Opinion: Latvia and Lithuania share similar situations with grey economy
Latvia and Lithuania both have the same situation when it comes to combating the grey economy. This is because residents often justify the existence of envelope wages and other illegal symptoms, says the head of Lithuanian Free Market Institute Zilvinas Silenas.
Latvian Chamber for Commerce and Industry in cooperation with Latvian embassy in Lithuania organized an informal meeting with businessmen to discuss at the ‘LatviaLithuania: competitors or cooperation partners’ seminar problems and solutions. Business representatives came to the conclusion that the neighbouring country is an important export and import partner in different fields. This is why it would benefit both countries if they agreed on cooperation more often, BNN was told by LCCI representatives.
Latvian ambassador in Lithuania Einars Semanis notes that import and export structure between both countries is very similar in terms of products and volumes. This means the market quickly reacts and adapts to price changes. Latvian Investment and Development Agency representative in Lithuania Jelena Markune says that demand is the highest in tourism. At the same time, Latvian small business more and more often think about Lithuania when making the first steps towards exports. Rimantas Sidlauskas, director general of Lithuanian Chamber for Commerce and Industry, also took part in the seminar. He told participants of the seminar about the role his organization plays in Lithuania and how it can help Latvian businesses. Zilvinas Silenas, who is the president of Lithuanian Free Market Institute, emphasized in his presentation that Lithuania and Latvia both have a similar situation when it comes to grey economy, as residents often justify the existence of envelope wages and other illegalities. He noted that it is often said in Lithuania that people do not want to pay taxes because they see no benefits from doing so. He said that it is important to explain the role of taxes to society and how taxes are used.
Certus director Daunis Auers shared his opinion on whether Latvia and Lithuania are competitors or partners. He said that competition in business is noticed not so much between countries as it is between cities. He mentioned the example of Riga and Vilnius, where investors make positive or negative decisions based on experience, regulations and opportunities. On a national level, competition appears in the field of tax politics. Based on tax regulations, businessmen make decisions where to establish their businesses. Researchers say countries should cooperate more with one another and solutions to complicated matters, including the formation of joint enterprises. To motivate businesses to export more within the Baltic region and elsewhere in the world, construction materials manufacturer Sakret council chairman and member of LCCI Andris Vanags took part in the seminar with a presentation, BNN was told by LCCI representatives. He told participants of the seminar that it is important to form local teams that would regularly meet with owners and other company members on a regular basis, providing support and recommendations. «It is even more important to form contacts with local organizations and embassies to ensure that cooperation partners feel needed and supported,» Vanags said. During discussions, participants spoke with businessmen about cooperation matters. Multiple intergovernmental projects have been realized in culture, tourism and other fields. As an example for the realization of Baltic region projects, participants of the discussion mentioned Rail Baltica project, in which governments managed to reach an agreement in order to bring to life the biggest cross-border project in the past decade, LCCI emphasized.