bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Tuesday 25.07.2017 | Name days: Jēkabs, Žaklīna
LatviaLatvia

Economic Diary of Latvia. How to accomplish the best results with limited resources

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAs a small country with a small and gradually ageing population, Latvia has to address the matter of accomplishing the best possible results with limited resources. With that, the Employment Council launched a cycle of discussions on the topic of labour market reformation this week.

The information with which ministers commenced efforts to combat demographic trends are not too promising, to say the least. The country’s population continues declining and ageing at the same time. This trend is expected to continue. In addition, the population in general seems to have education that does not comply with requirements of the modern economy.

There is currently an excess of humanitarian and social science specialists in Latvia. What the country lacks, however, are highly-qualified specialists in natural sciences, ICT, engineering sciences, and generally workers with vocational education, as mentioned in Economy Ministry’s report. A significant number of youngsters enter the labour market without any qualifications. There is also a large proportion of low-qualified workers.

The Employment Council discussed the matter of educating adults in accordance with global changes in the structure of labour organization, which requires new knowledge and skills. Ministers participating in the meeting agreed that it is important to create a flexible education system for adults in Latvia to help them adapt to the market’s requirements more easily.

It is planned to reduce the number of low-qualified workers from the current proportion of 31% to 20% by the year 2020. This will be done at the expense of the reduced number of secondary school graduates who do not continue their studies, but rather enter the labour market without a specific profession.

At the end of the meeting, ministers agreed on three main principles. First – education offers will be developed in close cooperation with employers and industry experts. Second – a long-term strategy for the future development of education for adults will be developed to encourage companies and people to participate and enhance their knowledge and skills. Third – new proposals on involving higher and secondary education institutions will be developed to assist with the education situation.

Russia closes the valve

Another challenge Latvia will have to face in the near future is related to Russia’s plans to completely halt exports of oil products through Baltic ports by the year 2018. The neighbouring country continues its work to divert supplies of oil products through its own ports – Ust-Luga, Primorsk and Novorossiysk, as conformed by the head of Russian Transneft Nikolai Tokarev. In 2015, around 9 million tons of oil products were handled by Baltic ports. This year, the volume is 5 million tons. Russia plans to have reduced the cargo flow to Baltic States to zero by 2018.

Latvijas Dzelzceļš is preparing for the moment when all Russian oil products will no longer be handled by Baltic ports, as confirmed by LDz Chairman Edvins Berzins. He did not say how the company prepares. It is possible Russian oil will be replaced with Chinese goods. This first such test train is scheduled to be sent to Latvia before the end of 2016, as promised by Transport Minister Uldis Augulis.

According to him, Latvia’s geographic location makes it a natural bridge that connects the west and the east. This is why Latvia with its well-developed infrastructure, three major ports, modern logistics and distribution centres remains interesting to many – Asia, Russia and CIS, western and northern Europe and the Black Sea region.

According to Augulis, development of relations with China is especially important here. To help out with the development of the world economy, it is necessary to work together, not compete with each other. Development of a transport corridor between China and Europe can help tremendously.

A single tariff for railway cargo transport has been developed to accommodate Chinese transports. According to Augulis, the new tariff is the result of his visits to China. Active work continues with Chinese and Belarusian partners to create the best possible model for the use of Latvian ports in the context of the Belarusian-Chinese projects Great Stone, he added.

Silent backwater

But even Latvia has a backwater location that seems immune to labour market trends and geopolitical storms. And this magical place is the State Revenue Service. This week, the Saeima approved amendments to the Law on Remuneration of Officials and Employees of State and Self-government Authorities that permit the launch of a pilot project aimed to increase wages of key employees in SRS. This pilot project is intended to see it is possible to increase wages in the government sector as a whole.

According to the legal draft, the wage of the director general of SRS will be EUR 4,020 with added option of bonus pay equal to 60% of the monthly wage. The current wage of the head of this institution is EUR 2,000-3,000 a month.

As stated by Finance Minister Dana Reizniece-Ozola, money to increase the wage of the head of SRS was taken from this year’s state budget.

Martins Krievins, director of the State Chancellery, had previously mentioned that SRS was chosen for this pilot project as an institution the successful function of which benefits society in a direct way. Results of the pilot project are planned to be evaluated in 2017.

The current state of the institution is indicated by the total amount of tax debts. At the beginning of September, it was EUR 1,421 billion, which is 0.3% less in comparison with August. It can be said that the overall work efficiency of the institution responsible for tax administration is equal to zero. Whether or not it becomes better after the increase of wages will become apparent in 2017.

Ref: 017.109.109.6900


Leave a reply

Latvia put on 34th place in global pension index

Latvia is on the 34th place of Natixis Global Asset Management global pension index. It is two places lower than last year, according to the index report for 2017.

Experts predict nearly half of beer consumed in Estonia will be procured in Latvia

Estimates of Estonian alcohol producers and retail traders show that nearly half of all beer and one-third of vodka that will be consumed in the country next year will be procured in Latvia. According to experts, this way Estonia will lose up to EUR 170 million in tax revenue, Postimees reports.

Latvia had the sixth smallest new vehicles registration index in Europe

Compared with the same period of 2016, Latvia has had the sixth lowest registration index for new commercial vehicles in Europe in January-June period, according to data published by European Automobile Manufacturers Association.

