How could the country's economy be evaluated in the last legislative term?
The Latvian economy has experienced the highest growth rate among all Central European countries over the past two years. GDP growth was 6,7% in 2000 and 7,7% in 2001.
This is because the country has fully transitioned to a market economy, adapting quickly to the new system. State ownership has been transferred to the private sector through privatization processes, fostering economic growth. In the first half of this year, GDP has already grown by 5%, meaning that even after September 11—when the crisis gripped Europe—Latvia continued to grow.
– Is the Ministry of Economy satisfied with the outcome of the privatizations?
The privatization process is very complex and involves both positive and negative examples. It's important to consider that we inherited most of the state-owned enterprises, and during privatization, not all of these companies have been able to adapt to the new circumstances. Therefore, it's impossible to definitively say whether the effect has been entirely positive or negative, but Latvia's significant growth is primarily due to the government's commitment to market economy policies.
– The Ministry of Economy oversees several agencies that promote and encourage international trade. What support do these agencies receive?
The Development Agency was created by the Government, and its board includes representatives from various ministries, such as Foreign Affairs, Finance, and, of course, Economy. Therefore, it is not the sole responsibility of our Ministry.
Currently, there is a project to make an economic presentation in Spain.
– What are the relations like with the Spanish Ministry of Economy and ICEX?
They could be more active; we exchange information, but there haven't been any major joint projects lately. With the Chambers of Commerce, there are more contacts.
– What is the current state of economic exchange between Spain and Latvia?
Spain currently ranks tenth among Latvia's trading partners. As with other countries, Latvia has a negative trade balance with Spain, importing far more from Spain than it exports.
We would be very interested in developing trade relations with Spain and, of course, increasing our exports.
– Which product would be the best fit for the Spanish market?
Basically, the same items that we export to other countries, mainly materials for car and machine construction, metallurgy, wood and wood products, textiles and other less important sectors.
– What economic repercussions will joining the EU have?
I would prefer to talk about benefits. The Latvian market is small, so it's obvious that for economic development we should focus our activities on exports. We support a liberal and open trade system; our businesses will gain access to a market of 400 million people, which will create new opportunities and give our economy a boost.
– Is the attraction of foreign capital also taken into account?
Of course. These are interrelated issues. Joining the EU will mean a significant increase in investment.
Another very important point is that the costs of doing business in Latvia will be lower than in any other European country due to our tax system.
In addition to these advantages, we are located close to interesting markets with great potential such as Ukraine or Russia, and this is a fundamental factor.
– The confidence of a potential investor depends on the political confidence in a country. Elections are coming up soon in Latvia. How will the new political and therefore economic map of the country be shaped?
The political course of recent years will likely remain the same; Latvia is probably one of the few countries in transition that will vote again for a center-right government that will ensure the continuity of economic reforms.
– Do you think that political management has become mere business management?
Economic interests are very important for any country, but without political decision-making, progress on economic issues is impossible. In countries as small as Latvia, political and economic interests overlap.
– What recommendation would you give to that Spanish businessman who doesn't know whether to invest or trade with the country?
Spanish investments are very modest at the moment, not even reaching one million lats (more than two million euros). This is perhaps due to the geographical distance between the countries and the perception of Latvia as a new and little-known country.
However, there are several compelling reasons to invest in Latvia; firstly, because the transition to a market economy was completed in just 10 years. In Latvia, the tax burden is 36%, almost half of what it is in other European Union countries. In Germany and Great Britain, it is around 50%, and in the Scandinavian countries, it is even higher.
"Without political decision-making, it is not possible to make progress on economic issues."
Latvia enjoys great macroeconomic stability according to its economic indicators. Its imminent entry into the EU and its strategic position relative to other markets also play a role.
– What can you tell us about economic crime and the well-known Russian mafias?
We haven't heard anything about Russian mafias for years, which means they're not a problem. We are addressing cases of the underground economy together with the Ministries of Finance and the Interior.
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