Contemporary Central Asia (CA / Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan) is an internationally important region in economic and security sense. Its biggest problem is the lack of long-term political stability, which became the object of the thesis. Accordingly, the purpose of the thesis was to determine the basic reasons of instability in CA states, to disclose their detailed essence and offer an effective conception to maintain long-term stability in them. Stability was defined in dissertation as absence of revolution and objective/subjective socio-political and socio-economic base of discontent with the government of a single taken country, which is a premise and condition of the revolution in it. More favorable conditions for any revolution (classical or "colorful"), as it was stressed in the study, are supposed to form in the transitional societies with no deep historical tradition of statehood, as it is in case of CA states. Therefore, the conclusion was made that the successful state (as ethnic-civil entity and institutional system) "building" is a fundamental preventive condition of revolution (instability) and its premises there, applying principle of socio-political corporatism in organization of the system of governance in the framework of Central Asian presidential regimes. The core idea of the principle is a consensual politics of the ruling elite of the country, meeting not only individual needs, but also socio-economic needs of the society, what will keep the political system of CA states stable in the long run. External factor in case of stability in Central Asia is secondary, but presumed balance of power between Russia and China in the region is going to become its additional guarantee.
Contemporary Central Asia (CA / Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan) is an internationally important region in economic and security sense. Its biggest problem is the lack of long-term political stability, which became the object of the thesis. Accordingly, the purpose of the thesis was to determine the basic reasons of instability in CA states, to disclose their detailed essence and offer an effective conception to maintain long-term stability in them. Stability was defined in dissertation as absence of revolution and objective/subjective socio-political and socio-economic base of discontent with the government of a single taken country, which is a premise and condition of the revolution in it. More favorable conditions for any revolution (classical or "colorful"), as it was stressed in the study, are supposed to form in the transitional societies with no deep historical tradition of statehood, as it is in case of CA states. Therefore, the conclusion was made that the successful state (as ethnic-civil entity and institutional system) "building" is a fundamental preventive condition of revolution (instability) and its premises there, applying principle of socio-political corporatism in organization of the system of governance in the framework of Central Asian presidential regimes. The core idea of the principle is a consensual politics of the ruling elite of the country, meeting not only individual needs, but also socio-economic needs of the society, what will keep the political system of CA states stable in the long run. External factor in case of stability in Central Asia is secondary, but presumed balance of power between Russia and China in the region is going to become its additional guarantee.
Contemporary Central Asia (CA / Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan) is an internationally important region in economic and security sense. Its biggest problem is the lack of long-term political stability, which became the object of the thesis. Accordingly, the purpose of the thesis was to determine the basic reasons of instability in CA states, to disclose their detailed essence and offer an effective conception to maintain long-term stability in them. Stability was defined in dissertation as absence of revolution and objective/subjective socio-political and socio-economic base of discontent with the government of a single taken country, which is a premise and condition of the revolution in it. More favorable conditions for any revolution (classical or "colorful"), as it was stressed in the study, are supposed to form in the transitional societies with no deep historical tradition of statehood, as it is in case of CA states. Therefore, the conclusion was made that the successful state (as ethnic-civil entity and institutional system) "building" is a fundamental preventive condition of revolution (instability) and its premises there, applying principle of socio-political corporatism in organization of the system of governance in the framework of Central Asian presidential regimes. The core idea of the principle is a consensual politics of the ruling elite of the country, meeting not only individual needs, but also socio-economic needs of the society, what will keep the political system of CA states stable in the long run. External factor in case of stability in Central Asia is secondary, but presumed balance of power between Russia and China in the region is going to become its additional guarantee.
Contemporary Central Asia (CA / Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan) is an internationally important region in economic and security sense. Its biggest problem is the lack of long-term political stability, which became the object of the thesis. Accordingly, the purpose of the thesis was to determine the basic reasons of instability in CA states, to disclose their detailed essence and offer an effective conception to maintain long-term stability in them. Stability was defined in dissertation as absence of revolution and objective/subjective socio-political and socio-economic base of discontent with the government of a single taken country, which is a premise and condition of the revolution in it. More favorable conditions for any revolution (classical or "colorful"), as it was stressed in the study, are supposed to form in the transitional societies with no deep historical tradition of statehood, as it is in case of CA states. Therefore, the conclusion was made that the successful state (as ethnic-civil entity and institutional system) "building" is a fundamental preventive condition of revolution (instability) and its premises there, applying principle of socio-political corporatism in organization of the system of governance in the framework of Central Asian presidential regimes. The core idea of the principle is a consensual politics of the ruling elite of the country, meeting not only individual needs, but also socio-economic needs of the society, what will keep the political system of CA states stable in the long run. External factor in case of stability in Central Asia is secondary, but presumed balance of power between Russia and China in the region is going to become its additional guarantee.
