Latviski English По-русски
Ceturtdiena 22.03.2018 | Name days: Tamāra, Dziedra

Foreign investors’ mood improves further in Latvia

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe general mood of foreign investors in Latvia has improved in the past year, said Professor Arnis Sauka of Stockholm School of Economics in Riga at the presentation of the Foreign Investment Environment Index 2017 on Wednesday, 10 January.

He also said problems have not changed much, most of them are associated with the country’s demographic situation and labour force availability.

Interviewed investors gave Latvia’s investment attractiveness a score of 2.5 out of 5 in 2017, whereas the score given to Latvia the year before was only 2 out of 5. Efforts of Latvian policy-makers to improve the country’s investment environment were given a score of 2.9 points (2.3 points in the past) by interviewed investors.

Three fields in which no major progress was observed in the past 12 months include the demographic situation, labour force accessibility, as well as healthcare and social system. Investors gave the demographic situation a score of 1.6 points out of 5. 74% of interviewed investors said they have seen no improvements in this field in the past year.

«Yes, not major changes are expected with the country’s demographic situation, but we do wish to see at least some progress. If progress is achieved, this field will not have a declining tendency. In this case investors do not look at how many children were born – they focus more on political initiatives and measures undertaken to improve the demographic situation. We have yet to see any positive changes in this field. And if no positive changes are noticed, what can we expect from the future?» said Sauka.

Labour force accessibility is given a score of 2.7 out of 5. Unfortunately, 71% of respondents do not see any improvements in this field. «It is notable that it is more about productivity of workers, not their availability. Everyone says productivity of Latvian workers cannot be considered poor,» added Sauka.

Another sector in which no real progress was noted last year, according to investors, is healthcare and social system. Investors gave it a score of 2.5 points out of 5. 71% of interviewed investors mentioned not seeing any notable improvements in this field.

57% of interviewed investors also see no improvements for the country’s judicial system. 55% believe the quality of legislation associated with business activities has not changed at all, whereas 52% of investors said there is still a great deal of uncertainty in regards to certain decisions associated with the future.

«Investors still talk about lengthy and complicated court processes, which often paralyse everyday work. We can say that the situation has improved somewhat. Inefficiency is a word often mentioned by investors. I am not as much worried about obstacles in the existing system, but rather the fact that Justice Ministry acts blind and unwilling to resolve existing problems. I truly hope that this is no more than public rhetoric, because legal education in Latvia is very strong, and there is Judicial Affairs Council and other capable lawyers that are not shy to speak about problems. I hope that such a position from the ministry is only public and politically motivated,» said Sauka.

Investors are more positive about the quality of Latvia’s education system and science – 3.1 points out of 5. In addition, 17% of respondents fully agree and 40% partially agree that the education system has improved over the course of the past twelve months. 33% fully and 24% partially agree that support and communication with state structures has improved.

When asked about the quality of Latvia’s tax system, 17% of interviewed investors noticed improvements, 49% partially agree there have been improvements, whereas 43% of them said they have not seen any improvements. ‘Reading between the lines makes it look like investors do not believe things will remain the way they are,’ said the professor.

Among the initiatives undertaken by Latvia’s government, investors value the most the decision regarding non-application of reinvested profits with corporate income tax. Other noteworthy decisions include credit guarantees for exports and creation of a start-up environment. The lowest praise was given by investors to the initiative to introduce ‘zero bureaucracy’.

«If you try talking to policy-makers in ministries, they will give big speeches about all the good efforts, that 45 out of 50 initiatives have already been realized, three are in the process of completion and two more will be commenced soon. Businessmen laugh or cry, depending on which field they represent. One thing is putting initiatives on paper. It is completely different when initiatives are put into practice. Most often investors speak of bureaucracy in different e-systems and construction. Businessmen also mention unethical and illegal behaviour by state representatives as major problems,» said Sauka.

The foreign investors’ mood index was compiled in cooperation with Foreign Investors Council in Latvia. 42 businesses took part in it.


Leave a reply

Planned hospital reorganisation in Lithuanian regions irks both mayors and patients

If the plan of the Lithuanian Ministry of Health to overhaul treatment services in the provinces does not hit a snag, the rural hospitals will be soon providing only essential care and nursing, the focus will be on out-patient care and treatment will be available only in larger county hospitals.

Ventspils beach high in popularity this week; Lembergs gets spotlight time as well

Ventspils ended up in the spotlight in an unusual way this week: seals washed up on the beach there. Animal Freedom emphasizes that human contact with baby seals would hurt them. Residents are asked to maintain at least 50 m distance from them. However, the suspended Mayor of Ventspils Aivars Lembergs decided to take photos with baby seals and publish them on his Facebook profile.

Ombudsman: problems in nursing homes and social care centres are associated with lack of funding

Problems in nursing homes and social care centres are largely associated with lack of funding, because it is not possible to perform high-quality work using currently available resources. This is the responsibility of ministries and the government, as ombudsman Juris Jansons mentioned in an interview to Latvijas Radio.

Estonian music authors receive record royalties for 2017

The organisation, which is tasked by collecting royalties for local and foreign music in Estonia, the Estonian Authors' Society, has received six million euros in royalties in 2017, which is its record level.

Facebook sorry for permitting exploitation of 50 million user data in politics

Facebook CEO Mark Zuckerberg has apologised for the social network failing to ensure enough privacy to its users that allowed for data on about 50 million of its users to abused by a political consultancy firm.

