Laima Andrikienė: ‘Risks arising from dealing with countries under authoritarian regimes were discussed with Lithuanian business representatives’
Press release, 28 January 2022
Photo by Aldona Drėgvaitė
Laima Andrikienė, Chair of the Seimas Committee on Foreign Affairs, says that under Chinese economic pressure, responsible Lithuanian businesses are already looking for new markets to export their products and import raw materials and necessary equipment. According to the Chair of the Committee, the Seimas and the Government are searching, through active diplomatic channels, for new markets for Lithuanian business in order to ensure its sustainability and development.
‘China’s aggressive and unpredictable policy is a problem not only for Lithuania, but also an issue for the international community. Lithuania’s diplomatic efforts to achieve solidarity between the EU Member States have already yielded results. On Thursday, the EU filed a complaint to the World Trade Organisation over Beijing’s economic pressure on Lithuania, where due to Lithuania’s position vis-à-vis Taiwan, de facto sanctions are imposed without their official announcement. I would like to take this opportunity to thank the Lithuanian business community and our entrepreneurs, who invest in new projects, create new jobs, and move, or will sooner or later move, their supply chains to safe and reliable regions and countries,’ said Ms Andrikienė after a closed Committee meeting.
Business representatives attending the meeting noted that problems with China had begun much earlier, even ahead of the talks about the Taiwanese Representative Office in Lithuania. Rimas Varkulevičius, President of the Association of Lithuanian Chambers of Commerce, Industry and Crafts, said that for a number of years Lithuanian businesses had been experiencing obstacles and restrictions in relations with China, and in recent years those trends had intensified.
‘This results in almost no export and limited or completely cut off supply of raw materials and equipment from China. In addition, China warns that it will not allow imports of products made by famous foreign companies in Lithuania. What do Lithuanian enterprises that experience difficulties do in response? They cannot do nothing but wait for the relationship to normalise. In fact, they are looking for new markets for their products, and new sources of raw materials and equipment. This, however, requires time and additional working capital. We must take into account that lately, energy and supply prices have risen several fold rather that by percentage points. Therefore, political government-level decisions are needed to provide the affected enterprises with loan guarantees. In other cases, simply financial support for working capital is needed, and this is true for enterprises of any size. We need to mobilise diplomatic and other institutional efforts with special engagement to find new markets. What is more, any decisions on the national-level must be economically motivated. Only this way can we ensure the sustainability and growth of Lithuania’s business,’ said Mr Varkulevičius.
Vidmantas Janulevičius, President of the Lithuanian Confederation of Industrialists, who attended and spoke at the meeting, observed that closer dialogue between the government and business with a view to best assessing all the risks before making any decisions, was a key condition for common success.
‘We need to learn our lessons and move forward. Let us not forget that the stronger the business that generates added value is, the stronger is the state. In addressing the current challenges resulting from tensions with China, we must also bear in mind other issues. In addition to the risks posed by the pandemic and global tensions, the biggest long-term challenge for industry now is slow labour productivity growth, rapidly increasing labour costs, and labour shortages. Labour productivity can be enhanced by investing in production volume increase and modernisation of equipment. To achieve this, however, the Seimas and the Government have to make certain tax-related decisions, for instance on the taxation of distributed profit. It is crucial to achieve by joint effort that Lithuanian businesses maintain competitiveness in the global markets,’ said Mr Janulevičius.
Besides the President of the Association of Lithuanian Chambers of Commerce, Industry and Crafts and the President of the Lithuanian Confederation of Industrialists, the meeting of the Seimas Committee on Foreign Affairs on Friday, was attended by Rolandas Valiūnas, Chairman of the Board of Investors’ Forum; Danukas Arlauskas, President of the Lithuanian Employers’ Confederation; Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania; Egidijus Meilūnas, Vice-Minister of Foreign Affairs; and representatives of other authorities.
The meeting was aimed at discussing Lithuanian economic resilience in today’s challenging environment, and matters related to strengthening of Lithuanian economic diplomacy.
Inga Milašiūtė, Adviser, Office of the Committee on Foreign Affairs, tel. +370 5 239 6799
Monika Kutkaitytė