This article analyses highlights of the occupational pension fund regulatory provisions at the European Union institutional level and in Lithuania, the organisation of the occupational pension schemes and problems. Also this article examines the relationship between the current pay-as-you-go system and the second pillar pension funds, assessing occupational pensions funds development opportunities for Lithuania. The article analyzes the advantages and disadvantages of funded pension system, evaluating occupational pensions funds system in Lithuania in line with the principle of solidarity. The author points out, that prior to the reform of the social security system and the introduction of incentives for the creation of occupational pension funds, it is necessary not only to review the legal regulation (introducing incentives for active participation in pension funds, creating alternative pension schemes, creation of the economic crisis stabilization mechanisms), but also the identification of occupational pensions funds organizational problems.
This article analyses highlights of the occupational pension fund regulatory provisions at the European Union institutional level and in Lithuania, the organisation of the occupational pension schemes and problems. Also this article examines the relationship between the current pay-as-you-go system and the second pillar pension funds, assessing occupational pensions funds development opportunities for Lithuania. The article analyzes the advantages and disadvantages of funded pension system, evaluating occupational pensions funds system in Lithuania in line with the principle of solidarity. The author points out, that prior to the reform of the social security system and the introduction of incentives for the creation of occupational pension funds, it is necessary not only to review the legal regulation (introducing incentives for active participation in pension funds, creating alternative pension schemes, creation of the economic crisis stabilization mechanisms), but also the identification of occupational pensions funds organizational problems.
This article analyses highlights of the occupational pension fund regulatory provisions at the European Union institutional level and in Lithuania, the organisation of the occupational pension schemes and problems. Also this article examines the relationship between the current pay-as-you-go system and the second pillar pension funds, assessing occupational pensions funds development opportunities for Lithuania. The article analyzes the advantages and disadvantages of funded pension system, evaluating occupational pensions funds system in Lithuania in line with the principle of solidarity. The author points out, that prior to the reform of the social security system and the introduction of incentives for the creation of occupational pension funds, it is necessary not only to review the legal regulation (introducing incentives for active participation in pension funds, creating alternative pension schemes, creation of the economic crisis stabilization mechanisms), but also the identification of occupational pensions funds organizational problems.
This article analyses highlights of the occupational pension fund regulatory provisions at the European Union institutional level and in Lithuania, the organisation of the occupational pension schemes and problems. Also this article examines the relationship between the current pay-as-you-go system and the second pillar pension funds, assessing occupational pensions funds development opportunities for Lithuania. The article analyzes the advantages and disadvantages of funded pension system, evaluating occupational pensions funds system in Lithuania in line with the principle of solidarity. The author points out, that prior to the reform of the social security system and the introduction of incentives for the creation of occupational pension funds, it is necessary not only to review the legal regulation (introducing incentives for active participation in pension funds, creating alternative pension schemes, creation of the economic crisis stabilization mechanisms), but also the identification of occupational pensions funds organizational problems.
The paper compares the introduction and stabilization of national currency in the First and Second Republics of Lithuania (LR I and LR II) during the years 1918–1922 and 1990–1993, respectively. These diachronic comparisons are supplemented by the synchronic ones where LR I is compared with Estonia, Latvia, and Poland and LR II with Estonia and Latvia. Jointly with Lithuania, all these countries faced the challenge of nation state building simultaneously with the macroeconomic stabilization. Both times, Lithuania was the last to introduce the national currency. The analysis starts with a discussion of the similarities and differences in the economic situations of the LR I and LR II during the first years of independence. In this discussion, the author argues that the prototype of the Soviet command administrative economy was the administrative war economy of Kaiser Germany during WWI, with occupied Lithuania suffering under extreme forms of the administrative control of economic activities by the Oberost authorities. The restoration of the capitalist free market economy and macroeconomic equilibrium was complicated by the extraordinary spending to finance the independence wars in 1918–1920 when national states-in-making lacked administrative capacities to collect taxes in the ordinary ways. Therefore, all Lithuanian neighbours did finance their independence wars by inflation tax, introducing national currencies almost immediately after proclaiming independence and collecting up to 2/3 of the total state revenue from the seigniorage. Among all countries fighting indepenendence wars in the modern times, Lithuania was probably unique in its persistent effort to pay the war cost without the inflation tax. As Lithuania maintained a monetary union with Germany up to 1922, it donated to this country the seigniorage income and was not able to draft all its available manpower because of monetary restrictions. At the same time, the early LR I provides for the posteriority an example of the frugal management of state finance policies even under extraordinary circumstances. This example still lacks the due appreciation by neoliberal monetarist apologists of the sound monetary and fiscal policies. During its early time of restored independence, LR II procrastinated to end the monetary union with its former imperial suzerain (Russia) too for quite a different reason: the choice of the Gediminas Vagnorius' government to participate in the "inflation race" in the rouble zone after September 1991 when the restoration of independent Lithuania was internationally recognized. The winners in this race were the former republics of the