Lithuania has to clean up its own yard first

  • 2018-01-31
  • Linas Jegelevicius

The centennial anniversary celebrating Lithuania faces many challenges, but the biggest malady is emigration, claims Zygimantas Mauricas, a much sought-after Lithuanian economist and commentator. “However, in stemming the exodus, not only a higher wage matters. The pay of the Poles, Hungarians and Czechs, for example, isn’t much higher than ours, but they don’t leave their homelands in hordes,” Mauricas told The Baltic Times. He emphasised several times throughout our conversation that Lithuania ought to clean up its own yard first, in both the direct meaning and figuratively, meaning embedded corruption, injustice and mistrust in the state.

What issues within the Lithuanian economy seem to you more urgent than the others?

Emigration is the Number One issue on the list, first and foremost. Secondly, the huge mistrust (of the population) within the state and its authorities, which makes us all look as if we’re living in a realm of twisted mirrors. This is definitely a remnant of our Soviet past, in which daily life details sound anecdotal to many today. Empty shop shelves and huge queues for goods being brought epitomise the era. However, remember, the people could get by quite easily relatively due to state-controlled prices and cheap utilities. Similarly, now, with the prices, utilities and taxes being at the higher end, many people are rather affluent too. For example, our doctors complain, quite rightfully, about their small salaries. But again, they live pretty well. What’s characteristic to Lithuania is that we often want to see and portray ourselves as one sort of nation, a modern and efficient one embracing the best Western practices, but in reality there are many gaps in dealing with things; some of them are from the past, and therefore the mentality, What I find disturbing (in Lithuania) is that we can’t find common ground amongst ourselves on many issues. Then the situation begs the question: how can we come up with a vision for the nation when we disagree on so many things of not the first importance? 

The unbiased picture of us is such that we resemble a state of mediocre development, however one with very big aspirations, which is good. Our advancement, which we want to much more rapid, is acknowledged however by many international bodies. To remind everyone, Lithuania is this summer set to become a member of the rich countries’ club, the Organisation for Economic Cooperation and Development (OECD), although our economic indicators are quite worse off than those of the other OECD member states.

I’m worried that Lithuania could get stuck at its current level of development as Argentina has done. A hundred years ago it was as affluent as the United States, but now the disparity between the standards of living in the two countries is four-fold. An example of this sort in Europe is Greece, which is currently stagnating. 

Speaking of emigration, Lithuanians emigrate not only for a better livelihood abroad but also because of the daily injustices they see here. An uncertainty about the future comes as a third factor. People are driven away by such questions as what if a new crisis strikes and what will pensions be when I retire? Even people who earn more than the rest don’t have confidence confident in Lithuania, therefore the frugality of many business professionals who don’t want to invest in the expansion of their businesses, in raising capita and in their workers. Coupled with the ongoing revolution of the traditional industries (I have in mind their going digital), all of this doesn’t bode well. No wonder that, against this backdrop, the average Lithuanian business owner is only concerned with his or her own business interests.

Speaking of the unceasing decamping, do you believe it’s possible to stem it with the borders open and the disparities in the standards of living between here and the West? How do you view the headline-grabbing initiatives to bring Lithuanians back?

Indeed, many of the campaigns of this kind seem to me quite declarative, as if embellishing the emigration-targeting goals the ruling political parties have already set out. Tackling emigration from its core hasn’t become a primary objective for any party so far as the execution of such an ambitious plan would perhaps reach a stalemate due to your aforementioned reasons. 

What is disturbing is that Lithuanian governments have sent its émigrés quite a few ambiguous messages, which in fact deter them from returning. For example, a demand to pay social security taxes throughout the entire period of departure if the emigrant hasn’t declared it to Lithuanian officials is such an example. This can add up to a huge amount of money for many. The unwillingness or inability of Lithuania to strike an accord on dual citizenship, another key issue for many emigrants, is another example of our failure to work things out.

Do you believe Lithuania has an efficient system to successfully integrate former emigrants?

I really doubt whether we’re excelling with our efforts and pledges to emigrants on the subject of their integration upon their return. Look, I ‘m myself a former emigrant who’s lived in a number of different countries including Latvia, Poland, France, Armenia, Ireland, Great Britain and Switzerland. I’ve taken different jobs there. I was a programmer in Ireland, a sales person for a Lithuanian furniture maker in Great Britain, a EU consultant in Armenia and a financial sector researcher in Switzerland. With the jobs being quite different, my interest in the investment environments in these countries has persisted throughout. 

Why is Luxembourg, for example, so popular with investment funds? In fact, this tiny country leads the pack in this regard. Being a tax haven does matter in being acknowledged as a hub of the kind, but others things, such as the simplicity of founding an investment fund, matters no less. The entire setup can be achieved easily following the guidelines set out on a single sheet of paper. On the other sheet of paper they provide you with a list of basic contacts to move the business forward. Do you imagine that in Lithuania? I don’t. To answer your question on emigrants’ integration in Lithuania, I’ve visited a couple of websites aiming to help emigrants upon their return here. To tell the truth, I got mired in the ocean of information on different links through all of which the emigrant is taken. I really doubt the usefulness of this abundant information.

