On Friday 27 May, the participants of the 20th FICIL and Latvian government High Council Meeting agreed that this year’s priorities are sustainable economic development, justice and the rule of law, the availability of workforce and education, and efforts to counter the informal economy. The participants of the 20th meeting discussed progress in the implementation of priorities so far and expressed their readiness to continue the dialogue in 2017.
In his opening speech, Prime Minister Māris Kučinskis welcomed the foreign investors’ activities in Latvia and paid tribute to entrepreneurs who have trusted Latvia and decided to invest their money here.
The Prime Minister stressed that there was a clear principle for developing the Declaration of the Government – we should search for effective solutions for a more rapid but at the same time balanced development. The key principle of the Declaration is to ensure balanced annual GDP growth in the range of 5% in the medium-term.
M.Kučinskis emphasized that in order to implement the objectives of the Declaration, the government has clearly defined the priority action points for economic development - business environment, predictable tax system, development of an innovation platform, reforms in health care and education systems, demography, national identity and security dimension.
The Prime Minister remarked that the government will work to improve the attraction of foreign investment by creating a competitive investment portfolio and providing a holistic approach to servicing investment projects in public administration, as well as increasing the role of local governments in the process of investment attraction, ultimately leading to an increase in investment in the medium term by approximately 7 % annually. The government will also work to support SMEs and promote the international competitiveness of start-ups.
FICIL Honorary Chairman and PricewaterhouseCoopers UK partner Stephen Oldfield said, “We expect strong leadership from the government and results in the field of good governance and the rule of law in Latvia; it’s time to move from words to deeds. The rule of law needs to be strengthened in Latvia and it has to become a policy priority and commitment of this government. There must be a clear signal to entrepreneurs and society as a whole. The enforcement and judicial authorities have to provide the resources that are necessary to implement it”.
The Foreign Investors' Council congratulated the government of Latvia and its public administration on a decision of the Organization for Economic Cooperation and Development (OECD) - to invite Latvia to become its 35th Member State. The Foreign Investors’ Council pointed out that the OECD recommendations have been a strong stimulus for a series of reforms and improvements which, in the long term, will contribute to the development and competitiveness of the Latvian economy.
When assessing the progress made so far, the entrepreneurs welcomed the determination expressed in the government's action plan - a more rapid economic development - GDP growth within a range of 5% per year starting from 2018. The entrepreneurs welcomed the government's efforts to improve the regulatory environment in Latvia and promote the transparent and predictable operation of the judicial system. The entrepreneurs believe that Latvia has made progress in the field of governance of state and local government capital companies.
The investors expressed satisfaction over the fact that the government was able to reduce the shadow economy, however, they also emphasized that the proportion of the shadow economy in the Latvian economy is still a serious obstacle that creates unequal conditions of competition and increases inequality in society.
The investors stated that Latvia needs to accelerate economic growth in order to achieve long-term growth and equivalency with the other EU and OECD countries in the near future. Latvia has to adapt to the challenges posed by the EU funds after 2020 through a timely investment attraction policy that focuses on strengthening competitiveness, innovative production and services, job creation and the diversification of the overall investment structure.
During the meeting, the participants also stressed that one of the challenges for Latvia is productivity and availability of workforce. To address this, there is a need to continue the concentration of human and financial resources through the intended administrative reform, and a need to optimize the education system by reducing the number of infrastructure units and improving quality.
The meeting was chaired by Prime Minister Māris Kučinskis and Stephen Oldfield, FICIL Honorary Chairman and PricewaterhouseCoopers UK partner.
The government of Latvia was represented at the meeting by the Prime Minister, Deputy Prime Minister, Minister for Economics, Minister for Justice, Minister for Health, Minister for Environmental Protection and Regional Development.
The Foreign Investors’ Council in Latvia was represented at the meeting by senior management of the following companies: Cemex, Coca-Cola Company, DNB, EY, Eversheds International Limited, Fortum, Food Union, GlaxoSmithKline, Klasmann-Deilmann, Knauf, KPMG, Linstow, Mariner, MTG, Narvesen Baltija, Neste, NCH Advisors, Norvik banka, PricewaterhouseCoopers, Rimi Baltic, Powszechny Zaklad Ubezpieczen, SEB, SPI Group, Statoil Fuel&Retail, Stockholm School of Economics, Swedbank, TAV, Telia Sonera, Uralchem, Vitol, as well as Chairpersons of 12 foreign chambers of commerce representing the United Kingdom, USA, Belgium and Luxembourg, Denmark, Estonia, France, the Netherlands, Norway, Finland, Switzerland, Germany and Sweden.
The FICIL and government meeting:
FICIL is a public entity that brings together the largest foreign companies in Latvia as well as 13 foreign chambers of commerce. FICIL actively searches for and proposes solutions to improve and develop the business and investment environment in the country in cooperation with the government of Latvia. According to the priority issues raised by investors, the working groups, which are composed of representatives of investors’ companies and foreign chambers of commerce, develop specific proposals within the FICIL framework.
High-level meetings of the government of Latvia and FICIL have been taking place since 1999 with the objective of providing structured information and the exchange of views between investors and local policy makers to improve the business environment and encourage foreign investment inflows in Latvia. The annual meetings of the government of Latvia and FICIL are attended by ministers, senior officials and heads of FICIL member organizations.
Video recording of the press conference
Presentations:
http://www.ficil.lv/f/FICIL_HC16_MK-27.05.2016_Final_edit.pdf
http://www.ficil.lv/f/KPMG_presentation%20-%20short%20Armina.pdf
http://www.ficil.lv/f/20160527_FICIL_Aseradens.pdf
ATTACHMENT:
Supplementary information:
Andrejs Vaivars
Press Secretary to the Prime Minister
Phone: 29228678
E-mail: Andrejs.Vaivars@mk.gov.lv
Information prepared by:
Zaiga Barvida
Deputy Head of the Communication Department
Phone: 67082902
E-mail: Zaiga.Barvida@mk.gov.lv