bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 20.10.2017 | Name days: Leonīda, Leonīds
LatviaLatvia

Economic Diary. Latvia Week 27 of 2012

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

If not for the visit of the big delegation of American businessmen, this week’s events could have been rated under «barely average» category.

Innovations are hard to come by

Firstly, Latvia is on the 30 (141 in total) place in the global index of innovations in 2012. The main goal of the index of innovations, which is compiled every year by the INSEAD international business school and the World Intellectual Property Organization (WIPO), is the development of methods that could describe the importance of innovations in modern society. When compiling this index, authors take 84 factors into account, including education quality, human capital, conducted research, import and export of goods. Starting from 2012, two new factors are now taken into account – online creativity of country representatives and ecological stability (reasonable use of natural resources, energy efficiency and ecological policy).

As professor of INSEAD business school and one of the key authors and editors of the report Soumitra Dutta admits, there are no ideal methods to measure innovation levels. According to him, successful innovation development processes are going on in many countries, but almost all countries benefit from this kind of research.

No matter how much you reduce taxes…

Second, it turned out that the agreement signed by Prime Minister Valdis Dombrovskis with traders on the reduction of VAT by 1% starting from July 1 that will also leave a mark on retail prices, gave a completely opposite result.

In any case, Chief of the Latvian Traders Association Henrik Danusevic claims that large trade networks carried out an incomplete re-evaluation of products and they could have benefited from the reduction of VAT. Earlier, he claimed that VAT reduction would cost the trade segment 8.73 million LVL and will cause an increase in prices. According to him, by not re-evaluating products under one LVL, large trade networks received additional income. And it partially covers those expenses that were related to re-evaluation.

Maxima Press Secretary Ivars Andins reports that the trade network’s expenses are around 110 thousand LVL. The retail network reduced prices of around 25 thousand different products. First of all, prices on bread, milk, meat and fish were reduced. According to the words of Rimi Latvia representative Zane Elina, they also replaced price tags on approximately 25 thousand products. Small traders, on the other hand, have put off global re-evaluation. According to Danusevic, they are acting realistically, because they are re-evaluating everything that comes in for new prices. In general, the head of the association claims that products in Latvia will not become cheaper because of VAT reduction. This is due to the fact that natural gas has already become more expensive and the increase of the base tariff on electric energy was already announced – all this does not benefit the reduction of prices on products.

The response of trade networks was strict: Rime Latvia, Maxima Latvia and IKI announced that they will leave the Latvian Traders Association. According to the Chairman of Rimi Latvia Valdis Turlais, the head of the association discredits such a positive sign for Latvia’s economy as the reduction of VAT. These trade networks plan on representing their interests and communicating with the government through a different industry organization – the Latvia Food Traders Association.

A similar thing happened to fuel traders, with whom the Prime Minister also signed a memorandum on non-increase of fuel prices. However, after July 1, three leading networks of petrol stations – Statoil, Lukoil and Neste – increased petrol and diesel prices by one santim per litre.

As fuel traders explain, a sharp increase of oil prices has been continuing for one week and the companies are incapable of influencing external factors.

Americans find Latvia interesting

The only good news of this week is the visit of a delegation of American businessmen to our country. Representatives of 20 American companies came to Latvia, seeking economic contacts with Latvian business. Among them are the Boeing Company, Warner Brothers, the largest player on American and European market of railway wagons GATX Corporation, pipeline construction and repair company Argus Limited, IT companies JEB Technology and Novalytica and others.

American businessmen were interested in automobile construction, IT and movie making the most. Warner Bros. representative Kevin Trehy came to Riga to evaluate the possibilities offered by the local film industry: «We need to know what kind of specialists, infrastructure and places there are here.»

«We listened to the information about local railroad projects. We, as rolling stock providers, have opportunities to partake in one way or another,»- claims GATX Corporation Finance Director. According to him, the corporation could partake in such projects as the Nordic Distribution Network, which services NATO non-military shipments to Afghanistan through Riga. Furthermore, Latvia attracts GATX Corporation by its location close to Russia, the market of which the company is planning on joining.

«We have a beautiful country, a lot of educated people and relatively easy conditions for starting a business. There are low taxes here. American companies can consider coming here because manufacturing costs here are lower than in the rest of Europe,» – says Honorary Councillor of Latvia in Southern California Juris Bunkis.

In 2011, Latvian companies exported good to the United States of America worth 72 million LVL. The volume of American import to Latvia was 54.4 million LVL to Latvia in 2011. According to the data from the Bank of Latvia, direct savings of investments from USA to our country reached 183.9 million LVL in the first quarter of 2012.

So what if statistics does not cause joy so far, but as Economy Minister Daniels Pavluts said: «Not too long ago America was characterized in the world as the land of opportunity. It is unquestionably so. But no one can deny Latvia the right that are a land of opportunity ourselves; in addition, we know of our opportunities and know how use them! Cooperation with businessmen and business organizations from other countries creates opportunities to increase export, increase the flow of investments and create added value in Latvia.»

Ref: 017.109.109.2481


Leave a reply

Latvia to invest EUR 5.9 million into formation of unified port network

Ports of Riga planning region and Kurzeme planning region have commenced an important tourism project. The goal of this project is creating a unified yacht port network in Latvia and Estonia with quality services that would allow developing sailing tourism and attract foreign sailing enthusiasts in the future, reports the regions’ representative Inese Ozoliņa.

