LFMI announces a writing contest "Freedom Studies"

In pursuit of its educational activities, LFMI has announced a writing contest "Freedom Studies," which is aimed to enhance the understanding of social and economic laws in the life of the society. LFMI hopes that this contest will develop a tradition of teaching freedom as a subject that requires profound public understanding.

The contest is designed for university students and self-studying people who are above 17 years of age and do not hold a PhD. Contestants will have to submit a course paper dedicated to the issue of social and economic laws of the society and their workings in the economy, law, morals and other spheres. LFMI believes that by writing this paper, students will be encouraged to analyse how economic and social laws function in the society, to understand peoples’ motives in social-economic activities, and to perceive that the variety of people’s aims and values does not disturb but, quite the contrary, maintains a smooth coexistence of the society.

The winners of the contest will be announced in September of 2004 and will be awarded by cash prizes. The best papers will be posted on LFMI’s website in Lithuanian.

This is not the first initiative by LFMI in co-operating with the studying yougt. For a fourth year, LFMI offers a semester-long university course “Capitalism and Freedom,” which is aimed to instil in students self-conscious liberal thinking through the study and internalization of sound social and economic ideas. This course was taught at a number of faculties of Vilnius University, the Institute of International Relations and Political Sciences and the International School of Management.

More than one-third of people in Lithuania know LFMI

Seeking to find out to what extent the Lithuanian society is familiar with the Lithuanian Free Market Institute (LFMI) and its activities, as well as recommended by the Board of LFMI, the institute commissioned a survey of public opinion in Lithuania which was conducted by company TNS Gallup in October 2003. The survey was carried out on the basis of an Omnibus poll. The number of respondents polled totalled 518. The poll represents the residents of the entire country at the age between 15 and 74 years.

The survey showed that more than one-third (37 percent) of Lithuanian residents know or have heard about the Lithuanian Free Market Institute. As expected, LFMI is known more widely among senior (40 to 49 years) people (53 percent of those polled), people with university education (80 percent), employed people (48 percent), people with higher income (62 percent), and residents of Vilnius, the capital, and Kaunas, the second largest city (49 percent).

Asked about what the Lithuanian Free Market Institute represents, more than half (57 percent) of the respondents who knew or heard of LFMI answered that this organisation stands for the ideas of the free market. Around one-third of the respondents think that LFMI represents the interests of consumers (33 percent), all Lithuanian citizens (32 percent), and Lithuanian companies (30 percent). When answering this question, the participants of the poll could indicate more than one answer.

According to the survey, two-thirds (69 percent) of those who know or have heard about LFMI entirely or partly trust this organisation as regards the informing of the society about key economic issues. A similar share (70 percent) of the respondents trusts societal non-political organisations in general. The level of confidence in other institutions goes down as follows: the Presidency (62 percent), the Government (55 percent), trade unions (54 percent), business organisations (48 percent) and the Parliament (45 percent). The political parties are trusted the least (24 percent).

Asked about the organisation type of LFMI, most of those who know or heard of LFMI chose the right answer – that LFMI is a non-profit non-government organization. None of the respondents said that LFMI is a political organisation.

LFMI analyses employment regulations

On 18 December, 2003, LFMI held a press conference “Work Councils: From a Good Idea to Unapt Implementation” to present a position on, and proposals for, a draft law on work councils currently debated by the Parliament. Representatives from LFMI and business associations pointed out at the press conference that work councils were a welcome and needed institution for a balanced representation of employees but, they argued, certain provisions of the draft law can act as a drag on the establishment of work councils.

They spotlighted that the draft law discriminates work councils against trade unions as it states that a work council shall be eliminated once a trade union is established in the organisation. Moreover, the draft law lays down an overly bureaucratic procedure for setting of a work council and places a financial burden on the employer who, according to the draft law, will have to cover the costs of the work and training of the representatives of the work council. The draft law also stipulates that the representatives of the work council will have to be furnished with the organisation’s confidential information.

LFMI and business representatives highlighted that the said provisions would be disastrous to many of the companies in Lithuania, while the duty to provide secret information may be hazardous even to the strongest companies. They called for revision of the draft law which is to be passed by the Parliament in the coming month.

Taxation of NGOs profit would retard the development of the third sector

Working on the regulation of the NGO sector, LFMI has analysed draft amendments to the law on profit tax, according to which, profits of non-profit organisations gained from commercial activities would be taxed. LFMI pointed out that the amendment had been drafted without taking into account the specific nature and activities of public non-profit institutions, the most popular form of non-profit organisations. Taxing the profits of non-profit organisations (these profits have to be used to finance their own activities anyway) would stifle the development and activity of the third sector which would have negative effects on the democracy and integration processes in Lithuania.

LFMI submitted recommendations on the draft amendments to the Parliament in October 2003. This legal document is to be passed in the coming month.

A debate on pension reform and its future

On November 12, 2003, LFMI hosted a discussion “Pension Reform and Its Prospects,“ which was designed to enlighten the public about the possibilities and benefits of the funded pension system and private pension funds and to debate the prospects of the pension reform in Lithuania. The event aimed at bringing for the public discussion the roadblocks that impede the implementation of the reform and to propose measures that would eliminate them. The debate drew participants from state supervisory institutions, pension funds, the Ministry of Social Security and Labour, and LFMI.

Representatives from private pension funds spoke at the event that the pension reform was taking place similarly to their expectations: people in Lithuania were quite active in choosing private funded pension system and that the most popular were diversified pension funds. They also pointed out that privately funded pension system is not a measure to make a fortune but a way to save for the future.

