Task of the science is to serve
people.

– Tolstoy –

Science is the captain, and
practice the soldiers.

– Leonardo da Vinci –

Frontiers of science are like the
horizon: the more we approach
it, the more it moves away.

– Boiste –

The fantasy is more important
than knowing.

– Albert Einstein –

Science – it means organized
knowledge.

– Spencer –

Freedom for the science the
same as the air for a living soul.

– Poincaré –

Research area of all sciences is
endless.

– Pascal –

System of science must be
looked at as the system of
nature: all in it is endless and
necessary.

– Cuvier –

Scientific plan without working
hypothesis is a skeleton without
living body.

– Hirschfeld-

The main research subject of
mankind is the human.

– Goethe –

All is important in science.

– Heine –

Books must be results of
sciences, but sciences not results
of books.

– Bacon –

Scientist is not the one, who
gives the right answers, but the
one, who asks the right
questions.

– Claude Lévi-Strauss –

The more we will seek for the
truth outside us, the more we
will move away of it. The more
we will be able to understand
who we are, the more the truth
will assert us in ourselves.

– Antonio Meneghetti –

Before being dictated the nature
needs to be obeyed.

– Bacon –

A true scientist is not one who
has more acquired, but one who
has more understood.

– Leibniz –

Science – to know how the
being acts. To know the action
of the being.

– Antonio Meneghetti –

Science is benefactor of
mankind.

– Berthelot –

Sākums » Briefings » Page 2

Latvia social briefing: Social development trends in 2020

Some experts say that the following years will be crucial for the sustainability of  Latvia. The main reason for that is the decrement in the number of population. In the last 30 years, 450 thousand people have emigrated from Latvia, which forms a significant part of the total population of Latvia.[1] At the same  period of time the overall amount of permanent residents has fallen down for 700 thousand, which is approximately 28%.[2]In order for Latvia to experience the decrement of emigrated citizens, it is essential to make wise political decisions and ensure the growth of the level of welfare in Latvia. The year 2020 will bring changes in social field to Latvia, mainly in the medical industry, and will improve the support of people who are under social vulnerability.

In 2019 the public health care sector was in the epicenter of discussion. The doctors went on marches and expressed their frustration with the current medical system in various ways of protests.  Mainly the medical staff was unsatisfied with the planned amount of funding for the healthcare sector in the forthcoming years. Although the Health Care Financing Law, which came in force in the Year 2018, determined that the income of medical personnel should be raised by 20% annually, practically the raise was not that high.  Undoubtedly, it is in the best interests of politicians to keep the overall climate peaceful. Therefore, it is forecasted that the medical staff could experience increment of salaries by around 20% in the Year 2020 as it was initially planned considering the Health Care Financing Law.  The Minister of Health Ilze Vinķele stressed that it is possible to find additional funding for healthcare if the government would raise taxes that affect wealthier citizens. However, this question is still surrounded by discussion, and the outcome may result in several ways.

The second change in health industry is expected in the pharmacy sector. Currently Latvia has the biggest Value Added Tax for medication in Baltics  and the fifth largest in the European Union– 12 % . [3] In addition reviewing the data of the Competition Council of the Republic of Latvia it has been concluded that the added pricing of wholesalers is the biggest in the Baltics. However, the represantives of  wholesalers have previously stressed  that the prices of medication will fall as the Value Added Tax will decrease. It is most likely that the medication is going to get cheaper in the Year 2020. Therefore ensuring benefits in particular for people who suffer from chronic diseases. It is worth noting that the second initiative from the medication wholesalers was to increase the total amount of government’s funding  to compensatable medication products. However, there is a long process of debates ahead between the government and medication wholesalers.      Currently, there are two possible options for lowering the prices of medication. It is clear to say that the costs of medicine will not be raised in the Year 2020 in Latvia. And in the best-case scenario, medication will get cheaper, thus making health care more accessible to people who are under the risk of social exclusion.      The year 2020 is going to bring changes in the field of the education sector. For several years the Latvian government has been preparing the new educational reform, which is going to be implemented starting from September 1st, 2020. The new educational reform is going to be applied in all schools in Latvia, thus affecting teachers, students, and their parents as well. The reform is focused on developing a new approach to educating pupils from the age of preschool until the age of highschool. As a result, the students will obtain skills and knowledge that is necessary nowadays. One of the main priorities of the new educational reform is for students to acquire skillsets as critical thinking, problem-solving, innovation, self-learning, cooperation, civil activism, and digital skills. With the implementation of the reform, the new education system will follow more after the Western countries’ model. It is worth noting that in recent years some schools had already successfully adapted the teaching process to the new standards. However, in most of the cases currently nor the parents, nor the students have not received a sufficient amount the information about the upcoming changes.  Thus it may cause some misunderstandings and misinterpretation at the beginning of the following school year.

As previously mentioned,  within the years’ demographics has become one of the most pressing issues for Latvia. Reviewing the data from the Central Statistical Bureau of Latvia, it can be concluded that since the Renewal of Independence of the Republic of Latvia, the amount of residents in Latvia has been falling annually. The Strategic Goal of Latvia, which was accepted by the Latvian Parliament in 2010, suggested that in the Year 2030, the total amount of citizens should be bigger than 2.02 million. Afterward, in the Year 2015, it was noted by the Government of Latvia that if the total amount of residents in Latvia in 2020 is going to be 1.93 million, then the goal for 2030 will be reachable. However,  the data from the Year 2019 show that the total amount of citizens in Latvia at that time were 1,909 million, which was  already less than the goal for 2020.[4] For the upcoming years, the Government of Latvia has to focus on at least sustaining the current population. The rate of births and deaths per year is also unpleasant for the sustainability of Latvia. For the last years, it has remained negative, and it is doubted that it would experience a change in 2020.

As long as the natural population growth remains negative, it can cause chains of problems for the future generations of Latvia. Because of the population aging trend, which is already currently observed in Latvia, it can lead to a lack of workforce, thus reinforcing problems like shortage of tax income and increasing social budget expenditure. Although the Latvian government has provided the families with children with various kinds of facilitation, the data shows that more action is needed. Therefore it is forecasted that demography is going to be one of the main priorities for the Latvian government in the Year 2020.

The social challenges caused by the decrement of population and urbanization can directly impact the rural areas in the near future. Some experts say that the countryside regions may be in a particularly difficult situation. Because of the urbanization trend in Latvia, it is observed that people are increasingly moving to cities. As a result, rural  areas could be experiencing a long-term shortage of taxpayers – a lack of working hands and consumers – and the consequences of the aging population.

