Latviski English По-русски
Wednesday 18.10.2017 | Name days: Rolanda, Rolands, Ronalds, Erlends

Economic Diary. Latvia Week 28 of 2012

(No Ratings Yet)

The holiday season does not contribute to the lively economic life of our country. Nevertheless, there were separate flares of business activity this week.

The President prefers energy independence

Even the President of Latvia Andris Berzins is concerned with the issue of energy independence. He invited elected Saeima deputies from Latgale that are part of the ruling coalition, to discuss the possibility of constructing two new HES on Daugava River. The people’s representatives could not give a definite answer, noting that this issue requires an in-depth investigation.

Last month, the head of the state presented an idea to add new sections to the cascade of Hydro Electric Dams on Daugava River. The development of national capacities in the production of electrical energy could become an alternative to the participation in the construction of the Visagina NPP in Lithuania. The reanimation of the Daugavpils HEP project that was cancelled due to protests from the «green» movements in the late 80s was noted as the most possible variant. However, now, the Saeima deputies do not deny the old idea as categorically as they did in the past, saying that this issue should be discussed in detail by specialists.

Latvenergo specialists, on the other hand, are skeptical about this idea. Member of the Board of the energy monopolist Maris Kunickis claims that the reanimation of the Soviet project is impossible. Back then, it was planned to construct a 200 MW hydropower plant, but this would cause the flooding of large territories of land not just in Latvia but in Belarus as well. If the area of the water reservoir is limited to only Latvia, the power output of the station would reduce to 100 MW, which will immediately make it hardly cost worthy. What about the Jekabpils HEP? Power output can only reach 30MW, which will not make an impact on the country’s energy independence.

Who are they – the most honest ones?

While the head of the state is busy with global problems, the State Revenue Service (SRS) begins compiling the so called «white list» – a register of the most honest people in the relationships with the state company. At least two companies have already handed in applications to be admitted to this list, but the state service is not planning on revealing their names yet. If these candidates are deemed worthy to be included on the «white list», information regarding them will be published on the website of the Finance Ministry; if not, it will remain a secret.

The wait for the publishing of the names of the courageous ones will not take long. According to the rules, the SRS is obligated to evaluate a candidate within ten days and then report to the Finance Ministry. With a full compliance with the required criteria, the ministry will allow a company’s inclusion on the «white list»; while with a clear discrepancy will only result in a decline. Insignificant irregularities in specific points will forward the candidate to a special commission (it includes officials and representatives of business organizations). If a situation reaches this institute, ten more days will pass before the commission will give its recommendation – whether the candidate is fit or not.

At first, «white list» members will have only modest bonuses – all from the SRS. The service will allocate special consultants for them (even though only big companies that are already well within the sight of the Office of large taxpayers will be able to join the rotation during the first year) who will warn them about the risks of not paying taxes; swiftly return VAT and respond to inquiries faster. In time, the list of benefits could include additional bonuses: the ministries are ordered to evaluate their own readiness to support honest businessmen. After the end the year, the range of candidates is also expected to increase.

Tax e-Book

The abolishing of traditional tax books: another initiative of the SRS – to replace traditional tax books with electronic versions. Right now, the SRS is preparing a full report for the Cabinet of Ministers on this topic, so the current information on this topic is rather scarce. Nevertheless, it is already known that the main connection channel will be the Electronic Declaration System (EDS). It is expected that individuals will use it on equal terms with businessmen to look up the volume of discounts on PIT and its source (if the person is employed on more than one job). Those, who will remain on the outside of the system, will be able to look up this kind of information using

Foreigners are buying up Jurmala

Finally, one more fact worth mentioning – Jurmala is once again going through a rather massive construction of residential homes. At least, statistics state that Jurmala’s real-estate segment is going up. According to Jurmala City Council, 169 – 193 construction permits were handed out in 2006-2008, these permits mostly accounted for residential houses. In 2009, this market predictably collapsed, and only 79 such permits were handed out that year. The situation gradually improved – there were 106 permits handed out in 2011.

