Latvia – nine­teenth most favourable coun­try for busi­ness in the world

Baltic News Network - - News -

This year, Latvia earned 19th place among 190 coun­tries, leav­ing 171 economies be­hind. Among EU mem­ber states, Latvia is on 8th place, with Ire­land, Lithua­nia, Fin­land, Es­to­nia, Swe­den, UK and Den­mark ahead, ac­cord­ing to World Bank’s Do­ing Busi­ness 2018 data.

Econ­omy Min­istry told BNN that changes in the rat­ing can be ex­plained with re­forms that came into force when the rat­ing data was be­ing com­piled. This year, Latvia has been very ac­tively re­al­iz­ing re­forms de­tailed in the busi­ness en­vi­ron­ment im­prove­ments ac­tion plan. Re­sults of those re­forms will be re­flected in Do­ing Busi­ness 2019 and 2020. «Po­si­tions of dif­fer­ent coun­tries in the rat­ing are de­ter­mined in com­par­i­son with the best re­sult or dis­tance to fron­tier (DTF). Latvia’s re­sult in com­par­i­son with the best one has changed by only 0.79 per­cent­age points. Lithua­nia’s re­sult has im­proved by 1.05 per­cent­age points than be­fore. Lithua­nia’s in­tro­duced mech­a­nisms, which Latvia al­ready have, in­clude ma­jor re­forms in the con­struc­tion sec­tor, elec­tric­ity con­nec­tions, pro­tec­tion of in­ter­ests of mi­nor­ity share­hold­ers and ad­min­is­tra­tion of tax pay­ments. With that, Lithua­nia has moved from 21st to 16th place in the rat­ing, whereas Latvia has dropped from 14th to 19th. Es­to­nia’s re­sult has wors­ened by 0.25 per­cent­age points. The coun­try re­mains on 12th spot in the rat­ing,» the min­istry ex­plains.

The min­istry also notes that re­spon­dents in­ter­viewed by the World Bank in Latvia men­tioned they value busi­ness start-up op­por­tu­ni­ties in Latvia, in re­gards to which Latvia has im­proved from 22nd to 21st place; tax pay­ment ad­min­is­tra­tion, in re­gards to which Latvia has im­proved from 15th to 13th place; and com­pli­ance with le­gal com­mit­ments, in re­gards to which Latvia has im­proved from 23rd to 20th place.

Latvia has suf­fered a de­cline in po­si­tions like con­struc­tion per­mits, elec­tric­ity con­nec­tions and sol­vency.

Kristaps Soms, Econ­omy Min­istry’s busi­ness com­pet­i­tive­ness de­part­ment di­rec­tor says Con­struc­tion Law in Latvia came into force in 2014, and since then noth­ing has changed. ‘This is why a drop in rat­ing points to pos­si­bil­i­ties to im­prove work in dif­fer­ent in­sti­tu­tions that ap­ply the law. This in­cludes Riga Con­struc­tion Of­fice.’ «Changes in re­gards to elec­tric­ity con­nec­tions are likely as­so­ci­ated with two de­vel­op­ments: Sadales tīkls’ in­vest­ments in the net­work, be­cause the com­pany had to plan more sched­uled shut-downs thanks to ex­pan­sion and im­prove­ments, and the in­tro­duc­tion of new tar­iffs on 1 Au­gust 2016 for cer­tain groups of res­i­dents. Among the peo­ple in­ter­viewed as part of the study were rep­re­sen­ta­tives of law firms, banks, and lo­gis­tics companies. How­ever, there were no ma­jor pro­duc­ers of elec­tric­ity among re­spon­dents. As a re­sult, for the sec­ond con­sec­u­tive year, the num­ber of new con­nec­tions, which is one of the com­po­nents of this cri­te­rion, does not fit Econ­omy Min­istry’s and Sadales tīkls’ data. In 2016, when data for this rat­ing was col­lected, it was 57, not 107 days,» ex­plains Soms.

Ieva Lūka/LETA

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