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Friday 22.09.2017 | Name days: Maigurs, Mārica, Māris
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Economic Diary of Latvia. About strong women in power

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThis week, members of the Saeima unexpectedly declined amendments that provided for the merging of finance and customs police of the State Revenue Service. After hearing out deputies, Finance Minister Dana Reizniece-Ozola decided not to give up.

SRS put a lot of effort to prepare the two institutions for their merging and make sure the new institutions would be able to start working on 1 January 2017. It would have resulted in fewer managers and more investigators. SRS has two investigative institutions – Finance Police and Customs Police. Both perform investigations to uncover and prevent crimes in the customs field.

Finance Ministry was the initiator of this merging plan. The ministry explained the need for this measure with the possibility of increasing the level of efficiency in the work of the tax service, reducing risks of corruption, increasing the level of public trust and optimizing the internal structure of the tax service.

And once everything was set to go, Saeima deputies suddenly decide to decline amendments to the Law on State Revenue Service. Having decided to take a pause to think, Reizniece-Ozola announced her intention to continue with the original plan and find other means to ensure the merging of Finance Police and Customs Police. Also, the minister believes the Saeima’s decision indicates that people who do not wish there to be changes in the tax service have major influence.

Investments both direct and indirect

This week was rich with all kinds of paradoxes and surprises. For example, it became known that investments of the European Bank for Reconstruction and Development in Latvia have reached approximately EUR 600 million.

This money has been invested into 70 projects. 43% of investments went into the finance sector, 37% – to the energy sector, 19% – to the industrial sector and service. Latvia’s largest projects financed by the European Bank for Reconstruction and Development include the reconstruction of TEC-2, Graanul Invest biomass power plant, loans for banks and investments into Citadele Bank.

The volume of direct foreign investments in Latvia, on the other hand, continued to decline in the first half-year, as announced by Economy Ministry and Investment and Development Agency of Latvia.

The flow of direct foreign investments in Latvia is three times lower than it was before the crisis. This trend is also noticed in all three Baltic States. Latvia receives the majority of investments from Sweden, Cyprus, Netherlands, Germany, Estonia and Lithuania. Over the course of the past six months, 10 investors decided to invest funds into Latvia (31 in 2015). Latvia was visited by a total of 44 potential investors in the first half year of 2016 (168 in 2015). The total volume of direct foreign investments reached EUR 11.52 million in the first six months of 2016 compared to EUR 37.08 million last year.

The forest will shelter and feed

Opposite to claims that Latvia is irrationally using its forests, it turns out that the total forested area in Latvia has doubled since the pre-war period. It continues to increase year after year, according to information from Green House association.

According to the head of the association Kristaps Cepsis, Latvia’s total forested area was 1,747 million ha in 1935. By 2015, it had reached 3,356 million ha.

Harvest of Latvia’s wood resources is very stable. An average of 12 million m3 of wood is cut down every year. The annual increase is no less than 25 million m3. This means Latvian woodworking companies are supplied with the necessary resources. At the same time, Latvia remains one of the leaders in Europe in terms of forested area size.

According to the head researcher of Silava institute Aris Jansons, forests take up 52% of Latvia’s territory. Finland is the most forested country in Europe. Forests take up 66% of the country’s territory.

With 1.7 ha of forest area per capita, Latvia is on the 4th place among EU member states. Latvia’s forests are also some of the most accessible in Latvia. They are open for residents who wish to harvest berries and mushrooms, as well as engage in active leisure activities.

Demands grow

The majority of residents in Latvia believe it is impossible to become rich using legal means, according to results of a public study performed by SKDS. This opinion has been dominant among Latvian residents since 1999.

According to Latvian residents, to have a normal life, they say they need to have income of EUR 1,216 a month. In 2008, residents mentioned wanting a smaller amount to afford a normal life – EUR 1,146.

In 2000, residents mentioned an amount of EUR 494 to be able to afford a normal life. Since 2000, this amount has been growing steadily every year. By 2007, it had reached EUR 963 and by 2008 it had reached EUR 1,146. Then it began to decline again, and by 2012 it had dropped to EUR 844 only to increase again later.

To satisfy their desires, however, residents mentioned income of EUR 3,316, according to data from SKDS. In 2000, when SKDS first launched its regular studies, the amount residents mentioned a much more humble amount – EUR 1,164.

Ref: 017.109.109.4782


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