On Friday, the 11th of September, during the High Council meeting of the Cabinet of Ministers of the Republic of Latvia and the Foreign Investors’ Council in Latvia (FICIL), the investors and the government agreed on priority areas that need improving for the investment environment of Latvia to become more competitive. The investors highlighted the reconditioning of the healthcare system, stability of the taxation policy, strengthening the rule of law and wider use of digital solutions in Latvia.
“It is important that Latvia is an interesting and attractive place for foreign direct investment that is a precondition for faster economic growth. Currently, the government implements several reforms: from the so called “capital reconstruction” of the financial sector to the administrative and territorial reform that also offers opportunities for further improvements in education and healthcare sectors. We also focus on improving the taxation system. Like the local business organisations, the Foreign Investors’ Council in Latvia is an important partner for the government. Today, we worked together with the Foreign Investors’ Council in Latvia to assess the progress and identify the needed improvements in various sectors. It is important to continue this cooperation day-to-day, improving the business environment and eventually also our competitiveness,” underlined Krišjānis Kariņš, the Prime Minister.
“We felt heard and highly appreciate the government’s efforts made during the last year in implementing the long-awaited reforms in the higher education, the territorial reform, and the very timely response to the Covid-19 crisis by curtailing the spread of virus and considerably reducing the degree of economic decline. However, the pace of reforms should be maintained by adjusting to future developments in Latvia and elsewhere, as well as by addressing the overlong reforms in healthcare, taxation policy, and strengthening the rule of law, and by ensuring a more extensive use of digital solutions,” explained Gunta Jēkabsone, FICIL’s Chairperson of the Board and the Executive Director of Circle K Latvia.
The government and the FICIL agreed that digital transformation is one of the priorities to facilitate global competitiveness of Latvia by developing a common approach and responsibility in the entire state administration for the digital development to ensure digital transformation in all areas, adopt the best practices and improve the digital literacy in the society.
Furthermore, during the meeting it was agreed that the healthcare reform should be continued eventually achieving extensive citizen access to healthcare both information wise, as well as physically and economically.
To secure the economic growth of Latvia, workforce efficiency is a top priority that can be achieved by facilitating employee retraining to meet the current labour market needs. Closer cooperation between the universities and employers should be promoted, and it is necessary to fully complete the ongoing higher education reform to secure a high-quality outcome. FICIL, in particular, drew the government’s attention to strengthening the current mechanism for supervision of issuance of sick-leave certificates to ensure that these are not abused.
To strengthen the rule of law and ensure a trusted and stable investment environment, it is necessary the reinforce the professional qualifications and capacity of law enforcement bodies by facilitating their specialization in investigating complicated economic cases, preparing the charges and hearing the cases in courts; this also entails strengthening the interinstitutional cooperation of the law enforcement bodies. Investors’ trust can be gained with a predictable taxation system, thus, the taxation reform should be planned well in advance, and tax administration should be continued in cooperation with the social partners. Moreover, in developing the taxation policy long-term planning should become the main focus.
The government and the FICIL also agreed that the ongoing strengthening of administration efficiency should continue at the state level by facilitating interinstitutional cooperation in tackling economic crimes, introducing good governance principles not only in state, but also municipal bodies, and by launching an extensive audit of state administration and municipal functions to ensure more efficient use of resources.
The FICIL has submitted 11 position papers to the Cabinet of Ministers with initiatives in macroeconomics, workforce availability, healthcare, tax policy and administration, combating the organised crime and tackling economic and financial crimes, digitisation, food and drinks sector, investment protection and judicial efficiency, fair competition and public procurement, waste management and energy policy.
The high level meeting of the government and the FICIL that took place on the 11th of September was chaired by Krišjānis Kariņš, the Prime Minister, and Gunta Jēkabsone, FICIL’s Chairperson of the Board.
High level meetings of the Government of Latvia and the FICIL have taken place since 1999, and they aim to ensure a well-structured exchange of information and opinions between investors and local policy makers to improve the business environment and facilitate the in-flow of foreign investment in Latvia. Ministers, senior state officials and senior managers of FICIL member companies participate in the annual meetings of the Government of Latvia and the FICIL. The next high level meeting of the Cabinet of Ministers of the Republic of Latvia and the FICIL will take place in 2021.