bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 23.11.2014 | Name days: Zigfrīda, Zigrīda, Zigrīds
LatviaLatvia

Agency: Latvian businessmen suffer losses because of situation in Ukraine

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RULatvia’s total volume of export to Russia reached EUR 1,470,000,000 last year. Import figures are said to have been EUR 1,200,000,000. One year ago, Russian businessmen invested half a billion euro in Latvia. This includes approximately 100 million in electricity and gas sectors and 50 million in real estate sector.

Latvia mostly traded with Russia with food products, the lion’s share of which was alcohol. According to Investment and Development Agency of Latvia (LIAA) – TOP 7 export goods to Russia include whiskey, medicine, cognac, particle boards, sprats, rum and vodka. Import from Russia to Latvia is dominated by oil and gas products, as reported by Nekā personīga (Nothing personal) programme of TV3.

According to the agency, the crisis has already begun.

‘Our agency is certain – Latvian entrepreneurs are suffering losses already. This applies to transit and logistical sectors and trading. Businessmen are concerned about the future. If sanctions are introduced, the losses businessmen suffer right now will be next to nothing compared to what will come after,’ – says LIAA Director Andris Ozols.

Compared to that of Russia, the volume of trade Latvia has with Ukraine is 13 times smaller. Ukrainians mostly invest in Latvia’s financial and banking sectors. The volume of real estate deals does not exceed EUR 5 million. Latvia’s exports to Ukraine include medicine, mobile phones, television sets and vodka. Ukraine provides Latvia with – metal alloys, train coaches and tugs. Trade volumes with Ukraine had reduced by half one year ago. What might happen this year – none can say. Nevertheless, Latvia may also benefit from a conflict in Ukraine.

‘The centre of Kyiv now has plenty of potential trading space available for attractive prices. Latvian businesses that have the resources should take advantage of this situation. Even though such steps may be emotionally heavy – business is business,’ – says Ozols.

Latvijas Balzams is the largest Latvian exporter of alcoholic drinks to Russia. It belongs to SPI Grupa. Its owner, Jurijs Šeflers, has invested money in the construction of a Z-tower in Riga. Latvijas Balzams is worried that sanctions against Russia could close the Russian market for Latvian businesses for a long time.

‘If Russia ends up being economically isolated, it will likely switch to other countries. And after the end of the sanctions, it may be difficult for the EU to re-establish good trade relations,’ – believes Latvijas Balzams Commercial Director Valters Kaže.

Rīgas piena kombināts is now owned by a Russian businessman – Andrei Bezhmelkitsky bought it along with Valmieras piens in 2011. The growing crisis has yet to impact the company. The fluctuations of the Russian ruble raise some serious concerns. Contracts with Russian companies allow them to pay for supplies within one month’s time. If the value of the Russian ruble falls within this period of time, Russian companies may end up paying less. Banks have become cautious in providing loans to companies related to Russia.

Possible sanctions may freeze multiple important national contracts, including: the sale of airBaltic, Citadele Bank and Liepājas Metalurgs.

Finance Ministry does not plan to narrow the range of possible investors; Russian investors are still welcome.

Sanctions against Russia will likely impact Latvia’s transit sector the most. This especially applies to railway cargo transport. In 2013, 77% of all railway cargo handled in Latvia came from Russia.

Soon the EU will gather to discuss sanctions that will limit Russian businesses in Europe. In order to prevent such a turn of events, Russia is expected to start constructive discussions with Ukraine. Nevertheless, Latvian entrepreneurs should keep in mind that there will be losses regardless of the two possible outcomes.

‘Of course, we do not want to become another railway station. We want our planes to fly to Russia. We want our businessmen to cooperate on equal terms and clear contracts that are recognized and respected by both sides. As for the current situation – what we see now is an unprecedented situation. And actions that have breached all possible and impossible agreements and actions that contradict all international conventions, traditions etc. It is possible that the situation will become more complicated. I also understand that there will be losses if the situation develops following this scenario. But this is the kind of situation when we speak of things that are more important than losses in economic cooperation,’ – explains State Secretary to Foreign Ministry Andrejs Pildegovičs.

Ref: 102.109.109.2111


Leave a reply

Government approves Latvia’s budget plan project for 2015

During the meeting of the Cabinet of Ministers this Saturday, November 22nd, the government approved Latvia’s budget plan project for 2015. The government will soon continue its work on the next year’s budget.

Changes to existing management boards of Latvian freeports to be performed next week

Three Latvian ministries have announced their plans to carry out replacement of existing representatives in management boards at freeports in Ventspils, Liepaja and Riga next Tuesday, November 25th.

Vilks: Europe is stuck in the 19th century

Europe is stuck in a welfare level with too high costs, and it is a neglected disease, believe former Finance Minister of Latvia Andris Vilks.

Romanian organised crime prosecutor accused of corruption

Romanian anti-corruption authority has arrested on corruption charges a prosecutor, who heads a government department investigating mafia, organized crime and terrorism.

