Kaunas feels the Economic Crisis

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May 21st 2009
Published: May 21st 2009
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I have been in Lithuania for probably its most crippling economic period since their post-occupation economic growth began just after the fall of the Soviet Union in the early ‘90’s. Teaching English at a small English school in the center of town, on ‘Freedom Avenue’, a pedestrian street that stretches the length of the whole downtown of Kaunas, I have seen shop after shop close down. And they all have a common series of events. First a sign goes up saying ‘sale’, then big circle-shaped ads in bold colors advertising that everything is on sale. 50%, 60%, 70% ‘nuolaidos’ (discount). Then a week later the shop is closed, completely empty, sign taken down, with stickered letters posted across the windows spelling out ‘isnuomuojame’, which means ‘for rent’, followed by a phone number.

And you know no one is calling that phone number.

I have seen 20%, if not more, of the shops in the area of my school close down and this is the main shopping area in town. The only shops that seem to be doing well are the two large mega-malls, AKROPOLIS and MEGA, though shops in the malls also have major sales that seem to never end (is anything regular price anymore? Or is everything on sale EVERYWHERE).

A teammate of mine who is a manager in a piping/construction company, they have laid off 2/3 of their workforce. He says that right now over half the clients they contract with them are not paying the full price for their work—once the project is finished, the client may offer to pay 15% less of the agreed upon price. They say they are bankrupt or simply that they won’t pay the full price.

One guy I was teaching English to twice a week, a business owner who had lots of time on his hands and wanted to pick up some English, had to fire half of his staff and return to work in the warehouse himself because sales were slow and he could not keep his full staff.

I know others who are on month-long ‘forced unpaid vacation’ because there is no work in the distribution plant where they work. Step 1: lay off 20 employees. Step two: reduce salaries by six hundred litas per month. Step three: mandatory, unpaid vacations.

People who have worked for 12 years, in secure managerial positions, are being laid off.

Pro football and basketball clubs are not paying salaries; most, almost all, foreign players on these clubs have left Lithuania because their contracted salary was not being paid. Some clubs have not paid salaries for several months yet the players still play—what else can they do?

In other public jobs, salaries are sometimes delayed a week or several weeks with no explanation.

Fly LAL, the Lithuanian Airlines, went bankrupt in January. Kaunas Zalgiris, the famed Kaunas basketball team owned by NBA Legend Arvydas Sabonis, is bankrupt. “FBK Kaunas”, the pro football club, is not far from it. Corporate sponsors are pulling out of their agreements with these clubs, investment is disappearing.

Another teammate of mine working in a scrap metal yard says that one of his fellow employees, who cannot find work anywhere else, is working for a salary of 500 litas per month!! 500 a month!! That is like working for the same dollar sum in the US ($500/mo). I can’t imagine how people are living on these amounts of money. Ironically, the scrap metal yard’s business is booming, with so many people holding off on buying that new car and instead looking for used parts at the junk yard. Draugas, my teammate, says business has never been better.

The other night Vika and I went to the movies and we were the only ones in the theater.

Our baseball team had games in Utena this past weekend, and on our way home we stopped off at ‘Arena Pizza’, a pizza joint in the center of town. Utena is a small town, but in Lithuania certainly one of the ten largest. Normally this pizza joint is pretty packed, but on this night, a Saturday night, there was only our team and two other tables of folks eating. It was practically empty.

A word that pops up in conversation regularly is ‘krize,’ or ‘crisis,’ both in serious and joking ways. “Hey man, why didn’t you get me a drink, too?” “sorry, krize”. “Hey you should really get your car checked, it is making a crazy sound.” “Yeah, that’d be a good idea, but you know, krize.”


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