A Lucky Government

Quite recently, the Government of Lithuania presented to the parliament and the public a report on its activities in 2002. Following the tradition, the Lithuanian Free Market Institute commented widely on this report and expressed its opinion about the 12th administration’s policies pursued last year. The following article was printed in the national daily Lietuvos zinios.

Whichever way you look at it, the 12th Government of Lithuania [1] is lucky. Any political power could envy such an unseen success. Glaringly, the Government “affords itself” playing pranks such as showing journalists out of the meeting hall [2], restricting access to draft laws [3], adopting decisions and proposing to the parliament draft laws that are clearly aggravating business conditions. The Government is planning to introduce progressive taxes and… nothing terrible happens! Gross domestic product is growing, unemployment level and tax burden are on the decrease, budget revenues are rising, Lithuania is being invited to NATO, the negotiations for EU membership are coming to the end, and the “delinquent” Government continues working. So what is going on? Were they wrong saying that the higher the level of freedom of the market, the wealthier people are, or are these economic laws just not functioning in Lithuania?
Not to worry, everything is fine both with Lithuania and the economic laws. A consequence and a reason are usually separated by a time gap. Processes ongoing in the market and an administration in power can have nothing or so little in common that the government can be helpless to halt these processes. Thus, today, we observe the results of the long awaited phenomenon – market reforms of the thirteen years. The fruits of privatisation launched in 1991, of the litas [4] strengthened by the Currency Board in 1994, of the Sunrise and Sunset initiatives that succeeded in 1999 and of many other market-oriented reforms are ripe. An impressive economic growth, increasing income, and new jobs that were pointed out by the 12th Government in its Report for 2002, are not the result of its activities alone. But this “insignificant” detail was not hinted at in the Report, while all the merits were gladly appropriated. Yes, this Government was everywhere: it stopped the growth of unemployment and created 64 thousand new jobs, it transported 36 million tons of railway cargo, vaccinated, computerised, exported, and so on.
Let’s be fair – the twelfth Government also did what it should do: it drew draft laws on taxation from drawers, wiped off the dust and presented them to the parliament [5]; it finally stirred the matters of pension reform, continued privatisation, and adopted some sensible and some poor decisions. Activity (not to be confused with strategic thinking or essential reforms!) is a really good feature of this Government. But the matters are made slightly worse because at times the Government would get lost in details, and things are absolutely spoiled when the Government would get lost in itself. Restricted access to draft laws, closed sittings, disengaged “microphone of journalists”, dissociation from the public at large – such style of work would not be tolerated if Lithuania were a member of the European Union. However, the 12th Government was lucky again! It was neither reproved nor punished for such an ”independence.” Let’s hope that this Government is the last one who can afford such arrogance.
To read the Government’s Report for 2002 is an entertaining occupation. For instance, it is interesting to learn how much money it spent and for what purposes. No doubt, spending money is an important objective of the Government that takes a lot of ingenuity and efforts; concealing it would mean not telling the public what the sittings are about. The Government has executed these (expenditure) plans very well. It is also very amusing to search for items that have not been enumerated in the Report. Well, the Government did not mention the expanded base of taxation, increased (or proposed to increase) excise taxes, raised social insurance contributions, rejected resolutions of the Sunrise Commission, and a number of other deeds. It does not say anything about a healthcare reform that has not been launched, a launched “reform” of higher education that has not been overhauled, a tangled tax regulation that cannot be untangled even by tax inspectors themselves. It takes no time to realise that the Government is blind of an eye. This only indicates that it is an optimist. So, the Government was lucky again.
Finally, while reading the Report, it is fascinating to make guesses at what the twelfth Government did for Lithuania. Most interestingly, this contribution will be seen only in a year or so. But at that time there will be another government in Lithuania, and Lithuania will be different: it will be a state of Europe (I hope for that). Look here, the twelfth Government is lucky again! Because when the results of the current Administration’s bad deeds will start surfacing, it’ll be possible to write them off as expenses of EU integration, or the benefits of EU integration will offset the negative effects. All the tribulations will not be attributed to the twelfth Government, or they will not be seen with the naked eye. What else could they desire?

[1] Since independence was restored in 1990, Lithuania has had 12 administrations. The 12th Government of Lithuania was formed from Social democrats and Social liberals on 12 July 2001.
[2] Media representatives used to be allowed into the meeting hall of the Government House to listen to, and record, government sittings until the 12th Government revoked this long standing practice. Journalists could hear entire sittings through microphones which later were turned off.
[3] The 12th Government ceased to provide draft laws to various non-government organizations, interest groups, etc. so that they could not get familiar with its contents before they were adopted by the government.
[4] Lithuania’s national currency.
[5] All major laws on taxation were amended or new versions were passed during the 12th administration.