USSR that were the leaders in rising prices and wages. Therefore, while Lithuania in 1918–1922 suffered only from imported (from Germany) inflation, in 1991–1992 this country both imported and exported inflation. While permissive policies of the Vagnorius government helped to void the efforts of the Moscow to undermine Lithuanian independence in January–August 1991 by the economic blockade, their continuation after the dissolution of the USSR delayed the onset of macroeconomic stabilization until the early summer 1993. Even after October 1st, 1992 when the national provisional currency talonas became the only legal tender in Lithuania, its govermnent continued collecting the inflation tax, which was immoral given the absence of the war or other extraordinary circumstances. Because of the delayed macroeconomic stabilization, market reforms in Lithuania were conducted in the wrong sequence, with a large-scale privatization enacted under conditions, near to hyperinflation, which favoured prolonged rent-seeking by the early winners. The correct sequence of market reforms in Estonia, due to its early monetary stabilization (since June 1992), jointly with more favourable initial conditions, helped this country to become the leader in the "Baltic race". The policy of Gediminas Vagnorius to chase after short-time advantages of the leadership in the inflation race among the former Soviet republics was punished by Lithuania losing the long-time advantages of the leadership in the transformation race among them Baltic countries. According to another concluding causal argument, the governments of LR I committed a strategic blunder by declining to use the inflation tax for the extraordinary spending to finance the independence war in 1918–1920. Despite their smaller populations and a greater WWI damage (in Latvia's case), both Estonia and Latvia raised more than 70 000 manpower each, financing their war efforts by the inflation tax. Because of its responsible and frugal financial policies, which were wrong given the extraordinary circumstances of a war, the peasantly penny-pinching Lithuania had only some 30 000 manpower at the time of critical battles for its historical capital Vilnius in the autumn 1920. Such military power was too small and weak to hold the city against only one allegedly rebellious division under general Lucjan Żeligowski from landlordly lavish Poland which, like other Lithuania's neighbours, financed its war effort in 1918–1920 by the inflation tax. So Lithuania lost Vilnius in 1920, because it was not ready to pay its (monetary) price. Credits to Prof. Dr. Arnd Bauerkämper from Freie Universität Berlin who hosted the research visit of the author to Berlin to collect and research part of the sources (about post-WWI inflation in Germany and Eastern Europe) used in the paper.
The paper compares the introduction and stabilization of national currency in the First and Second Republics of Lithuania (LR I and LR II) during the years 1918–1922 and 1990–1993, respectively. These diachronic comparisons are supplemented by the synchronic ones where LR I is compared with Estonia, Latvia, and Poland and LR II with Estonia and Latvia. Jointly with Lithuania, all these countries faced the challenge of nation state building simultaneously with the macroeconomic stabilization. Both times, Lithuania was the last to introduce the national currency. The analysis starts with a discussion of the similarities and differences in the economic situations of the LR I and LR II during the first years of independence. In this discussion, the author argues that the prototype of the Soviet command administrative economy was the administrative war economy of Kaiser Germany during WWI, with occupied Lithuania suffering under extreme forms of the administrative control of economic activities by the Oberost authorities. The restoration of the capitalist free market economy and macroeconomic equilibrium was complicated by the extraordinary spending to finance the independence wars in 1918–1920 when national states-in-making lacked administrative capacities to collect taxes in the ordinary ways. Therefore, all Lithuanian neighbours did finance their independence wars by inflation tax, introducing national currencies almost immediately after proclaiming independence and collecting up to 2/3 of the total state revenue from the seigniorage. Among all countries fighting indepenendence wars in the modern times, Lithuania was probably unique in its persistent effort to pay the war cost without the inflation tax. As Lithuania maintained a monetary union with Germany up to 1922, it donated to this country the seigniorage income and was not able to draft all its available manpower because of monetary restrictions. At the same time, the early LR I provides for the posteriority an example of the frugal management of state finance policies even under extraordinary circumstances. This example still lacks the due appreciation by neoliberal monetarist apologists of the sound monetary and fiscal policies. During its early time of restored independence, LR II procrastinated to end the monetary union with its former imperial suzerain (Russia) too for quite a different reason: the choice of the Gediminas Vagnorius' government to participate in the "inflation race" in the rouble zone after September 1991 when the restoration of independent Lithuania was internationally recognized. The winners in this race were the former republics of the USSR that were the leaders in rising prices and wages. Therefore, while Lithuania in 1918–1922 suffered only from imported (from Germany) inflation, in 1991–1992 this country both imported and exported inflation. While permissive policies of the Vagnorius government helped to void the efforts of the Moscow to undermine Lithuanian independence in January–August 1991 by the economic blockade, their continuation after the dissolution of the USSR delayed the onset of macroeconomic stabilization until the early summer 1993. Even after October 1st, 1992 when the national provisional currency talonas became the only legal tender in Lithuania, its govermnent continued collecting the inflation tax, which was immoral given the absence of the war or other extraordinary circumstances. Because of the delayed macroeconomic stabilization, market reforms in Lithuania were conducted in the wrong sequence, with a large-scale privatization enacted under conditions, near to hyperinflation, which favoured prolonged rent-seeking by the early winners. The correct sequence of market reforms in Estonia, due to its early monetary stabilization (since June 1992), jointly with more favourable initial conditions, helped this country to become the leader in the "Baltic race". The policy of Gediminas Vagnorius to chase after short-time advantages of the leadership in the inflation race among the former Soviet republics was