Lithuania is a country of North Europe on the shore of Baltic Sea, but it is usually called as a country of Eastern Europe. Because of the similarities in the latest historical events Lithuania is known as one of the three Baltic countries (together with Latvia and Estonia). It is one of the smallest country in Europe (the territory is 1,5 times smaller than the territory of Portugal). The first declaration of independence of Lithuania was in 1918, but independence last not very long – until the 1st Soviet occupation in 1940. Finally, in 1990 the independence was restored and in 2004 Lithuania became a member of European Union (EU). Nowadays the population of the country is 3,281,000 citizens. Neighbour countries are: Latvia, Belarus, Poland and Kaliningrad region (Russian Federation).
First years of independence was full of hopes to the better living conditions and well-being, but not all hopes came true, because Lithuania faced a lot of economic problems. As for all Eastern Europe countries it was grate challenge quickly change economic orientation from the planned economy to a free trade economy. There are still big differences between old EU member’s economic parameters and new EU members. For comparison of the countries I will use the data of gross domestic product (GDP) per capita in PPS (corrected by European Purchasing Power Standard), where E-27=100. In 2008 in Lithuania the value of this parameter was 62 and it was the highest result reached during all the membership. However, the bad influence of the crisis led that in 2009 GDP per capita in PPS in Lithuania was just 52. For comparison, this parameter did not change in Portugal – it was 79 in 2008 and in 2009.
I have shortly introduced Lithuania as a region of Europe and compared it to averages of EU, I will continue my article analyzing disparities between Lithuania regions. Lithuania is divided to 10 counties. In the first year of independence there were almost no bigger economic differences between counties, but some regions was much more attractive for investments, so after twenty years of independence there are significant differences. The main aim of official Lithuania region policy is „the reduction of social and economic disparities between and within its regions, maintenance of the individuality of each region, alongside the stimulation of an even development across the country“. According to the data of Statistic Department of Lithuania in 2008 the highest GDP per capita was in the region of capital (Vilniaus) – 14,813 thousand euro, it is 154% of national average of GDP per capita and in the sum it consist even 38,02 % of all GDP of Lithuania. The region which is in the second place is the region of the second biggest city- Kaunas. This region create 19,32 % of national GDP, the value of GDP per capita is very close to the national average (96,5 %). One more important region is Klaipėda, the only one harbour of Lithuania. GDP per capita is also very close to national average (100,05 %) and this county creates 11,28 % of Lithuania GDP. Hence the regions of three biggest cities shares 68,62 % of all country GDP, and for other seven counties just 31,38% are left. Tauragės county creates the smallest part of national GDP – 1,72%. In this region GDP per capita reach just 45,65 % of national average. The numbers of other left regions are similar – they do not exceed 7,5% of national GDP and do not reach national average of GDP per capita.
I have already mentioned that some of the regions are much more interesting for investors than others, and the most distinguished is Vilniaus region which during all independence period received almost two thirds of all foreign direct investments (FDI). It is considered that it is the main reason of now existing high disparities between regions.
The government of Lithuania is making considerable efforts to reduce these differences. There are two official regional policies conducting in Lithuania. First policy is EU regional policy. The aim of this policy is to reduce differences between EU countries. In Lithuania case the aim is to reach the average level of economy of EU. The main instrument for this policy is EU Structural Funds. I have to accept the opinion of most experts, that Lithuania does not use this support efficiently enough. Many goals of programmes financed by Structural Funds are not reached. Second policy is national regional policy. To implement this policy government identify the regions that have the biggest economical or social problems, create programmes to recover these regions and try to fulfil these programs. In my opinion, the implementations of these programmes are usually not successful, because of not professional institutions work, the shortage of information and excessive bureaucracy. Also, it is very hard to attract investors to invest in the smaller cities, their infrastructure are not so developed as in the capital. However, wages in Lithuania are quite low and there are a lot of experienced people with the high education, prepared for work, so if regional policies will be implementing more efficiently Lithuania can reach other EU countries and also reduce economical and social disparities between regions in Lithuania.
Aušra Pockevičiūtė
First years of independence was full of hopes to the better living conditions and well-being, but not all hopes came true, because Lithuania faced a lot of economic problems. As for all Eastern Europe countries it was grate challenge quickly change economic orientation from the planned economy to a free trade economy. There are still big differences between old EU member’s economic parameters and new EU members. For comparison of the countries I will use the data of gross domestic product (GDP) per capita in PPS (corrected by European Purchasing Power Standard), where E-27=100. In 2008 in Lithuania the value of this parameter was 62 and it was the highest result reached during all the membership. However, the bad influence of the crisis led that in 2009 GDP per capita in PPS in Lithuania was just 52. For comparison, this parameter did not change in Portugal – it was 79 in 2008 and in 2009.
