Politics Archives – Institute of Economics
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 –

Home » Briefings » Politics

Latvia political briefing: Latvia – 5G pioneer in the North of Europe

In July 2019, Latvia became one of the first countries in Europe[1], which introduced 5G network coverage. Latvia is ahead of such European countries as Sweden, Norway, Lithuania, France, Estonia in the area of Internet coverage and becoming one of the 5G network leaders worldwide. 5G is currently developing an environment in Latvia that will be able to ensure a higher level of exports, thereby making it possible to compete globally. The development and use of 5G compatibility have been one of the priorities of the European Parliament which means not only speed and coverage, but also a series of functions that will be provided for sensors and other equipment in the digital environment. 5G was introduced in Latvia by “Latvian Mobile Telephone” (LMT), one of the most ambitious and innovative companies in Latvia with more than 25 years of experience in the telecommunication sector.

Latvia is known throughout the world for its fast Internet connection, while at the same time providing low costs for its consumers[2]. As a result, Latvian telecommunication companies such as LMT can provide solutions to processes that consume huge amounts of data daily. Latvia is experiencing increasing trends in Internet connection consumption. In recent years, the usage of Internet in Latvia has increased rapidly.[3] As Latvian mobile operators can ensure free access to fast Internet, with consumer-friendly cost, customer demand in Latvia is still growing. For this reason, one of the challenges for the telecommunication operators in the future will be to provide common information capacity while maintaining the security of data transmission as well as stability.

The deployment of 5G-enabled technologies can have high added value for businesses, attracting investment and increasing national competitiveness. The implementation of 5G in Latvia means a breakthrough in technology that will create new industries and will have a positive impact on existing industries and change our daily lives.

In Latvia, there will be many benefits from the introduction of 5G network coverage. Not only will the population of Latvia have access to several times faster internet connection, but the introduction of the 5G network will also provide the possibility of running many more Internet of things (IoT) (system of interrelated computing devices, mechanical and digital machines) devices simultaneously as well. 5G coverage in Latvia will also expand opportunities for 4G network coverage. For example, the NarrowBand IoT will allow mobile internet to be provided in places where it was not possible until now. Similarly, it is now possible to establish local mobile networks on the 4G network for the needs of a particular company or authority.[4] The introduction of 5G network coverage in Latvia will also improve the stability of the data transmission connection and the security of  the network coverage. By that guaranteeing an uninterrupted data exchange as well as an improvement in response time. These improvements would be able to help to implement and guarantee high-quality solutions in Latvia, such as the development of the digital economy, remote drone management, unmanned vehicles.[5] 5G Technologies has high added value and can provide a new business, investment attraction and increase national competitiveness.

Although 5G network coverage has only recently been developed in Latvia, LMT has already started developing and presenting innovation of the defense industry for export. 5G will open up unprecedented mobile capabilities, such as creating a dedicated transmission channel to security authorities, so that the rest of the Internet does not interfere with the channel.[6] LMT has introduced its potential clients with other innovative solutions in the security field – mission management system, drone traffic management, computer vision and other. The development of 5G in Latvia has contributed to the creation of new potential areas of export, as well as the development of new products in Latvia.

The implementation of this powerful 5G network has enabled Latvian entrepreneurs to develop new ideas in the technology sector. Together with internal affairs and defense sector authorities, LMT, in cooperation with Riga Technical University, is developing new, innovative solutions for national defense. By being able to successfully provide internet coverage in Latvia has allowed LMT to be involved in various European projects. All of this results in the development of mission management systems that integrate both human communication and various IoT sensors to assess the situation more quickly and to be able to make more accurate decisions.

The income from the information and communication technology sector in Latvia’s state budget has increased from €289 million in 2015 to €356 million in 2017, as well as exports of the Information and Communication Technology sector are experiencing rapid growth.[7] The introduction of 5G in Latvia will mainly support the information and communication technology sector. The introduction of 5G will significantly improve the environment of this sector in Latvia, thereby strengthening the leaders’ position in terms of building the communication infrastructure, which will also have a significant impact on the state’s budget.

