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Lithuania makes another attempt to stem emigration, ease youth‘s employment

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Linas Jegelevius for the BNN

Amid exodus of youth to more developed Western European countries able to provide a better livelihood, the Lithuanian government scrambles to find ways to keep the population, and especially so its young people, in the homeland.

Considering adverse effects on the national economy, social welfare system, as well as the country’s national and social development caused by a complicated demographic situation, the Lithuanian Parliament this week has endorsed the Strategy for the Demographic, Migration, and Integration Policy for 2018–2030.

The strategy spans 17 targets and consists of 116 provisions. It ought to be adopted by 1 December, 2018.

It is one of many strategies aiming to stem emigration and boost youth employment in the country.

To remind, in early 2018, the Lithuanian MPs passed legislation enabling young families to acquire affordable housing in the Lithuanian provinces and the draft document of this week sets out a series of measures to integrate successfully adolescents into the job market.

For example, it envisions employment incentives, such as subsidised employment, support for acquisition of professional skills, public works and job rotation programmes.

Importantly, young workers, who apply for their first job, would be exempted from social security payments, which now account for nearly third of a wage in Lithuania, according the draft.

In the Seimas (Lithuanian Parliament), 77 MPs voted for it, 24 abstained and 3 were against.

The Chancellery of Lithuanian government believes the measures, the social security tax exemption in particular, would encourage local employers to hire job market novices, often without a proper experience and knowledge.

«The chief purpose of the strategy is to ensure positive changes in the population numbers and appropriate proportions in age of the employed,» says a statement issued by the Chancellery.

If successful, the measure is thought to motivate young people to stay in the country, tight wedding knots and raise families and plan their future in Lithuania.

«The statistics purport that young people leave for abroad after graduating the school or the universities due to the inability to successfully study and work at the same time. In order to reduce youth-related emigration, it is urgent to make sure that transition from the school to the labour market is smooth and well thought-out. It can be done through active, youth-tailored labour market policies,» the statement reads further.

Specifically, the strategy envisions changes of secondary school curricula, with the emphasis to be placed on development of schoolchildren‘s practical skills.

The document especially targets young Lithuanian expats and aims to bring them back to Lithuania.

The strategy also strives to improve the economic welfare, social security, and psychological/emotional well-being of the Lithuanian population; strengthen their bond with the country and living environment; and pursue an effective diaspora policy.

It also addresses demographic challenges, seeks to increase the low fertility, reducing emigration, promote return migration, and improve the quality of life of the senior population.

According to the resolution, from 1992, when the population in Lithuania was at the peak of 3.706 million people, the number of people dropped by 23 per cent to 2.848 million on 1 January 2017. In 25 years’ time, Lithuania lost 859,000 inhabitants or the current population of Vilnius and Kaunas combined. Should the current trend remain unchanged, the population in Lithuania will only be 2.4 million in 2030, according to Eurostat, which represents another 15 per cent decline compared to 2017.

One more problem to be addressed is the unfavourable change in the age structure of the population, which means less children and more senior people. The strategy states that at the beginning of 2017, Lithuania had 550,200 people in the age group of 65 and above. The share of this age group in the total number of permanent residents grew from 15.8 per cent in 2005 to 19.3 per cent in early 2017.

There were 130 seniors for 100 children in early 2017 (93 for 100 children in 2005). Based on the forecasts of Eurostat, it can be estimated that in 2030 there will be 45.865 people aged 65 and above for 100 people in the age group of 15–64.

However, critics say the new strategy will not work as it is too clumsy and bureaucratic. Lithuania has passed similar measures in the past and none of them appeared to be effective, they point out.

Among critics is economist and the presidential hopeful Aušra Maldeikienė, who has called the strategy «a dead document».

«It is doomed to fail for a single reason: it targets not humans, but the dead amorphic and extremely complicated structure known as economics,» she said.

«The whole document embeds what a good economics is all about, but it says nothing about real people,» she went on blasting the draft before adding: «It was apparently penciled by a bunch of bureaucrats, who were writing it turning ear to the whims of the politicians. Therefore, we see so many politically-catchy terms in the documents, like «healthy nourishment at schools», «family support» and all the other popular modern clichés».

Other critics of the draft strategy point out that, with its enactment, social security service, known as SODRA in Lithuania, will lose millions in social security taxes. Notably, the youth exempted from them could expect only smaller pensions in future.

As for the housing programme aiming to help young families with affordable housing, some 840 young families applied for grants to buy or build their first homes in Lithuanian regions in three days after the scheme was launched on September 1, the Social Security and Labor Ministry said.

Some 111 applications were filed in the district of Kaunas, 73 in the district of Klaipėda, 67 in the district of Vilnius and 47 in the district of Panevėžys. The remaining 542 applications were field in other municipalities.

The government has earmarked 2 million euros for the scheme for this year and 4 million euros for 2019, 2020 and 2021 each. The amount of funding may be adjusted based on the actual need for housing in regions and on the state’s financial capabilities.

However, it has its shortcomings too. Some say programme leaves room to abuse it and the mechanism as to how the state can claim back the support has not been worked out properly.


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