Zhdanok’s replacement to promote non-citizen matter in European Parliament

Miroslavs Mitrofanovs, who has taken Tatyana Zhdanok’s place in the European Parliament, plans to promote the matter of non-citizens in the institution.

Riga City Council committee supports increasing municipalities’ expenditures by 42.38 mln euro

Following an initiative from the Financial Department, the outlook for the municipality’s base budget revenue has been increased by EUR 1.66 million for 2018. The expenditures portion of the budget is planned to be increased by EUR 42.377 million, as reported by Riga City Council.

French ex-President named suspect in Libya funding case

In France, its ex-President Nicolas Sarkozy has been named as a suspect in the formal investigation for alleged illicit campaign financing, misappropriation of public funds of Libya and passive corruption.

Finance sector’s development council supports prohibition of shell companies

On Wednesday, 21 March, Latvian Prime Minister Māris Kučinskis’ managed Finance Sector’s Development Council supported initiative on prohibiting shell companies, as confirmed by the prime minister.

Level of producer prices in Latvia’s industry is up 3.4%

Compared to January, level of producer prices in the Latvian industry rose by 0.5 % in February 2018. Prices of products sold on the domestic market grew by 0.7 %, but prices of exported products went up by 0.3 %.

Minister: Latvia is far behind its neighbours in terms of digitization and e-skills

In terms of digitization and e-skills, Latvia is far behind its neighbouring countries and the rest of Europe, said Latvian Economy Minister Arvils Ašeradens in an interview to Latvijas Radio.

OECD: Latvian employees work longest hours in Baltics

In a comparison of Baltic countries per average annual hours worked, the Organisation for Economic Cooperation and Development has found earlier this year that the average Latvian worker spends 1,910 hours at work, followed by the Lithuanian employee with 1,885 hours and the average Estonian worker with 1,855 hours.

12th Saeima failed to complete half of its pre-election promises in field of justice

In 2014, Delna – society for openness and Providus think tank received support from all parties represented in the 12th Saeima in regards to an action plan to help strengthen the rule of law in the country.

Russia carries out military drills in Gulf of Finland

Russian Defence Ministry has stated that in the Baltic Sea Gulf of Finland, which has Finland, Russia and Estonia in its coastline, the Russian military has performed drills for its tactical special operations units.

Prime minister doubts Anti-Money Laundering Service head’s competence

«The work performed by the service requires drastic changes. Whether or not it can be done by its current head [Viesturs Burkāns], I am not sure,» said Latvian Prime Minister Māris Kučinskis in an interview to LNT, commenting on the work performed by Latvian Anti-Money Laundering Service.

Vilnius chosen for office of game developer Lockwood Publishing from UK

UK's mobile game developer Lockwood Publishing has unveiled plans to open its first overseas office in Vilnius, pointing to the industry's talent in Lithuania and the wider region.

Association: municipalities should organize their work on their own

On 6 March, Latvian Association of Local and Regional Governments reviewed the letter sent to Riga City Council by Environment Protection and Regional Development Ministry, in which the institution ordered the municipality to review their internal order and lift restrictions on the length of debates and the number of questions deputies are allowed to ask.

Canada moves to increase gun control

Canada's federal federal government has proposed new gun control measures, but they could reduce support to the ruling Liberal Party in rural areas, where guns are widely owned and used.

Minister: EU should work on rules to make sure social networks cannot be manipulated

«European Union needs to react to the Facebook data scandal and develop strict regulations to make sure social networks cannot be used to manipulate people. Appropriate regulations are needed in the matter regarding political campaigns performed on social networks, which is gradually becoming a common occurrence nowadays,» says Latvian Foreign Affairs Minister Edgars Rinkēvičs.

Profits of Latvian State Roads increased by 8.6% last year

Turnover of Latvian State Roads reached EUR 14.529 million last year, which is 10.3% more when compared to 2016. The company’s profits increased by 8.6% - to EUR 59,485, according to the published interim financial report.

Slovak President casts doubt over impartiality of proposed government

In a continuation of the political crisis in Slovakia, Slovak President Andrej Kiska has not accepted a the newly proposed government deeming it possibly unable to supervise an impartial investigation of the two murders that have shaken the Eastern European nation.

France's ex-leader Sarkozy in custody over links with Libya

French ex-President Nicolas Sarkozy has been taken in custody on March 20 and was held in custody on Tuesday and interrogated amid an investigation into whether late Libyan leader Muammar Gaddafi added funds to his 2007 election campaign.

KVV Liepājas metalurgs’ steelworks bought out by Austrian Smart Stahl

The auction for the sale of the insolvent KVV Liepājas metalurgs rolling mill equipment concluded with the victory of Austrian Smart Stahl GmbH, as confirmed by insolvency administrator Guntars Koris.

Entomologist: at least 5% of ticks in Latvia are infected with encephalitis

There have been cases of tick activity during the winter period in Latvia this year. As air temperature increases, ticks become active and start popping up. This means residents should seriously consider vaccination to avoid getting encephalitis from tick bites, entomologists say.

Rail Baltica station’s construction at Riga airport will cost EUR 4.5 million

Creation of a separate railway station and related infrastructure at Riga International Airport as part of Rail Baltica project will cost EUR 4.5 million, says the project’s manager in Latvia and board member of European Railway Lines company Andris Linužs.