Latvia is experiencing an increase in the number of information and communication companies that introduce innovations that are competitive in the global market. For example, “Giraffe Visual” is one of the first companies in Europe to provide the highest-quality interactive visualization in 360 ° virtual tour format, 360 ° video, interactive presentation technology as a service for touchscreen surface and virtual reality. from a small Latvian youth company that built virtual tours for guesthouses in Latvia for a couple of years, they have become industry leaders in Europe with clients in 27 countries. This is just one of many examples. Business incubators, accelerators are currently active in providing financial support, working spaces, self-growth seminars for young Latvian entrepreneurs. In particular, capacity building for information and communications companies is supported. The support of the state and the introduction of 5G coverage in Latvia will provide technology companies with a better environment to carry out their potential, thereby contributing to the development of the economy in Latvia.

Education and the development of 5G have a common future in Latvia. With the introduction of the new education reform in Latvia, emphasis will be placed on the acquisition of information technologies, promoting high computer skills for pupils. The number of students in the information and communication technology sector has also increased in recent years.[8] It is therefore important that future professionals in this sector are provided with an environment that is competitive with the global market, an environment for improving their knowledge in the field of information and technology. Developing 5G specifically in Latvia will allow students to operate with big data, create innovations in the information and technology sector.

“Big data is a key basis of competition, productivity and innovation development nowadays. Mobile telecommunications is an industry which espouses well with big data concept. Experts predict that in the next few years, 50 billion different smart devices will use to collect, analyze and share data. The amount of data in our world will explode. Data management and analysis steps show – Big data is from mere buzzword – big data is here to stay” – stresses the President, Chairman of the Management Board of LMT Dr, Prof. Juris Binde.

A significant benefit of 5G Internet coverage in Latvia will be job efficiency. 5G will improve business efficiency and productivity, as well as make easier people’s everyday life. Due to the high speed of the 5G Internet, it will be possible to improve and implement smart solutions, not only in the technology sector. For example, the ability to transfer and process large-capacity data more quickly will improve the functioning of public administration, health care, education. 5G network coverage will ensure a rise in job productivity in Latvia.

Similarly, 5G allows information to be processed not only centrally but also locally in the base station area to perform data analysis quickly and in a restricted field. LMT, together with the University of Latvia, has already developed a method for evaluating the regional economic activity, based on big data from the mobile network. Mobile data analysis makes it possible to measure population dynamics, plan infrastructure and find many more effective solutions. This study has shown good results and confirms the potential for large data use in Latvia.

Although the introduction of 5G brings a lot of benefits to the Latvian economy, almost every fifth of the population (17%) believes that 5G technology in Latvia should not be implemented.[9] One of the reasons explaining the resistance to the deployment of the 5G network in Latvia is the disinformation campaigns in the social networking apps like Facebook, which uses distorted and false facts about 5G technologies that have been shared by several hundred people, thereby reaching thousands of others[10]. Surveys show that against 5G implementation are older people or people with a low level of education. The financial situation of people has also great importance. The higher it is, the more positive attitude towards the introduction of new technologies in Latvia is received.[11] As part of this disinformation campaign, there was even a protest against 5G in Latvia this year.

It is worth noting that in Latvia the electromagnetic radiation rate is supervised by the Health Inspectorate. Commenting on the hazards of 5G waves, the Latvian Health Inspectorate stresses that there are no grounds to question the effects of 4G or 5G on human organisms.[12] The commercial operator must confirm the safety of the antennas with special certificates to install them. Independent measurements are performed after the installation of the antennas. The measurements ordered by the Health Inspectorate have never shown deviations from the norm.[13]

In order to successfully implement the 5G network in Latvia and use full capacity that this technology offers to Latvia, the world’s first hackathon of 5G policymakers took place on 26th and 27th November 2019. This 5G hackathon is an innovation in policymaking. The event aimed to bring together all sectors involved in 5G technology to assess current challenges related to 5G and to develop recommendations to promote 5G innovation in the Baltic Sea region.[14]

With the help of this hackathon, industry professionals, representatives of the Baltic and European region met in Riga to recommend more appropriate legislation for the opportunities that will create 5G technologies, while making the Baltic region a 5G innovation leader in the world. By creating this type of hackathons, the Latvian government has shown that it cares about entrepreneurs in its region and that the government wants to provide a business-friendly, innovation-friendly environment.

