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Sunday 24.06.2018 | Name days: Jānis

Kilis: government clings to empty hopes

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU, social anthropologist Roberts Kilis

Social anthropologist Roberts Ķīlis

Radical pessimism is not that evident already, currently most of people hope it is going to be better. They want it to be better, as they are simply sick and tired of tormenting themselves with questions and uncertainty. But the government has little to do with it, the social anthropologist Roberts Ķīlis told the business news portal BNN.

A year ago you concluded the society’s mood was mostly negative, but stabilizing and not worsening. Why is the economic optimism that fragile?

One of the surveys, measuring people’s mood since April 2008 is DNB Nord Latvijas barometrs. Their research shows an improvement in the average mood. Of course, not everyone is becoming more optimistic. It simply means that deep and radical pessimism is becoming less apparent. Half of the population was willing to emigrate a year ago, while in late 2010 the figure amounted only to 20%. It stresses the thesis there is «two speed» society in Latvia. There are sectors of the national economy (exportable production) whose employment and remuneration level were back on track already half a year ago. While the permanently unemployed are the unlucky ones. Their mood is worsening. The so called «unemployment expectations» have dropped as well, which means those working hard believe they are unlikely to lose their jobs.

Is it possible for our society to get rid of «the fat years» consumption habits at all?

I’d say it is absolutely impossible. Capitalist economy does not abandon consumption driven by fight for social status. You cannot change that. It is only possible to put the emphasis on smaller, greener and more sustainable consumption. If all the leaders suddenly started to travel by trams like in Sweden, then a huge part of the society could switch to these standards as well.

You wrote in your blog in a situation of a «prisoner’s dilemma» and ideal government «cuts and reduces». Why?

We should not deceive ourselves by believing the GDP will constantly and inevitably grow, due to the global tendencies. It is silly to trust that everything is going to return to the pre-crisis level and our economy will rule as a «Baltic Tiger» again. We should get used to the fact the economic development will take place much slower, ranging from 2-3% a year. One percent growth, as in the most wealthy EU member states, would be a very good indicator as well. If we cannot transform ourselves from the inside, then Dombrovskis government hopes the damaged economic organism will recover itself – grow back its extremities.

Have we hit the very low-point already?

You know in very primitive computer games they have gradual pits. If you jump over them unsuccessfully, you might find yourself landing on one of the steps, not necessarily the lowest one. Is there a final step of this economic pit at all? Maybe this was a metaphor for «a trap for the clumsy giant»? Despite joining the eurozone and and 1.3 million people, Estonia might soon not be able to ensure public services, due to its little population. Latvia’s financial stability does not exclude the government’s most important challenges, linked to the negative demographic situation. It can thrust us on an even lower step.

You head the Latvia’s Commission of Strategic Analysis under the Auspices of the President of Latvia. Will you try to generate new ideas of combating the structural unemployment?

We cannot perform the same functions as the executive power, as it would mean doubling but what we can do is we can propose new ideas for the respective ministries to discuss. In near future Latvia should implement considerable restructuring of everything connected to economic innovations. Currently they are simply on the level of imitation. There is not a single, completely safe recipe of how to reduce the army of 164 000 jobless persons in a year’s time. When electric bulbs started to be produced, candle makers with their skills were not necessary any more. Structural unemployment is a huge issue, if the economy is shrinking. When it starts recovering, it should be that people’s skills were fit for the new job openings. They do not need lectures on psychology, they need psychological support. Re-qualification of the unemployed faces difficulties in adapting their skills to the actual economic situation. Those employers hiring jobless persons of certain categories should be granted 50% discount for the social tax contributions. It was the President’s idea that young people should be offered internship in both the private and the public sectors, so that they get some kind of an experience to list on their CV for their future work and career. They are short-term solutions, though.

You forecast the Latvian country side will be completely different in ten years, moreover agriculture will be more like a hobby than means of making a living. What should farmers and and their children willing to follow their parents footsteps do?

When there is a huge inflow of cheap foodstuff from other EU countries, it means the type of the economic activity should be altered. Why should our consumers (tax payers) subsidize ineffective agricultural production? People should seek for small niches, where their agricultural activities would be competitetive, for example, growing buckthorn, herbal tea, big berry cranberries, technical oats for the pharmaceutical industry or planting aspen for heating. The structure of population will definitely change in Latvia. If we do not start selling Latvia part by part, in a long term we will not be capable of ensuring public services to distant locations. The number of people purchasing cheap country houses for a healthy life style will not compensate for the huge number of country people leaving.