The State Buget of 2020 has made some contributions to the social development of Latvia. Following the European Commisins recommendations to decrease the social inequality between the European Union countries there have been made modifications to the monthly maximum differentiated non-taxable minimum thus experiencing raise from 230 Euros to 300 Euros. In addition, changes were made for the upper limit to which the maximum differentiated non-taxable minimum is applied – from 440 Euros to 500 Euros.  The Government of Latvia is also planning to work on solutions for increasing the differentiated non-taxable minimum to 500 Euros per month.In order to ensure social security for the most socially vulnerable groups

of scoiety, it was accepted by the Parliament of Latvia to raise the minimum income level for both disabled people and seniors in 2020.

One of the social development trends that have already come in force in 2020  is the adjustments to the Law on Government-Funded Pensions, therefore providing that the second level pension is going to be able to inherit. The new Law determines that people will have the option to choose what is going to happen with their pension capital savings accumulated in the second pillar of the pension system in the event of their death.  In case of a resident’s death before reaching the age of retirement, the resident now will have the right to choose whether their savings in the second level of the pension system will be inherited by their spouses or added to the pension savings of another person. However, if the person will not have indicated their willingness regarding the second pension level heritage, the pension capital will be transferred in the Special Budget. The new amendment will socially protect families, especially those in which the spouse is the only one receiving income. Second, it could motivate others to make responsible decisions regarding their pension funds. By that, the new law enforcement could serve as an additional inducement of the decrement of Shadow Economy.

Conclusion       

In the Year 2020 demography, the aging and decrement of the population will remain as one of the most pressing issues in Latvia. It is forecasted that natural growth of the pupulation of Latvia will remain negative as previously. The upcoming Educational reform is going to change the process of education and focus more on developing skills that are necessary to obtain nowadays. The new social development trends of Latvia in 2020 are going to be beneficial for people who are the risk of social vulnerability. People who are at the risk of social exclusion will have a larger amount of income, thus decreasing social inequality. In addition, the prices of medication could experience fall in 2020.  Due to the protests against financing plans in the field of medicine, the medical staff could experience a more significant income raise.

[1] https://www.csb.gov.lv/lv/statistika/statistikas-temas/iedzivotaji/migracija/galvenie-raditaji/imigracija-emigracija-un-saldo

[2] Central Statistical Bureau of Latvia

[3] https://www.statista.com/statistics/458957/vat-rate-on-prescription-only-drugs-in-europe/

[4] Central Statistical Bureau of Latvia

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute

Latvia external relations briefing: PROSPECTS OF FOREIGN POLICY OF LATVIA IN 2020

Summary

Latvia’s foreign policy environment is and will continue to be constantly changing. The year 2020, like 2019, will bring many challenges, tough decisions and opportunities. Foreign policy of Latvia is mainly depending on common position of European Union and is very much affected by proximity to Russian Federation. Geographical location of Latvia can be viewed as one at the intersection of superpower interests. As the Annual Report of the Minister for Foreign Affairs on the accomplishments and further work with respect to national foreign policy and the European Union 2018states, the best way for Latvia to defend its vital interests and make the foreign policy is to operate in an international environment characterized by the four following features: a strong European Union (EU), a strong NATO, the preservation of the current international system, and possibilities for engaging in regional cooperation that meets its national interests. It stays true for 2020 as well.

The future development of Europe and Latvia faces many challenges: geopolitical shifts, competitiveness in the digital economy, climate change, security in changing global environment, search for its own identity and future image. Important foreign relations event for Latvia is the Conference on the Future of Europe to be held on Europe Day, 9 May 2020. The conference will address a broad debate on the future of Europe – on institutional change, decision-making, policy priorities, values. The interest of Latvia in the conference is to assert itself as the creator of the future of Europe, as a supporter of a strong Europe, and as a keeper of European values [1].

Several big trends affecting foreign policy of Latvia in 2020 are listed below.

  • Multilateralism is in crisis 

Multilateralism now is experiencing a small crisis. The important challenge for Latvia in 2020 is rivalry between the main players, such as U.S.-China-EU-Russia relations, which inevitably affects the current multilateral order and Baltic region state of affairs. The recent debates contain several issues: the weakening of the values of democracy, human rights, free trade and collective defense alliances, such as NATO in the international area. It also can be assumed that European Union got weaker in 2019 due Brexit and many populist and nationalist parties evolving in Europe. Instead of the multicultural practice of coordinating national policies, including foreign relations, in groups and alliances of many states who all therefore have a voice at the international stage, world is approaching multipolar order with several great powers heavily influencing international relations. For small countries like Latvia these are not good news.

Wider multilateralism crisis shares doubt over the foundations on which agreements have been reached and over institutions that regulate interstate disputes. Neighbor of Latvia, Russia, is actively working to bring international norms and the interpretation thereof closer to their own more authoritarian norms. International organizations and regional agreements, which have characterized the political space of post-war Europe, are experiencing a certain crisis of influence and recognition. Such shifts of values and norms towards specific regimes are not in the interests of Baltic states. Latvian government should be able to accurately assess the international situation, the challenges and opportunities created by changes, and to formulate its foreign and security policy in accordance with the conclusions drawn.

  • Security is a priority of foreign policy

Russia is one of the security challenges of Latvia. If in the past the European Union had pursued a strategic partnership with Russia to address a wide range of issues – trade, energy, climate, counter-terrorism, non-proliferation of nuclear weapons – then, since the military aggression of Russia against Ukraine, the EU has resorted to the policy of sanctions. The next decisions on the sanctions will be made in summer 2020. However, current trend shows that Western countries are looking to build closer relations with Russia; there is a weariness of sanctions and a weariness of the strong position that has been taken so far.

Latvian parliament insists that the task of Latvia is to ensure that the sanctions policy remains in place until a solution is found to the conflict in Eastern Ukraine and the Crimea. It is important for Latvia to keep the focus on international violations of Russia on the European agenda, without giving the opportunity to deviate from the principles and fundamental values of the EU. The security of Latvia is closely interconnected with of the strong transatlantic links. Special attention will be paid to the enhancement of the legislative framework regulating the field of development cooperation, the improvement of the system for evaluating bilateral development cooperation, as well as public outreach measures to raise awareness of the importance of development cooperation and its role in fostering sustainable development [2]. The cooperation between allies will remain the priority on 2020 foreign policy agenda in Latvia.