punished by Lithuania losing the long-time advantages of the leadership in the transformation race among them Baltic countries. According to another concluding causal argument, the governments of LR I committed a strategic blunder by declining to use the inflation tax for the extraordinary spending to finance the independence war in 1918–1920. Despite their smaller populations and a greater WWI damage (in Latvia's case), both Estonia and Latvia raised more than 70 000 manpower each, financing their war efforts by the inflation tax. Because of its responsible and frugal financial policies, which were wrong given the extraordinary circumstances of a war, the peasantly penny-pinching Lithuania had only some 30 000 manpower at the time of critical battles for its historical capital Vilnius in the autumn 1920. Such military power was too small and weak to hold the city against only one allegedly rebellious division under general Lucjan Żeligowski from landlordly lavish Poland which, like other Lithuania's neighbours, financed its war effort in 1918–1920 by the inflation tax. So Lithuania lost Vilnius in 1920, because it was not ready to pay its (monetary) price. Credits to Prof. Dr. Arnd Bauerkämper from Freie Universität Berlin who hosted the research visit of the author to Berlin to collect and research part of the sources (about post-WWI inflation in Germany and Eastern Europe) used in the paper.
The paper compares the introduction and stabilization of national currency in the First and Second Republics of Lithuania (LR I and LR II) during the years 1918–1922 and 1990–1993, respectively. These diachronic comparisons are supplemented by the synchronic ones where LR I is compared with Estonia, Latvia, and Poland and LR II with Estonia and Latvia. Jointly with Lithuania, all these countries faced the challenge of nation state building simultaneously with the macroeconomic stabilization. Both times, Lithuania was the last to introduce the national currency. The analysis starts with a discussion of the similarities and differences in the economic situations of the LR I and LR II during the first years of independence. In this discussion, the author argues that the prototype of the Soviet command administrative economy was the administrative war economy of Kaiser Germany during WWI, with occupied Lithuania suffering under extreme forms of the administrative control of economic activities by the Oberost authorities. The restoration of the capitalist free market economy and macroeconomic equilibrium was complicated by the extraordinary spending to finance the independence wars in 1918–1920 when national states-in-making lacked administrative capacities to collect taxes in the ordinary ways. Therefore, all Lithuanian neighbours did finance their independence wars by inflation tax, introducing national currencies almost immediately after proclaiming independence and collecting up to 2/3 of the total state revenue from the seigniorage. Among all countries fighting indepenendence wars in the modern times, Lithuania was probably unique in its persistent effort to pay the war cost without the inflation tax. As Lithuania maintained a monetary union with Germany up to 1922, it donated to this country the seigniorage income and was not able to draft all its available manpower because of monetary restrictions. At the same time, the early LR I provides for the posteriority an example of the frugal management of state finance policies even under extraordinary circumstances. This example still lacks the due appreciation by neoliberal monetarist apologists of the sound monetary and fiscal policies. During its early time of restored independence, LR II procrastinated to end the monetary union with its former imperial suzerain (Russia) too for quite a different reason: the choice of the Gediminas Vagnorius' government to participate in the "inflation race" in the rouble zone after September 1991 when the restoration of independent Lithuania was internationally recognized. The winners in this race were the former republics of the USSR that were the leaders in rising prices and wages. Therefore, while Lithuania in 1918–1922 suffered only from imported (from Germany) inflation, in 1991–1992 this country both imported and exported inflation. While permissive policies of the Vagnorius government helped to void the efforts of the Moscow to undermine Lithuanian independence in January–August 1991 by the economic blockade, their continuation after the dissolution of the USSR delayed the onset of macroeconomic stabilization until the early summer 1993. Even after October 1st, 1992 when the national provisional currency talonas became the only legal tender in Lithuania, its govermnent continued collecting the inflation tax, which was immoral given the absence of the war or other extraordinary circumstances. Because of the delayed macroeconomic stabilization, market reforms in Lithuania were conducted in the wrong sequence, with a large-scale privatization enacted under conditions, near to hyperinflation, which favoured prolonged rent-seeking by the early winners. The correct sequence of market reforms in Estonia, due to its early monetary stabilization (since June 1992), jointly with more favourable initial conditions, helped this country to become the leader in the "Baltic race". The policy of Gediminas Vagnorius to chase after short-time advantages of the leadership in the inflation race among the former Soviet republics was punished by Lithuania losing the long-time advantages of the leadership in the transformation race among them Baltic countries. According to another concluding causal argument, the governments of LR I committed a strategic blunder by declining to use the inflation tax for the extraordinary spending to finance the independence war in 1918–1920. Despite their smaller populations and a greater WWI damage (in Latvia's case), both Estonia and Latvia raised more than 70 000 manpower each, financing their war efforts by the inflation tax. Because of its responsible and frugal financial policies, which were wrong given the extraordinary circumstances of a war, the peasantly penny-pinching Lithuania had only some 30 000 manpower at the time of critical battles for its historical capital Vilnius in the autumn 1920. Such military power was too small and weak to hold the city against only one allegedly rebellious division under general Lucjan Żeligowski from landlordly lavish Poland which, like other Lithuania's neighbours, financed its war effort in 1918–1920 by the inflation tax. So Lithuania lost Vilnius in 1920, because it was not ready to pay its (monetary) price. Credits to Prof. Dr. Arnd Bauerkämper from Freie Universität Berlin who hosted the research visit of the author to Berlin to collect and research part of the sources (about post-WWI inflation in Germany and Eastern Europe) used in the paper.
