Lithuania Country brief

Introduction/overview

Lithuania is the largest of the three Baltic states, covering an area of 65,300 square kilometres (approximately the size of Tasmania). It has a population of 3.4 million people. The capital of Lithuania is Vilnius.

Political overview

Lithuania regained its independence from the Soviet Union in 1991. Lithuania adopted its constitution in 1992 and has since been a stable democratic state. It has a unicameral parliament (the Seimas) with 141 members elected for four years, and a presidential head of state elected directly for a five-year term. The current President Valdas Adamkus, was elected in June 2004 (President Adamkus also served as President from 1998 to 2003). The next Presidential election is due September 2009. Executive power is vested in the government of Lithuania headed by a Prime Minister, who is appointed by the President and approved by the Seimas. The next parliamentary election will be held in October 2008.

In parliamentary elections held on 12 and 26 October 2008, the conservative Homeland Union party, led by Andrius Kublius, won the largest share of the vote, securing 45 seats. The Homeland Union is holding negotiations with three other centre-right parties to form a coalition government, replacing the previous government led by outgoing Social Democrat Prime Minister Gediminas Kirkilas.

Lithuania was accepted as one of ten new members for accession to the EU at the Brussels summit in October 2002. In a referendum in May 2003, 91 per cent of voters supported EU accession. Lithuania became a full member of the EU on 1 May 2004.

Lithuania was invited to join NATO in November 2002, in NATO's single largest enlargement. Lithuania became a full member of the organisation on 2 April 2004. Lithuania became a member of the World Trade Organization (WTO) on 31 May 2001.

Economic Overview

GDP growth is slowing and is estimated to be 6.5 per cent in 2008. Inflation for 2008 is forecast to be 8.3 per cent and unemployment was at 3.5 per cent in 2007.

Services have undergone rapid development since Lithuania's independence. Most foreign direct investment (worth around Euro 8.3 billion at the beginning of 2007) has been channelled into the services sector (primarily finance, trade and communications).

In May 2006, Lithuania's application to join the Euro zone was rejected after narrowly missing an inflation target set by the European Commission. Because of rising inflation, Lithuania is unlikely to be able to join the Euro zone before 2012.

Bilateral relationship

Australia was among the first countries to recognise Lithuania's independence in August 1991. Australia continues to develop education links with Lithuania including student exchange programs with Lithuanian universities.

The Lithuanian community in Australia, numbering some 17,000 (including second and third generation Australians of full and part Lithuanian descent), has made an important contribution to strengthening bilateral ties.

There have been several high level visits since Lithuania's independence. President Adamkus, and his wife, Mrs Alma Adamkiene, visited Australia from 24-27 February 2006. The President also visited Australia for the Sydney Olympics in September 2000. Former Foreign Minister, the Hon Gareth Evans, visited Lithuania in 1994 and also in 1999, and an Australian parliamentary delegation, led by the then Speaker, the Hon Stephen Martin MP, visited in 1994. The former Speaker of the NSW Parliament, the Hon John Murray, visited Lithuania in September-October 2002. A Lithuanian parliamentary delegation, visited Australia in March 2008.

The Australian Ambassador in Stockholm is accredited to Lithuania. Australia has an Honorary Consul in Vilnius. Lithuania has Consulates-General in Sydney and Melbourne, headed by Honorary Consuls-General, and an Honorary Consul in Adelaide.

Bilateral economic and trade relationship

Two-way merchandise trade between Australia and Lithuania was around A$38 million in 2007. Exports to Lithuania were A$6 million in 2007 (mainly measuring and controlling instruments, raw hides and skins (not fur skins), wool). Imports from Lithuania were A$32 million over the same period (mainly rubber tyres and furniture). Australia’s total merchandise trade with Lithuania is ranked 89^th.