  • Cyber security is a part of comprehensive national defense system

There are significant challenges that Latvia and its allies should address collectively in 2020: climate change, migration control, gun control and cyber security. President of Latvia stressed, that “cybersecurity imposes one of the greatest challenges for the future not only on a state but also on every citizen. To overcome this challenge much has been already done at national level. However, to ensure the security of our information space and cyber security, the capacity of the responsible institutions must be further enhanced, and public media literacy must be facilitated” [3]. On 17 September 2019, Cabinet of Ministers of Latvia (Latvian government) approved the ‘Cyber Security Strategy of Latvia for 2019-2022’. The strategy describes cyber security context of Latvia, identifies future challenges and national cyber security policy priorities. Cyber security is part of comprehensive national defense system. Considering the potential national and social impact of cyber-attacks, cyber security is becoming more and more crucial in comprehensive national defense, which aims to engage every member of the society in defending Latvia against all types of conflicts, including both the military and non-military conflicts. Ministry of Defense and other competent authorities will have to complete specific tasks, for example, define security standards for cloud computing, smart devices and on-line services; develop recommendations for authentication of digital signature; raise public awareness on internet safety; educate public and local administration staff on ICT safety; strengthen the capacity of law enforcement community to prosecute cyber-crime [4].

  • Challenges of digital communication: preservation of democratic values and fight with disinformation

The communication of values is another challenge provided by digital communication technology, which is expected in 2020. Today’s international challenges are becoming more and more complex. Globalization and the development of new technologies has created strong mutual connections, but also a mutual vulnerability, and are seriously affecting foreign policy. The digital economy, digital tools, the digital world – this is the future of economic development. But it also poses a challenge to democratic values. The creation of new platforms for the flow of information and its transnational use make the boundaries between military and non-military threats to blur. Misused digital tools pose a threat to democracy (disinformation, spreading of false information, hacking and manipulating social media platforms, interfering with electoral processes, etc.). Social media manipulation become the new frontier for global powers seeking to influence elections, not only their own, but those of neighbors as well, polarize public opinion and side-track legitimate political discussions [5]. Latvia will be increasing the capabilities of responding to these challenges and preventing intervention in the national politics through the media by working with units that identify cases of disinformation, creating campaigns against “fake news”, stimulating media literacy in society and teaching critical thinking to young people.

Conclusion

The world is constantly changing, and humanity and states must be able to change along with it. Currently, Latvia’s image can be summarized as following: “Latvia would be regarded as a small state that is trying to jump into another weight category in the area of culture and which has a large and dynamic capital, which is a northern European transit center and is developing as a growing innovation center for education, ICT and health care.” [6] The challenges of foreign policy that Latvia will face in the future will require long-term strategies in all sectors of national importance as well as the creation of a stable economic, political and security environment.

To conclude, the foreign policy of Latvia in 2020 will be affected by mutual relations of super-powers such as China, USA and Russia; polarity of the world order; next steps in international politics made by Russia; joint priorities of European Union. However, foreign relations with Russia Latvia will build according to democratic values and its own national security priorities, no matter if some of its European allies will move towards closer cooperation with Russian Federation. The participation in international organizations and NATO alliance will be maintained as priority of Latvian foreign policy to save multilateral order. Cyber-security and battle with fake news and disinformation aimed to weaken the security of the state, will be high on agenda in 2020.

In short, Latvia will pursue a proactive, Euro-Atlantic, effective foreign and security policy.

REFERENCES:

[1] Latvian Foreign and Security Policy. Yearbook 2020

http://www.liia.lv/en/publications/latvian-foreign-and-security-policy-yearbook-2020-831

[2] Website of Ministry of Foreign Affairs of the Republic of Latvia. https://www.mfa.gov.lv/en/news/latest-news/62813-the-cabinet-considers-the-report-on-the-implementation-of-latvia-s-development-cooperation-policy-guidelines-for-2016-2020

[3] Website of Chancery of the President of Latvia. https://www.president.lv/en/news/news/the-president-of-latvia-cybersecurity-is-one-of-our-greatest-challenges-for-the-future-25408

[4] Website of Ministry of Defense of the Republic of Latvia.  https://www.mod.gov.lv/en/news/latvia-approves-new-cyber-security-strategy-2019-2022

[5] How Social Media Companies are Failing to Combat Inauthentic Behaviour Online. Prepared by NATO Strategic Communication Center of Excellence: https://www.stratcomcoe.org/how-social-media-companies-are-failing-combat-inauthentic-behaviour-online

[6] The Centenary of Latvia’s Foreign Affairs: Scenarios for the Future, http://www.liia.lv/en/publications/the-centenary-of-latvias-foreign-affairs-scenarios-for-the-future-760

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute

Latvia external relations briefing: Latvian forests – Latvian Green Gold

More than half of Latvia’s territory is taken by Latvian forests, making Latvia one of the greenest countries in the world.[1] For this reason, wood processing plays an important role in Latvia’s economy, compiling approximately 20% of total exports in 2018.[2] Currently, there is a growing trend in Latvian tree exports: businesses offer new ways for efficient timber use and produce products with high added value. Overall wood-processing industries such as manufacturing of wood, cork products, manufacturing of paper and paper products, printing and reproduction of recordings, manufacturing of furniture are the common wood sub-industries in Latvia.

As most of the products produced by wood processing industry in Latvia are exported to other countries, various wood products form a significant part of Latvia’s exports. In general, Latvia’s wood export production can be divided into 2 large groups – raw materials and processed products. Analyzing the data since the beginning of 2000, it can be concluded that the proportion of processed wood production in Latvian timber exports is increasing. Producers appear to be offering customers higher value-added products.[3] Mostly Latvian timber products are exported to European countries as well as to Asia.[4] In 2019 around 40% of total exports of sawn timber materials were shipped to the UK. To countries such as South Korea, China, Germany, the Netherlands were exported around 5% materials of the total exports of the industry to each trading partner.

In the wood products sector, over the years, a bigger share of wood furniture in the total export of Latvia has emerged. The data shows that this production sector has been rising already for several years. The value of exported wooden furniture in 2018 reached about 170 million Euro.[5]Most wood furniture produced in Latvia is exported to Scandinavian countries – Sweden, Denmark. Exports of wooden furniture to Denmark reached around 23% of all but to Sweden about 10% of the total exports of wooden furniture. About 13% were transported to Germany.

