Andrius Kubilius: 95% Of Enterprises In Lithuania Are Small And Medium-Sized Enterprises

Average salary in Lithuania is 700 Euros, in Belarus - about 320 Euros.

How did a country, which is not rich in natural resources, managed to build an economy capable to ensure the well-being twice as high as in our country without external assistance? Belsat had a conversation with the former Prime Minister of Lithuania Andrius Kubilius.

– Belarus and Russia are going through a deep recession. It might seem that Lithuania should be affected by this due to its geographical position, but quite the contrary happens. Lithuania is experiencing economic growth. Why?

– Firstly, more of our export goes to the Western partners. As far as I remember, exports to the EU market is about 80%, in Russia, products manufactured in Lithuania remain at the 15th place in the market. I don’t think that Belarus stands higher.

– Starting conditions in Lithuania were similar to those in Belarus. How did you manage to shift from Belarus and the Soviet market?

– We were going through sour times, but when we signed an agreement on free trade with EU in 1995, we realized that we would switch to the European market. The Russian crisis of '99 helped in some sense. Prior to this, 50% of our export was going to the Russian market.

Europe and its big money was helping us to upgrade our production to meet the standards. On the other hand, many of the Soviet plants couldn’t find new markets and went bankrupt. But the infrastructure of such plants (there is water, electricity and gas there) can be used to attract new investors, in particular, Scandinavian ones. We are still competitive, because we have qualified labor force, which is cheaper than in Sweden, Germany and Denmark.

– What drives your economy?

– 80% of GDP is a business based on private capital. Only energy supply, some transport companies, the railway company and the supply of heat are left in the public sector. Small and medium-sized enterprises make 95%. It would be difficult to name a single sector, which could be called a driver of the entire economy. We have strong traditional sectors of furniture manufacturing, textile manufacturing, engineering and chemical industry.

Various sectors are successfully developing. Information technology sector has been rapidly developing recently. International capital helps us to create a lot of jobs which also attract young people to come back from London or Dublin.