Nordic business in Lithuania to government: reform immigration and decentralise!

Lithuanian advances in terms of innovation might be promising; however, there is no time to be complacent. During the business lunch organised by the Danish, Finnish Norwegian and Swedish, Chambers of Commerce last Tuesday morning, the business community reminded the government that it still needs to address key problems hindering long term sustainable development.

The Nordic chambers of commerce in Lithuania encourages politicians and members from the private sector to meet every year to discuss the challenges and opportunities that shape the country’s investment environment. This year the main speakers were the Finance minister Vilius Šapoka, the Minister of Energy Žygimantas Vaičiūnas, and the Vice-minister of Economy and Innovation Marius Skuodis; for the discussion panel business representatives: John Afseth, Indre Dargyte, and Vaidotas Rukas also joined the event.

It was almost 11 am, and while the Minister of finance announced he had to leave after his speech, the moderator opened up the floor for questions from the audience, several hands rose above the crowd. Among those with questions was the Chairman of the Swedish Chamber of Commerce in Lithuania eager to challenge the minister’s claim about the labour market.

It is not surprising for government officials to portrait their work under a flattering light. However, according to the latest data, Lithuania’s current economic stand might do not need too much embellishment. Last year the unemployment rate remained at 6.2, two points below the EU’s average. In the meantime, Lithuania jumped from number 14 to 11 in the ease of doing business index.

Give us more immigrants

In 2019 the country also registered the most massive immigration since 1990. Bearing in mind that local entrepreneurs often cite the workers’ deficit as deterrence for foreign investments, a positive balance in the immigration statistics should have been good news. However, at the conference room in the Hotel Kempinski, they were received with scepticism.

“Most of the incoming immigrants are low skilled workers. Moreover, if companies need engineers, they do not need them in three years or three months; they need them now. Besides, the process for employers to bring qualified foreign workers remains complicated” said Andrius Francas SCCL’s Chairman in direct response to Minister V. Šapoka.

Although Lithuania is currently issuing Blue Cards as a measure to help companies to hire highly-skilled non-EU citizens, it is clear that the business community feels like there are several improvements to be made. According to the Vice-Minister Skuodis, the government is already taking action. For instance, Skuodis explained, there are plans to develop free economic zones further (Lithuania has seven at the moment) to balance the labour market’s supply and demand.

As the event moved forward to the panel section, the free economic zones idea received significant scrutiny. In a moment when local executives continue to struggle to find financing support for projects outside the main cities, there is an increasing demand from the business sector for a clear plan to decentralised economic development.

On the Free Economic Zones

According to Jan Hyttel Chairman of the Danish Chamber of Commerce and a business veteran himself, in Lithuania, small cities also suffer from an underdeveloped or non-existing infrastructure, which in return cripples investments. While certain areas in the country experience a steady improvement in living conditions, finding a way to allow this prosperity to spread is an urgent matter. Unfortunately, there was no time left to sort it out then.

Once the panel was finished, I was invited to join both speakers and special guests for lunch. My neighbour at the table was Vice-Minister Skuodis. Between dishes, he managed to share his impression about the event with me “It was a rough discussion, as it should be (…) I enjoyed it,” he said. There are good reasons to share politicians’ optimism. The overall numbers show a positive balance. However, finding a way to guarantee that everyone can benefit from this promising future is the most important task ahead.