In total, approximately 40-50 thousand inhabitants of Latvia work in the forest and wood processing industry. Forest industry workers represent approximately 7% of non-budget jobs in Latvia, and the taxes paid by them provide approximately 1/12 of the state’s economy. Timber is an important source of income for many residents of Latvia, particularly in rural areas – more than half of the wood processing industries are located outside cities,  and by that this economic sector is  stimulating and employing citizens living in the rural areas of Latvia.[6] As the wood processing industry is one of the most strategically important regional manufacturing in Latvia, many other industries, such as retail, transport are gaining more demand. Because of the timber processing sector, it is estimated to have resulted in an additional 30-40 thousand job places that are not related to the timber sector in Latvia.[7]

In the last 100 years, the total area of Latvian forests has risen almost four times, so Latvia has become one of the most forested countries, both in Europe and in the world.[8] In order to prevent forest pollution in Latvia, there is also a common forest clean-up every year, when thousands of people go to clean up the surrounding forests. Latvian forests mostly consist of trees such as spruce, pines, and birch. Property rights to forests in Latvia are distributed proportionally to the public and private sectors. 49% of all Latvian forests belong to Latvia’s state, while 48% belong to the private sector. Remaining of the share belongs to Latvian municipalities. Similarly, resource extraction from forests of Latvia is proportionally distributed – approximately half is gotten from the private sector and the other half from state-owned forests.

The attraction of investments in the timber production sector in Latvia is mainly driven by 4 factors – easy access to raw materials, average salary levels and foreign language skills of employed personnel, as well as attractive geographical location. About half of Latvia’s territory is covered by forests of various trees, mainly pines, spruce, as well as birch. Access to forests is very convenient, so raw materials are very easily available for the businesses.

Besides, different methods of transportation of the products are easily available in Latvia. Latvia is a suitable place for organizing transit and logistics between the European Union and Asian markets. Ports, railways, road transport operators, customs warehouses, logistic centers, and ship agents provide efficient and competitive services. The transit and logistics sector forms about a quarter of service exports in the Latvian economy.[9] Therefore particular attention at both national and business levels is paid to the transit sector and the major investments in transport infrastructure – ports, railways, and roads – are first invested directly in transit directions. In particular, rail and road transport services are most commonly used for products such as sawn timber, while ships or road transport services are used for the export of finished products such as furniture.

Latvia has one of the lowest salary levels in the European Union.[10] Despite this, approximately 96% of the population aged 25-64 have indicated that they know at least one or more foreign languages, which is the second-highest level in the European Union. For these reasons, Latvia is very attractive to investors because it has educated but at the same time cheap workforce. Cheap labor costs allow businesses in Latvia to spend more costs on upgrading manufactures, thereby increasing the efficiency of the company. Data shows that on average, one manufacture worker costs employers around 750-1000 EUR per month in cities, while around 500-750 EUR per month in rural areas.[11] Latvia offers many programs in the forest and wood processing industries at different levels of education – both professional and higher as well.

In recent years, the Latvian economy, including wood processing, has seen a more rapid increase in the share of production with higher added value than the average level in the EU countries.[12]For this reason, Latvia has a high potential for attracting investment and profitability, which is an important aspect of global competition for attracting new investments.

The manufacturing of timber furniture, as well as the manufacturing of paper and its products, currently has one of the biggest potentials for development in the wood-processing industries in Latvia. Approximately 20% of timber-processing companies in Latvia specialize directly in the manufacture of furniture, which is considered to be relatively high because the proportion of products produced on the Latvian market does not correspond to the possibilities for competitiveness in Latvia.[13] Therefore, the production of wood furniture is one of the sectors that both local and foreign investors’ eyes, to invest money in goods to increase export.

The smallest number of companies in wood processing is currently in the paper and its products industry.[14] As the availability of wood raw materials is very convenient in Latvia, and there is an increase in demand for different various timber products worldwide, the interest in the development of paper production manufactures is still ongoing among investors.

The amount of investments in the wood processing sector is increasing and new, large-scale investment projects are being developed. Most recently, the most ambitious investment project in the wood processing sector in Latvia took place in 2018, when one of the forest industry’s leaders “Kronospan Riga” invested around €100 million in the development of production.[15]

The purpose of this investment project was to increase the company’s competitiveness on the global market by increasing the availability of raw materials and by modernizing production techniques, thereby increasing existing production capacity, and increasing the efficiency of production processes. In addition, the company intends to invest in the development of more environmentally friendly technologies. As a result, the company will be able to use recyclable wood during the manufacturing process, which is an alternative and more efficient raw material. As well as the company intends to make significant investments in the development of the production process for wooden boards, thereby ensuring an increase in production capacity, the efficiency of the production process and improving the overall performance of the company.

The Latvian government was supportive of this investment project. The government plans to give the company a $20 million corporate earnings tax benefits after implementing the project to raise the company’s opportunities to compete globally.

“Wood-processing is the main engine of the manufacturing industry. Recent data also shows a continuation of the trend at the beginning of this year. In the past year, timber companies have made investments in the development of the sector, planning to invest also this year. This increases the share of high value-added products in the sub-sector,” stresses Finance Minister Janis Reirs.

[1]https://data.worldbank.org/indicator/AG.LND.FRST.ZS?view=map

[2]https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=2ahUKEwjGubX12NPmAhUlxaYKHcm8DgEQFjABegQIAxAC&url=https%3A%2F%2Fwww.zm.gov.lv%2Fpublic%2Fck%2Ffiles%2Fskaitlifakti_LV_2018web.pdf&usg=AOvVaw32IPEukzXwpgPrUxVxY5o2

[3]Central Statistical Bureau of Latvia

[4]https://eksports.csb.gov.lv/lv/products-selected/export/2019/sp_83/TOTAL

[5]https://www.diena.lv/raksts/latvija/zinas/koka-mebel-export-pern-increased-by-03-14214525

[6]Research on employed staff cost and foreign language skills in most competitive sectors of economy in Latvia by “Institute of Economics of the Latvian Academy of Sciences and CREATURA”

[7]https://www.lvm.lv/sabiedribai/meza-management/latvia-meza-sector

[8]Latvian State Forest Service

[9]http://www.sam.gov.lv/satmin/preview/?cat=112&action=print&

[10]https://ec.europa.eu/eurostat/statistics-explained/index.php/Wages_and_labour_costs

[11]Research on employed staff cost and foreign language skills in most competitive sectors of economy in Latvia

[12]Research on employed staff cost and foreign language skills in most competitive sectors of economy in Latvia

[13]Research on employed staff cost and foreign language skills in most competitive sectors of economy in Latvia by “Institute of Economics of the Latvian Academy of Sciences and CREATURA”