Researcher: Russia will play the human rights card against Latvia more often

Russia will increase its use of the human rights card against Baltic States, especially Latvia, which will become the presiding country over the European Union next week, believes Eastern European Policy Research Centre’s expert Rinalds Gulbis.

Lithuania’s political and economic diary. «Lithuanian president’s assaults on Russia exceeds those of Ukrainian radicals», Russian Foreign Ministry

Lithuania’s President Dalia Grybauskaitė has been such a vociferous critic of the Russia that even the Kremlin is exhibiting her to the world as an example of the «extreme» animosity.

Venice could fine use of wheeled suitcases in touristic Italian city

The historic Italian city of Venice considers introducing a ban on wheeled suitcases, as tourist masses keep locals from having a good night sleep.

Experts: crisis in Ukraine is Russia’s previously planned hybrid war

The crisis in Ukraine is Russia’s previously planned hybrid war, in which armed clashes are accompanied by an intensive information campaign, as concluded in the report by NATO StratCom COE.

Ministries to change representatives at freeports of Ventspils and Riga

Latvian Environmental Protection and Regional Development Minister Kaspars Gerhards plans to replace the ministry’s representatives in the management boards of freeports in Ventspils and Riga.

Kaliningrad sprat producers may be forced to close down due to embargo

Kaliningrad canned fish producers may be forced to reduce sprat production volumes or even stop production altogether because of shortage of raw materials.

Lithuania maps out its entrepreneurialism

In a small county like Lithuania, the scope of entrepreneurialism varies tremendously from one region to another. The most people that do not fear business risks dwell in largest cities, but some of the otherwise agricultural and touristy regions in the hinterlands can also boast of a decent number of private business initiatives.

Snow comes unexpectedly to Latvia; drivers urged to be careful

This Friday, November 21st, Latvia was hit by unexpected snowfall. According to meteorologists, snowfall will continue throughout the entire day and night to Saturday. Thickness of the mantle of snow on the ground may reach 6-10 cm in some areas.

Another disciplinary case is launched against Strīķe

Another disciplinary case has been launched against Juta Strīķe, former deputy of Chief of Corruption Prevention and Combating Bureau Yaroslav Strelchenok, according to information from LETA.

SA: management of Latvian ports remains excessively politicized and unprofessional

Replacement of some members of Boards of freeports will not make their management more professional, effective and responsible, believes Latvian State Auditor Elita Krūmiņa. She calls for immediate changes to regulations that govern port management.

PHOTO: residents commemorate the first anniversary of Zolitude Tragedy

In commemoration of the first anniversary of Zolitude tragedy, which claimed the lives of 54 people, Latvia’s national flag will be raised on all apartment buildings, Riga City Council and its institutions with a mourning ribbon this Friday, November 21st.

UN: Close to thousand people killed in Ukraine since September 5 ceasefire

In the eight weeks that have passed since the truce agreed by Ukraine, Russia and separatists came into force, battles in Ukraine's east have claimed 957 lives.

SRS officers find 4.5 million contraband cigarettes in boiler unit

State Revenue Service’s Border Control officials found more than 4.5 million contraband cigarettes that were stashed in boiler units on board of a ferry that runs from Liapaja to Travemünde this month. The cigarettes, bearing Winston, Minsk and Fest brands with excise duty stamps from the Republic of Belarus, could have impacted the state budget by EUR 677,000.

Police may announce names of those responsible for Zolitude tragedy soon

The deformation of the building of Maxima supermarket in Zolitude began nearly two years ago. This is why State Police is currently investigating persons who could have potentially prevented the disaster.

One year passes since the tragedy in Zolitude

Friday, November 21st, marks one year since the tragedy in Zolitude. 54 people died under the collapsed roof of Maxima supermarket, including several rescuers.

Wynergy to sue Latvia and demand at least 51 million as compensation

Owner of Wynergy wind park company Indreks Kuivaliks has launched an international arbitration procedure against Latvia, asking no less than EUR 51 million as compensation.

Putin’s spokesperson discusses possibility of coup d'état in Latvia

During a discussion with BBC about the crisis in Ukraine and its impact on relations between the West and Moscow, Vladimir Putin’s Press-representative Dmitry Peskov discussed a theoretical possibility of a coup d'état in Latvia.

Lembergs family’s property value declines by 28 million

The Lembergs family remains the wealthiest in Latvia. The value of properties owned by Aivars, Anrijs and Liga has declined by EUR 28 million down to EUR 171 million in 2014.

Number of students enrolled in vocational education institutions up by 1.6% in Latvia

11.7 thousand students were enrolled in 62 vocational education institutions and 14 colleges implementing vocational education programmes in the 2014/2015 school year in Latvia. Compared to the previous academic year the number of enrolled students has increased by 1.6%. 46.5% of the students enrolled are women.

People living in Baltics are more concerned about poverty than violence

Residents of Latvia, Estonia and Lithuania are more afraid of poverty than violence. Only a little more than one-third of Baltic residents are afraid of getting mugged.

Owners of ABLV Bank remain at the top of Latvia’s list of millionaires

ABLV Bank owners Oleg Fils and Ernests Bernis remain at the top of Latvia’s list of wealthiest people for the third consecutive year.