EY: most Latvian businessmen are not ready for changes to EU fund distribution
Latvia has a generation of businessmen that expect to receive assistance, including from European Union funds, partner of professional business advisory and audit service company EY Andris Laucins said in an interview.
«We have created a generation of businessmen that are used to receiving money from the EU and other assistance tools as gifts. I would say that we have more changes ahead of us – we have grown up in an economy that is used to receiving aid,» said Laucins. He emphasizes that Latvian residents should start thinking about creating an economy in a situation when Latvia is no longer expected to receive help, but provide it.
«This could be an economically advantageous process for us. We all remember how in the first years of our independence different Danish advisors helped us, and there were different programmes from other countries. This was also beneficial for our supporters. Now Latvia is a member in a number of international institutions. We have become a supporting country ourselves. This fact has to be clear within the halls of the government and among businessmen. On the business side of things, we still live with the thought that we can receive gifts in exchange for filling some table or writing a business plan,» says EY partner. Laucins also noted that the majority of Latvian businessmen are not prepared for possible changes to regulations that govern the division process for EU funds, which may include letting go of the grant principle and instead using different financial instruments to allocate money.
«If you ask an average businessmen what financial instruments are available, I doubt most will explain what those instruments are. No one will give away money to businessmen any longer. It will be necessary to come up with development projects that detail clear plans as to how this money is borrowed and for what purpose, as well as how this money will be returned. Maybe we will see some other mechanisms that will make it mandatory to re-invest money in other good things. I believe the number of businessmen that are able to qualify to maintain money flow and ensure re-investment of money further down the line is not high,» comments EY partner.
He also notes that businessmen of old EU member states have experience working with financial instruments. Latvian businessmen, on the other hand, are behind the times with that. «If projects are to be evaluated and compared, it should be concluded that businessmen from old EU member states are ten steps ahead of us ideas and experience-wise working with such instruments. We don’t have such a history,» Laucins said.
Nevertheless, he said Latvian businessmen have begun using assistance from consultants to assist with their company’s development.