The current legislative framework is not suitable for achieving the maximum efficiency of 5G technologies. Innovative policy-making tools such as the 5G hackathon have helped Latvia, as well as the Baltic Sea region, together with professionals in its field, take the first steps towards a common approach in establishing a legal framework. The regulatory frameworks must be not only conducive to innovation but also safe for consumers and others.

As has already been shown, in the future 5G technologies will have the opportunity to boost economic growth, so Latvia is already creating appropriate laws that support both entrepreneurs and households. Important topics as cross-border transport problems, infrastructure issues, personal data protection challenges, security, data availability were discussed in the hackathon.

5G is one of those technological breakthroughs that has the potential to change the way we live. We have to be responsible for creating an environment and legislation at a cross-border level that will enable new innovations and increase our economic competitiveness globally. That’s why the first-ever 5G policymakers’ hackathon will bring together the key representatives from all Baltic Sea Region countries to create common recommendations for policymakers, to help them to prepare better legislation for the possibilities that 5G technologies will create, and to establish the region as leaders in 5G innovation.” – Ralfs Nemiro, Minister of Economics of the Republic of Latvia.

5G hackathon was just the beginning of creating a single policy for 5G across the Baltic Sea region. After the hackathon, the Ministry of Economy and members of the hackathon had prepared 5 recommendations for the policy makers, which are planned to be discussed.[15]

[1] https://www.speedtest.net/ookla-5g-map

[2] http://research.rewheel.fi/prices/country/

[3] https://tefficient.com/usage-up-but-monetisation-falters/#more-5431

[4] https://www.lmt.lv/lv/preses-relizes?g=2019&pid=913

[5] https://www.lmt.lv/lv/preses-relizes?g=2019&pid=912

[6] https://www.lmt.lv/lv/preses-relizes?g=2019&pid=913

[7]https://2018.economicforum.lv/wp-content/uploads/2019/10/Rezololucija.pdf

[8] www.izm.gov.lv.

[9] Latvian research centre SKDS

[10] https://www.facebook.com/patiesibapar5g/

[11] Latvian research centre SKDS

[12] http://www.vi.gov.lv/lv/sakums/aktuali/this-just-in-2019/par-5g-elektromagnetiska-starojuma-ietekmi-uz-cilveka-veselibu

[13] https://www.lsm.lv/aizliegtais-panemiens-operacija5G

[14] https://www.em.gov.lv/en/news/25997-the-first-ever-5g-policymakers-hackathon-announced

[15] https://www.em.gov.lv/en/news/26377-5-policy-recommendations-from-the-first-ever-5g-policymakers-hackathon

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

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

Latvia political briefing: Priorities of Latvian national development policy for 2021-2027

The National Development Plan of Latvia for the next planning period of 2021-2027 has been developed to identify the largest state budget investments into the development of Latvia and improvement of the quality of life of people over a 7-year period, and has been submitted to Parliament of the Republic of Latvia on March 4, 2020. The document serves as a road map for policy makers on the country’s development vision and investment needs for the next seven years.

National Development Plan of Latvia for 2021-2027 (furthermore – NDP or NDP2027) aims to implement more than 330 initiatives for a total of € 14.5 billion over the next seven years, from 2021 to 2027. This includes national development priorities, objectives and investment directions, as well as planned reforms and policy changes. The NDP 2027 also pictures Latvia’s seven-year commitments to achieve the Latvian Sustainable Development Strategy 2030 (Latvia 2030) and the UN Sustainable Development Goals. The NDP balances investments or spendings/expenses and opportunities for the state and its citizens to “earn”[1].

Latvia’s NDP is prepared by the Cross-Sectoral Coordination Centre (CSCC) – the leading development planning authority which is under direct authority of the Prime Minister. The number of meetings, discussions and public hearings dedicated to the subject are large. The result is a multi-vocal but also a fragmented perspective on Latvia. Although many actors are involved, the ministries have the decisive role in setting the priorities included in the NDP.

The NDP is implemented mainly with public resources and is also supported by private and municipal funding as well as foreign financial assistance. The resources of the European Union funds also contribute to the future of the Latvian population by supporting and co-financing the implementation of objectives of the National Development Plan.

Structure and overview of NDP 2027

The NDP 2027[2] provides a vision for fundamental change and growth of Latvia in four general directions. Equal rights encompass the implementation of the fundamental rights of all residents of Latvia through state-provided services. The quality of life characterizes the general increase of well-being and opportunities of every inhabitant of Latvia. The knowledge society is a common direction for change in education and science, civic awareness, media and the economy. Responsible Latvia is the answer to the threat of climate and demographic trends today and in the future.