The paper compares the introduction and stabilization of national currency in the First and Second Republics of Lithuania (LR I and LR II) during the years 1918–1922 and 1990–1993, respectively. These diachronic comparisons are supplemented by the synchronic ones where LR I is compared with Estonia, Latvia, and Poland and LR II with Estonia and Latvia. Jointly with Lithuania, all these countries faced the challenge of nation state building simultaneously with the macroeconomic stabilization. Both times, Lithuania was the last to introduce the national currency. The analysis starts with a discussion of the similarities and differences in the economic situations of the LR I and LR II during the first years of independence. In this discussion, the author argues that the prototype of the Soviet command administrative economy was the administrative war economy of Kaiser Germany during WWI, with occupied Lithuania suffering under extreme forms of the administrative control of economic activities by the Oberost authorities. The restoration of the capitalist free market economy and macroeconomic equilibrium was complicated by the extraordinary spending to finance the independence wars in 1918–1920 when national states-in-making lacked administrative capacities to collect taxes in the ordinary ways. Therefore, all Lithuanian neighbours did finance their independence wars by inflation tax, introducing national currencies almost immediately after proclaiming independence and collecting up to 2/3 of the total state revenue from the seigniorage. Among all countries fighting indepenendence wars in the modern times, Lithuania was probably unique in its persistent effort to pay the war cost without the inflation tax. As Lithuania maintained a monetary union with Germany up to 1922, it donated to this country the seigniorage income and was not able to draft all its available manpower because of monetary restrictions. At the same time, the early LR I provides for the posteriority an example of the frugal management of state finance policies even under extraordinary circumstances. This example still lacks the due appreciation by neoliberal monetarist apologists of the sound monetary and fiscal policies. During its early time of restored independence, LR II procrastinated to end the monetary union with its former imperial suzerain (Russia) too for quite a different reason: the choice of the Gediminas Vagnorius' government to participate in the "inflation race" in the rouble zone after September 1991 when the restoration of independent Lithuania was internationally recognized. The winners in this race were the former republics of the USSR that were the leaders in rising prices and wages. Therefore, while Lithuania in 1918–1922 suffered only from imported (from Germany) inflation, in 1991–1992 this country both imported and exported inflation. While permissive policies of the Vagnorius government helped to void the efforts of the Moscow to undermine Lithuanian independence in January–August 1991 by the economic blockade, their continuation after the dissolution of the USSR delayed the onset of macroeconomic stabilization until the early summer 1993. Even after October 1st, 1992 when the national provisional currency talonas became the only legal tender in Lithuania, its govermnent continued collecting the inflation tax, which was immoral given the absence of the war or other extraordinary circumstances. Because of the delayed macroeconomic stabilization, market reforms in Lithuania were conducted in the wrong sequence, with a large-scale privatization enacted under conditions, near to hyperinflation, which favoured prolonged rent-seeking by the early winners. The correct sequence of market reforms in Estonia, due to its early monetary stabilization (since June 1992), jointly with more favourable initial conditions, helped this country to become the leader in the "Baltic race". The policy of Gediminas Vagnorius to chase after short-time advantages of the leadership in the inflation race among the former Soviet republics was punished by Lithuania losing the long-time advantages of the leadership in the transformation race among them Baltic countries. According to another concluding causal argument, the governments of LR I committed a strategic blunder by declining to use the inflation tax for the extraordinary spending to finance the independence war in 1918–1920. Despite their smaller populations and a greater WWI damage (in Latvia's case), both Estonia and Latvia raised more than 70 000 manpower each, financing their war efforts by the inflation tax. Because of its responsible and frugal financial policies, which were wrong given the extraordinary circumstances of a war, the peasantly penny-pinching Lithuania had only some 30 000 manpower at the time of critical battles for its historical capital Vilnius in the autumn 1920. Such military power was too small and weak to hold the city against only one allegedly rebellious division under general Lucjan Żeligowski from landlordly lavish Poland which, like other Lithuania's neighbours, financed its war effort in 1918–1920 by the inflation tax. So Lithuania lost Vilnius in 1920, because it was not ready to pay its (monetary) price. Credits to Prof. Dr. Arnd Bauerkämper from Freie Universität Berlin who hosted the research visit of the author to Berlin to collect and research part of the sources (about post-WWI inflation in Germany and Eastern Europe) used in the paper.
