Russian business dangerous: Kubilius

  • 2008-09-10
  • By Adam Mullett
VILNIUS - Russian investment into Lithuania is a threat to national security, says Homeland Union party leader Andrius Kubilius.
In light of recent developments in Georgia and the Russian president's foreign policy doctrine, Russian-capital investments in Lithuania can be viewed as a threat.
Financial experts reacted to the comments by Kubilius by reiterating Russia's importance to Lithuanian business.

"I think we need to distinguish between several things. It would be really irrational for us to take any measures against it and conflict with business people working here, and try and force them out of the country," said Gitanas Nauseda, advisor to the president of SEB Bankas. Yekaterina Royaka, a DnB NORD analyst, dismissed talk about Russian investment being a threat to national security as "not serious." She pointed out that Russia is the only country still interested in investing in Lithuania, with other countries having lost interest.

Kubilius said that the five-point foreign policy doctrine recently announced by Russian president Dmitry Medvedev clearly indicated that "Russia retains the unilateral right of defending its citizens and its business interests."

The policy to protect ethnic Russians anywhere is Russia's justification for invading Georgia.
Russia currently ranks first in terms of trade turnover out of the 160 foreign trade partners of Lithuania.
Kubilius said the Lithuanian population should "give up the illusions of Russia's gentleness."
"Living in the light of new events we should not have any illusions. Up until now we thought that Russia's armed aggression against us was very unlikely. We should give up the illusion without delay and review our doctrines, [and] not only those of foreign and defense policy. This applies to the doctrine of operations of the entire political system because the political system and work of parties is just as dangerous, as suggested by The Economist," Kubilius added.

Nauseda thinks the issue isn't as black and white as Kubilius portrays it to be.
"This issue is not that simple. We could look at it one way before the Georgian conflict, but now all things related to Russia have to be looked at through a magnifying glass," he said. "But we can speak about new investment or, say, potential Russian investors. If all of a sudden there were a massive inflow of Russian investment in all Lithuanian economic sectors, we would have to react to this and analyze the reasons behind this," Nauseda added.

Political analysts have said that while a direct attack is unlikely, Russia has other ways to pressure its opponents.
Top business leaders have also urged caution in reprimanding Russia, saying it is better to keep friendly relations with the Eastern giant.
Lithuania's business community is fearful of potential economic sanctions, which Russia may impose in retaliation for sharp criticism of Lithuania's policymakers over Russia's conflict with Georgia, Veidas magazine reported.

"Being a large, ambitious and aggressive country, Russia will use all possible measures of political and economic pressure. Considering Lithuania's dependence on Russia in terms of energy resources and raw materials, we would probably face the whole set of their measures. Small bordering countries are a good example when trying to intimidate others," said Darius Mockus, president of MG Baltic.
Bronislovas Lubys, president of Lithuania's Confederation of Industrialists, also advised Lithuania's politicians to avoid sharp criticism.

Lubys said Lithuania should adopt a more flexible position with respect to Russia, and that Lithuania's sole source of natural gas and the destination of 40 percent of its agricultural output.
In the first quarter, the Lithuanian-Russian turnover increased
The Lithuanian-Russian trade increase was primarily due to the 2.5 billion-litas (729 million-euro) rise in the imports of mineral products, primarily oil and gas.