This record is a partial extract of the original cable. The full text of the original cable is not available.

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 
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. 
 
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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