Accordingly, the NDP 2027 sets 4 strategic goals (equal opportunities; productivity and income; social trust; regional development) in six priority areas. Each priority consists of several directions for key policies. Policy changes are supported by public investment from the national budget, European Union (EU) funds and other financial instruments.

The structure of the National Development Plan 2021-2027 is following:

Priority: Strong families, healthy and active people

  • Direction: Human-centered health care
  • Direction: Psychological and emotional well-being
  • Direction: Strong families across generations
  • Direction: Social inclusion

Priority: Knowledge and skills for personal and national growth

  • Direction: Science for social development, economic growth and security
  • Direction: A high quality, accessible and inclusive education system

Priority: Competitiveness of business and material well-being

  • Direction: Productivity and innovation
  • Direction: Jobs and income
  • Direction: Capital and the business environment

Priority: Quality living conditions and territorial development

  • Direction: Nature and the environment
  • Direction: Technological environment and services
  • Direction: Balanced regional development
  • Direction: Housing

Priority: Culture and sports for active and fulfilling life

  • Direction: Public participation in culture and sport activities
  • Direction: Contribution of culture and sports to a sustainable society

Priority: A united, secure and open society

  • Direction: Cohesion
  • Direction: Rule of Law and Governance
  • Direction: Security

To compare, National Development Plan for 2014-2020[3] contained only 3 main priorities: “Growth of the National Economy”, “Human Securitability”, “Growth for Regions” and had a motto: “economic breakthrough – for the greater well-being of Latvia!”. The outcomes and tasks in NDP2020 were structured as 12 mutually coordinated and interrelated strategic objectives: Competitiveness and Productivity; Business Environment; Research and Innovation; Energy Efficiency; Employment; Competencies; Health; Demography; Cooperation, Participation and Culture; Natural Capital; Potential of the Regions; Access to Services.

So, we see that for the next planning period of 7 years there is more stress at law, public governance and security (which was not even mentioned in objectives for NDP 2014-2020). Also, while acknowledging that costs of energy are crucial for industry and manufacture, NDP’s priority areas do not comment on the energy policy directly. Only “smart energy solutions” are listed among the activities for productivity and income. The National Development Plan ascertains that energy transformation will have a solid place in Latvia’s governance and lists it among the budgetary priorities after 2021. However, the plan mainly considers energy as a part of environment and technology, leaving its commercial and industrial drivers largely intact[4].

Strategical targets of the Latvian national development for 2021-2027

Strategic indicators mentioned in the NDP 2027 are: nominal productivity per hour of work as a % of the EU average (60,2 % in 2018; target value in 2027 – 68 %); ), GDP per capita PPP as a % of the EU average (71 % in 2018; target value in 2027 – 80 %); GINI coefficient (35.6 % in 2018; target value in 2027 – 30 %); rate for children at risk of poverty (17,5 % in 2018; target value in 2027 – 10 %); mutual trust (51 % in 2015; target value in 2027 – 64 %). Regarding employment and social issues, Latvia has planned to increase employment level of inhabitants aged 20-64 from 76,8 % up to 78 % in 2027. It is important for Latvia also to decrease long-term unemployment, setting the measurable indicator 2,2 % in 2027, and number of NEET young people (15-24 years old who will stay not employed, nor in education, nor in training) from 7,8 % till 6 %. Education is another important priority for the development of Latvia. It is defined that in 2027 proportion of STEM graduates out of total number of higher education graduates should be at least 12 %; 60 % of 16-74 years old people will possess basic and advanced digital skills; there will be 54 % of 25-64 years old who took part in formal or non-formal education/training in the last 12 months. It is also planned that ratio of general education and vocational education at the secondary education level will be 50/50 (at the moment this ratio is 61,14/38,86).

According to Head of the CSCC Pēteris Vilks, the most difficult goal in the new NDP will be to reduce inequality, as discussions on tax policy are expected to be tough. He admitted that the previous National Development Plan 2014-2020 has achieved its targets by about 70%. There are areas where targets have not been achieved at all, such as demographics, where targets have been very ambitious.