Research problem It has been four decades since conclusion of the Vienna Convention on the law of treaties. The Convention included a provision that a treaty shall be inter-preted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. The customary status of this rule has been accepted by the International Court of Justice. Disregarding that, some question whether the rules, as opposed to principles, of interpretation are possible (i.e. would that not be better not to reduce them to writing). The International Law Commission itself has com-mented on this. On the other hand, the differences concerning interpretation of treaties were apparent already at the time the treaty was drafted. When the Convention was finally adopted, a few scholars representing the so-called New Haven approach opined that they expected the Convention to fail due to its "insistent emphasis upon an impossible, comformity-imposing textuality". In their view, conclusion of an international agreement was a continuous process of cooperation and collaboration of the parties, which required a much more detailed focus on the intentions of the parties than the Vienna Convention rule of interpretation envisaged. They called for interpretation which would search for genuine shared expectations, together with the complementary appeals for 'supplementing' and 'policing' communications in accordance with overriding community goals. Disregarding these hallmarks, they accepted that the text should remain an important index of party expectations, which they identify as one of the goals of interpretation. In their view, attention to the carefully worked out arrangements of the parties encourages the clarity of expectation, especially when sources of equal credibility give contradictory results concern-ing their expectations. Although the New Haven approach to interpretation of treaties was not included in the Vienna Convention on the Law of Treaties, a form of their reflection could be identified in national law, especially that of continental legal systems. It is agreed that the major difference between common law and conti-nental practice lies in the rules of interpretation: common law is based on a presumption of law, into which statutes are interwoven, hence the practice of drafting statutes in the fullest detail, and the broad assumptions that a statute deals only with those cases which fall within its actual wording. Continental theory, on the other hand, treats statutes as a basis of the law, but these tend to be drafted in a very general and abstract way, leaving it up to the courts to fill in the details by reference to a presumed legislative intention. However, this key difference seems to dissipate, as the common law tends to move away from the purely literal towards the purposive construction of statutory provi-sions, i.e. a new, 'revamped' version of literal rule has developed, which required the general context and purpose to be taken into consideration before any decision is reached concerning the ordinary meaning of statutory words. The continental practice remains consistent on its emphasis on the legislative intention. In the law of contracts this rule turns into a global one: both Lando and UNIDROIT principles of international commercial contracts include a rule of interpretation requiring to determine the common intentions of the parties. This approach finds reflection also in the Civil Code of the Republic of Lithuania, which was drafted on the basis of the UNIDROIT Principles. The International Law Commission returned to the topic of interpreta-tion of treaties thirty years later, in 2000, when it decided to consider the issue of fragmentation of international law and the potential problems it might give rise to. With this purpose in mind in its report on the topic of 2006 the study group has identified four general principles of interpretation of international rules: first, international law should be considered as a legal system, not as a random collection of international rules; second, in applying international law, it is necessary to determine the precise relationship between two or more rules and principles that are both valid and applicable in respect of the whole situa-tion (i.e. to identify whether their relationship is a one of interpretation or con-flict); thirdly, the norms should be interpreted in accordance with the Vienna Convention on the law of treaties, and fourthly, when several norms bear on a single issue, they should be interpreted so as to give rise to a set of compatible obligations. Explaining the latter principle, the Commission, similarly to the New Haven group approach, emphasized the need to take into consideration the community values, i.e. ius cogens and erga omnes, even though continues to recommend to follow the Vienna Convention approach on the ordinary meaning of the terms. Forty years later, it is already possible to consider, whether the New Haven group was correct criticising the Vienna Convention rule of interpreta-tion for its excessive emphasis on text, and how significant is the practical difference between the rule requiring to determine the common intentions of the parties as opposed to the rule, which requires to interpret a treaty in accor-dance with the ordinary meaning of its terms. Also, what is the practical im-pact of these differences on protection of the rights of persons. In order to answer this research question, the focus of the dissertation is on the foreign investment law in the energy sector. The topic is suitable and convenient to consider the impact of the rules of interpretation and the problems posed by fragmentation of international law. Its sources include in-ternational, national, and for the EU countries also EU law, even though the nature of the relationship between EU law and international investment law remains a disputable issue. The energy sector has been chosen in order to evaluate more precisely the impact of the rules of interpretation and fragmenta-tion of international law on the content of the rights of persons and their appli-cation. Research sources The Dissertation analyzes multilateral and bilateral investment trea-ties which are significant for the the protection of investment in the energy sector and the decisions of international investment arbitral tribunals. The ma-jor sources of international investment law are international treaties. The most significant documents for the energy sector currently are the Energy Charter treaty, the ICSID Convention, and the bilateral investment treaties, although