Where are we heading from here? Minister of Economy shares her vision

Aušrinė Armonaitė, the Minister of Economy and Innovation of Lithuania (Photo by Mona Avik via the SCCL)

On February 3, the Minister of Economy and Innovation Aušrinė Armonaitė was invited by the Nordic Chambers of Commerce in Lithuania to Hotel Kempinski for a so-called “Business Lunch” where she presented the Ministry’s reforms, answered questions, and discussed other topics, such as education, Russian sanctions and Taiwanese credits incentives.

Chairwoman of the Freedom Party of Lithuania (“Laisvės Partija”) since 2019 and Minister of Economy and Innovation since December 7, 2020, Aušrinė Armonaitė attended the meeting organised by the Nordic Chambers of Commerce in Lithuania, composed of the Swedish, Danish, Finnish and Norwegian Chambers of Commerce. The event was a chance to start a  dialogue with government representatives and raise any important questions members of the Chambers and non-members alike might have. The event was moderated by Vilius Bernatonis, Managing Partner of TGS Baltic.

Vilius Bernatonis, Managing Partner of TGS Baltic and moderator of the event (Photo by Mona Avik via the SCCL)

“Our job is to make a friendly environment where a business has more freedom, where consultants, regulatory institutions and inspectors consult you on how to be prepared for everything, rather than find you because you’ve done something wrong,” says Aušrinė Armonaitė.

“We are an exporting economy. Almost 80% of our GDP comes from exports. This means that goods and services that are produced here in Lithuania are competitive all around the world. […] We are proud of it. So, as an open economy with a population of 3 million people based on exports, we need stronger economic diplomacy. We have to be all over the world,” claims the Minister.

Priority sectors for the Ministry of Economy and Innovation

The Ministry’s primary focus is its innovation reform with three chief domains that Armonaitė qualifies as a “strong ecosystem”: biotechnology, information-communication technologies and high-tech engineering. “Our job is to make our economy more advanced, higher-end and to produce more added value here in Lithuania,” says Armonaitė.

“We are one of the most digitalised countries in the world. The ICT (information-communication technology) sector is something that is rapidly growing. Biotechnology is already a success story with Northway Biotech, […] but also [with] Thermo Fisher Scientific who produces components for the COVID-19 vaccines from Pfizer.”

A future Innovation Agency?

“As a liberal, I believe that people themselves and in their own initiative should grow the economy, while the government should not interfere. However, what we can do is facilitate growth. To create the rules that apply to all. […] So, basically, we are currently building an Innovation Agency with three institutions: MITA, Versli Lietuva and Lietuvos Verslo Paramos agentūra,” says the Minister of Economy and Innovation, according to whom the Innovation Agency will work both on exports and providing businesses with services, finances and consultancies.

Currently, institutions such as MITA are owned by both the Ministry of Economy and the Ministry of Education. The Innovation Agency would also be the administrator of European funds and would give access to various financial instruments.

Attracting investments and talent in Lithuania

“When I meet investors, both Lithuanian and foreign, the number one thing they ask us is ‘So, how are the people in Lithuania?’” says Armonaitė. She underlined the liberalisation of the process for migrating investments and the automatisation for relocating workers from outside countries, such as Belarus, Ukraine, Canada, the United States and the United Kingdom, now that they’re out of the EU. As well as tax incentives to attract businesses and talents, like, for instance, digital nomads.

“As for the Minister of Economy, education is the number one priority.”

In terms of education, the Ministry of Economic and Innovation makes an effort to contribute to students’ scholarships in STEM. In addition, the Ministry aims to incentivise foreign students to come to Lithuania and get dual diplomas from Lithuanian and British universities in life sciences in a new project.

Members of the Nordic Chambers of Commerce and non-members attend the event (Photo by Mona Avik via the SCCL)

“I think that we have to involve more coding in our schools, even in the primary schools. When I was in school, I studied coding in seventh grade, and it was far too late. It was boring […] but now there are numerous different kinds of methodologies,” explains Armonaitė.

“I’m a fan of coding because it’s not only about maths and formulas but also about creativity,” she added.

Inflation and the economic growth of Lithuania

“The growth prognosis is great, we do have challenges, but again, the Lithuanian economy withstood Covid during the strictest regulations and quarantine. As a result, our economy grew by 1% at the very beginning of 2021. There were only two countries in the EU that grew during the hardest part of the pandemic,” explains Armonaitė.

Indeed, when compared with the first quarter of 2020, Lithuania had a GDP growth of +0,8% during Q1 of 2021, while France had a growth of +1,7%, compared to the -1,1% of the Euro area in general, according to Eurostat. We can add that Sweden and Belgium stayed at a 0% growth rate.

“I would say it’s quite stable, and our experts are great. So I think everything will be fine,” added the Minister of Economy and Innovation.

What kind of financial sanctions on Russia?

“First of all, Lithuania can’t invoke sanctions on its own. So, I would say it’s a European decision. Energy is something that could hurt the regime, but of course, it could hurt European economies. But again, that’s if military aggression happens. It has to be discussed in terms of imports, energy, and transport. Probably in my view, it’s a personal opinion, financial services could also be unbearable [to be cut out from] like Swift. So this could also be something that even only being mentioned could deter aggression,” answered the Minister in response to a question from the audience.

And what about Taiwan?

“When we look at the European financial market, there is a supply of money, a good supply of money. It’s cheap in Europe. […] What we are trying to discuss and to do is to show our colleagues and friends in Taiwan that the money that they are planning to invest will be competitive here in Europe,” states the Minister.

“Sometimes I hear Lithuanian businesses saying me ‘Oh come on, you’re always attending and visiting foreign events. You like foreign companies more than us’, and this is not true. We want Lithuanian companies to grow and invest here as much as we want foreign companies to invest here,” explains the Minister of Economy and Innovation Aušrinė Armonaitė.

—by Lukas BARBIER (lukas@lukasbarbier.com)

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