Taking A Dig into Lithuania : One of Globe Chamber of Commerce's Trade Mission Destinations

Lithuania, an Eastern European country with a coastline at the Baltic Sea in west. It is the largest and most populous of the three Baltic States. The country is bordered by Belarus, Latvia, Poland, and Russia (Kaliningrad) and it shares a maritime border with Sweden.

Lithuania covers an area of 65.300 km², making it slightly smaller than half the size of Greece, or slightly larger than West Virginia. Its smooth, flat landscape offers sandy beaches, numerous lakes, wetlands, and mixed forest areas.

The country has a population of 2,8 million people (in 2015), capital and largest city is Vilnius. Spoken language is Lithuanian, a Baltic language, closely related to Latvian. Main religion is Roman Catholic (more than three-quarter).

Ethnic Lithuanians make up more than four-fifths of the country’s population; there are also Russians and Poles and lesser numbers of Belarusians, Ukrainians, Latvians, Tatars, Roma (Gypsies), and others. There was a significant Jewish community in Lithuania prior to World War II, and an influx of Jews from German-controlled Poland in 1941 boosted this population to nearly 250,000. By 1944, however, the majority of the population had been murdered, deported, or sent to concentration camps.

The official language of Lithuania is Lithuanian. Russian, Polish, Belarusian, Ukrainian, and other languages are spoken in the larger cities. Yiddish is commonly spoken by members of the tiny remaining Jewish community in Lithuania.

Lithuania was the last pagan country in Europe, accepting Roman Catholicism in the late 14th century. About four-fifths of the population is Roman Catholic; there are smaller groups of Evangelical Lutherans and other Protestants, as well as people of other faiths. Elements of the pagan religion have survived in the countryside.

Economy

Even before independence from the U.S.S.R. was formally established, the Lithuanian government had embarked on a program of dismantling the Soviet economic system. Beginning in February 1991, laws were passed to facilitate privatization. Complications marred the government’s aspirations, however. Foremost, the bulk of Lithuania’s trade was still closely linked to the former republics of the U.S.S.R., which were themselves in the throes of economic collapse. Second, Lithuania was dependent on critically important foreign oil and natural gas and industrial raw materials. Finally, the transition to a market economy had caused high rates of inflation and unemployment. Nevertheless, the succeeding governments continued to implement stringent stabilization policies; by 1995 inflation had been reduced, and the country’s trade balance was positive for the first time since independence. Lithuania was admitted to the EU in 2004.

Agriculture

The development of agriculture since 1991 has been closely linked to land reclamation and swamp-drainage schemes. By the early 21st century agriculture contributed only a small percentage to the gross national product (GNP) and employed only about one-tenth of the economically active population. The chief trend is toward the production of meat and milk and the cultivation of flax, sugar beets, potatoes, and vegetables. A significant portion of total production is made up of fodder crops, grain (barley and rye), and leguminous crops; most of the rest consists of potatoes and vegetables. Livestock breeding is still the leading branch of agriculture, with an emphasis on dairy cattle and pigs. Most crop cultivation is mechanized, though during the autumn harvest large amounts of manual labour are still required.

Lithuania has long been a small net exporter of food products. The privatization of farming in the early 1990s began with the decision to liquidate all former collective and state farms. Some private farms emerged in the period immediately following independence, but the process was slow. Not only were there problems of financing, but equipment appropriate to smaller-scale farming operations was not readily available. By the late 1990s private farms had begun to outnumber state farms. The majority of these farms are not specialized and are involved in mixed production based on crops and livestock.

Agriculture products highlight: Grain, potatoes, sugar beets, flax, vegetables; beef, milk, eggs; fish.

                                       

Manufacturing

During the Soviet period Lithuanian economic policy emphasized manufacturing. After World War II the country’s machinery, shipbuilding, electronic, electrical and radio engineering, chemical, cement, and fish-processing industries were overhauled. Traditional industries such as food processing and various branches of light industry also expanded significantly. Following independence in 1991, the textile, chemical, and food-processing sectors were the first to adapt to new market conditions. The manufacturing of communications equipment became a dominant economic activity. By the late

Industries: Metal-cutting machine tools, electric motors, television sets, refrigerators and freezers, petroleum refining, shipbuilding (small ships), furniture making, textiles, food processing, fertilizers, agricultural machinery, optical equipment, electronic components, computers, amber jewelry.

Trade

Lithuania’s chief trading partners include Russia, Latvia, Germany, Poland, and Estonia. Imports include crude petroleum, machinery, foodstuffs, chemical products, and metals. Lithuania exports refined petroleum, foodstuffs, machinery, textiles, and transport equipment (mainly automotive parts). Lithuania joined the World Trade Organization in 2001.

Exports - commodities: refined fuel, machinery and equipment, chemicals, textiles, foodstuffs, plastics

Exports - partners: Russia 13.7%, Latvia 9.8%, Poland 9.7%, Germany 7.8%, Estonia 5.3%, Belarus 4.6%, UK 4.5%, USA 4.4%, Netherlands 4%.

Imports - commodities: oil, natural gas, machinery and equipment, transport equipment, chemicals, textiles and clothing, metals