national law remains also important for enforcement of arbitral awards and interpretation of state contracts. State contracts also remain significant, be-cause as a rule they include arbitration clauses and stabilization clauses. The latter are particularly common in the energy sector due to its specificity – on the one hand, energy is a heavily politicized sector due to its significance for the development of the economy of a state and both its economic and political stability. Therefore it has a status of a strategic sector, even an issue of national security. This could be observed ever since the beginning of the twentieth century. On the other hand, energy is an infrastructure sector, which requires high investments for development. Not all states are capable to develop this sector by their own financial means, and choose to attract foreign investment. As a result, investment contracts (state contracts) are concluded; they have a status of international commercial contracts, and their parties are free to choose both the applicable law and the means of dispute settlement. The en-ergy contracts as a rule include stabilization clauses, which seek to maintain stable business legal and financial environment for the duration of the contract. Finally, European Union law may also be accepted as a source for in-vestment protection, despite its generalized purposes, which are to achieve the strengthening and convergence of their economies and to establish a monetary and economic union, to implement a common foreign and security policy, including the progressive framing of the common defence policy, and to estab-lish the area of freedom, security and justice. EU law and foreign investment law are still largely conceived as independent and hardly interlinked. However, as integration between the EU member states becomes closer, EU legislation makes an increasing impact also on the specific sectors of the economy, in-cluding the energy sector. Research object The research object of this dissertation are the problems of interpreta-tion and application of law which arise in the resolution of disputes concerning protection of investments in the energy sector between the host states and for-eign investors. They may be grouped into three groups on the basis of the ap-plicable law: 1. The problems of interpretation of international agreements. Both BITs and MITs apply only with respect to investment. ICSID arbitral tribunals can hear only disputes arising directly out of an investment. Disregarding the key role the notion has on the exercise of rights, its meaning remains unclear. The most recent arbitral practice is completely inconsistent on this issue. No less problems are posed by the umbrella clauses, which are included in a large number of BITs and the Energy Charter Treaty, and which requires states to observe obligations they have entered into with an investor. These provisions have been included even in the BITs of 1970s, but in practice they have emerged only recently. The arbitral tribunals differ on whether this provision should be read literaly, or whether its meaning should be restricted. 2. The problems of interpretation of arbitration clauses and invest-ment contracts. This group includes the problems concerning arbitrab
Research problem It has been four decades since conclusion of the Vienna Convention on the law of treaties. The Convention included a provision that a treaty shall be inter-preted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. The customary status of this rule has been accepted by the International Court of Justice. Disregarding that, some question whether the rules, as opposed to principles, of interpretation are possible (i.e. would that not be better not to reduce them to writing). The International Law Commission itself has com-mented on this. On the other hand, the differences concerning interpretation of treaties were apparent already at the time the treaty was drafted. When the Convention was finally adopted, a few scholars representing the so-called New Haven approach opined that they expected the Convention to fail due to its "insistent emphasis upon an impossible, comformity-imposing textuality". In their view, conclusion of an international agreement was a continuous process of cooperation and collaboration of the parties, which required a much more detailed focus on the intentions of the parties than the Vienna Convention rule of interpretation envisaged. They called for interpretation which would search for genuine shared expectations, together with the complementary appeals for 'supplementing' and 'policing' communications in accordance with overriding community goals. Disregarding these hallmarks, they accepted that the text should remain an important index of party expectations, which they identify as one of the goals of interpretation. In their view, attention to the carefully worked out arrangements of the parties encourages the clarity of expectation, especially when sources of equal credibility give contradictory results concern-ing their expectations. Although the New Haven approach to interpretation of treaties was not included in the Vienna Convention on the Law of Treaties, a form of their reflection could be identified in national law, especially that of continental legal systems. It is agreed that the major difference between common law and conti-nental practice lies in the rules of interpretation: common law is based on a presumption of law, into which statutes are interwoven, hence the practice of drafting statutes in the fullest detail, and the broad assumptions that a statute deals only with those cases which fall within its actual wording. Continental theory, on the other hand, treats statutes as a basis of the law, but these tend to be drafted in a very general and abstract way, leaving it up to the courts to fill in the details by reference to a presumed legislative intention. However, this key difference seems to dissipate, as the common law tends to move away from the purely literal towards the purposive construction of statutory provi-sions, i.e. a new, 'revamped' version of literal rule has developed, which required the general context and purpose to be taken into consideration before any decision is reached concerning the ordinary meaning of statutory words. The continental practice remains consistent on its emphasis on the legislative intention. In the law of contracts this rule turns into a global one: both Lando and UNIDROIT principles of international commercial contracts include