Conclusion

The Latvian National Development Plan for 2021-2027 provides four general directions for future growth of Latvia: equal rights, the quality of life, the knowledge society and responsible Latvia.

It also sets 4 strategic goals: Equal opportunities; Productivity and income; Social trust; Regional development, and contains 6 priority areas: 1) Strong families, healthy and active people, 2) Knowledge and skills for personal and national growth, 3) Competitiveness of business and material well-being, 4) Quality living conditions and territorial development, 5) Culture and sports for active and fulfilling life, 6) A united, secure and open society.

Thus, following sectors has been put in the center for the next 7 years for Latvia: healthcare, demography, education and science, business and innovation, environment and regional development, culture and sports, security and the law. Quantitatively the main focus of NDP is on education, health and business promotion, and measures based on European Green Deal. If divided by main topics, NDP 2027 indicates funding for: climate (almost 5 Mln euro), research, science and innovation (1,1 Mln euro), digitalization (1,2 Mln euro), demography (1 Mln euro), all Latvian regions (nearly 6 Mln euro), including regions outside Riga (4 Mln euro). Funding will also be allocated for development of public media and their exit from advertising market, to promotion of critical thinking among general public etc.

References:

[1] Law on the Development Planning System: https://likumi.lv/doc.php?id=175748

[2] The Cross-Border Coordination Center of the Republic of Latvia website: https://www.pkc.gov.lv/

[3] National Development Plan of Latvia for 2021-2027:https://www.pkc.gov.lv/sites/default/files/inline-files/NAP2027galaredakcija.pdf

[4] National Development Plan 2014-2020: https://www.pkc.gov.lv/sites/default/files/inline-files/NDP2020%20English%20Final__.pdf

[5] Prospects of Energy Transformation in Latvia’s National Development Plan 2027, Green Liberty (NGO):

[1] The Cross-Border Coordination Center of the Republic of Latvia website: https://www.pkc.gov.lv/

[2] National Development Plan of Latvia for 2021-2027. Available at:https://www.pkc.gov.lv/sites/default/files/inline-files/NAP2027galaredakcija.pdf

[3] National Development Plan 2014-2020. Available at: https://www.pkc.gov.lv/sites/default/files/inline-files/NDP2020%20English%20Final__.pdf

[4] Prospects of Energy Transformation in Latvia’s National Development Plan 2027, Green Liberty (NGO):

Latvia political briefing: Political solutions to mitigate the effects of COVID-19

The amortization of social and economic consequences 

For more than half a month the citizens of Latvia have been living under the emergency situation. Undoubtedly the economic impact on the daily lives of the Latvian citizens has been massive as the unemployment levels have been increasing. [1] However, the precaution activities taken has proved them to be successful as the number of active cases of Coronavirus have been decreasing.[2]  Although the limitations are relatively small in comparison to other European countries, Latvia has been able to sustain one of the lowest death rates per 100 000 citizens in the European countries.[3]  Despite the success in health system and the provided support tools Latvia is in front of upcoming political challenges and is already facing restructuring process to improve the welfare of Latvian citizens during these challenging times. 

The borrowing limit for local governments is increased by 150 million euros to mitigate the effects of COVID-19

One of the key priorities for Latvia during the Covid-19 crisis is to improve the unemployment level. The data from State Employment Agency shows that the share of unemployment is increasing, which is mainly explainable due to the Covid-19 crisis. [4] Because of that the Parliament of Latvia has been actively creating solutions to boost the economics of Latvia. This decision of increasing the municipal borrowing limit for 2020 by 150 million euros in order to be able to invest in high-readiness projects co-financed by European Union funds and other foreign financial assistance with economic significance, as well as investment projects submitted by the Ministry of Environmental Protection and Regional Development. Proposals for redistribution of EU funding to mitigate the effects of COVID-19 have been supported      The opportunity approved by the European Commission to restructure and reorganize the European Union funding to fields which currently need the most support has a great influence since Latvia will be able to save the State budget funds. The redeployment proposal for European Union funding was designed to address three current needs. Primarily, strengthening the capacity of the health system by ensuring urgent investments in strengthening the capacity of infectious and psychiatric fields. Providing support to companies – in the provision of working capital of export-capable and productive companies, modernization of production and heating of the economy. As well as investments in mitigation of socio-economic consequences – employment measures. In total, it has been decided to redistribute 500 million euros of European Union funding. It has now been decided to allocate 100 million Euros to the Ministry of Transport for the discontinuation of railway projects for the strengthening of health services, 30 million euros for entrepreneurs, 35 million Euros for working capital and fixed assets instruments, 20 million Euros for employment support measures and workforce training and reorientation measures. In its turn, the financing of energy efficiency projects under the Ministry of Economics in the amount of approximately 7.5 million Euros should be directed to the projects of municipal energy efficiency measures to be implemented in 2020.

