Is it worth spreading illusions?

“The most beautiful word”

– Experts from the Lithuanian Free Market Institute (LFMI) and you will also monitor markets and forecast economic development. Could you have foreseen the Customs War, which suddenly rose and now it subsided again?

– We knew the customs duties for US President D. Trump « The Most Beautiful Word ». We felt that there would be some attempts to protect the American industry, but that duties would cause such a market collapse, we didn’t really expect it because it’s an unprecedented thing.

– But before the Lithuanian customs war, Domino’s pads did not open?

– Customs touches our manufacturers as well. There are companies in the Republic that 30-50 % its products sell the United States market. There are not many such companies – only up to 2 thousand, when there are about 100 thousand in Lithuania. companies. These include high -tech, photonics, lasers manufacturing companies. Now it all depends on whether the product is unique. If so, the Americans will simply pay more for it by 20 percent. than so far and will still buy it. But if the product is not unique, most of them can be replaced by something else, they will probably be lost. This means that other markets need to be sought very quickly. And here the issue of competitiveness comes to first place. Because now the projected reaction to Europe and Lithuania, that is, is the expansion of the goods of Asian countries to Europe. The question of whether Europe will also defend against them by increasing duties, as they are already there. As a result, our competitiveness will become a major challenge for us. Because salaries grew very fast with us, and the performance did not increase completely over five years. Therefore, in reality, the competitiveness of the economy is deteriorating because we earn more, but we do not create more adequately.

– So why do salaries grow then?

– First of all, they are due to lack of employees, and even before universal inflation, salaries began. Inflation was mainly associated with the onset of Russia’s large -scale war against Ukraine. But before that, 2022 In January, 10 percent were recorded in Lithuania. Annual salary growth, that is, it even overtook the rise in prices, which later arrived. Revenue is growing, we are all excited about it, but not only income but also prices are rising.

Ministries will have to save

– People in the private sector are most painful for public sector debt, salary rates and non -silent speeches about four working days. Will Lithuania not go to bankruptcy if so?

– Both the Prime Minister and the Minister of Finance said that the public sector should also be involved in the formation of the Defense Fund. And things even moved. It is provided that all ministries must save $ 10 million each. euros. In total, the ministry should save about $ 140 million. euros. In fact, it has long been whispering that salaries in the public sector are low, but now they have already overtaken the private sector. Some of the public sector workers have not returned to work in offices after pandemic, working in a distance, which means that some people are already working in four working days in the week or even better conditions. I have seen public sector job ads, which states that there is a way to work in a distance, and it is even possible to work abroad for half a year. I cannot imagine how all this activity is controlled, what products and services are created for the public.

– What could change the situation?

– I would very much like some Sąjūdis in the public sector, more prominent people who would start the renewal movement and cleanse off unnecessary procedures, from unnecessary employees. LFMI experts have estimated that the holidays in the public sector can last up to two and a half months, if a person has a high seniority, belongs to the trade union. Consequently, the institution needs more employees to replace the holidays. There is certainly a lot to save in the public sector. Another moment is the aspect of social justice, it is important for people to see that not only they have to save, not only for them (likely), but also public sector employees also jointly and severally contribute to all our common needs.

– You believe that is possible?

– The news has already sounded that ministries have to save at least $ 140 million. euros. I believe that some movement in the direction of saving in the state will begin. I understand that this requires strict discipline, very high concentration and political approval. According to the practice of so -called sunset commissions, we have seen if there is no political will and no discipline, such initiatives are simply extinguished. However, it seems that the prime minister has a will, the desire and the understanding of the need to do so.

Was afraid to return socialism

If there is no political will and there is no discipline, such initiatives are simply extinguished.

– How do you evaluate price regulation?

– As I understand it, there was an electoral promise to rearrange the prices in the chain of raw material manufacturers, the processing industry and traders. Because in the event of inflation, it was said that traders earn very well and need to redistribute those profits. The new Minister of Agriculture was tasked with doing so. Then there was an ambition to « arrange » the prices. Then LFMI specialists quickly prepared the examination and explained what the price regulation was at risk.

– And what does the price regulation really at risk?

– It may seem attractive to people that the state will take care of prices. There is an illusion that prices will be lower. But when you start to record prices, some products may become useless, and those products may not be left at all. Otherwise, when the prices record, the competition will disappear and prices will not be able to decline. And when there is competition, price fluctuations usually affect the benefit of consumers.

– Who stopped power from such intentions?

– The new government is probably frightened by the accusations that the desire to regulate prices is a desire to return to socialism. And then the authorities began to speak that they are not supporters of regression and do not want to return to socialism, they just want to check how the income of producers, processors and dealers are distributed. As I understand it, after the recent utterance of the minister, egg prices may be recorded through the experiment. However, it seems that the pretext is looking and not.

Example: It is stated that the « cut » functions have already begun in the Ministry of Economics and Innovation, but it is not yet clear whether it will save you actually save. Ž. Photo by Gedvila/ BNS

– Do you think the selection of politicians should be more serious, because the decisions they make depend on the functioning of the state and the well -being of citizens?

– Once upon a time, we talked to colleagues in half ironically that politicians should be licensed, they should learn it, then pass the exam, take practice in the private sector to know what it means to be responsible, to be able to balance the budget. The value of private business experience is that a person knows that he cannot spend more than earning. According to this, the functions and human resources are optimized, then it is decided whether it is possible to allow employees to leave for two and a half months or not, or whether to spread illusions for about four working days. After all, this illusion is very insidious, especially since we have not increased labor productivity over the last five years.

There is no time to relax

– So what do we need most now?

– Now we need to try to create, grow and increase the state budget as much as possible. Now is the time to focus, to be more inventive and endure, as the challenges are getting newer. As far as I know, there are problems for the consequences of the sanctions of Klaipeda port, not easy times. Currently, you just need alertness in the economy and greater effort, and now the signal of a four -week weekly weekly talk is that it is time to relax. It is definitely not the time yet.

– Maybe public sector employees are, in a sense, demoralized that the state budget will still be the money, and if they are missing, they will borrow it?

– It will be different this year. Both the Prime Minister and the Minister of Finance promised that the budget would be formed on a zero principle. This means that all public institutions will have to justify all activities, its necessity, priorities. This is a good idea, but today it was to be sent a signal to save everything, as the control of using money will be very serious, and every euro will be questioned. I understand that there are many public institutions, and the employees of the Ministry of Finance will be able to control the validity of their needs, it is difficult to say.

– What about the National Audit Office?

– This is a great tool, but it only checks the post factum. The National Audit Office has a great deal of good recommendations on how to efficient management. Already today, public institutions must cooperate with the National Audit Office. This would help to purify their activities from unnecessary costs. It would be very nice that employees are not told to save from above, but they themselves realize that today is not time for some costs.

– Can you give at least one such a good example of the public sector?

– The Ministry of Economics and Innovation began to « cut » functions, I do not know if anything has been saved, but they are a counterweight to life.