May 29, 2020
On May 29, a live discussion took place among investors, experts and Prime Minister of Latvia, hosted by Foreign Investors’ Council in Latvia (FICIL) and the American Chamber of Commerce in Latvia (AmCham) to outline the best-case scenario for Latvia after the crisis and discuss the next steps for economic transformation.
The speakers discussed crisis-induced challenges that entrepreneurs are currently facing in Latvia, as well as potential economic and fiscal measures that should be taken for effective economic recovery and economic transformation, stimulating employment, supporting business, boosting productivity, digitalisation and other areas.
The discussion began with a brief review by Krišjānis Kariņš, the Prime Minister of Latvia on Latvian Government’s response to the unprecedented global Covid-19 crisis as well as the government’s support instrument plan in terms of 3 blocks: human resource and employment, infrastructure and state modernization. During the discussion, Krišjānis Kariņš informed about the financing for state aid in the amount of a few billion EUR in state loan and EU funds. The Prime Minister acknowledged that unlike the economic crisis of 2009, when countries had to function in austerity regime, this year’s crisis demands more investments, expenses and government spending to promote economic development: “This is not a belt tightening crisis, we are investing into the economy to stimulate its recovery; therefore, our national debt will also increase.”
Zlata Elksniņa-Zaščirinska, Member of the Board at FICIL and Country Managing Partner and Chairperson of the Board at PwC Latvia emphasized that according to recent FICIL study, most foreign investors have experienced a significant drop in demand for their products or services as a result of Covid-19 crisis. The results of the report also show that a large part of investors are currently not planning to increase their investments in Latvia in the upcoming year. Zlata Elksniņa-Zaščirinska gave an insight into the main priorities of entrepreneurs for a successful long-term economic recovery, as an example, strengthening the link between the new labour market and education: “Higher education reform needs to go ahead without hesitation. The State Employment Agency should not only manage unemployment, but also focus on upskilling and requalification of the employed ensuring the necessary skills for job market.” The Prime Minister agreed with investors on the need to improve upskilling and development programmes with a particular focus on digital and IT skills, which are essential in all levels of education: “We need to focus on the quality of education now, so that our workforce in the future will successfully guide Latvia towards further development. ”
John Tully, the Chairman of MikroTIk, noted that a successful digital transformation of the country and bioinformatics will be a significant investment in Latvia’s future: “Latvia must continue to invest in IT and bioinformatics, which will also significantly promote sectors such as health, research and development (R&D) and education. Latvia has a good potential to develop technology and innovation industries in order to retain local IT professionals.” In his reply, the Prime Minister expressed support for the promotion of allocating crisis prevention funds for science and research.
The following speakers took part in the discussion: Krišjānis Kariņš, Prime Minister of Latvia and investors Zlata Elksniņa-Zaščirinska, Member of the Board at FICIL and Country Managing Partner and Chairperson of the Board at PwC Latvia, John Tully, Chairman of the Board of MikroTik and Morten Hansen, Head of Economics Department at SSE Riga and Deputy Chairman of Latvian Fiscal Discipline Council. The discussion was moderated by Kārlis Danēvičs, Member of the Board of SEB Banka. The full recording of the discussion is available here: https://www.ficil.lv/media/
About AmCham Latvia:
AmCham speaks on behalf of more than 140 leading U.S. and international companies in Latvia. AmCham is committed to fostering trade, investment, partnership and friendship between the U.S and Latvia and it serves as a business, knowledge, networking and policy forum for its members and partners. AmCham’s actions are grounded in four core values: integrity, responsibility, cooperation and excellence.
FICIL is a non-governmental organization that brings together the largest companies from various countries and sectors that have made significant investments in Latvia, as well as ten foreign chambers of commerce, Stockholm School of Economics and French Foreign Trade Advisors.