For­eign in­vestors’ mood im­proves fur­ther in Latvia

Baltic News Network - - News -

The gen­eral mood of for­eign in­vestors in Latvia has im­proved in the past year, said Pro­fes­sor Ar­nis Sauka of Stock­holm School of Eco­nom­ics in Riga at the pre­sen­ta­tion of the For­eign In­vest­ment En­vi­ron­ment In­dex 2017 on Wed­nes­day, 10 Jan­uary.

He also said prob­lems have not changed much, most of them are as­so­ci­ated with the coun­try’s de­mo­graphic sit­u­a­tion and labour force avail­abil­ity.

In­ter­viewed in­vestors gave Latvia’s in­vest­ment at­trac­tive­ness a score of 2.5 out of 5 in 2017, whereas the score given to Latvia the year be­fore was only 2 out of 5. Ef­forts of Lat­vian pol­icy-mak­ers to im­prove the coun­try’s in­vest­ment en­vi­ron­ment were given a score of 2.9 points (2.3 points in the past) by in­ter­viewed in­vestors. Three fields in which no ma­jor progress was ob­served in the past 12 months in­clude the de­mo­graphic sit­u­a­tion, labour force ac­ces­si­bil­ity, as well as health­care and so­cial sys­tem. In­vestors gave the de­mo­graphic sit­u­a­tion a score of 1.6 points out of 5. 74% of in­ter­viewed in­vestors said they have seen no im­prove­ments in this field in the past year.

«Yes, not ma­jor changes are ex­pected with the coun­try’s de­mo­graphic sit­u­a­tion, but we do wish to see at least some progress. If progress is achieved, this field will not have a de­clin­ing ten­dency. In this case in­vestors do not look at how many chil­dren were born – they fo­cus more on po­lit­i­cal ini­tia­tives and mea­sures un­der­taken to im­prove the de­mo­graphic sit­u­a­tion. We have yet to see any pos­i­tive changes in this field. And if no pos­i­tive changes are no­ticed, what can we ex­pect from the fu­ture?» said Sauka.

Labour force ac­ces­si­bil­ity is given a score of 2.7 out of 5. Un­for­tu­nately, 71% of re­spon­dents do not see any im­prove­ments in this field. «It is no­table that it is more about pro­duc­tiv­ity of work­ers, not their avail­abil­ity. Ev­ery­one says pro­duc­tiv­ity of Lat­vian work­ers can­not be con­sid­ered poor,» added Sauka.

An­other sec­tor in which no real progress was noted last year, ac­cord­ing to in­vestors, is health­care and so­cial sys­tem. In­vestors gave it a score of 2.5 points out of 5. 71% of in­ter­viewed in­vestors men­tioned not see­ing any no­table im­prove­ments in this field. 57% of in­ter­viewed in­vestors also see no im­prove­ments for the coun­try’s ju­di­cial sys­tem. 55% be­lieve the qual­ity of leg­is­la­tion as­so­ci­ated with busi­ness ac­tiv­i­ties has not changed at all, whereas 52% of in­vestors said there is still a great deal of un­cer­tainty in re­gards to cer­tain de­ci­sions as­so­ci­ated with the fu­ture. «In­vestors still talk about lengthy and com­pli­cated court pro­cesses, which of­ten paral­yse every­day work. We can say that the sit­u­a­tion has im­proved some­what. In­ef­fi­ciency is a word of­ten men­tioned by in­vestors. I am not as much wor­ried about ob­sta­cles in the ex­ist­ing sys­tem, but rather the fact that Jus­tice Min­istry acts blind and un­will­ing to re­solve ex­ist­ing prob­lems. I truly hope that this is no more than pub­lic rhetoric, be­cause le­gal ed­u­ca­tion in Latvia is very strong, and there is Ju­di­cial Af­fairs Coun­cil and other ca­pa­ble lawyers that are not shy to speak about prob­lems. I hope that such a po­si­tion from the min­istry is only pub­lic and po­lit­i­cally mo­ti­vated,» said Sauka.

In­vestors are more pos­i­tive about the qual­ity of Latvia’s ed­u­ca­tion sys­tem and science – 3.1 points out of 5. In ad­di­tion, 17% of re­spon­dents fully agree and 40% par­tially agree that the ed­u­ca­tion sys­tem has im­proved over the course of the past twelve months. 33% fully and 24% par­tially agree that sup­port and com­mu­ni­ca­tion with state struc­tures has im­proved.

When asked about the qual­ity of Latvia’s tax sys­tem, 17% of in­ter­viewed in­vestors no­ticed im­prove­ments, 49% par­tially agree there have been im­prove­ments, whereas 43% of them said they have not seen any im­prove­ments. ‘Read­ing be­tween the lines makes it look like in­vestors do not be­lieve things will re­main the way they are,’ said the pro­fes­sor. Read more on

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