On the whole, speaking of Lithuania, I believe that we’re often forced to deal with redundant information, requirements etc to a level where it exasperates and irritates many. I’ve encountered that kind of trouble myself. As I completed my studies in Switzerland, a non-EU country, I had to re-evaluate my Swiss university diploma, issued in English, in Lithuania after I came back to Vilnius. I still feel dismayed by what I’ve been subject to throughout the bid, a prolonged questioning on how, when and by whom the diploma was issued. The Lithuanian officials were unable to verify basic information and their demand to translate my English-language diploma into Lithuanian first made no sense at all. The experience exasperated me beyond words, the feeling of being forced into a subservient position throughout the process still haunts me.

Many former emigrants are subject to the same kind of treatment, scrutiny and bureaucracy upon their return. I often think that our officials act too bookishly, formally as if having some inferiority complex. I can’t otherwise explain the abundance of their requirements and the tone in which they formulate them.

Yet many experts declare that we’ll soon hit the mark when emigration numbers will start declining, mostly due to new demographics, i.e. few young and working-age people left in the country.

Indeed, this is what’s going to happen in the years to come. I’ve even put a 1,000 euro bet on that it will happen this year due to your aforementioned reason. Also bear in mind that the arrival of workforces from third countries such as Ukraine has been constantly growing. So I’m confident that, already this year, migration in Lithuania will be positive, although many people see 2018 and the one after as their last chance to leave for the United Kingdom before the completion of Brexit. In the near future, our reliance on foreign workforces will be even larger. However, we tend to mistreat immigrants, especially Ukrainians, and we don’t allow them to bring their families here and cheat them on their wages. No wonder that the Ukrainian President Poroshenko raised the issue of Ukrainian migrant workers’ exploitation during his recent visit to Lithuania. 

Speaking on the whole, we need to improve the way our people feel in Lithuania, to fight embedded corruption and injustice. Only then will emigration subside.

Nevertheless, with EU support, which accounts for a third of our annual budget, Lithuania has done a lot in moving from being a leading Soviet republic to a new market economy. As many experts believe that emigration will continue, in lesser numbers however, until the level of wages reaches those in the West, I want to ask you when this will happen?

I don’t think that wages are always a defining factor in emigration. The wages in Hungary, the Czech Republic and Poland are at the lower end of the EU average, but migration within these countries is positive. Even the Estonians managed to stem emigration, with some technical tricks of their migration statistics, however. What I want to underscore again is that it’s not higher wages, but something else that holds the Hungarians, Poles and Czechs in their homelands. What exactly? As I mentioned before, it’s trust in their states, the feeling of security and a positive psychological atmosphere, all of which are missing in Lithuania, alas. 

Unlike in Estonia, where every yard is in good order and well taken care of, many yards (of apartment blocks) in Vilnius, especially in the suburbs, are still untidy and messy. Maybe it doesn’t sound very relevant to what I’m speaking about, but the bottom line in the matter of the yards and our greater maladies is the same, ie. a lingering feeling of temporariness. No wonder that many local communities don’t rush to invest in their surroundings as, with new authorities taking over, new policies will be passed. Employing the allegory of the yard, when the resident doesn’t feel like the proprietor of the yard, he or she doesn’t feel comfortable in their environment and, possibly, makes plans to leave the suburb, the city and perhaps the country. 

For me, these seemingly insignificant things are big. Striving to embellish your own surroundings and live in a pleasant setting has to come from the bottom up, meaning local communities should be encouraged to come forward with initiatives as to how to improve them. Unfortunately, we often see the opposite, the top-to-bottom approach, when the authorities proceed with structural changes without listening to the communities. No wonder that many residents don’t even know who built, say, a playground, and with whose money it was done. When I lived in Switzerland, for example, I marvelled at the bottom-to-top determination to make a change for the better in their small communities and beyond. We Lithuanians are very far from that so far, unfortunately. 

Some of your fellow economists have warned of a new crisis looming. The prediction is based on signs of an emerging stagnation in the real estate sector. What’s your take on this?

Indeed, some of the signs you’re referring to are worrisome. However, I believe it’s too early to speak of an encroaching new down-turn. I think, this year, we’ll be ok more or less. The inertia from previous years should carry us through the entire new year unless a 2008-like shake-up of a major financial body with the subsequent aftermaths occurs. It’s unlikely however, I’d say. Speaking of things to watch is the burgeoning market of cryptocurrencies, the situation in China and in Italy, for example. The major European economies, like that of Germany and France, are doing pretty good so far. With the excessive budget we have in Lithuania this year, we ought to think how to properly use the money, perhaps invest it in the clean-up of our yards and not only of them. And certainly, we have to invest in innovations and automation. The bragging that Lithuania has best the highways in the region is a thing of the past. To wrap up, Lithuania faces many challenges, but with a proper attitude and a strategy, supported both by the parties and the population, they can be overcome and the highly successful example of Ireland, which has managed to turn things around regarding its high emigration and the lack of confidence in the state, shines as the polar star for us.