Summed up

  • 1998-12-17
NEW SHOPPING MALL MAY GRACE TALLINN: The board of Finland's SOK trade group is considering building a shopping centre in Tallinn which would resemble the group's shopping mall Itakeskus in Helsinki. Pekka Pirttikoski, SOK development director, said he doesn't think the purchasing power of Estonians will fall in the next few years, and if the company decides to build a shopping mall, the investment will pay for itself eventually. However, Pentti Korhonen, director of Stockman department store, was more skeptical of his competitors' success. "I wonder where the clients will come from," he said.

EVERYTHING MUST GO: The Lithuanian government will put up 207 companies for privatization in January, 1999. State-owned stakes in 62 companies will be on offer at auctions run by the State Assets Fund. Over 80 percent of shares in the fish processing company Zuvu Konservai will be offered for an open privatization tender although no initial share price has been announced. Klaipedos Hidrotechnika, a company engaged in wharf building, repair and sea dredging works, will be privatized via direct negotiations. The government will sell 95 percent of the company for 11.2 million litas ($2.8 million). The highest price has been fixed for 21.53 percent of shares in Gargzdu Mida. The stake will be auctioned by the State Assets Fund at an initial price of 11.88 million litas.

GOLD TO COME DOWN IN PRICE: Riga Jewelry Factory announced it might cut prices next year, as excise tax on precious metals will be reduced from the current 30 percent to 5 percent as of Jan. 1, 1999. "The excise tax will be reduced next year and we have grounds for positive thinking," said Uldis Berzins, the company board chairman. He said the reduced excise tax will allow the company to compete with illegally imported jewelry. According Berzins' estimation, around 50 percent of the jewelry offered on the Latvian market is illegal.

EVEA BANK SEEKS LATVIAN INVESTOR: Estonia's EVEA bank gave up finding a Western investor after its talks with the British Siege Plc slowed down. Instead, it turned to Latvia and Russia for help. The bank made an offer to one of Latvia's biggest banks, Parekss Banka, and to Russia's Inturnbank. "The talks [with Siege Plc] have lasted for two months, and there's a time limit to everything," EVEA bank Board Chairman Margus Tilga told the Eesti Paeveleht daily. "As we also have other investors, we will start working with them." Tilga and the bank's temporary trustee in bankruptcy Tiina Mitt met with Parekss Banka leaders in Riga. So far Parekss has been refusing to pay $19 million for EVEA bank, but the Estonian's bank representatives said talks are continuing. The Bank of Estonia started EVEA bank's bankruptcy proceedings at the beginning of October when it found that the bank had not been able to meet its clients' demands and was undercapitalized.

REPSE: THINGS ARE GETTING BETTER: The Russian crisis no longer has a strong effect on Latvia's economy, said Einars Repse, president of the Bank of Latvia. He pointed out that the demand for foreign currencies had reduced considerably, and in November the total value of sold foreign currencies was the lowest in the last four months. The lat's coverage with foreign currency reserves still exceeds 100 percent. In November, the cash base also recovered after several months of decline and increased by about 15 percent. Repse had to admit, however, that secondary effects of the Russian crisis are still felt, and are reflected by such indicators as the unemployment rate that climbed to 8.6 percent by mid-November.

ESTONIA SOLVES MILLENNIUM BUG PROBLEM: Estonian state institutions will replace all information systems which might have the millennium bug, said Arvo Otti, state chancellery information systems department director. Otti said the year 2000 should cause no problems for Estonian state institutions, as the information technology is sufficiently new, and most of the outdated hardware had been replaced already. "Most of the state's information systems have been acquired over the past three to five yeas, but the millennium bug may occur even in some newer software," Otti said. The World Bank has given Estonia a $100,000 planning grant to solve its year 2000 problem.

FREE CALLS FOR LITHUANIANS: The telecommunications company Lietuvos Telekomas announced that all Lithuanian residents will be granted one hour of free local telephone calls a month in 1999. This year, Lithuanian residents could use three hours of free local telephone calls per month, with two hours covered by government and one hour by the Lietuvos Telekomas. The government has not said yet if it would continue to pay for two hours of telephone calls next year. Pensioners and people with low incomes were given five hours of free calls and had a discount on subscriber fees in 1998.