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Lithuanian living standard: purchasing power and welfare in Lithuania


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Lithuanian bureaucracies

The budget of the SODRA (the Lithuanian social security) has not greatly changed since 2000. Expenditure for 2003 was predicted to be 4.8 billion Litas (1.4 billion Euros), this is 4% higher than the expenditure planned for the year 2000. This austerity should enable the SODRA to absorb some of its debts. The recession following the 1998 Russian crisis contributed to the draining of its accounts and in 1999 its deficit reached a record high of nearly 150 million Euros. In the absence of additional means, the quality of the services supplied by the social protection system, has not improved significantly in recent years. Retirement pensions remain derisory and the authorities are not really working on the revision of the present system. On the employment side, the high level of structural unemployment requires a great effort towards training those seeking work. Finally, the standard of health care is only average and the reimbursement of medical expenses is more and more limited.


Because it de-structured the previous system and disorganised the country, before it enabled the creation of great fortunes, economic liberalisation first contributed to greatly impoverishing certain categories of the population. Significant inequalities were thus created between the few capitalists of the first hour and vast groups of people who had to suffer the transition to liberalism (e.g. agricultural workers). More generally, a huge gulf separated the countryside in which a large proportion of the population did not have running water or central heating, and towns with skyscrapers and business quarters. Thus, all is not a good as it seems. Blinded by the new and modern, the modest day-to-day life of a large part of the population, which is a long way from experiencing the mass consumer society, is almost forgotten.

mass consumption

The rapid expansion of mass marketing which has completely changed the Lithuanian economy is one of the most visible signs of the countryĺs development. The spread of supermarkets and hypermarkets could wrongly suggest that Lithuania has definitely entered the mass consumption era. However, even if the supply of goods is overabundant and comparable with that of the West, consumption remains dependent on the peoplesĺ purchasing power which has not significantly increased. This is in surprising contrast to the situation before Lithuanian independence : during the Soviet period, purchasing power was unlimited but goods were rationed and there were frequent shortages. It is an encouraging sign that in recent years, there has been a limited but real increase in incomes. In addition, in urban areas (in particularly in the capital Vilnius), some salaries are beginning to reach levels corresponding to those in Western Europe : this is the case for management personnel working in the service sector. Thus a middle class of under-paid intellectual professionals and ultra-minority nouveaux riches, is beginning to appear.


Newly refurbished hotels, good restaurants, flashy old towns and multilingual greetings are charming diplomats, tourists and business people in Lithuania. However, this is the showcase of big cities: Vilnius, Kaunas, Klaipeda. Cultural support is not evenly distributed among Lithuanias different districts. There are growing differences in wealth within big industrial towns, but the gap between the small, wealthy minority and the masses of the provincial poor is alarming. Local communities are suffering from depopulation or a mass exodus (they rarely get the necessary support from the state) to the West: to work or to study. The big transformations stated by official reports have done comparatively little to enhance common peoples everyday life.


Other useful sections of the website


kuLithuanian population

kuStatistics in Lithuania


To go further

Development indicators for Lithuania

hdrstats.undp.org... - Human Development Indicators - Lithuania

data.worldbank.org... - Lithuania data from the World Bank


Social security

ssa.gov... - Social Security Programs in Lithuania


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