[14]Lursoft

[15] https://www.lsm.lv/raksts/zinas/ekonomika/kronospan-riga-100-miljonu-eiro-investiciju-projekts-sanems-uin-atlaidi.a283301/

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute

Latvia political briefing: LATVIA AS THE CENTER OF THE GLOBAL BUSINESS SERVICES

The Global Business Services sector in Latvia is growing. In 2019, the sector formed around 1.9% of gross domestic product and 2% of total exports.[1] Increasingly, internationally recognized companies choose to centralise the company’s administrative functions in Latvia, replacing it with the performance of functions in each country individually. Global Business Service is developing widely in Latvia – approximately 9,000 jobs places have been created in this service sector.[2] As well as 100 new jobs are offered monthly in the Global Services sector.[3] Around 50 companies are currently registered in Latvia in the field of Global Services.[4]

Latvia’s attractiveness as a Global Business Service center is shown by the A.T.Kearney index, which examines which countries provide the most favourable outsourcing offer. The Global Service Location Index consists of four factors: financial benefits, human resources, business environment, and digital resonance. In 2019, Latvia took 21st place in the Global Services Location Index, outperforming countries such as the United Arab Emirates, Canada, and Poland.[5] According to index data, mainly companies choose to create a global service center in Latvia due to financial attractiveness and the business environment.

Meanwhile, the Association of Business Services Leaders, which represents the interests of the Global Business Service companies in order to strengthen the development of this growing sector in Latvia, refers to the main reasons for Latvia’s attractiveness, such as a favourable location, a stable, growing economy, supporting infrastructure, access to modern spaces, convenient transport opportunities, financial benefits, educated labour.

Mainly, international companies choose to set up global service centers in Latvia because of the financial benefits. First, Latvia’s salary level is below the average level in the European Union.[6]The employer will, therefore, make savings by hiring the employee from Latvia. Secondly, the overall price level for different expenditure is lower in the European Union.[7] Services such as rental of premises, electricity, water in Latvia are approximately 40% lower than average in the European Union. Spending on communication services – Internet connection, telephone calls – is about a third cheaper than in the European Union on average.[8]

One of the reasons why international companies choose to build global service centers in Latvia is the labor level of knowledge of the official languages. Approximately 96% of Latvian residents know at least one or more foreign languages.[9] In general, Latvians are most familiar with both English and Russian, so global service centres in Latvia can work with both the East Market and the Western Market. Data shows that overall 16 different languages are used in Latvia’s Global Business Service centers, most often English, Russian and Latvian.[10] Around 18% of all companies in the sector use Danish, Spanish, German, Italian, French, Swedish, less often –  Japanese, Lithuanian, Estonian.

The development of the Global Business Service industry and the interest of investors in setting up administrative departments in Latvia, by which they are available to promote the company’s growth, demonstrate that Latvia is able to adapt to business trends by providing a competitive business environment for growth. Along with the advantages of geographic and transportation services, Latvia demonstrates itself as a trusted outsourcing partner for the development of international companies.

In order to promote the development of the Global Business Service sector in Latvia, a joint memorandum was signed in 2018 between Riga Municipality,  Investment and  Development Agency of Latvia, the Ministry of Economy and others, with a view to taking additional activities in promoting the sector. Within the framework of the Memorandum, an association was founded, which deals with informing the public about job opportunities in the international business sector in Latvia, forms a dialogue with Latvian universities in order to develop the skills, which are needed in the sector, in students  . Association and university cooperation have a key role to play in the development of the Global Business Sector in Latvia, it is the most common choice to work in this sector for employees who have recently graduated from university because of the opportunities for international career growth. The association represents several dozen global enterprise service companies in Latvia.

The growth of the Global Service sector has contributed greatly to Latvia. When investing in the creation of new centers in Latvia, international companies not only make savings themselves but also contribute to the Latvian economy. First, global services companies offer higher wages than average in Latvia.[11] Thus increasing the level of welfare, as well as increasing the total revenue of the Latvian Government. It is worth noting that the international business services sector provides health insurance, a modern working environment, career growth opportunities for its employees. Secondly, international experience acquired by employees while working in Global Business Service companies increases the added value of Latvian employees. Third, Latvia’s higher education system is being built in a way that is allowing students to compete internationally. Global Business Services representatives have met with representatives of higher education institutes to discuss the integration of the necessary skills into the Global Business Service industry already in the study process with methods such as case studies, bachelor’s works in the field of Global Business Services, guest lectures and others.

Latvia’s success in the Global Business Services sector has already gained international recognition. During the CEE Shared Services & Outsourcing Summit & Awards 2019, Latvia won several nominations. Riga City won the title “The Rising Global Service Sector Centre in Europe”. The Tele2 Shared Service Center Latvia nominated the “Social Company of the Year” for its campaign, which inspired women to improve themselves in the IT field. Meanwhile, Cognizant Latvia, part of the international company Cognizant, was founded in India and entered Latvia in 2018, currently employing 300 IT specialists, won the title “The digital services company of the year”.

The Circle K Business Center, which won the nomination “Global Business Services Company in the Baltic of the Year”, is currently the largest international service center in Latvia.

Currently, the Investment and Development Agency of Latvia is actively working with representatives of this perspective sector, inviting them to expand their administrative departments in Riga. The received ratings and nominations so far show that Latvia has a high potential for developing the Global Business Services sector, providing an attractive industry operating environment for already existing and new companies.

In total, there are around 50 global service centres are currently in Latvia, such as the Tieto Global Shared Service Centre, Tele2 Billing, Atea Global Services, Circle K Business Center and others. Administrative services centres in Latvia most often provide services such as IT finance, customer service, logistics, personnel management.

One of the most recognizable centers of Global Business Service in Latvia is currently SEB Global Services, where approximately 700 people are employed. The Centre in Riga provides a number of functions – handling all payments by SEB Group, processing of financial instruments such as shares, bonds. As well as in Latvia, the various financial processes offered by SEB Grupa are being examined whether the customers have received payments or the depositary has entered the required account. In addition, the SEB Group Business Service Office in Riga regulates if the international control requirements are met in money laundering, risk management, provision of IT systems. It should be stressed that SEB Group is the largest and most valuable bank in Scandinavia, and therefore the business services center in Riga plays an important role.

