VILNIUS - Kaliningrad Governor Vladimir Yegorov has proposed that Prime Minister Algirdas Brazauskas hold a bilateral meeting to discuss repercussions of a draft law on Kaliningrad's free economic zone, news of which has Lithuanian businessmen in a panic.
During their meeting in Vilnius on March 18, Yegorov assured Brazauskas that, as it is now, the law would have no effect on companies now operating in Russia's exclave.
But fears have taken root after political scientists said amendments to the law on the Kaliningrad economic zone would essentially deter Lithuanian business from staying in and entering the region. Raimundas Lopata, director of the Institute of International Relations and Political Science at Vilnius University, said that after the law is adopted the tax benefits in the zone would only be available to companies investing around 150 million rubles (4.1 million euros). Worse, smaller companies already operating in the enclave would lose all privileges.
Lithuanian capital in the Kaliningrad region accounts for 21 percent of foreign investments - the nation's largest investment abroad.
Yegorov proposed that Brazauskas chair a bilateral council meeting that would open to businessmen and women worried about the law. He also informed the prime minister about plans to launch a water-purification reconstruction project, aimed at improving equipment in cellulose factories. Vilnius has repeatedly drawn Russia's attention to the pollution in the Nemunas River, for which some $450 million has been allocated to clean it up.
Other issues on the meeting's agenda included power, transport and infrastructure.
