The Universidad Francisco Marroquín (UFM) welcomes Elena Leontjeva, president and co-founder of the Lithuanian Free Market Institute, who has played a crucial role in implementing free-market reforms in Lithuania. In the present interview Elena will address the topics of pension reform, capital markets, and tax reform.

"Time preference is essential for an ethical behavior on the market and good relationships with yourself and your neighbor". — Elena Leontjeva

To begin, Leontjeva provided a historical context of Lithuania's post-Soviet independence, highlighting the nation's enthusiasm for returning to private property and free markets. As a doctoral student, she saw the founding of the Lithuanian Free Market Institute as an opportunity to implement tangible changes rather than merely theorizing about them. This involved establishing foundational institutions for a free-market society, such as a national currency and a revised tax system, to replace Soviet-era laws.

"Sound ideas conquer minds, so it's very important that this model was defended" — Elena Leontjeva

Leontjeva emphasized the importance of rapid privatization, noting that in Lithuania, privatization was broad-based, with every citizen receiving vouchers to buy shares or property, fostering a sense of equality. This approach contrasted with Russia’s more concentrated privatization, which created future challenges.

The next point Leontjeva discusses is private property rights, she recounted her experiences under the Soviet system, where state-owned property led to widespread corruption and inefficiency. She observed that the absence of private property rights resulted in systemic theft and shortages of goods, as people relied on connections and corruption to meet their needs.

"Scarcity is not a curse, it's a blessing, creating room for advancement and human betterment". — Elena Leontjeva

Regarding pension reform, Leontjeva explained that after stabilizing their currency in 1994, Lithuania recognized the need to privatize the social system. They developed legislation to gradually transition from a pay-as-you-go system to private savings. Despite political compromises and challenges, this reform aimed to encourage individuals to save for their future, contributing to financial education and long-term planning.

Leontjeva also discussed significant tax reform, introducing a zero tax rate on reinvested profits in 1997. This model boosted investment and technological advancement. And beyond economic reforms, Elena delved into the philosophical underpinnings of scarcity, emphasizing its universal presence and its role in driving human creativity and advancement.

"Don't follow Communist illusions; embrace freedom for a better life and intellectual adventure" — Elena Leontjeva

Addressing Latin American audiences, Leontjeva admired the entrepreneurial spirit in the region and encouraged the adoption of sound institutions to foster private production and peaceful coexistence. She warned against the allure of communist utopias, advocating for free markets as the path to prosperity and intellectual fulfillment.

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