MINISTER OF SOCIAL SECURITY AND LABOR LAYS OUT VISION FOR

UNCLAS SECTION 01 OF 02 VILNIUS 000306 SIPDIS E.O. 12958: N/A TAGS: ECON ELAB EINV PGOV PHUM LH SUBJECT: MINISTER OF SOCIAL SECURITY AND LABOR LAYS OUT VISION FOR LITHUANIA'S LABOR FORCE REF: A. VILNIUS 57 ¶B. VILNIUS 88 ¶1. SUMMARY: On March 21, Ambassador Mull met with Vilija Blinkeviciute, the Minster of Social Security and Labor, as part of his ongoing series of discussions with cabinet members of the new GOL (ref a). Ms. Blinkeviciute, a member of the Social Liberal party who came in fourth in the first round of last year's presidential election, spoke effusively of Lithuania's achievements in the areas of social security and labor and gave credit to the United States for its contributions to these successes. She also offered to assist in locating a possible site for a USG-funded trafficking in persons (TIP) shelter. END SUMMARY -------------- -------------- Cooperation with NGOs and Thanks for the United States -------------- -------------- ¶2. Noting that March 11 marked the fifteenth anniversary of Lithuania's independence, Blinkeviciute claimed huge achievements for Lithuania in the creation of a social security system, a public assistance system, a labor inspection system, and other aspects of the social safety net and labor regulation. She thanked the United States for its contribution to Lithuania's developments in these areas. She also mentioned that she visited the United States and found the U.S. model of cooperation between the government and non-governmental organizations (NGOs) to be an important example for Lithuania. Blinkeviciute stated that the GOL works closely with NGOs in crafting policy in the fields of disability, children's issues, and so-called "social risk groups," and she reiterated her thanks to the United States. ¶3. While on the subject of cooperation between NGOs and the government in Lithuania, Ambassador Mull detailed problems that a local NGO is having setting up a shelter for TIP victims in the town of Sirvintos, using grant money from the U.S. European Command Humanitarian Assistance Program. The Ambassador raised the same issue in his meeting with Minister of Agriculture Kazimira Prunskiene (ref b). The Ambassador asked if Blinkeviciute could provide assistance in finding a new location or project towards which the grant money could be spent. Blinkeviciute expressed her own feeling of the importance of combating TIP and distress at the Sirvintos case. Blinkeviciute lamented the entrenched social attitudes that led the community to �00A;block this important project, but she counterposed that with the example of a successful effort to get local support for the creation of a drug rehabilitation center in another community. She believes that Lithuanian communities do not have much experience working with NGOs, and that the key to a successful partnership is convincing local communities that NGOs have the ability and resources to maintain the security and infrastructure associated with such projects. Blinkeviciute said that she did not think that it was too late to turn things around in Sirvintos: towards that end, she promised to speak to the mayor of Sirvintos, and possibly to other localities that might be suitable for such a project. -------------- Pension Reform -------------- ¶4. When asked about the future of the Lithuanian pension system, Blinkeviciute was optimistic. She said that discussions of pension reform date back ten years and that, working with experts from the World Bank, Lithuania had passed a pension reform law which took effect in 2004. Blinkeviciute cited the fact that under the provisions of the new law, fifty percent of eligible workers have opted to divert a percentage of their contributions from the basic social insurance system (SODRA) into a privately managed system of "pension accumulation" funds. Stressing that participation in the pension accumulation system was entirely voluntary, she felt that the high participation rate is a sign for optimism. However, she estimated that it would be ten years before any realistic evaluation of the reforms can take place. ¶5. Speaking to the demographic factor of an aging population which threatens "pay as you go" social insurance and pension programs, Blinkeviciute stated that, because the current social insurance payments from the GOL are so low, Lithuania does not face a crisis of the magnitude of Germany or some other Western European countries. Blinkeviciute said that her main goal now is to raise the calculation of the pension level - currently calculated at forty percent - to fifty percent. Success towards this goal will be dictated in large part by Lithuania's economic growth, and she explicitly mentioned the United States as a possible model, particularly noting that Lithuanians "take too much rest" compared to Americans. -------------- Lithuania's Workforce -------------- ¶6. Blinkeviciute believes that Lithuania will become more attractive to foreign investment, including that from the United States. While Lithuania's full employment level is below the average of the European Union (EU),the growth rate is faster than the EU average. Blinkeviciute credited this faster growth rate with higher job growth among youth - of which she approved - and an increase in women's presence in the work place - of which she was "not so happy" because she felt that it reflected poor social conditions that force women to take low-level jobs in order to provide for their families. She said that the employment level of men was rising, too, which she took as a good sign. ¶7. Counter-balancing these positive signs, Blinkeviciute conceded that skilled labor is becoming scarce in Lithuania. She had two ideas for preventing the flight of skilled workers from Lithuania to more prosperous countries. The first was that GOL institutions and employers must work together to increase salaries and the quality of working conditions in Lithuania. The second idea was that the GOL should mount a public-awareness campaign to illustrate that it is not as easy to find good jobs abroad - including in the United States - as popular sentiment in Lithuania now believes. ¶8. COMMENT: Blinkeviciute remains one of the country's most popular politicians, and it was easy to see why during the meeting. Persuasive and engaging, she is well-disposed towards the United States, and is clearly in command of the issues under her portfolio. MULL