Even the biggest enemy of Lithuania could not deny the economic progress of our country in the last ten years. In terms of income, we have caught up with and even surpassed some old European countries, we are consistently integrating into the West in every sense and simply live better and better. As in the rest of the world, you still need to work in Lithuania, but those who want it have all the opportunities to earn well – the number of well-paid jobs is increasing, it is easy to start and grow your own business.
In such circumstances, it is easy to forget that today’s well-being is not a given, but a consequence of the right decisions made several decades ago. Not to mention the strong Euro-Atlantic direction chosen since the restoration of independence, Lithuania also made the right decisions in attracting foreign investors, energy independence, digitization of public services and many other important areas, which allowed us to become a flexible and dynamic economy. It is simply unbelievable that we have already surpassed countries in a much more favorable geographical position such as Hungary or Slovakia, let alone neighboring Latvia or Estonia, which speaks different dialects of the same language as rich Finland.
The problem is that a good place is not empty, others claim it, and the long-earned laurels start to lull us to sleep. Even before the Russian war, investors were talking loudly about the structural problems of the Lithuanian labor market and other problems limiting development, while such future or even existing economic stars as Poland or Romania were calmly and purposefully preparing their homework.
Having already reached a noticeable level of comfort at the end of the last decade, we can start to stumble and falter in terms of attracting investments, and in some places this is already happening. In some cases, our investment attraction strategy has already become nothing more than “non-objection”, although this is not enough for foreign or even Lithuanian investors.
Not only that, but narratives of unsustainable political appeasement are also gaining ground in some regions: the flag of “no manufacturing expansion” has become dangerously dearer than simply not opposing job creation, let alone proactive efforts to attract investors. It has become easy to forget that it was the foreign investors attracted earlier and the Lithuanian businesses that followed them that probably contributed the most to the prosperity in which some already want to limit development. The passivity of regions receiving GPM redistributed by big cities seems particularly paradoxical. It’s not cheap when we already live quite well, but where would we be now if we hadn’t invited those first?
Not only that, things got even more difficult in 2022. at the beginning Let’s look at today’s Lithuania through the eyes of a Western European or US investor: it is not cheap anymore, next to an aggressive neighbor and not yet completely resistant to the temptations of political populism. The problems of some new large investors with local communities also send a signal to other interested parties that the promises of the state can quickly fade away here. I understand that Rheinmetall can really break out, but what about the other real interests? And the old investors themselves, who paid salaries and taxes and even managed to expand in recent difficult years, are also not imprisoned here or eternal and always have options to choose from.
Therefore, both the future national authorities and municipalities, and apparently we, the inhabitants of this country, must wake up again. We are not unique, special or deserving of anything. Business is pragmatic, it evaluates, compares and calculates, and at the time Lithuania’s “offer” was simply more competitive than elsewhere. We no longer count money in Spanish or Italian resorts, just because we once focused, were not too lazy to turn our heads, roll up our sleeves and make a good offer. But it is today that we must lay new foundations that will determine our prosperity for the next few decades.
To be more specific, the national government and self-government today are not only obliged to roll out red carpets for foreign and local investors (to carry out preparatory work, advertise, provide benefits, support or, let’s say, “buy” the investment), but also to basically grow economic development and investment recruitment knowledge and experience. An extremely important role must be assigned to self-government – by using national programs, cities and regions must have a proactive policy and know-how for promoting the development of existing investors and attracting new investors. It seems that our regions have not yet realized that today it is the regional government that attracts or stops investments. Indeed, we currently have accumulated most of the experience of economic development at the national level, but cities and regions will have to catch up strongly – in a competitive global environment, simply not interfering or politely agreeing is no longer enough. The passivity of today’s regions is surprising even from a political point of view – after all, an independent investment promotion strategy and activities would help reduce the “risks” of fluctuations in the national political cycle.
It is also surprising that local communities are used to comfort and want more of it, but they do not make efforts to spread the good news to investors. It becomes much more comfortable to go against negative preconceptions than to understand the benefits of an investment and evaluate them positively. Today, that simply cannot happen anymore. If communities are worried or don’t know, let’s work with them, communicate, invite, build the infrastructure and common environment they need. Undoubtedly, the objective interests of the communities must not suffer as a result of business development, and the business itself is interested in good relations with people and the environment. However, the investment environment cannot be surrounded by myths and myths initiated by anyone, and if they appear, it means that someone is not doing their homework properly, is not trying, or is even deliberately doing harm.
Energy and courage, or at least ideas, are starting to be lacking at the national level as well. There is a lack of talent, but at the same time we want a responsible migration policy? Great, let’s make the kind of universities that the most ambitious people around the world want to attend. In one form or another, let’s “buy” foreign specialists who have already graduated, let’s try to get them back and let’s grow our own in every possible way. Let’s take advantage of the Ukrainian diaspora, let’s finally do something meaningful with Taiwan. Let’s agree on, for example, a branch of a prestigious global university in Lithuania. There are always ways, but they can no longer be slow or standard.
The good news at the moment is that after a year and a half of real stagnation, Lithuania is showing a bit more interest from investors. The first half of this year shows signs of recovery, interest in us is recovering a bit, but it is followed by the question: “why should I invest here and not, for example, in Portugal, Spain, Romania or Poland?”. My team and I can provide a “red carpet” for such an interest, but the efforts of individual free zones are often not enough. In difficult circumstances, the Government, “Invest in Lithuania” and, very importantly, the teams of cities and regions should join the “laying of the carpet”.
Therefore, today I urge the private, administrative, population and political community that is indifferent to the business and economy of Lithuania to forget the disagreements and return to the “hungry” 90s or the crisis of 2008: today it is not poverty that poses a danger to us, but the lethargy brought by prosperity. Let’s admit that we have come to a new crossroads: we continue to grow or we don’t. We certainly still have ways to manage risks and make proposals, but this needs to be done proactively, energetically, professionally and courageously. It was only recently that I finally realized that the so-called “middle income trap” is not due to the comparative base effect, but due to resting on one’s laurels. And that trap is not made by average income, but by “average thinking”.
Let’s recall the Barclays investment once again: even if we “bought” it in a sense a dozen years ago, its significance for today’s thriving Lithuanian IT sector – both for services and, more importantly, for our own IT product developers – was historic. In less than a decade, this bold step (like many others) helped all of Lithuania to climb unseen mountains. But these “mountains” keep changing and growing, so we must bring new energy to avoid being left at the foot.
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2024-08-25 17:48:06