Graft-suspected Tartu deputy mayors resign

In Estonia's second largest city, Tartu, Deputy Mayors Artjom Suvorov and Valvo Semilarski have stepped down from office, Estonian press reported, after the politicians were arrested under suspicion of graft.

Expert: workers of Latvia’s NGO sector have high ‘burnout’ risk

Workers of Latvia’s NGO sector have a high burnout risk, said once the director of Providus Dace Akule in an interview to Latvijas Radio.

Producer: many young people come to work in the film industry

Latvia’s film industry has been steadily growing these past several years, and it is especially gratifying that many young people are coming to work in the industry, says director and producer, representative of Film Angels Productions Jānis Kalējs.

Pollution blamed for every sixth premature death globally

Nine million premature deaths globally in 2015 are said to be related to pollution, a study has found pointing to presence of harmful matter in air, water and workplace as the three main risk factors.

Infectologist: influenza kills biologically the weakest, including children and pregnant women

Influenza is an infection that affects both children and adults. However, it kills those who are biologically weak, says Immunization State Council chairperson and infectologist of Children’s Vaccination Centre Dace Zavadska.

Investor activity made easier between Latvia and Vietnam

An intergovernmental agreement has been signed between the Republic of Latvia and Socialist Republic of Vietnam on prevention of double taxation and tax avoidance in relation to income tax.

Colder masses of air to enter Latvia in coming days; precipitation to be limited

Although high atmospheric pressure will be present above Latvia in the coming days, southern regions in Latvia will experience short-term precipitation on Saturday, 12 October, caused by the cyclone active above Poland. Colder masses of air will enter Latvia in the coming days.

Maltese journalist said to be killed by remotely-controlled explosive

Officials in Malta have unveiled it is assumed that investigative journalist Daphne Caruana Galizia was murdered by an explosive places under her car, which was detonated remotely.

Prime Minister: Latvia cannot accept additional asylum seekers

Latvia cannot afford to resettle additional asylum seekers, said Prime Minister Māris Kučinskis during his meeting with European Commission President Jean-Claude Juncker on Thursday, 19 October.

Scandinavians purchase tourism company in Lithuania; changes expected in Latvia too

Dutch Otravo online travel organization has expanded and has purchased Lithuanian online travel agency Interno Partneris, thereby entering the Baltic market.

Ombudsman: non-citizen status matter should be resolved in next decade

The next ten years may be the transition period to ‘put an end’ to the non-citizen status in Latvia, said ombudsman Juris Jansons in an interview to LTV programme Rīta panorama.

Swedish Foreign Minister: harassment exists at highest political level

The Foreign Affairs Minister of Sweden, Margot Wallström, has commended the current sexual assault and harassment awareness campaign in social media and urged to fellow politicians to address the problem.

Latvenergo recognized as Latvia’s most valuable company for tenth time

Latvenergo has been recognized as Latvia’s most valuable company in 2017. Its value grew 34% in comparison with 2016, according to the TOP 101 list of Latvia’s most valuable companies compiled by Prudentia and Nasdaq Riga.

Number of births and number of deaths decline in Latvia

During the first nine months of this year 15,723 babies were born in Latvia, which is 1,113 children fewer than in the corresponding period of the last year.

CC applies binding conditions for the sale of MTG Broadcasting AB

Latvian Competition Council has decided to permit Bite Lietuva to purchase MTG Broadcasting AB group’s businesses in Latvia. CC has applied several binding conditions to prevent a possible impact on competition on the television services and advertisement market.

Eesti Energia warns: Limiting CO2 emissions on capacity could endanger energy supply

Estonian energy giant Eesti Energia has evaluated that a plan under discussion in the European Union to introduce a carbon dioxide release limit for capacity mechanisms to qualify for subsidies could adversely affect the security of supply in Estonia and the Baltic states.

Solidarity tax norm recognized as non-compliant with Latvia’s Constitution

On Thursday, 19 October, the Constitutional Court of the Republic of Latvia declared the Solidarity tax norm as non-compliant with the country’s Constitution.

Survey: Riga residents go to the doctor’s the most often

34% of residents undergo regular health checks, according to Mana Aptieka & Apotheka health index. In addition, women are twice as serious about health checks as men.

LG cozies up with idea of rebuilding railway tracks to Reņģe, Latvia

Lithuania‘s Lietuvos Geležinkeliai has sent a mixed message as to what it intends to do next following an EC fine of nearly 28 million against it over the dismantling a 19-km railway stretch with the Latvian village of Rengė.

Čigāne: European Union’s social pillar is very important to Latvia

On Wednesday, 18 October, Saeima’s European Affairs Committee approved Latvia’s national position on the introduction of EU Pillar of Social Rights.

40% of all car problems are relate to lighting, battery and security systems

It has been determined that 41% of all car problems are related to lighting devices, 39% of problems are related to malfunctioning batteries, and 44% of problems are related to security systems.

Xi Jinping: Chinese socialism has entered new era

China's ruling Communist Party's five-year congress has been opened with the country's President Xi Jinping outlining a general plan for the future development of China.

Public transport in Latvia procurement may be at risk

Considering that continued and unhindered provision of public transport services on ten routes may become at risk from 1 January 2018 onward, Public Transport Council made a decision to ask the Road Directorate to sign a new contract to ensure services are available in multiple Latvian cities, as confirmed by Road Directorate.

Iraqi forces retake disputed territories from Kurdish forces

Three weeks after the Iraqi Kurdistan independence referendum, forces of the Iraqi central government have taken control of the territories in the country, which had been seized by Kurdish fighters after victories over the terrorist group «Islamic State».