According to market players, there are currently 15-20 multi apartment residential houses that are already issued for exploitation or are expected to be finished in the nearest time. As a result – there are around 300 apartments available in new projects in different stages of readiness. Fifty six buildings are considered to be elite housing by specialists. The rest is business class.

The explosion was caused by the lack of sufficient supply in Jurmala, i.e., no new projects were being constructed in 2008-2010. Furthermore, demand of real-estate was also affected by the opportunity of receiving investor residence permits, so new players decided to develop projects.

Foreign investors became the mechanism for launching the current real estate activity. As the head of the Jurmala department of Latio Edgars Spuravs says, foreigners are buying up around three quarters of housing in new projects. Some experts mention far more radical numbers. So, according to Marketing Manager of Ober Haus Evita Zembega-Zakalovska, foreigners are buying around 95% of housing in new projects. And all this is despite the fact that prices increased by 20-50% in the last two to three years. According to realtors, the price of one m2 varies right now from 2 500 to 5 000 EUR, depending on location: the closer to the sea and the Center of Jurmala – the more expensive it gets.


Leave a reply

Anti-corruption protesters in Ukraine push for reforms

Three protesters and a policeman have been injured in Kyiv, Ukraine, as a crowd of anti-corruption demonstrators voiced their demands for reforms aimed at tackling corruption in the country.

«Islamic state» capital conquered by Syrian Democratic Forces

An alliance of Syrian-Kurdish fighters, which is supported by the U.S., has stated it has gained full control of Raqqa, which has been for three years the centre of the «Islamic state» regime.

Poland hopes Turkey would join EU

Polish President Andrzej Duda meeting his Turkish counterpart shortly before an European Union-Turkey summit has expressed a hope that the country located at the cross-roads between Europe and the Middle East would join the EU some time.

Number of people at risk of poverty in Baltics in higher than the average in EU

The ratio of people subjected to poverty or social exclusion risk in Baltic States is higher than the average in the European Union, according to Eurostat data compiled for 26 out of 28 member states in 2016.

E-voting defended in Estonia after criticism from party leader

Responding to claims from a leader of an Estonian political party that the country’s e-voting system lacks transparency, the head of e-Government Academy’s e-democracy department explained it was possible that the voters of one party are more active e-voters than supporters of other parties.

Residents’ mood worsens; people become more critical about their finances

Over the course of the past month, residents’ general mood has worsened significantly – declines have been noted on all positions analysed by the survey. Residents were critical the most in the survey about their material state – the index in this category declined from -9 to -11, according to the latest Baltic International Bank Latvian Barometer.

Antāne: Saeima’s National Economy Committee has heard the transit industry’s cry

Inga Antāne, president of Baltic Association – Transport and Logistics, is satisfied with the decision that was made at the recent meeting of Saeima’s Economic, Agricultural, Environmental and Regional Policy Committee, asking the Transport Ministry to develop and present a sustainable development strategy for the industry and putting an emphasis on raising the competitiveness of railway tariffs.

Latvian’s attitude towards combating cancer in late stages seems irresponsible

The attitude towards combating cancer in late stages in Latvia remains very low, says former healthcare minister of Latvia Ingrīda Circene.

Hydrogen-powered transport technology – a reality in Latvia

There are plans to establish a hydrogen refuelling station in Riga before the end of 2017. A publicly available H2 refuelling station in Riga would secure an inter-state network of hydrogen refuelling stations: the closest other station will be established in Pernava, says Association Zero Emission Mobility Support chairman Arnis Bergs.

Estonian ministry to collect 270 000 euros from IT company over failure to build information system

Tieto Estonia, the Estonian branch of Finnish IT firm group Tieto will compensate the Estonian Ministry of Social Affairs 270,000 euros for the failure of the SKAIS2 project, the aim of which was the development of a new information system for the Estonian social insurance authority, but was deemed a failure in August.

