Poverty in Lithuania

Current political changes in Lithuania have brought many people hope over the current concerns of increases in immigration, income inequality and poverty in the country. The newly elected President, Gitanas Nauseda, has vowed to touch on these issues and tackle poverty in Lithuania. In 2018, around 650,000 people or 22.9 percent of Lithuanians lived below the at-risk-of-poverty threshold. The poverty line stood at 307 euros a month per capita or 644 euros a month for a family of two adults and two children under 14.

Furthermore, 17.3 percent of city residents earned disposable income below the at-risk-of-poverty threshold in 2018. This percentage stood at 34.4 percent for rural residents. The year 2019 has shown no improvements so far. In fact, the at-risk-of-poverty threshold increased by one percentage point making it the highest among the Baltic states.

Research has shown that inequality of income is hampering the development of society and the state. Although Lithuania has made remarkable progress during the independence period and is one of the fastest-growing economies in Europe, the income inequality in the country is currently one of the largest in the European Union. In 2016, the income of the richest 20 percent and poorest 20 percent in Lithuania varied seven times and has not improved.

The Main Challenges of Poverty

  1. Barriers to the Minimum Income: In Lithuania, people in need of social support often face a lot of bureaucratic barriers which greatly complicates their receipt assistance. Moreover, the prevalence of stereotypes and the stigmatization of beneficiaries causes them to refuse to apply for the minimum income. In 2017, about 2.7 percent of the country’s population received minimum income and this number is decreasing.
  2. Debts: Debts are also a primary cause of why many Lithuanians are living in poverty. According to the Ministry of Justice on October 2017, 292,612 people had debts that passed to bailiffs. Almost 10 percent of the total population of Lithuania is in debt. For a long time, the country could deduct up to 50 percent of a person’s minimum wage, and 70 percent of the amount exceeding the minimum wage. As a result, people experiencing poverty are less likely to seek legal employment, which helps deepen the poverty trap. Also, even if they did work, they would be unable to retain a sufficient amount of income to live on. In almost 60 percent of the cases, they owe debts to the state, while in 37 percent of cases, they owe to private companies and in three percent of the cases, they owe other individuals. As a result, Lithuanians who are in debt often fall into the social assistance system, work illegally or seek help from their relatives.
  3. Education: The report of the National Audit Office states that the results of the pupils in smaller schools, most often in rural areas, are lower in Lithuania as well as the European Union. Specifically, 30 percent of the audited schools had joint classes. Furthermore, around eight percent of children are unschooled, and Lithuania does not guarantee children’s right to education.
  4. Energy Poverty: In Lithuania, the law does not precisely define the concept of energy poverty. However, 29 percent of Lithuanian residents face difficulties in paying their heating bills. In 2016, 18 percent reported living in housing affected by dampness, draughts and leaks. These numbers are among the worst across the EU and show that many suffer with energy poverty in Lithuania.
  5. In-Work Poverty: Finally, the in-work poverty rate in Lithuania varies every year and is similar to the EU average. In 2017, 8.5 percent of persons were at risk of poverty. However, it is important to note that this indicator may be low partly because the average income of the employed is low. It is fairly easy to find a job for minimum wage in Lithuania, however, a minimum wage paying job in Lithuania is not enough to live.

The New President and His Plans

Gitanas Nauseda, an economist, was an independent candidate and won the second round of elections in Lithuania on May 26, 2019, with 65.8 percent of the vote. He took office on July 12, 2019, after President Dalia Grybauskaite’s second five-year term came to an end.

Many believe that newly elected President Gitanas Nauseda, a specialist in the field of banking and economic analysis, owes his victory to his emphasis on social issues, including tackling poverty. He also announced that he would increase the protective role of the welfare state and that the president’s office would supervise the introduction of controversial reforms to education and health care.

Although Lithuanian presidents do not directly craft economic policy, Nauseda plans to seek cross-party deals to bridge the gap between the rich and poor and decrease regional differences. “We will not have a welfare state if we care only about ourselves while social inequality increases,” stated Nauseda in parliament after taking the oath of office.

Another objective for the new president is to strengthen cooperation with the Baltic area. He has announced regular meetings with the leaders of the three Baltic states, as well as the coordination of regional cooperation at the highest level. Moreover, on foreign policy, Nauseda said he would seek deeper relations with both the EU and the U.S. and plans on strengthening Lithuanian defense.

Hope for the Future

While President Gitanas Nauseda has certainly made promising plans for the future of Lithuania, other associations, such as the European Anti-Poverty Network Lithuania (EAPN Lithuania), are also working to fight poverty in Lithuania. EAPN Lithuania emerged in 2006 and works to strengthen the institutional capacities of Lithuanian non-governmental organizations and encourage their cooperation with national and local governmental institutions to reduce poverty and social exclusion in Lithuania. The association comprises 42 anti-poverty organizations working to reduce social exclusion throughout Lithuania.

Furthermore, UNICEF’s country program in Lithuania has made progress in decreasing child poverty and increasing children’s rights. Lithuania declared 2004 the year of children’s health and since then increased attention and resources to children-focused national health services and programs. Moreover, UNICEF has helped strengthen the effectiveness of the National Public Health Service and lent technical support to the creation of a national database of young people’s health indicators.

– Grace Arnold
Photo: Flickr