We stole everything,
we drained the schools, universities, we took offshore the capital, we bought Porsches for the leftovers, what do you want from us now? Let's replace
America's gas with farts, just shake our beanbags in Vilnius.
"Vidmantas
Janulevičius, president of the Confederation of Lithuanian Industrialists
(LPK), says that the country's exports, which shrank in the second quarter of
2024, refute optimistic annual industry forecasts. According to him, industrial
companies' costs are growing faster than productivity, so it is difficult for
them to compete with dumping companies in Asian countries.
"The first
quarter of this year gave us the opportunity to speak with optimism, because
our situation seemed to be improving and was almost 2.9 percent. growth
compared to last year. However, the second quarter showed a different picture.
We see a decline in exports, up to 8 percent. compared to last year, when
taking into account 2022 the results weren't the best either," commented
V. Janulevičius to "Žinių radijas" on Monday.
"There is a
problem with China and Asian countries dumping certain products. (...) And it's
not easy for the industry either, because wages in our country are growing the
fastest in the OECD countries in 5 years. I'm not saying that compared to 2017
salaries doubled. So costs are rising because productivity is constantly
lagging behind wage growth. And this pushes the industry into a situation where
we cannot be competitive with Asia," he commented.
According to the
president of LPK, the decline of the industry that uses Lithuanian goods,
visible in Europe, contributed to these problems. Here, the representative of
industrialists will also mention the problem of competition with Asia.
"And that
decrease is due to the fact that, for example, German industry shrank by 7
percentage points in the second quarter of this year. And this is highly
correlated, since the largest number of goods and products go to Germany, goods that
are used further", said the president of LPK.
"It's 7 percent.
in Germany and 8 percent. highly correlated with us. Even the countries of the
south that had such great resilience to this era of high money cost and slowdown.
France had 4.5 percent. contraction. It's our customers who are
shrinking," he added.
According to the
State Data Agency, in 2024 January-May compared to 2023 in the same period,
Lithuanian exports decreased by 8 percent, imports by 10.4 percent.
The European Union must create a common capital market
V. Janulevičius also
says that in order to increase competitiveness, the countries of the European
Union (EU) must create a common capital market. According to the representative
of the industrialists, the gradual green transformation of the Western
countries, which would reduce the country's dependence on fossil fuels from
non-democratic states, would also help.
"The more of
that capital remains with us internally, the better access to it is within the
same European Union. Therefore, it is very important to talk about the common
market of the European Union, the capital market. I mean
the Eurozone. This would be an incentive for other countries to join the euro
zone", V. Janulevičius told "Žinių radio" on Monday,
highlighting as an example the unevenness of access to capital in Lithuania and
Poland, which does not belong to the euro zone and therefore have no
restrictions.
"In 2022, the
European Union spent a trillion euros on fossil fuels in third countries. Thank
God that 50% of those third countries money went to the United States for gas and to
Norway. The rest left for third countries, which are not always democratic. If
that money remained within the European Union, which is almost 7-8 percent.
(...) of the gross domestic product, then in 10 years we would investigate
everything ourselves and not spend that money", emphasized the
businessman.
According to the
representative of industrialists, the competitiveness of Lithuanian industry in
the markets of third countries is hindered by expensive access to capital,
lower productivity of employees and significantly increased energy costs because of sanctions on Russia.
Therefore, as V. Janulevičius emphasized, in order to compete with China and
the USA, Lithuania must invest in innovative products.
"Or we have to
produce something very unique, innovative, but it requires research, it
requires investment in innovation, it requires money, let's be honest. To sell
what the Third World doesn't have. Because with standard goods, with the
so-called commodities, we will not move anywhere, we are simply too expensive -
because of people and their productivity", V. Janulevičius noted.
"These are the
three things that for now unfortunately limit our exports, and we will probably
stay with the EU and the US, which should not be lost, as the biggest markets,
so that we still maintain the balance." It would be very good to talk
about third countries, but then we have to innovate and invest a lot,"
noted V. Janulevičius.
As an opportunity to
increase competitiveness, V. Janulevičius singled out the EU's gradual
transition to green industry solutions in those industrial areas where
dependence on fossil fuels, such as gas, remains high. According to V. Janulevičius, it would be
worthwhile for Lithuania to consider parallel development of gas exchange with
green hydrogen.
"We can't run
headlong. (...) Hydrogen can replace gas almost 100 percent in any production
processes, but if we are talking about sustainable, green (hydrogen - ELTA), it
is quite expensive today.
The transformation,
the green course, must move in parallel with our gradual abandonment, so as not
to undermine competitiveness," said V. Janulevičius."
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