It was also highlighted during the debate that Lithuania had chosen the right scheme for pension reform but its scope was too small to solve the anticipated problems in the state insurance system, to create conditions for the acceptable growth of future pensions, and to ensure the success of the reform. According to policy analysts of LFMI, Lithuania‘s economic and demographic conditions at present are favourable enough to increase, in the short-run, the size of social security contribution which is being channelled into private pension funds. This decision, they argued, depends only on the political will.

Business and government representatives discussed “the unknowns” in the EU law

On 4 December, 2003, LFMI, in co-operation with the Friedrich Naumann Foundation and companies Ernst & Young Baltic and Coca-Cola Bottlers Lietuva, held a conference “Ready for the European Union accession? Getting into the details of implementing EU norms.” The aim of the event was to provide an opportunity for Lithuanian entrepreneurs to discuss unclear issues regarding the regulations of the European Union and practical implementation of the EU regulatory norms, as well as to discuss what difficulties Lithuanian business people still faced as the membership in the EU was approaching. The conference drew participants from the business sector and state institutions that are responsible for the implementation of the EU norms.

Although the European Commission has recognised Lithuania as the one of the best candidate countries in transposing the EU norms into the national laws, recently there has been an apparent gap between these optimistic official evaluations and Lithuanian entrepreneurs’ fears about how specifically the legal acts regulating individual business sectors will change. For this reason, LFMI organised this conference to give an opportunity for business representatives to learn about the coming changes as regards EU membership, and for the state institutions to present the information that is essential to the business community.

It was concluded at the event that the most serious challenges for the Lithuanian companies will be to prepare for competing in the common market and for operating in a changing environment. The basic challenges that the state institutions will come up with were enumerated as proper representation of Lithuania’s interests in the EU and the implementation of the decisions by the EU.

Tobacco control tightened more rigidly than in the EU

Pursuing the activities regarding market regulations, in October 2003 LFMI made an analysis of a draft law on tobacco control and submitted to the Parliament a package of policy proposals on the testing of, and trade in, tobacco products, protection from second-hand smoke and the economic sanctions laid down in the draft law.

LFMI concluded that the EU requirements had been inaccurately transposed into the proposed draft law: provisions regarding the testing of tobacco products and the dissemination of such results constrained companies more than the EU law. Moreover, the draft law stipulated unjustified restrictions on tobacco manufacturing, trade and consumption that could have negative results on tobacco business, on an effective implementation of the ban to sell tobacco products to children and adolescents and on the adults’ possibilities to choose and acquire tobacco products. Drawing on these arguments, LFMI called for revision of the draft law, for accurate transposing of the EU provisions and for revoking of the said restrictions on tobacco trade and consumption. The Parliament passed the Law on Tobacco Control in the end of 2003; however, LFMI’s recommendations were not enshrined in it.

LFMI studies the Lisbon agenda’s impact on Lithuania

LFMI has completed a study “Evaluation of the Lisbon agenda of the European Union and its impact on Lithuania,“ which introduces the Lisbon strategy, its main goals and methods of implementation, and research methodology. The main parts of the study are devoted to the analysis of the general goals and specific targets of the Lisbon strategy in the areas of economic and social policies, their relevance, coherence and the potential impact on Lithuania are assessed. Further on, the conclusions of the analysis and recommendations are provided.

This work is the first significant input to the debate in Lithuania about topical issues of the EU economic and institutional reforms. The authors of this study hope that this research will provide analytical background for formulating Lithuania’s position and for informing the public about EU integration and its impact on Lithuania. The study will be disseminated among relevant state institutions and the public at large.

The LFMI’s study was contracted by the European Committee under the Government of Lithuania within the framework of the Programme of assessing economic and social impact of Lithuania’s accession into the EU, negotiations with the EU and coordination of Lithuania’s participation in the work of EU institutions. The study was co-financed by the local pre-accession assistance program of Danish Ministry of Foreign Affairs.

An English summary of the study can be downloaded at http://www.freema.org/Projects/Lisbon.phtml.

LFMI completes a project on the information society

LFMI has completed a project joint project “Factors and Impacts in the Information Society: a Prospective analysis in the candidate countries.” Its goal was to make an in-depth analysis of challenges and potentialities related with the EU enlargement by identifying technological, economic, political and social drivers and their impact on science and technology policy, competitiveness and employment in the wider Union over a ten-year horizon.

A contracting authority of this project was the Institute of Prospective Technological Studies, Seville, one of the seven institutes of the Joint Research Centre of the European Commission. Its main mission is to provide prospective analyses in support of the EU’s policy making-process. Thirteen candidate countries were taking part in this project; Lithuania was represented by the Lithuanian Free Market Institute. As a result if this project, 13 national monographs were developed. They will be incorporated into an integrating and prospective report about the future outlook for the information society in the candidate countries and the enlarged EU. The report will be conducted by the International Centre for Economic Growth, Budapest.

LFMI implements a new project

In October 2003 LFMI launched a new project which aims at analysing the laws in Lithuania that regulate export, import, and transit procedures in order to evaluate whether they conform with the articles 28-30 of EC Treaty. According to these articles, no quantitative restrictions on export and import and no measures having equivalent effect can be imposed as regards the trade among the EU countries.

Within the framework of the project, LFMI will review and evaluate the laws of the Republic of Lithuania on non-tariff barriers, define their compatibility with the EU legal norms and propose their revisions. LFMI will also evaluate the norms of non-tariff regulation that are set in the laws of the Republic of Lithuania to determine whether they can be compatible with the articles 28-30 of the EC Treaty.

The project will be completed in February 2004. LFMI won this tender organised by the Ministry of Economy.