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Ceturtdiena 20.02.2020 | Name days: Smuidra, Vitauts, Smuidris

Latvian government to spend 14.5 billion euros on National Development Plan

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NAP 2027, objectives, funding, Latvia, outlookIn order to meet the goals outlined in Latvia’s National Development Plan 2027 (NAP 2027), the government plans to allocate funding of 14.5 billion euros, as journalists were told by the Cross-Sectoral Coordination Centre’s (PKC) director Pēteris Vilks on Friday, 7 February.

Explaining the importance of NAP 2027, Vilks stressed that this is the main state development plan used in talks with the European Union (EU) about the necessary funding for Latvia from EU funds. This plan is also an important tool for Latvia because it outlines goals the state wants to accomplish in the coming years.

NAP 2027 is composed of four strategic goals – equal opportunities, productivity and income, social trust and regional development. The plan’s motto – change of habits, path to development. ‘It is necessary to change society’s habits in regards to how we treat the environment, education and other people. NAP 2027 includes goals that will help promote these changes,’ said PKC director.

Generally ministries submitted 538 proposals for different initiatives during the plan’s development process. Implementations of these initiatives would cost the budged 40 billion euros in the next seven years. However, PKC has added 330 of the ministries’ submitted proposals to the plan. Funding of 14.5 billion euros will be allocated in the next seven years to finance those initiatives. Proportionally the largest amount – more than three billion euros – is planned for Rail Baltica project.

European funds will be the main source of funding for NAP 2027, according to Vilks. The exact volume of EU funding is unknown because debates on financing from EU funds still continue. Nevertheless, according to the most cautious outlooks, EU funds financing for Latvia’s cohesion policy may reach 5.4 billion euros in the next planning period. The funding amount for agriculture and fisheries may reach 3.7 billion euros, whereas Latvia will have to compete with other countries for funding for Horizon programme and other separate EU fund projects.

Latvia’s state budget may allocate 2.2 billion euros for goals outlined in NAP 2027. According to Vilks, even this is a cautious outlook, because calculation took into account Finance Ministry’s report on state budget’s available fiscal space in the coming years. Additionally, some funding will be sought in municipal budgets.

«EU funds will serve as the most serious source of funding for NAP 2027. This money will have to be invested in areas like climate, digitization, science, innovations, infrastructure and social protection,» as reported by PCK director.

Indicatively the largest volume of funding – 49% of total planned funding for NAP 2027 – is planned to be allocated for the section that outlines quality life environment and territorial development, including Rail Baltica project.

Although the final redaction of NAP 2027 is currently in development, political debates still continue. The final version of the plan may yet change significantly. Vilks mentioned as an example Saeima’s idea for the development of Daugavpils Airport, which may require 30 million euros. Although this initiative is not included in the plan, it is considered an important initiative.

PKC plans to review the final redaction of NAP 2027 during a meeting of the National Development Council on 13 February.

Initially NAP 2027 included three strategic goals – equal opportunities, productivity and income, as well as social trust. However, in November the Saeima decided to add a fourth strategic goal – regional development.

The direction for equal opportunities is defined as the most important social justice element to reduce income inequality. ‘We will secure everyone equal opportunities to receive good education and quality healthcare, have a decent job, growth and live in an environment and be socially protected equally in all of Latvia’s regions. This will help grow productivity, economic stability in the country, social and civil activity, as well as improve the situation for the middle class,’ the plan mentions.

The productivity and income direction forms the foundation for sustainable growth. NAP 2027 mentions that increase of productivity can be accomplished through investment of resources into production of high added value and sales on the global market. By supporting local businessmen, introducing innovations, new technologies, effective work processes and improvement of competences of employed persons it is possible to generate more competitive advantages for Latvia based on knowledge and innovations.

Social trust is the path based on a person’s belief other people can be trusted and depended on to accomplish common goals. «Trusting others is easier if a person is confident in himself and knows his opinion will be heard. However, often it is made more complicated by financial complications and lack of time to spend with family. Trust can be accomplished by promoting social inclusion and balancing the interests of different social groups for common benefit and explain choices and causation that affects long-term growth for the country,» as mentioned in NAP 2027.

Regional development is a path that is mentioned as the foundation for the country’s balanced growth. The plan mentions that potential development of regions and reduction of social economic differences can be accomplished by improving the business environment, using the advantages and resources unique to each region, as well as creating conditions for new jobs and services to make the attractiveness of each region’s territory and ability to participate in state general growth can help secure welfare for residents.

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