Economy

A New Video to Present Lithuania’s Business Environment

A new video has been released to showcase Lithuania to foreign investors. The video was developed in collaboration with current investors and it presents the country as it is perceived through their eyes. It focuses on forward thinking people, who are full of ideas, drive and energy. People who are self-starters.

Until recently, because of the country’s resource base, Lithuanians have been a farming people. During the period of independence(1918-1940), the productivity of private agriculture at least doubled and Lithuania was in a position to begin an intense industrial development on the basis of internal economic resources. The occupation by the Soviet Union and World War II drastically slowed and altered the course of economic growth.

The Soviets sought to exploit the existing economic resources through forced collectivization of agriculture and industrialization. Lithuania is among the developed areas of the world, with 69% of the population living in the cities and 22% of the labor force employed in agriculture, while the rest earn their livelihood from industrial, scientific, and commercial activities. Nevertheless, Soviet policies of development, partly geared to the political and military purposes of the Soviet Union, denied the Lithuanian people a standard of living comparable to that of Western societies.

Today, Lithuania is in the process of dismantling a Soviet imposed command economy. An intensive program of privatization has turned over 90% of the housing stock and 80% of small, retail enterprises to private owners while state industrial enterprises are being sold off to private investors. An extensive program of one-time, state issued vouchers has given the population an opportunity to become owners of property and capital. The country has adopted laws favorable to foreign investors and once again has a convertible currency, the Litas. Although 64% of the labor force is still employed by the state sector, the number of new private companies continues to grow, expanding the free market sector. During this difficult period of transition, Lithuania has been able to maintain a positive trade balance by increasing its trade relations with Western nations. A network of private, commercial banks exists, able to engage in international operations. Major international donors and lenders are providing general support to Lithuania as it restructures its economy and many Western nations, including the United States are providing bi-lateral technical assistance to Lithuania.

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