Facts and Analysis. Municipalities, Investment and Communities

Investment is a key element behind economic growth. Research shows that municipalities where investment is higher have lower unemployment and higher average wages.

2013 and 2014 data show that two thirds of municipalities recorded a growth of foreign direct investment and material investment per capita. Overall economic activity judging by the ratio of active agents to people having a business licence increased in almost all of Lithuania’s 60 municipalities. Yet, more than half of municipalities reported a decline in the number of construction permits.

The situation regarding investment across the country’s municipalities is improving, but the progress could take up an even faster pace.

The Lithuanian Free Market Institute has analysed the situation with investment development in Lithuania’s municipalities and has conducted a survey of more than 250 local community leaders. The survey was aimed to elicit information about local communities’ attitudes towards business investment and involvement in the development of investment projects, relationships and communication with investors, and the scope and peculiarities of their engagement in the public policy process relating to investment development.

The survey findings show that:

  • Communities welcome investment sand recognize the benefits they bring;
  • Communities have insufficient knowledge of the legal and public policy processes relating to their involvement in the development of investment projects;
  • Communities are not inclined to conflict with investors and such conflicts are quite rare;
  • The risk of conflict can be further diminished through education of local communities and timely communication.

Full analysis (in Lithuanian) Municipalities, Investment and Communities is available here.