a rule of interpretation requiring to determine the common intentions of the parties. This approach finds reflection also in the Civil Code of the Republic of Lithuania, which was drafted on the basis of the UNIDROIT Principles. The International Law Commission returned to the topic of interpreta-tion of treaties thirty years later, in 2000, when it decided to consider the issue of fragmentation of international law and the potential problems it might give rise to. With this purpose in mind in its report on the topic of 2006 the study group has identified four general principles of interpretation of international rules: first, international law should be considered as a legal system, not as a random collection of international rules; second, in applying international law, it is necessary to determine the precise relationship between two or more rules and principles that are both valid and applicable in respect of the whole situa-tion (i.e. to identify whether their relationship is a one of interpretation or con-flict); thirdly, the norms should be interpreted in accordance with the Vienna Convention on the law of treaties, and fourthly, when several norms bear on a single issue, they should be interpreted so as to give rise to a set of compatible obligations. Explaining the latter principle, the Commission, similarly to the New Haven group approach, emphasized the need to take into consideration the community values, i.e. ius cogens and erga omnes, even though continues to recommend to follow the Vienna Convention approach on the ordinary meaning of the terms. Forty years later, it is already possible to consider, whether the New Haven group was correct criticising the Vienna Convention rule of interpreta-tion for its excessive emphasis on text, and how significant is the practical difference between the rule requiring to determine the common intentions of the parties as opposed to the rule, which requires to interpret a treaty in accor-dance with the ordinary meaning of its terms. Also, what is the practical im-pact of these differences on protection of the rights of persons. In order to answer this research question, the focus of the dissertation is on the foreign investment law in the energy sector. The topic is suitable and convenient to consider the impact of the rules of interpretation and the problems posed by fragmentation of international law. Its sources include in-ternational, national, and for the EU countries also EU law, even though the nature of the relationship between EU law and international investment law remains a disputable issue. The energy sector has been chosen in order to evaluate more precisely the impact of the rules of interpretation and fragmenta-tion of international law on the content of the rights of persons and their appli-cation. Research sources The Dissertation analyzes multilateral and bilateral investment trea-ties which are significant for the the protection of investment in the energy sector and the decisions of international investment arbitral tribunals. The ma-jor sources of international investment law are international treaties. The most significant documents for the energy sector currently are the Energy Charter treaty, the ICSID Convention, and the bilateral investment treaties, although national law remains also important for enforcement of arbitral awards and interpretation of state contracts. State contracts also remain significant, be-cause as a rule they include arbitration clauses and stabilization clauses. The latter are particularly common in the energy sector due to its specificity – on the one hand, energy is a heavily politicized sector due to its significance for the development of the economy of a state and both its economic and political stability. Therefore it has a status of a strategic sector, even an issue of national security. This could be observed ever since the beginning of the twentieth century. On the other hand, energy is an infrastructure sector, which requires high investments for development. Not all states are capable to develop this sector by their own financial means, and choose to attract foreign investment. As a result, investment contracts (state contracts) are concluded; they have a status of international commercial contracts, and their parties are free to choose both the applicable law and the means of dispute settlement. The en-ergy contracts as a rule include stabilization clauses, which seek to maintain stable business legal and financial environment for the duration of the contract. Finally, European Union law may also be accepted as a source for in-vestment protection, despite its generalized purposes, which are to achieve the strengthening and convergence of their economies and to establish a monetary and economic union, to implement a common foreign and security policy, including the progressive framing of the common defence policy, and to estab-lish the area of freedom, security and justice. EU law and foreign investment law are still largely conceived as independent and hardly interlinked. However, as integration between the EU member states becomes closer, EU legislation makes an increasing impact also on the specific sectors of the economy, in-cluding the energy sector. Research object The research object of this dissertation are the problems of interpreta-tion and application of law which arise in the resolution of disputes concerning protection of investments in the energy sector between the host states and for-eign investors. They may be grouped into three groups on the basis of the ap-plicable law: 1. The problems of interpretation of international agreements. Both BITs and MITs apply only with respect to investment. ICSID arbitral tribunals can hear only disputes arising directly out of an investment. Disregarding the key role the notion has on the exercise of rights, its meaning remains unclear. The most recent arbitral practice is completely inconsistent on this issue. No less problems are posed by the umbrella clauses, which are included in a large number of BITs and the Energy Charter Treaty, and which requires states to observe obligations they have entered into with an investor. These provisions have been included even in the BITs of 1970s, but in practice they have emerged only recently. The arbitral tribunals differ on whether this provision should be read literaly, or whether its meaning should be restricted. 2. The problems of interpretation of arbitration clauses and invest-ment contracts. This group includes the problems concerning arbitrab
