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2013.12.17 11:50

Sweden’s expectations in Lithuania: underpromised, but overdelivered

DELFI|The Lithuania Tribune2013.12.17 11:50

 Swedes are cautious about the investment opportunities in Lithuania, due to several factors:  losses banks suffered during crisis, the image of Lithuania and Lithuanian-based businesses that have not settled in Sweden as yet, www.delfi.lt writes.

 Swedes are cautious about the investment opportunities in Lithuania, due to several factors:  losses banks suffered during crisis, the image of Lithuania and Lithuanian-based businesses that have not settled in Sweden as yet, www.delfi.lt writes.

The head of Swedish Trade and Investment Council for Central and Eastern Europe Mantas Zalatorius recalls that after the economic downturn it was possible to see the lessening of interest in many of the Swedish businesses in Lithuania. Now, an effort is being made to recover the attention of investors.

“Trade is like driving the highway from Vilnius to Kaunas. If we want to increase our integration, we must ensure the flow in both directions: the more Lithuanian companies will go to the Swedish market, the better, and vice versa,” maintained Zalatorius.

“Be aware of your business model and try countries where it could be adapted: if it operates in Lithuania, it is likely that it will work in Sweden. For example, the supermarket chain ‘Rimi’ works in Scandinavia, and works here. Another example, ‘Maxima’ operates here, but why doesn’t it work there?”

Zalatorius said that in 20 years of working with Swedish investors he has not met a businessman disappointed in Lithuania.

“All are very positively surprised what a good country Lithuania is. Not because Lithuania is a good place to live, but because the expectations are low when approaching Lithuania,” after the Swedish-Baltic Business Forum he said to DELFI.

When asked why the expectations of Swedish businesses are low, Zalatorius considered that this is due to the financial crisis, during which the Baltic countries were presented negatively as being in the worst economic downturn.

“The Baltic countries have been negatively reflected in Western Europe and in Sweden, and a precautionary question emerged: “How will we do in this place?”  We have seen banks and their losses in Lithuania, Latvia, and Estonia. The good news is that the caution is eventually forgotten,” Zalatorius speculated.

Other reasons why the expectations of investors arriving in Lithuania are low, according to the specialist, are Lithuania’s poor international visibility and an inconsistent presentation of the country – people do not know what to expect.

“Maybe we are too little known internationally; perhaps we are presented in different ways; but we are a brave country; this is the country where it is wonderful to live and create. If we maintained the same momentum for at least five years and consistently worked, we would really raise expectations, they would be adequate or above adequate,” Zalatorius claimed.

He agreed with Swedbank’s chief economist for Latvia Mārtiņ Kazāk’s observation that the Baltic countries are losing the cheap labour label, but questioned whether it was beneficial for the countries.

“Yes, but is it good? The expectation for the Baltic countries is that it is still a cheap labour force, but the experience is that labour is not so cheap,” continued Zalatorius.

In his view, this means that we need to work by changing expectations about Lithuania, and this is both expensive and time-consuming.

Direct Swedish Foreign Investments in Lithuania

Period

Lt, billions

Number of investors

2006

3.04

211

2007

4.06

229

2008

4.45

234

2009

3.04

237

2010

3.52

237

2011

7.82

238

2012

8.91

226

2013 two quarters

0.57

Estimated once a year

Direct Lithuanian Foreign Investments in Sweden

Period

Lt, billions

Number of investors

2006

0.79

3

2007

0.59

3

2008

0.75

7

2009

0.95

9

2010

7.27

8

2011

6.46

8

2012

5.59

5

2013 two quarters

8.39

Estimated once a year

 

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