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Wednesday 17.07.2019 | Name days: Aleksejs, Aleksis

Vilnius prospects dim unless it clusters with Kaunas, says investment expert

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

A street in Vilnius

Linas Jegelevičius for the BNN

Vilnius, the Lithuanian capital, is big in the eyes of Lithuanians, but from the standpoint of global urban urbanization, which is sweeping the developed countries, is tiny. Moreover: Vilnius’ prospects remain dim if it does not agglomerate. In other words, expands and merge to an extent with Kaunas, the country’s second-largest city, nearby.

Kaunas and Vilnius need to coalesce

«In future, in order to remain competitive on the European scale, Vilnius and Kaunas will have to coalesce. The developing capacity of Vilnius is insufficient to withstand the exponential growth of some other similar size European cities. Only cities able to expand attracting skilled people have a nice future,» Mantas Katinas, director general of «Investuok Lietuvoje» (Invest in Lithuania), a state company tasked with promotion of investments in Lithuania, concluded in the conference «Motivated@work» held this week. The investment chief promoter pointed out to the example of Sweden‘s Stockholm, which, with 2.5 million people now, aims to grow to  twice the size.

Remigijus Šimašius, mayor of Vilnius, neither expostulated nor cheered the idea of Vilnius and Kaunas agglomeration. He had embraced the idea in the beginning of his term as Vilnius mayor in 2012, saying that it would help both cities solve many issues and save public money.

The idea of Kaunas- Vilnius dipole was first brought up in 2003 during a discussion of Vilnius and Kaunas politicians. Soon the Councils of both cities embedded the idea in their strategic plans, but it nearly faded over the time.

Former Vilnius mayor still promotes the idea

Yet Vilnius mayor Artūras Zuokas is still convinced that the idea not just has not died, but, on the opposite, has become very actual nowadays. «If Kaunas and Vilnius worked in lockstep, their achievements would be much greater and the state would benefit significantly too. Just one little example of the potential: both cities buy buses and they spend a lot for that. But if they were to purchase them via a single joint tender, they’d both save a lot,» Zuokas said recently.

Although Vilnius has launched the eye-catchy self-advertising campaign as of G-point (reference to an erogenous area of the vagina), it is still very hard to locate it in the map of Europe, Zuokas believes. «If we ever created Kaunas- Vilnius dipole, we’d have a sizeable city of 1.5 million. It would make a big difference for both,» former mayor noted.

Size does matter

Otherwise a staunch opponent of Zuokas, Šimašius admitted last year that size does matter when it comes to attracting major investments to Vilnius.

«We have 550 thousand people in Vilnius, and many rightly ask if this is enough for us to grow. We’ve had several cases when investors picked, for example, Bucharest or Warsaw for their investments due to their bigger size,» Šimašius accentuated.

In his words, his counterpart, Kaunas mayor Visvaldas Matijošaitis, does understand well the necessity of both cities’ agglomeration, but there is no political will on both sides to pursue the coalescing.

New trends

Speaking to Baltic News Network (BNN), Jurgis Vanagas, emeritus professor at Vilnius Gediminas Technical University (VGTU) called the idea of Kaunas-Vilnius dipole his long-cherished «idea fix».

«The more time elapses, the less feasible it seems. We see opposite processes ongoing now – I mean the shift in focus from the largest cities to the development of the regions and the issues of regional disparities,» he said. «I am still convinced that creating such a dipole would help solve many issues that both cities face now,» he is convinced.

According to Vanagas, the first strides towards the implementation of the dipole vision saw plenty of enthusiasm – Vilnius and Kaunas organised joint events, concerts and sports competitions. In 2006, magazine «Foreign Direct Investment», a spinoff of «Financial Times” acknowledged the intention with a special prize. However, there has been a good deal of scepticism throughout too, with some ridiculing the idea and calling Kaunas- Vilnius dipole «a parasite on Lithuania’s body», «a single city Lithuania» and «the nail into the coffin of the provinces.»

«The initial enthusiasm we saw in the beginning has nearly tapered off now. When a couple of years ago I wanted to talk about the idea to the mayors of Kaunas and Vilnius, Matijošaitis and Šimašius, none expressed wish to meet me,» Vanagas remembered.

Vilnius devoid of Euro City status

VGTU professor paid attention to the fact that neither Kaunas nor Vilnius has status of Euro City.

«On the maps of European strategists, we are overshadowed by such Euro Cities in proximity like Riga, Minsk and Warsaw. An upgrade (in status) would be very important. It would serve as guarantor for a larger EU support and investments,» Vanagas underlined.

Other urbanization experts have also pointed out that, based on analysis, urban and strategic planning measures taken by Kaunas and Vilnius should be focused to bringing these similar-sized cities together and creating one structure of these two cites by linking them and incorporating smaller towns in between them into the functional region of growing metropolis.

The moving of the Ministry of Agriculture from Vilnius to Kaunas is seen by some as an effort to revive the idea of Kaunas-Vilnius dipole, but no more actions in the pursuit are planned.

A much gloomier picture for other Lithuanian cities

According to Katinas, of «Investuok Lietuvoje», Klaipėda, Lithuania’s third-largest city, has even fewer options than Kaunas and Vilnius. «It has to either agglomerate with Siauliai, Lithuania‘s fourth-largest city, and Panevėžys, the fifth-largest city. Otherwise it will become like a third redundant leg in the country,» he said.

Even gloomier prospects loom over the other Lithuanian cities, he says.

«I do not cherish any hopes in terms of their ability to attract people… Maybe just a sudden economic boom can prompt people to hunker down in cities of Šiauliai or Panevėžys,» « Investuok Lietuvoje» head predicted.

In his words, attracting skilful people is essential for Lithuania and every single city and town.

«Any major Northern European city boasts at least 30 per cent of high-skilled workforce that was raised elsewhere…From that point, Lithuania has no choice. Either we get talents here, or we will remain a regional-level player,» Katinas concluded.

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