Last year the third Micro-enterprises and Self-employment Ideas workshop took place in Latvia, with 220 people participating. Is it planned for this year as well?

We have developed a site on the Internet –, partly financed by the European Commission delegation in Latvia. Starting from January this year, we will organize discussions among people and experts every week.

Just recently it was concluded more than a half – 62% of Latvians are future-oriented. Will they end up having lived in illusions?

It is not bad to consider the future. But to what extent are we planning our future? The average time planned by a family is nine months. Everything following that is abstract, which is a problem, because we cannot plan neither getting a profession, nor investing in the family budget to pay back during many years. If we as the government and the society planned for more than 18 up to 24 months, we would be more successful.

The future of Latvia is uncertain, according to you, at least of four scenarios. How will the society and businesses benefit from the foundation of an institute for future research?

The society of Latvia would need 10 to 20 different institutions to forecast future. What we have is the Future Fund with Ilmārs Mežs, analysing demographic issues. Many business institutions – the leading commercial banks are concerned whether investments in agriculture will pay back in 10-15 years time. Real estate projects developers need to know whether people will buy apartments in the following years. It is important for insurers to know whether it is worth ensuring against the loss of job or business risks. The state cares for the fact whether the society will be able to sacrifice part of their welfare for servicing the public debt. The government should not intervene with the development of such a society, if they cannot enhance the process. Thus gathering the residents in the regional centers is a reasonable policy.

What would you say to those recognizing us as the «failed state»?

The article evoked a certain discussion. I would be very cautious with statements like that. Because Latvia is by no means «failed», as it is not possible in the framework of EU. We might have problems with different decision taking stages, for example, power outages due to the severe winter. Personally I would never indulge in discussions with people considering Latvia doomed. It would be like milking a he-goat…

You say the current policy of Latvia has promoted only one thing – the development of the average wealthy society level, not willing to pay taxes. Where is the solution?

Receiving services should be linked with tax payment, for example, a personal account in health care. People should be able to direct certain tax payments to specific sectors. Latvia is close to educating children after the principle money follows the pupil. The public funds to culture or other sectors to be directed money could be subject to individual choice, with the help of vouchers, like it is practised in the Netherlands, in comparison, with us when a small and personally interested group of people is dividing money for theaters, museums, publishing houses and concert halls. Only then people would realize the true essence of paying taxes. There will always be people willing to avoid taxes, there is even a company in Great Britain helping to do it. The question is whether we will motivate two thirds of the population pay taxes voluntarily.

Does the society lack long-term positive outlook, not offered by the political leaders?

The society of Latvia has never had a common outlook, not even back in 1990ies. It is crucial that the government defines its outlook for the future development and puts in on public discussion. The Commission of Strategic Analysis recommend this to the government.

Ho can the state make those who have left the country return?

It is yet too early to make them return to Latvia. It will be a topical issue in some years. What we should do is solve the issue of double citizenship for children born on an exile. The state should develop its unique immigration and birth promotion policy, as we are currently failing with it. We should not care for British people living in a multi-level society calling us «the white negro».

Do you see a strong spirit of live in Latvians?

At the moment the nation is voluntary committing a silent suicide. In Schopenhauer’s style. Without insisting and demanding that we should promote the birth rate. Discussion of experts would reveal the social budget cuts are constantly favouring the retired. Let’s say, the government clings to empty hopes, as pensioners will not be the ones boosting GDP growth in 10 to 20 years. yet they are voters and politicians are scared of them. It is not that we would actually want to die out, but our behavior could be compared to man drinking because of depressive thoughts. If we continue like this, we could really become extinct. The society needs a wake up call. As an expert, I must behave as someone screaming or hitting a gong in a public gathering.

What did the government’s approved forecast «Latvia 2013» show with regard to the economic benefit of promoting immigration?

The idea of tens or hundreds of thousand immigrants inflow is taken out of blue. If we do not restructure the the Latvian national economy, it will be just a pain-killer for 10-15 years. It is only worth inviting here fertile and healthy men/women aged about 20, in order they made kids here. However, as the residents of the developing countries would also drag along the elderly generation, it would be utterly pointless.

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  1. Tom says:

    “It is only worth inviting here fertile and healthy men/women aged about 20, in order they made kids here. However, as the residents of the developing countries would also drag along the elderly generation, it would be utterly pointless.”
    What? Would Latvians also ask for only blue eyed and fair haired people like Hitler did?
    And how would you know they are fertile????
    The comparison of pensioners and clinging to EMT hopes with regard to them, namely, adopting decisions in favour of them, is a scandalous one as well.

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