SGI 2024 | Lithuania | Executive Summary

Executive Summary

Recent Governments Experts

SGI experts on Lithuania

Ramūnas Vilpišauskas

Ramūnas Vilpišauskas is a director and professor of the Institute of International Relations and Political Science, Vilnius University. He has been a visiting fellow at several universities in the United States (Syracuse University) and Canada (Carleton University), has been a Fulbright scholar at the Columbia University, conducted research at a number of European institutions including European University Institute (Florence). He has worked as a Chief Economic Policy Advisor to the President of Lithuania V. Adamkus and the Head of Economic and Social Policy Group (2004–2009), has also been appointed to coordinate the team of advisors to the President (2006–2009). He has an extensive list of publications on EU enlargement, transition reforms, policy analysis and European integration policies. One of his recent publications, “Eurozone Crisis and European Integration: Functional Spillover, Political Spillback?” appeared in the Journal of European Integration in April 2013.

Marius Kalanta

Dr. Marius Kalanta is a Research Fellow at Institute of International Relations and Political Science at Vilnius University and a Senior Researcher at policy analysis and research centre Visionary Analytics. He has over 8 years of experience in basic and applied research and policy analysis in the fields of Industrial, R&I, entrepreneurship, trade, competitiveness, and labour policy. He has a strong theoretical background rooted in political-economic perspectives such as growth models, business-state relations, industrial, technological and economic upgrading as well as methodological background in case study research.

Daunis Auers (Coordinator)

Dr Daunis Auers is Associate Professor of Comparative Politics at the University of Latvia. He defended his PhD at University College London (UCL) and his MSc. at the London School of Economics (LSE). He has been a Fulbright Scholar at the University of California-Berkeley (2005-2006) and a Baltic-American Freedom Foundation Scholar at Wayne State University in Detroit (2014). He has widely published on Baltic and European politics. His most recent book – The Comparative Government and Politics of the Baltic States: Estonia, Latvia and Lithuania in the 21st Century – was published by Palgrave Macmillan in 2015.

Lithuania’s coalition government faced a challenging environment in 2022 – 2024. After coming into power in late 2020, it had to deal immediately with the ongoing COVID-19 pandemic crisis. Notably, the relatively good performance of the Lithuanian economy during the pandemic somewhat eased the challenges faced by the government. In mid-2021, it was confronted with an irregular migration crisis initiated by Belarus, followed by another crisis involving undeclared economic sanctions applied to exports from Lithuania by Chinese authorities in response to Lithuania’s government having allowed Taiwan to open a Taiwanese representative office in Vilnius.

In 2022 and 2023, political and public attention focused on Russia’s large-scale, unprovoked war against Ukraine and on mobilizing diplomatic, humanitarian, financial and military support for Ukraine. Efforts included hosting refugees from Ukraine in Lithuania and addressing their needs, as well as actively supporting new EU sanctions against Russia for its violations of fundamental UN norms. According to the Ukraine Support Tracker compiled by the Kiel Institute for the World Economy, Lithuania led the list of donors in terms of commitments made from 22 January 2022, to 31 October 2023, relative to donor country GDP (including the share of EU aid).

The geopolitical crisis prompted the government to accelerate defense spending and collaborate with NATO allies to bolster their military presence in Lithuania. The country faced a number of challenges simultaneously, balancing the need to raise additional funds while implementing compensatory measures to assist households and businesses during the energy and cost-of-living crisis, at the same time it was increasing spending for education, healthcare and social support. The government managed to secure resources to cover most public sector needs, but some funding sources, such as the temporary increase in profit tax for banks, are not sustainable. Meanwhile, an attempt to agree on and adopt tax reform was largely unsuccessful due to disagreements among coalition partners and a lack of support from opposition parties.

At the same time, the government also proceeded with key reforms in 2022 – 2023. The reform of the civil service was adopted in May 2023, and if implemented properly, is likely to lead to a more motivated and effective civil service. It should also promote a more systematic use of evidence in the policymaking process and foster a more competitive, adaptive and future-oriented public sector. In this regard, the progress made toward integrating various data registers and opening data pools to state institutions, researchers and the general public should be emphasized. The reform of data governance is likely to have a positive long-term impact on the transparency of policymaking processes, the systematic use of evidence and the sustainability of governance.

The government also took significant steps toward introducing structural reforms in healthcare, education and the transition to renewable energy. It has ambitious goals in many of these areas, especially the green transition, but the practical implementation of those policies remains uncertain. Restructuring healthcare organizations and educational institutions has been challenging, and public demonstrations by some trade unions representing teachers illustrate the political difficulties involved. Similarly, recent protests by farmers – with some demands related to the environmental agenda of the government and the EU – exemplify the future challenges in implementing more ambitious goals.

Finally, despite the need to manage multiple crises and advance structural reforms, the government successfully initiated and steered the drafting and adoption of the long-term Lithuania 2050 strategy. This exercise can be viewed as a good practice example of an inclusive process, involving researchers and societal stakeholders and utilizing a variety of methods, including foresight. However, much will depend on the strategy’s implementation in practice and the monitoring of progress as governing coalitions change.

Citations:

Kiel Institute for the World Economy. 2024. “Ukraine Support Tracker.” https://www.ifw-kiel.de/topics/war-against-ukraine/ukraine-support-tracker/