I have shortly introduced Lithuania as a region of Europe and compared it to averages of EU, I will continue my article analyzing disparities between Lithuania regions. Lithuania is divided to 10 counties. In the first year of independence there were almost no bigger economic differences between counties, but some regions was much more attractive for investments, so after twenty years of independence there are significant differences. The main aim of official Lithuania region policy is „the reduction of social and economic disparities between and within its regions, maintenance of the individuality of each region, alongside the stimulation of an even development across the country“. According to the data of Statistic Department of Lithuania in 2008 the highest GDP per capita was in the region of capital (Vilniaus) – 14,813 thousand euro, it is 154% of national average of GDP per capita and in the sum it consist even 38,02 % of all GDP of Lithuania. The region which is in the second place is the region of the second biggest city- Kaunas. This region create 19,32 % of national GDP, the value of GDP per capita is very close to the national average (96,5 %). One more important region is Klaipėda, the only one harbour of Lithuania. GDP per capita is also very close to national average (100,05 %) and this county creates 11,28 % of Lithuania GDP. Hence the regions of three biggest cities shares 68,62 % of all country GDP, and for other seven counties just 31,38% are left. Tauragės county creates the smallest part of national GDP – 1,72%. In this region GDP per capita reach just 45,65 % of national average. The numbers of other left regions are similar – they do not exceed 7,5% of national GDP and do not reach national average of GDP per capita.
I have already mentioned that some of the regions are much more interesting for investors than others, and the most distinguished is Vilniaus region which during all independence period received almost two thirds of all foreign direct investments (FDI). It is considered that it is the main reason of now existing high disparities between regions.
The government of Lithuania is making considerable efforts to reduce these differences. There are two official regional policies conducting in Lithuania. First policy is EU regional policy. The aim of this policy is to reduce differences between EU countries. In Lithuania case the aim is to reach the average level of economy of EU. The main instrument for this policy is EU Structural Funds. I have to accept the opinion of most experts, that Lithuania does not use this support efficiently enough. Many goals of programmes financed by Structural Funds are not reached. Second policy is national regional policy. To implement this policy government identify the regions that have the biggest economical or social problems, create programmes to recover these regions and try to fulfil these programs. In my opinion, the implementations of these programmes are usually not successful, because of not professional institutions work, the shortage of information and excessive bureaucracy. Also, it is very hard to attract investors to invest in the smaller cities, their infrastructure are not so developed as in the capital. However, wages in Lithuania are quite low and there are a lot of experienced people with the high education, prepared for work, so if regional policies will be implementing more efficiently Lithuania can reach other EU countries and also reduce economical and social disparities between regions in Lithuania.
Aušra Pockevičiūtė
References
1. Regional policy formation; Ministry of Interior, http://www.vrm.lt/index.php?id=561&lang=2 .
2. Regional policy implementation; Ministry of Interior, http://www.vrm.lt/index.php?id=562&lang=2 .
3. Samprata, tikslas, prioritetinės kryptys, įgyvendinimo teritorijos; Ministry of Interior, http://www.vrm.lt/nrp/index.php?id=162 .
4. EU Structural Funds; Lithuania in the European Union, http://www.euro.lt/en/lithuanias-membership-in-the-eu/eu-structural-support/ .
5. The impact of the EU Membership; Lithuania in the European Union, http://www.euro.lt/en/lithuanias-membership-in-the-eu/the-impact-of-the-eu-membership/ .
6. GDP per capita; Statistic Department of Lithuania, http://db1.stat.gov.lt/statbank/selectvarval/saveselections.asp?MainTable=M2010210&PLanguage=0&TableStyle=&Buttons=&PXSId=3108&IQY=&TC=&ST=ST&rvar0=&rvar1=&rvar2=&rvar3=&rvar4=&rvar5=&rvar6=&rvar7=&rvar8=&rvar9=&rvar10=&rvar11=&rvar12=&rvar13=&rvar14
[artigo de opinião produzido no âmbito da unidade curricular “Economia Regional” do 3º ano do Curso de Economia (1º ciclo) da EEG/UMinho]
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