Measures of Economy Promotion Plan are necessary, but insufficiently effective for small and medium business
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Measures of Economy Promotion Plan implemented by the Ministry of Economy and aimed at small and medium business were essentially relevant and necessary; however, in the face of economic crisis they were insufficiently effective due to too long implementation process and relatively small amounts of credits, which had reached the business, says Auditor General Giedrė Švedienė summarizing public audit report evaluating the impact of measures of Economy Promotion Plan (EPP) on small and medium business in 2009. |
The National Audit Office positively evaluated the objective to expand
business financing opportunities, since entities lack funds for
development of their activities, and borrowing possibilities have
decreased. Implementing expansion measures for business financing
opportunities, it was foreseen to allocate credit entities with
additional resources, which the entities had to borrow to small and
medium business entities.
To that end it was also foreseen to give loans, State guarantees for the
loans and to partially compensate for interest for loans. Out of LTL 2.1
billion provided for expansion of business opportunities in the EPP, in
2009 LTL 1.2 billion were allocated following the orders of the Minister
of Economy, and the actual amount which reached the market was LTL 155
million. Last year these measures satisfied only a very small part of
credit demand and could not compensate for the decrease in the bank
borrowing, which amounted to some LTL 4.99 billion in 2009; therefore
the benefit produced by these measures could not essentially change the
general economic situation in Lithuania.
Having analysed the impact of EPP on preservation of jobs, the NAOL
stated that the impact was minimal, since the aims provided for in the
Plan had not been achieved: the measures did not stop the increasing
number of bankruptcies, as well as the rapid growth of unemployment in
Lithuania. Furthermore, the Ministry of Economy did not set the
evaluation criteria enabling to evaluate the impact of EPP on
preservation of jobs, and how many jobs will be preserved by
entrepreneurs themselves. Creation of new jobs would ensure a better
economic recovery. This priority was forecasted in the Ministry of
Economys priority tasks in 2010.
Public audit report is available in Lithuanian:
Development of small and medium business