Cabot Corporation is the leading company in the world, specializing in solutions related to various chemicals and materials, in cooperation with the transport, infrastructure, environmental sectors. The Cabot Latvia Business Service Centre manages administrative tasks such as customer support, data management, digital support, accounting services, and others. After 5 years of successful activity in Riga, the number of service center employees was increased by half to boost the growth of Cabot Corporation.[12]

Chinese businessmen have also shown an active interest in expanding their activities in Latvia. Company “BGI” has officially launched new research, development, and production center in Riga to create a Chinese-European life science innovation center. The company has already set up three research, development, and production centers in China — Sheng, Shaun, and Qingdao — and San Jose, U.S. The new 7000 m2 large “BGI” center is located at the airport park in Riga. The company based its decision of building its expansion in Riga primarily due to the geographical reasons because MGI is planning to export its production to Europe, Africa, and Eastern countries.

At the premises of “BGI Latvia” in Riga, a product production center, a high-throughput sequencing center, training, as well as a logistics center will be provided. The company’s role here is to strengthen innovation-related cooperation between China and Europe in the fields of life sciences research, industrial use, and technical standards. This means that cooperation on transnational genomics projects, as well as the exchange of experience and information between companies in China and Europe, will continue through this center.[13]

“Given current biotechnology bases in Latvia, “BGI” feels safe when creating a gene-based life-sciences innovation platform in Europe. Here we will be using the company’s main products and technologies. This will help to advance the equipment needed to research higher-level life sciences in China on the global market by creating a system of technical support and a product supply chain that would meet customers’ needs and allow a deeper understanding of the European market, says “BGI” President Duncan Yu.

Thus, Latvia and Riga have always been and is open to creating new, dynamic and well-rewarded jobs, which is exactly what the global service sector gives our state.

[1]https://www.la.lv/strauji-augosi-but-unknowable

[2]Association of Business Service Leaders in Latvia

[3]UAA

[4]Association of Business Service Leaders in Latvia

[5]https://www.atkearney.com/digital-transformation/gsli/2019-full-report

[6]https://ec.europa.eu/eurostat/statistics-explained/index.php/Wages_and_labour_costs

[7]https://ec.europa.eu/eurostat/statistics-explained/index.php/Comparative_price_levels_of_consumer_goods_and_services

[8]https://ec.europa.eu/eurostat/news/themes-in-the-spotlight/price-levels-2018

[9]https://ec.europa.eu/eurostat/statistics-explained/index.php/Foreign_language_skills_statistics

[10]Association of Business Service Leaders in Latvia

[11]Research on employed staff cost and foreign language skills in most competitive sectors of economy in Latvia by “Institute of Economics of the Latvian Academy of Sciences and CREATURA”

[12]Association of Business Service Leaders in Latvia

[13] https://labsoflatvia.com/aktuali/mgi-centrs-riga

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute

Latvia external relations briefing: The Government approves Development Cooperation Policy Plan for 2020

On 3 March 2020, the Cabinet of Ministers of the Republic of Latvia approved the Development Cooperation Policy Plan for 2020 drawn up by the Ministry of Foreign Affairs (MFA). The Development Cooperation Policy Plan sets out specific measures for practical implementation of Latvia’s Development Cooperation Policy Guidelines for 2016–2020 to support less developed countries. It regulates the external relations of Latvia with EU Easter Partnership and Central Asia regions. The amount of 463,813 euros has been allocated in the MFA budget for the implementation of bilateral development cooperation measures in 2020 [1].

The goal of development cooperation is to aid poor and less developed countries by promoting their long-term social and economic human development, ensuring peace and security in the world. The new Cabinet Regulations, “Procedures for conducting grant project competitions”, have been developed pursuant to amendments to the Law on International Assistance that came into force on 13 February 2020. Amendments to the law making it possible to improve the planning and implementation of development cooperation activities, including the possibility of planning development cooperation activities for several years ahead.

The focus of the Development Cooperation Policy Plan for 2020 [2] is on cooperation with EU Eastern Partnership and Central Asian countries. As priority countries there are defined three Eastern Partnership countries: Georgia, Moldova, Ukraine, and three countries of Central Asia: Kyrgyzstan, Tajikistan, Uzbekistan.

The tasks of Development Cooperation Policy Plan are following: 1) to provide maximum support for the sustainable development of the EU Eastern Partnership and Central Asian countries using instruments of the bilateral development cooperation funding managed by the Ministry of Foreign Affairs; 2) to strengthen the implementation of the development cooperation priorities of Latvia within the scope of multilateral cooperation, particularly within the scope of the EU, UN, World Bank group, and OECD, thus promoting the coherence of the development cooperation policy of Latvia in all formats; 3) to strengthen the competence, coordination and sustainable activities of the developers and implementers of the development cooperation policy of Latvia; 4) to strengthen the transparency of the development cooperation of Latvia and its conformity with the international reporting standards; 5) to raise the public awareness of the importance of development cooperation, participation, and support for the implementation of the policy; 6) to implement a comprehensive and coordinated approach of Latvia for the support of sustainable development of partner countries. [3]

Support provided by Latvia to its cooperation partners in terms of the new Development Cooperation Policy Plan include support for the strengthening of judicial and interior system, particularly management and reforms of border security structures; strengthening of capacity of public administration; support for the decentralization process and strengthening of local/regional administration; combating corruption; support for the strengthening of export capacity and introduction of trade-related legal framework in practice in the field of agriculture, development of entrepreneurship; promotion of democratic participation and development of the civil society, including promotion of gender equality and opportunities for women; the development and administrative management of education policy, support for the improvement of education quality, including conformity with the requirements of the labour market, and monitoring, particularly in the field of vocational training.

In the Eastern Partnership countries priorities are the strengthening of territorial integrity of these countries and promotion of integration of the society. On March 16, together with the international community, while condemning Russia’s aggressive and illegal actions towards Ukraine and illegitimate annexation of Crimean Peninsula in 2014, Latvia claimed their support to the sovereign rights of Ukraine to choose the course of its domestic and foreign policy. [4] Latvia will continue providing political and practical support for Ukraine in the implementation of reforms. Latvian Ministry of Foreign Affairs also released a statement on March 23, to reiterate Latvia’s full support for the territorial integrity and sovereignty of Georgia within its internationally recognized borders, and remain deeply concerned over the continued occupation of the territory of Georgia. Latvia did not recognize the legitimacy of the presidential elections held in Georgia’s Abkhazia region on March 22, 2020 [5].

More than a half of the funds will be channeled into a grant projects competition and a competition to co-finance projects by civil society organizations that provide support and share Latvia’s best practices and lessons learned with the EU’s Eastern Partnership and Central Asian priority countries, thereby promoting sustainable growth and stability in those regions. As part of bilateral cooperation measures, taking-into-account Latvia’s expertise and the needs identified by partner countries, a training program will be run for the fifth consecutive year for representatives from some countries of European Neighborhood Policy (which covers Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia, Ukraine), Central Asia and Western Balkans.

