According to an open letter to the public by the organisation Vilniaus Klubas, which unites active business, science and culture representatives, the situation emerging due to the pandemic has revealed that Lithuanian society, business and politics have matured, can unite and are capable of harmoniously overcoming emerging challenges.
“History teaches us that shocks of this scale are always also a time of opportunity. In combatting the pandemic, governments are afforded powers to make unprecedented fiscal decisions; new monetary policy measures are tested. Changing circumstances around the world create unique opportunities for Lithuania as well – we have a historic chance for a leap forward, an opportunity to create a modern, globally leading welfare state. We are convinced that this unique window of opportunity will only be open briefly. We do not have the right to miss it,” says Alvydas Žabolis, Vilniaus Klubas board chairman and head of investment group Žabolis ir Partneriai.
According to him, by acting together, the country’s government institutions have the opportunity to make use of a still existing exception to resolutely increase state debt by making use of Lithuania’s higher ever achieved credit rating.
“Lithuania can make use of the experience of other countries and resolutely seek an extended government debt securities duration, also making use of all distribution opportunities, including distributing debt securities in international capital markets. This way, it would be possible to accumulate necessary financial resources for the country’s reforms and modernisation,” economist Paulius Kunčinas says.
Furthermore, Vilniaus Klubas proposes to establish a National Welfare Fund, which would finance the competitiveness of the country’s economy.
According to Vilniaus Klubas member Paulius Kunčinas, the minimal authorised capital for such a fund would have to be at least 10 billion euro and the total value of financed projects could reach over 50 billion euro. Such a sum would exceed Lithuania’s entire current GDP.
The fund could finance or co-finance strategically important for Lithuania projects: investment in city infrastructure, social infrastructure development, reforming the Lithuanian healthcare system, retirement, nursing and care homes. The fund would also allow reinforcing the scientific research and education infrastructure, would invest in airport, road and flight networks and strengthen the positions of innovative Lithuanian business, which creates particular competitiveness for the country.
“The National Welfare Fund could finance a double result – a mandatory positive financial result and a real social impact from financed projects. The profits from financed projects would enable the fund to pay dividends to Sodra. This way, the success of the fund’s activities would contribute to reducing the Sodra budget deficit and would reach the Lithuanian people,” Mr. Kunčinas is convinced.
It is essential to ensure that such a fund would not be politicised, it must remain transparent and independent and its management – defined by law, employing best practices from abroad, Linas Sabaliauskas, the board chairman of the investment management company Groa Capital, emphasises. He believes that by making use of borrowing and investment opportunities, Lithuania could ensure its future prosperity.
