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International Internet Magazine. Baltic States news & analytics Saturday, 24.02.2018, 17:43

Migration and the Lithuanian economy

Egidijus Barcevičius, Research Director PPMI Research & Advice Associate Professor Vilnius University, Baltic Rim Economies, ISSUE 4, 18.01.2018.Print version
During the last two decades, Lithuania has experienced a very high rate of population mobility, which peaked during the early years of EU membership (2004–2006) and once again during the recent economic and financial crisis (2009–2011). Lithuanian workers took advantage of economic opportunities abroad and made the most of free movement within the EU and EEA.

They settled in the UK, Ireland, Germany, Norway, and many other countries. Lithuanian citizens may be found working in all sectors of the host countries’ economies, from low-skilled jobs in agriculture and the service sector, to technical, academic or managerial positions requiring highly sophisticated skills. From the personal perspective of most migrants, mobility has worked well: they have not only gained income and learned new skills, but also contributed to the economies of the host (by paying taxes) and home country (by sending remittances). Nonetheless, behind every migration experience there is a story of success and disappointment, excitement and nostalgia, friendship and loneliness. These mobile workers have also undergone a process of redefining their links to the home and host countries, and, in broader terms, reinterpreting their identities, including the crucial question of whether they are settling abroad permanently, or one day plan to return. During the same period, Lithuanian society has undergone a lengthy process of defining its own relationship to the mobile part of the population.

 

The narratives vary, from celebration to despair. Migration has produced varied and complex effects, some of which are still unfolding. It has not only decreased the labour supply, but also the number of students and schoolchildren, due to the emigration of entire families, or family reunions in host countries. It has had a negative effect on the quantity and quality of public services, with many doctors and teachers opting for a career abroad. The country’s demographic balance has been affected, as the migrant population predominantly consists of those aged 25 to 45. On the positive side, the majority of mobile Lithuanians maintain links to the country and do not define themselves as ‘emigrants’. Some of them contribute to the home country’s economy through their networks, business or charitable initiatives. A significant number of migrants have returned to the country, and brought with them not only their savings, but also the skills and connections they developed abroad. The migrants have attracted foreign direct investment into Lithuania, particularly by facilitating business connections; there are also examples of persons returning to Lithuania to establish branches of the companies in which they have pursued successful careers.

 

Egidijus Barcevičius Research Director PPMI Research & Advice Associate Professor Vilnius University Lithuania Academics and practitioners are engaged in a protracted discussion as to the best policies to address migration and encourage return. In essence, this discussion is about the ability of the government to direct the economy of the state, and to influence the complex decisions made by its people. Some authors take a statecentrist view and believe that a mix of political will, appropriate policies and adequate resources could change the dynamics of the current situation. Yet the process of migration has a great deal of inertia at a time when public resources are scarce, and demands upon them from all groups in society appear ever-increasing. Policy success depends not only on the ability of the political leadership to identify the correct policy principles and say the right words, but also to gain trust, inspire and agree on compromises. It is also contingent on the administrative capacity of state institutions to actually work out the policy details and implement them. An appropriate policy mix would recognise migration as an important personal decision and acknowledge its benefits. All of these would be supported by policies aimed at maintaining links with the mobile part of the population, involving it in the political process of the home country, and cultivating cultural exchanges. In the long term the key is to tackle the economic and social factors involved in migration, which are also intrinsically linked to the overall economic and social success of the country. This means focusing on key drivers such as education and innovation, and at the same time finding the right balance between flexibility and security in the labour market. Indeed, various existing policies in different fields inadvertently encourage or discourage return migration and integration. They have to be rethought to take into consideration the needs of the mobile population.






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