For representatives from Ukraine, participation will also be ensured in the “Young professionals’ training programme” spring school. In addition, assistance will be offered to Ukraine in the field of agricultural development.

Capacity building among the Supreme Audit Institutions of Georgia, Moldova and Ukraine will be provided in cooperation with Sweden in 2020. Latvia will also support educational reforms in the Central Asian countries, including through different activities and projects under the EU-Central Asian Education Platform. This year, too, Latvia will continue sharing its experience and expertise with partner countries by participating in projects funded by other donors, for instance, the United Nations Development Program. Outreach measures will be supported in order to raise awareness among the general public of the development cooperation goals and policy. Support will continue for civil society organisations with the view of representing Latvia’s interests in EU-wide platforms of civil society organisations.

In 2020, the Ministry of Foreign Affairs, has also raised the issue of increased funding for development cooperation and submitted a Conceptual Report “On an increased allocation of funding for development cooperation in 2021–2025” to the Cabinet. The Ministry of Foreign Affairs emphasizes that increased funding for bilateral development cooperation is needed in order to promote the visibility of Latvia as a donor and enable a fuller utilisation in development cooperation of the expertise of Latvian public institutions, civil society organisations and the private sector.

Particular attention in the meeting of the Consultative Board for Development Cooperation Policy was paid to the work planned this year on drafting of the Development Cooperation Policy Guidelines for the next planning period 2021–2025. The Parliamentary Secretary pointed out that the goal of Latvia’s development cooperation policy remains unchanged: to contribute to the implementation of the 2030 Agenda in developing countries. Meanwhile, it is important to discuss future regional priorities, and in what way support provided by Latvia could be more focused and adapted to the present-day challenges: climate change, promotion of equality, and digitalization. Attention will also be devoted to engagement with the private sector and to building cross-sectoral partnerships, as well as to public outreach and global education. An inclusive process of consultation will be launched as early as at the end of March 2020.

Conclusion

The foreign policy of Latvia in March of 2020 has been focused on development cooperation sector. The objective of the development cooperation policy of Latvia is to promote sustainable development and eradication of poverty, rule of law, and good governance in developing countries, particularly in priority partner countries of Latvia. In order to promote the effectiveness of bilaterally provided aid, particular attention is paid to a limited number of countries. The EU Eastern Partnership and Central Asia regions have been determined as a priority in the development cooperation policy of Latvia, with special attention paid to Georgia, Moldova, Ukraine, Kyrgyzstan, Tajikistan, Uzbekistan.

Priority sectors of development cooperation of Latvia are development and strengthening of capacity of public administration, development of entrepreneurship and strengthening of export capacity, prevention and solving of conflicts, peace and security, promotion of democratic participation and development of the civil society, education, raising public awareness of development cooperation.

In its external relations with Eastern Partnership countries Latvia continue its policy of support for the territorial integrity of these countries and promotion of integration of the society. Latvia once again expressed the commitment to the restoration of Ukraine’s territorial integrity since the annexation of Crimea, and showed support for the territorial integrity and sovereignty of Georgia within its internationally recognized borders, following statement on the non-recognition of the legitimacy of the so-called presidential elections in Georgia’s region of Abkhazia.

References:

[1] The Cabinet approves Development Cooperation Policy Plan for 2020 and new procedures for conducting grant project competitions. Available at website of Ministry of Foreign Affairs:https://www.mfa.gov.lv/en/news/latest-news/65636-the-cabinet-approves-development-cooperation-policy-plan-for-2020-and-new-procedures-for-conducting-grant-project-competitions

[2] The Development Cooperation Policy Plan for 2020. Available at: https://likumi.lv/ta/id/313030-par-attistibas-sadarbibas-politikas-planu-2020-gadam

[3] Development Cooperation Policy Guidelines for 2016-2020. Available at: https://likumi.lv/ta/en/en/id/284775

[4] Latvia stands firm in its commitment to the restoration of Ukraine’s territorial integrity. Available at website of Ministry of Foreign Affairs:https://www.mfa.gov.lv/en/news/latest-news/65747-latvia-stands-firm-in-its-commitment-to-the-restoration-of-ukraine-s-territorial-integrity

[5] Latvia joins the statement on the non-recognition of the legitimacy of the so-called presidental elections in Georgia’s region of Abkhazia. Available at website of Ministry of Foreign Affairs:https://www.mfa.gov.lv/en/component/content/article/369-domestic-news/65769-latvia-joins-the-statement-on-the-non-recognition-of-the-legitimacy-of-the-so-called-presidental-elections-in-georgia-s-region-of-abkhazia?Itemid=353

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute

Latvia social briefing: The outbreak of Coronavirus has massively impacted social development of Latvia

Because of the global outbreak of Coronavirus, on the 2nd of March, the first officially confirmed case of the Coronavirus was detected in Latvia. Since the first registered case in March and even prior the government of Latvia has been taking serious virus prevention measures, which have helped to limit the outbreak of the virus. Although by the end of March 2020 there were confirmed only 400 cases, it is already seen that the upcoming months will be economically challenging for Latvia. Only in less than a month the environment of Latvia has completely shifted – businesses are facing serious issues: education institutions are closed, unemployment is growing rapidly and the health system of Latvia is in front of a serious challenge.

Observing both the global and national trends of Coronavirus outbreak on 12th of March representatives of the Latvian government declared emergency situation. The new amendments enforced to cancel and prohibit public gatherings such as remembrance, culture, sports, public meetings and marches to no more than fifty persons. The declaration of emergency situation in Latvia has particularly impacted the education system as all of the education institutions like universities and schools have been closed and while the emergency situation will continue the students will have to obtain their knowledge remotely with the help of online tools. The digitalization process of education has so far been difficult since the current Latvian online tools for the education system have showed incapability.

As the situation continued to escalate and more people were detected to be infected with the Coronavirus the government of Latvia approved stricter regulations. The new amendments stipulate that only two members of a household can be outside the house and that a distance of two meters must be maintained. These amendments were made based on the fact that a large proportion of the population of Latvia continued to visit public places after the declaration of emergency situation and therefore the risk of the infection increased. Besides there were also made amendments to the amount of fine in case of violation of the new amendments – up to 3500 Euros for natural person and up to 5000 Euros for legal persons.  To make extensive epidemiological investigations telecommunications operators will be required to provide data regarding the location of Covid-19 infected while still following the data protection rules.

