On November 2 and 3 this year, representatives of the Latvian Cabinet of Ministers met with the Foreign Investors’ Council in Latvia (FICIL) to agree on priority areas of cooperation for the coming year. The two sides highlighted the fight against the shadow economy and the development of a forward-looking energy policy in line with the objectives of the European Union’s Green Deal as critical tasks. FICIL and the Government also discussed the importance of fostering an efficient public sector and data-driven decision-making.

“Latvia is a safe environment for investment and investors are welcomed here. The Government will do what is necessary for investors to want to invest in our country in turn fostering Latvia’s productivity, innovativeness, prosperity, and ability to export. We will continue to attract investors by improving the legal environment, reducing administrative burden, investing in our human capital and talent, as well as, proposing new actions for greater digitalisation and reducing shadow economy levels. By doing this, we will bring even more new businesses with higher added-value and convince the present investors to remain in Latvia and continue their growth. Many thanks to the Foreign Investors’ Council for the cooperation so far and the desire to jointly improve the business and investment environment in Latvia”, stated Evika Siliņa, the Prime Minister.

The Government and FICIL agreed that a more efficient public sector is needed to accelerate the development of the economy of Latvia. Continuous performance evaluation of the public administration, including local authorities, is needed to ensure that they are able to quickly respond to economic, social and geopolitical challenges. This is necessary to identify the best legal and institutional framework, overlapping competences and potential knowledge gaps. It should also ensure performance-based budgeting, linking the financing of programs and activities to results and implementation. Corporate governance, transparency and accountability of state-owned companies must also be improved in order to ensure that a number of these companies can be listed on the stock exchange in the future.

“There are a number of issues that we have been highlighting and emphasizing for years, such as the fight against shadow economy and the need to improve the efficiency of the public sector. We see that different crises, large and small, follow one after the other, so the economy must be sustainable, robust, and public administration must be as efficient as possible to prevent various shocks from undermining economic growth potential. For example, one of the preconditions for long-term economic growth is the development of strong human capital policy to tackle the labor challenges that are becoming more acute every year. Digital transformation must also be promoted to facilitate data sharing, analysis and data-driven decision-making,” says Zlata Elksniņa-Zaščirinska, Chairperson of the FICIL Board.

The participants agreed that in the coming year, work must continue towards a predictable and stable investment environment in order to increase investor confidence and attract new investment. The rule of law and the efficiency of the judiciary need to be strengthened, and the quality of the legislative process needs to be improved. Improvements are also needed in the evaluation of the results of public procurement tenders so that the lowest price is not the only relevant criteria.

FICIL representatives submitted six position papers to the Cabinet of Ministers with proposals and recommendations for Latvia’s economic development that include improvements to human capital policy, facilitating the rule of law, sustainable development, a level playing field and modern public administration.

This was the 27th high-level meeting between the Latvian Government and the FICIL. The meetings have been held since 1999 with the aim of providing a structured exchange of information and views between investors and local policy makers to improve the business environment and facilitate the inflow of foreign investment into Latvia. The annual meetings of the Latvian Government and FICIL are attended by ministers, high-level civil servants, and representatives of FICIL member companies.

About the Foreign Investors’ Council in Latvia

The FICIL is a non-governmental organization that brings together major foreign companies from various sectors, foreign chambers of commerce and the Riga School of Economics (SSE Riga). FICIL’s mission is to improve Latvia’s business environment and competitiveness in attracting foreign investment by using the experience and expertise of its members to make recommendations to the Government.