LAR proposes reducing micro-enterprise tax to 12%

Latvian Association of Regions proposes establishing micro-enterprise tax rate at 12% instead of 15%, as well as state that calendar year turnover for micro-enterprises is not to be reduced to EUR 40,000, as it is proposed by the government, but to be kept at the current restriction – under EUR 100,000.

Court dismisses Krums from the last of his supervised insolvency process

On Monday, 24 July, Riga Pardaugava Court dismissed the currently arrested insolvency administrator Ilmars Krums from the last one of the insolvency processes currently under his supervision, as confirmed by Insolvency Administration’s representative.

49 «quota refugees» away from Estonia for over 90 days

49 people of the refugees accepted by Estonia as part of the European Union's refugee relocation programme have exceeded the 90-day period of being allowed be away from the country.

Opinion: EU agricultural policy is not equal to all member states

Latvian Association of Agricultural Cooperatives organized a meeting with Agriculture Ministry’s and State Plant Protection Service’s specialists to discuss and search for solutions for opportunities to sow fermented summer rapeseed.

In pictures: Corsica hit by widespread forest fires

Fire-fighters in the French Mediterranean island of Corsica continued on the night to July 25 to battle forest fires covering an area of some 900 hectares.

Can Latvia expect a more rapid rise of excise tax for alcohol and cigarettes?

Finance Ministry has plans to raise excise tax on alcoholic beverages and cigarettes even more rapidly, according to proposals prepared by the ministry to the Excise Tax Law. These proposals have been submitted to the Saeima for approval in the final reading.

LCCI: e-health system will help reduce the number of dishonest patients

«Healthcare Ministry has to secure full integration of e-health system and form a policy for healthcare specialists that is aimed at returning labourers back to work as soon as possible, not issuing countless sick leave certificates,» as noted by representatives of Latvian Chamber for Commerce and Industry.

Swedish government admits «disastrous» data leak

The government of Sweden has stated that one of its agencies has committed a massive leak of sensitive data in 2015, when it organised an information technology outsourcing procedure.

Vucans: there are plenty of proposals for tax reform laws

Around 350 proposals have been received by the Latvian parliament in relation to tax reform laws. Last week, the Saeima supported tax reform laws in the first reading. This week, on the other hand, it is planned to review them in the final reading.

Greece to return to financial markets after three-year pause

Greece, which has been suffering from severe and prolonged financial problems, is expected to return to international financial markets to borrow funds.

Duda to veto Polish judicial reforms

President of Poland Andrzej Duda has stated he would not announce the controversial reforms of the Polish Supreme Court and the National Council of the Judiciary passed in the Polish Sejm that have also sparked mass protests in the country.

Dairy product prices not expected to decline in Latvia soon

Prices of dairy products in Latvia will either remain on the current level or increase even more in the next couple of months. With that, there is no reason to expect price decline in the near future, predicts head of Agriculture Market Promotion Centre Inguna Gulbe.

Five insolvency administrators suspended due to criminal processes in Latvia

Five insolvency administrators have been suspended because of several criminal processes, said Director of Insolvency Administration Inese Steina in an interview to LNT 900 seconds.

Family doctors may change the form of strike if need be

Latvian Family Doctors Association could change the form of its strike of need be, as confirmed by the association’s representative Solvita Olsena.

Baltic animal rights organisations turn attention to fur farming ban in Czech Republic

Following the fur farming ban passed by the parliament of the Czech Republic, Latvian and Estonian animal rights organisations turn the attention of communities in Latvia and Estonia to the increasingly the ethical attitude of European countries to animal rights.

Toyota sales in Latvia up 25%

5,735 new Toyota cars were sold in Baltic States in the first six months of 2017, which is 33% more than last year. Toyota’s total market share in Baltics is 14.2%, BNN was informed by the company.

Number of accidents caused by tractors and size of claims on a rise

Over the course of the past several years, the number of traffic accidents caused by specialized agricultural vehicles and the size of insurance claims has grown in Latvia, as reported by Motor Insurers' Bureau of Latvia.

Businessmen offer to help fund railway works in Estonia rejected by minister

Entrepreneurs in Lääne County, Estonia, have offered the state to help with funding the reconstruction of a railway section, by attracting private money, but the offer has been rejected by Estonian Economic Affairs Minister Kadri Simson.

International Baltic Bikini military exercises to be organized in Latvia

Baltic Bikini 2017 military exercises will be taking place in Liepaja, Latvia, throughout 24 – 28 July. More than 100 Baltic and American troops will be participating together with State Border Guard and Emergency Health Service to practice survival skills, as reported by Defence Ministry.

SRS: envelope wages will be a priority this year

More than half of Latvian employers pay their employees wages below the minimal monthly amount, said Director of the State Revenue Service Tax Control Office Sandra Karklina Admine in an interview to Rīta panorama on Monday, 24 July.

Latvians hesitant to use electronic means to request benefits

So far, Latvia residents have been rather slow in the use of electronic tools to request benefits from the State Social Insurance Agency.

Orbán promises solidarity with Poland as it approves controversial court reforms

Following the criticism Warsaw has received in mass protests and from Brussels on the approval of a controversial court reform, the Prime Minister of Hungary Viktor Orbán has pledged to defend Poland in the European Union.