In order to sustain the enterprises government has enforced support system to ensure sustainability of the companies. During the emergency situation the government will cover the costs of incapacity sheet of employee therefore reducing the costs for companies. Additional measures taken to ensure sustainability of Latvian companies are the changes in tax policies.[1]After the request of entrepreneurs regarding the changes in total turnover, export and direct influence of the declaration of emergency situation the government of Latvia enforced amendments regarding tax payments.  It is planned that the upcoming tax payment will be divided by the State Revenue Service or postpone for up to three years without payment of delay.

In the latest month, the government of Latvia has been taking strong measures to ensure prevention of deeper crisis. On March 19th 2020 during the emergency government meeting there was considered a proposal to support companies in the event of crisis downtime. On March 24th the Regulations Regarding the Allowance for Idle Time for the Employees Affected by COVID-19 was passed. Currently the enterprises who represent the sectors, which have been included in the list of the sector affected by the crisis published by the Cabinet and experienced decrement of revenue for more than 50% in March 2020 (compared to March 2019), can apply for the support. It has been determined by the government of Latvia that the allowance for idle time will amount to 75% of the average monthly salary, but not exceeding 700 Euros per month.[2]

With the outbreak of Coronavirus and declaration of emergency situation has impacted the growth of unemployment rates in Latvia. In March 2020 the National Employment Agency received notifications from 24 employers of a total of 3858 collective redundancies. [3]Redundancies have been reported by various sectors of economy such as transport, accommodation, wholesales, real estate, art, entertainment, forestry, finance, insurance. The representatives of National Employment Agency stated that there are still enough registered vacancies for the unemployed. Despite that the situation is incomparably more complicated with national Latvian airline company airBaltic, which intends to relieve around 700 employees from their duties including pilots, flight attendees and technical workers. To find a job in field, which is directly related to aviation, it is foreseen that people will have to wait for airBaltic to resume operation or look for a job abroad.

The current crisis has already made an impact on the labour market as the average number of new job vacancies openings has decreased by more than 60% with the introduction of a state of emergency in the country.[4] The enforcement of emergency situation has contributed to the cool down of the Latvian labour market. Enterprises which, have been significantly affected by the Covid-19 crisis most likely will reduce the number of employees, review the salary of employees, reduce workload, apply for downtime benefits and use other available options. One of the most affected field regarding the largest drop in jobs vacancies are woodworking experiencing 45% decrement, media, marketing – 42%, transport – 33%, telecommunications – 31%.

At the same time there are some companies in Latvia, which are in search for new employees since they are facing lack of workforce because of the growing demand. These include companies whose business processes have previously involved teleworking, including ICT companies and business service centers, as well as companies that have significantly increased their operational capacity in the current situation, such as food, disinfectants and other current demand – manufacturers of goods, supply companies, retailers of food and household goods, especially those with e-commerce channels.

Along with that, additional challenge that is foreseen to be brought up is the income inequality. Even prior the pandemic, the social inequality rates have been one of the highest in European Union.[5] The Covid-19 crisis, has in particular made the weak-points of the governance of Latvian economy, such as social protection, tax evasion even more unstable.

March 2020 has become one of the greatest challenges for the medical system of Latvia. On 6th March the first case of Covid-19 in Latvia was detected and since then the number of infected people had increased up to 446.[6] Data from Latvian Centre for Disease Prevention and Control shows that more than quarter – 26% of the infected people are in age of 30 to 39 while other age groups such as 20 to 29, 40 to 49, 50 to 59, and 60 and older share approximately the same proportion – 17 to 19 %, 5% of the infected were children. During March 2020 approximately 15810 tests were made, from which 2,8% confirmed positive Covid-19 results. In most cases the infected people suffer from mild symptoms as in March 2020 only one death case was registered.

Despite the growing number of infected people, the public health sector has demonstrated great results. Because of the precautions taken mostly the sources of the infection is traceable and additional strategy that has been implemented it targeted Coronavirus testing, paying more attention to the risk groups.[7] To prevent the outbreak of the virus in medical institutions there is made targeted testing on risk groups such as an example all patients with pneumonia hospitalized in the hospital admissions department, pharmacists, doctors, social care workers, with symptoms of acute respiratory infections etc. Therefore, optimising the testing and prevent the spread of the virus in public institutions. Additionally, to support medical persons, epidemiologists, social health workers and others who are involved with limiting the expansion of the virus thus working under conditions of high risk and work load will receive raise of salary up to 50% for the following three months.

Summary

During March 2020 the outbreak of Coronavirus has massively impacted social development of Latvia. Education institutions have been temporarily closed, there have been made serious border-crossing restrictions and the economy of Latvia is facing serious challenges. With the outbreak of Coronavirus and declaration of emergency situation has impacted the growth of unemployment rates in Latvia. The biggest decrement in open job vacancies has been experienced in woodworking, media, transport industries.  Because of that the government of Latvia has enforced variety of financial tools to amortize the consequences of the Covid-19 crisis, such as amendments in tax policies, allowance for idle time, covering up to 75% of monthly income of employees, who worked previously in the fields that have been mostly affected by the Covid-19 crisis. At the same time industries such as ICT, business service centres are experiencing lack of workforce as the demand for their services is growing. To prevent expansion of the Coronavirus more targeted testing strategies have been implemented paying more focus to the social workers, who have contact with the infected people.

[1] https://lvportals.lv/norises/314276-uznemejiem-atbalsts-nodoklu-atvieglojumu-un-finansu-instrumentu-veida-2020

[2] https://likumi.lv/ta/id/313429-noteikumi-par-dikstaves-pabalstu-darbiniekiem-kurus-skar-covid-19-izplatiba

[3] https://www.apollo.lv/6941247/aprila-pirmajas-dienas-bezdarbnieka-statusam-registrejusies-1792-iedzivotaji?utm_campaign=draugiem_zinas&utm_medium=social&utm_source=draugiem.lv

[4] https://pardarbu.lv/brivo-vakancu-skaits-sarucis-par-vairak-neka-60/?utm_source=mailigen&utm_medium=email&utm_campaign=Raksts_BrivasVakances

[5] https://ec.europa.eu/eurostat/statistics-explained/index.php/People_at_risk_of_poverty_or_social_exclusion

[6] http://www.vm.gov.lv

[7]http://www.vm.gov.lv/lv/aktualitates/preses_relizes/6247_testesana_uz_covid19_bus_merktiecigaka_ipasu_uzmanibu_veltot

*This article has been made in cooperation with China-CEE institute and is the intelectual property of China-CEE institute