Latvia invites Iran to act constructively to ensure security

Latvian Foreign Affairs Minister Edgars Rinkēvičs participated in a meeting of the EU Foreign Affairs Council in Luxembourg, where he discussed about the role of Iran in the region and the Joint Comprehensive Plan of Action in light of the upcoming report from US President Donald Trump to the Congress on Iran’s progress realizing the plan.

Vigil held in Malta over killing of investigative journalist

Several thousand people in Malta have taken part in a vigil held after news broke of the killing of an investigative journalist, who blamed Maltese government for corruption.

American exchange indexes reach record-high values; oil prices on the rise

In response to price rise of bank stocks, three leading indexes of US exchanges reached new record heights on Monday, 16 October. In addition, US Federal Reserve System manager Janet Yellen’s prediction regarding a soon inflation rise has increased confidence that base interest rate will increase in December.

54.14% more alcohol exported from Latvia; most of it to Russia

In the first eight months of 2017, a total of 102.259 million litres of alcoholic drinks was exported from Latvia, which is 54.14% more when compared with the same period of last year.

In pictures: Ireland hit by worst storm in 50 years

Three people have been killed in Ireland in the storm Ophelia, which cut off electricity networks to 120 000 homes and businesses in the country. Gusts of wind in Ireland on Monday, October 16, had reached the speed of 44 metres per second.

Tragic wildfires in Portugal and Spain

No less than 30 people have died in wildfires in Portugal and Spain.

Ašeradens to leave Latvian government at the end of November

Latvian Economy Minister Arvils Ašeradens intends to leave the government after approval of the 2018 budget in the Saeima, which is scheduled for the end of November, as confirmed by Prime Minister Māris Kučinskis.

Islamic extremists blamed for tragic terrorist attack in Somalia

The death-toll in a tragic terror attack in the eastern African state of Somalia has reached 320 people and local authorities have stated that a key member of the cell that allegedly launched the attack on Mogadishu has told them that al-Shabaab was responsible for the crime.

Rīgas namu pārvaldnieks gets new management

From now on Rīgas namu pārvaldnieks will have a new chairman: once the head of Latio Namsaimnieks has been appointed as the new head of the company. The other vacant post has been given to Ardis Pāvilsons.

Catalonia misses ultimatum deadline, Spanish government vows to act after Thursday

The separatist Spainish region of Catalonia has missed the deadline to clarify, if it has declared independence and Madrid has received a letter from the President of the autonomous region, which still needs analysis.

What will be the consequences for companies that cheated with electricity production permits

Businesses that were caught using fake permits for electricity production in mandatory procurements will not have their permits extended, says Latvian Economy Minister Arvils Ašeradens.

Latvian tourist accommodation facilities experience increase of overnight guests

The number of nights tourists and other guests spent in Latvian hotels and other tourist accommodation facilities in the first eight months of 2018 has grown 12.2% in comparison with the same period of last year, reaching 3.524 million.

Antāne: transit industry has been on thin ice lately

«The transit industry has been on thin ice lately. Russia’s decision to divert all cargoes to its ports will only smash the ice. The government and state policy-makers have two choices – wait for the ice to break completely and watch the industry drown until finally stepping in, or act now to at least reduce the crisis for the country’s national economy, workers and their families,» says President of Baltic Association – Transit and Logistics Inga Antāne.

Kučinskis evasive in evaluation of Unity’s Economy Minister candidates

Latvian Prime Minister Māris Kučinskis remains evasive when it comes to assessing Unity’s Economy Minister candidates.

Amid alleged harassment scandal, Rõivas leaves post in Riigikogu

The former head of Estonian government Taavi Rõivas, who has been pointed to as allegedly having groped a woman during a visit to Singapore, has denied the claims, but has nevertheless decided to leave the of the second deputy speaker of the Estonian parliament.

Newest comments