to the West.

The prime minister had earlier met with US Treasury Secretary Timothy Geithner and US Federal Reserve Chairman Ben Bernanke.


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