Labor's populist promises fraught with national bankruptcy

  • 2004-09-02
  • By Milda Seputyte
VILNIUS - On a breakneck tour of the regions a month-and-a-half before the upcoming parliamentary election, the popular Labor Party has begun to make promises that would, according to experts, throw the country into bankruptcy if realized.

The campaign promises are indeed mind-boggling, and they have been strongly criticized by the current left-of-center government.
For example, Labor Party leaders promised that during the first working day in the Seimas (Lithuania's parliament) they would decrease heating prices by 10 percent - 20 percent.
Labor leaders said they would raise tax-free income from 290 litas (84 euros) to 390 litas in 11 days, while the minimum salary would be increased to 600 litas, and pensions would be boosted to 480 litas from the current 344 litas.
What's more, in the same 11 whirlwind days of legislation a Labor-controlled Parliament would amend laws regulating housing loans in favor of young families. If, for example, an apartment purchased by a young couple were built by a Lithuanian company, all interest would be covered by the state.
The list goes on. New enterprises will be exempted from taxes for four years, and the brightest students will be given an opportunity to study abroad, completely at the expense of the national budget.
The Labor Party has been claiming that all these promises could be accomplished in 1,111 days, or slightly more than three years.
Not surprisingly, political analysts note that Laborites have avoided making these extravagant declarations during meetings with, or in, the presence of government officials.
"Officially they limit themselves to very general phrases. However, in meetings with simple people, their tactics are first to denounce the present government and then to claim unrealistic plans," said political analyst Virginijus Savukynas.
According to the Ministry of Finance, the promises are unrealistic because similar strategies could increase the fiscal deficit, which in turn means that Lithuania would be unable to fulfill its commitments to the EU.
Moreover, finance experts believe that a promise to reduce what the Laborites are calling the "tax for heating" is an incomprehensible idea that turns Lithuania back to Soviet times, since this is not actually a tax, but rather payment for a service.
Prime Minister Algirdas Brazauskas told Lithuanian National Radio that the Labor Party's financial promises might endanger the country's confidence. He is confident that this could destroy the national finance system and would demolish budget politics.
The Labor Party has been leading opinion polls ever since its founding in October, 2003. The last Baltijos Tyrimai opinion poll in August showed that Labor has 29 percent support from the voting-age population, way ahead of its closest rival, the Social Democratic Party, which is at 18 percent.
During the last EU parliamentary elections, the largest portion of Lithuanian votes went to the Labor Party, which gained five mandates out of 13 in the European Parliament.
The party leader, Viktor Uspaskich, an ethnic Russian entrepreneur and one of the country's richest people, has had an approval rating of 62 percent in opinion polls, second only to President Valdas Adamkus.
"People are looking for new faces, and those who have been disappointed by [former President Rolandas] Paksas are now discovering someone very similar," said Savukynas.
"The phenomena of Uspaskich lies in his charisma. He is very confident, and despite the fact that his Lithuanian is very poor, he barely ever looses a dispute," he added.
Uspaskich's rising star appeared four years ago when a popular television humor show, "Dviracio sou," began using him as a prototype for one of their characters. Referring to Uspaskich's pickle producing company, the character was named Agurkichas, a derivation of the word for cucumber. The character mocked Uspaskich's poor knowledge of Lithuanian, ironically strengthening his image as a simple man, something many Lithuanians can relate to.
Later Uspaskich craftily exploited this image of Agurkichas in real life, using the character's vocabulary and humor.
However, political analysts strongly criticize him for populism and his party for failing to have an ideology.
"Unfortunately, the more we criticize him, the better for him. In that way the antagonism between the elite and him becomes stronger, which is even more convenient for him because most Lithuanians do not relate to the elite," explained Savukynas.
With the inception of the Labor Party, Uspaskich officially declared that he did not intend to associate his name with any ideology, since this was the old-fashioned way of party engineering. Thus, deprived of a platform, party members are united by their human attraction to Uspaskich.
"This is clearly a one person party that consciously does not try to bill-post its other less experienced party members. Therefore, this new political force, which fails to have any ideology, might endanger the established political life in Lithuania," said Savukynas.