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Distinguished participants of the conference,

Dear colleagues,  

Ladies and gentlemen,

On behalf of the Foreign Minister Petras Vaitiekūnas and our Ministry I would like to welcome you all in Lithuania.  We also thank the organizers -- Lithuanian Development Agency and the Belgian company „The European Finance Convention“ -- for the great idea to have this conference and for this invitation.  

We are impressed that so many leading business representatives from Lithuania and abroad have taken interest in this event.  I was reported that yesterday’s discussions were very lively and fruitful. It is a good sign. Lithuania with its vibrant economy must be an attractive and a challenging topic to discuss.  I wish that today we remained on the same path.

Let me start with a few words about our Ministry’s role in the development of Lithuania’s economy. Lithuania has 56 diplomatic missions and consulates abroad.  This is an important asset for our potential business partners looking for investment opportunities in Lithuania. We encourage them to take the advantage of a wide range of services that our diplomatic service is providing.  Although not always perfect, we are always flexible and open to cooperation.

Export growth is one of the driving forces behind Lithuania’s impressive economic development. Besides the traditional markets in the EU and the Baltic Sea region, Eastern markets have recently become a major target. Last year alone, Lithuania’s exports to Russia, Ukraine and Belarus have grown by 40 percent on average each. Our trade balance with the CIS countries remained overwhelmingly positive. 13 countries now make up the so-called ‘list of billionaires’ – markets where Lithuanian exports have exceeded LTL 1 billion; Ukraine is the latest entry on it.

The task of our diplomacy is to support and encourage these trends. We do that directly by helping our businessmen, and indirectly by promoting constructive relations with our partners in the region and in the East. The economic vector of our diplomacy fully overlaps with and complements our foreign policy priorities.

On the other hand, our foreign policy not only supports but also builds on the economic interest. Foreign companies, which choose to invest in Lithuania, do it also because they seek benefits in the vast CIS markets. Lithuania has an advantage of having a longstanding experience of working with these countries.

We also know the risks involved. We know that businessmen can disappear without a trace and contracts can be reviewed without prior notice. Pipes can run dry; meat can become ‘wrong’.  Much of the markets in the CIS countries are still state-regulated;  thus, business disputes often need to be addressed at the state level.

Having this in mind, we strongly support the development of clear and mutually acceptable ‘rules of the game’. The membership of such important markets as Russia and Ukraine in the World Trade Organization would save us from unnecessary trade disputes and various discriminative actions; it would also enhance the atmosphere of transparency and predictability in our relations.  We therefore welcome and support the efforts of Russia and Ukraine to join the WTO. We also hope that Belarus will catch up with this trend.

The EU Neighborhood Policy Action Plans also include instruments of promoting transparency and clear business rules in the East. The EU has such plans with Ukraine, Moldova, and South Caucasus nations. We believe they will create necessary preconditions for establishing free trade relations between the EU and all these countries, also creating new incentives for further integration in the future.

On the other hand, it is very important that Neighbor Partners implement Action Plans fully and consistently. Every year Lithuania spends more and more -- through its aid and development instruments -- on reform promotion and institution building in such countries as Georgia, Moldova, and Ukraine.   

We have to continue what was started more than a decade ago, when Lithuania and the rest of Central and Eastern Europe benefited from the substantial financial support coming from Europe and the United States. Our success has a chance to be repeated elsewhere.

Interesting business opportunities are brewing today in Belarus. We take note that the situation in the neighboring country is changing. Of course, market conditions are still very specific on that side of the border. However, we must be prepared for the moment when the conditions will change. Our diplomacy is now focused on the resolving of the remaining and the emerging border-related issues in order to avoid significant setbacks in business-to-business and people-to-people contacts after Lithuania joins Schengen.

We are also interested in the social and economic progress of the Kaliningrad Region of Russia. This region has more to offer than basic transit services for Russian exports. We have to work more closely with our partners in Russia and Kaliningrad to encourage this region’s successful transformation and its further integration with Europe.

North and South, we do enjoy the neighborhood of Latvia and Poland. Latvia is our export market Number One, while Poland is the largest foreign investor in Lithuania. Membership of the EU and NATO has largely increased the possibilities of our economic cooperation. However, some important projects remain unfinished. By completing Via Baltica and Rail Baltica projects we will create additional stimuli for North-to-South trade flows. Not to mention such important energy projects as the new modern nuclear power plant in Ignalina and the Lithuania-Poland energy bridge. All these projects stand very high on our foreign policy agenda.

A rather new phenomenon to us is the rapid expansion of Lithuanian business capital investments abroad. Figures show that Lithuania’s direct investments abroad this year may reach EUR 1 billion. Again, one-third of them go to Latvia, while in Poland they have increased six times over the last year.  Regional integration is going both ways.

But we also notice a growing interest of our businessmen in more distant markets like Romania and Bulgaria, which causes readjustments in our diplomatic representation network. Thus, Lithuania established an embassy in Bucharest last year and plans to open a new one in Sofia by 2008.

Attracting foreign investment to Lithuania is also a top priority. Foreign investment figures are growing, but not enough. Lithuania has to do more to successfully compete with the other Baltic States.

We are also concerned that foreign investment disparities inside Lithuania are widening. In certain districts, like Taurage district on the border with Kaliningrad, foreign investment per capita is already 80 times less than in the capital city of Vilnius. Local municipalities could more actively use the EU funds, including cross-border cooperation instruments, to improve the situation. But we, diplomats, can also contribute -- as we already do -- by organizing various contact-building trips to the regions.

The financial funds, which became available upon Lithuania’s accession to the European Union, should help Lithuania to attract new technologies and build a modern knowledge-based economy. Our ultimate goal is a modern, competitive Lithuania which not only has successfully integrated with the EU and NATO but also plays an active role in these structures. We want to make difference in the region and beyond. And we cannot achieve this only by political and diplomatic means.

Ladies and Gentlemen,

I do believe that during today’s discussions these and other ideas will be more thoroughly discussed and elaborated. Perhaps, the bold and focused messages of this conference will encourage some of your companies to start and to expand their business operations here in Lithuania. But I hope that your experience and your messages will also teach us some lessons. Like everything in business, this conference must be a two-way street.

May I wish you all a constructive and fruitful discussion.

Thank you.