Networking Breakfast with the Governor of Latvijas Banka

On the 16th of November Irish Latvian Chamber of Commerce organised the Networking Breakfast with the Governor of Latvijas Banka: Mr. Ilmārs Rimšēvičs. The topic was: “Latvian Economy: Recent Developments & Challenges”.

Latvia’s situation could not been analysed without wider context – the European Union remains the main corner-stone for economic growth. For each Member state situation is different, but there are some issues which are common, including the fiscal discipline.

In 2011 the budget deficits of the EU Member states were sizable, in 2016 Member states had a lack of willingness to balance their budgets. The current situation is tense, there are several reforms which are needed not only in monetary and fiscal policies, but in structural policy too. It is impossible to gain any economic growth without implementation of reforms in all the three fields.

One of the main problems for Latvia is that politicians are not willing to make unpopular decisions in society. The EU imposed sanctions towards Russia is an example – Latvian politicians do not agree on next steps, including compromise making, at the same time Latvia’s economy is hit by all sanctions. Demographic challenges are very topical for Latvia too – it is not possible to turn the time back. The positive aspect is that the people do not leave the country as actively as it was couple of years ago.

During the last couple of weeks media news has shown that the most challenging fields are health care and education. Latvia has one of the lowest expenditures on public health services, private sector looks better. One of the issues which should be solved is connected with insurance companies – it is necessary to send clear message to consumers what exactly is included in those services (Latvian-Dutch model). E-health projects have been topical for more than 10 years, a lot of money has been lost – it is time to change the strategy.

In education sector the situation is opposite – Latvia has one of the highest expenditures. It is completely wrong that one field is “hungry for money”, and the other one is over-payed. Latvian political elite has only a few small strategies and none of them can solve Latvia’s bigger issues in the future.

Loss of the EU Structural funds in the visible future also will have an impact on country’s economy. However, the situation should not be exaggerated – there is a lack of good bureaucrats who understand how to use those funds. For the future Latvia needs to find ambitious people who are ready to solve these problems. It is necessary to understand that structural reforms will help all of us, including business people.

ILCC would like to thank our members and guests for the participation, the atmosphere was really pleasant, and we would like to express a great gratitude to our guest of honour for the interesting presentation and his opinion. ILCC would like to thank the Radisson Blu Ridzene Hotel for the wonderful breakfast buffet.

The next ILCC events are on 13^th of December – Annual Christmas Party; 14^th of December – Joint Chamber Business Luncheon with the Mayor of Riga – Mr. Nils Ušakovs. For more information visit ILCC website, Facebook page and Twitter.