The Latvian Parliament approves additional measures to overcome the difficulties caused by Covid-19

To amortize the caused political and economic consequences by the outbreak of global pandemic during April 2020 the Parliament of Latvia enforced new amendments. Amendments to the law stipulate that expenses incurred in providing social assistance are recognized as operating expenses of the company and are not subject to corporate income tax. This will support companies that are actively involved in providing social support during an emergency, such as providing computers and other smart devices to schools, handing over disinfectants to medical facilities, and providing lunch and coffee to doctors. The amendments also stipulate that municipal capital companies, whose turnover has decreased by 50 percent due to the crisis caused by Covid-19, may receive a state budget loan to increase the company’s share capital in order to finance its maintenance costs. The amendments also provide for the establishment of an alternative investment fund, in which it is planned to invest not only public but also private funds, thus providing support to entrepreneurs, for example, by investing in the company’s capital. The fund will be managed by the development finance institution Altum.[5]

During April 2020, a big proportion of political discussion revolved around the State downtime support payments. During March 2020 in support of the local enterprises the government of Latvia supported the Law of Idle payment, which aims to support the enterprises and businesses which have been negatively affected by measures to control the spread of the Covid-19 virus. Entrepreneurs in all sectors that meet the set criteria can apply for state aid measures to mitigate the effects of the crisis – the distribution of downtime benefits and arrears of taxes in time or deferral for up to three years. In the beginning the companies whose income in March or April 2020 had decreased by at least 30% compared to the corresponding month of 2019 were able to apply for the downtime benefit and tax extension.

However, during April 2020 the enforced amendments received a lot of criticism from the public sector as around 40% of the Idle payment applicants received rejection and were not qualified to receive monthly Idle payment. [6] As more well-known Latvian enterprises received rejection it raised more public and political discussion regarding the Idle payments. The qualifications were written in a manner that made it really difficult to apply for the Idle payment support and therefore by data from State Revenue Agency it can be concluded that only around less than five percent of the Latvian workers were able to receive Idle payment support. Because of the public resonance and the flaws of the enforced amendments in April 2020 in approval by the Parliament of Latvia the criteria for granting the downtime allowance to employees of companies affected by the COVID-19 crisis have been improved and additionally the application deadline was extended. The amendments stipulate that in the future, when deciding on the granting of downtime benefit and / or “tax holidays”, the State Revenue Agency will consider the income of companies and their reduction due to the COVID-19 crisis from the moment of starting a real economic activity and not from the moment of registration. The amendments also stipulate that an employee of a company may receive a downtime allowance even if his or her employer or a member of the company’s board has been penalized for a violation related to tax, customs or employment relations in the previous year and at the time of assessment as previously it was one of the main reasons why workers were not able to receive Idle payment support.

The Parliament of Latvia conceptually supports amendments to the law on repayment of mortgage debts during the 2008 crisis

Before the economic crisis of 2008, there was a huge increase in lending rates in Latvia, but the sharp drop in income after that created very great difficulties in fulfilling the assumed obligations. These debts are now practically irrecoverable. The data at the disposal of the Bank of Latvia and the Financial Industry Association show that there are currently about 13 thousand debtors affected by the crisis in Latvia and the total amount of debt is estimated at up to 600 million euros. Because of that in April 2020, the Latvian Parliament conceptually supported the amendments to the Law on Credit Institutions and the amendments to the Law on Personal Income Tax, which provide for the possibility for credit institutions to unilaterally repay debts on mortgage loans taken before the 2008 economic crisis. With the changes in the personal income tax law, it is planned to determine the basic principles of repaying mortgage loans. It is envisaged that credit institutions will be able to unilaterally erase debts on loans taken by residents for the purchase of real estate by the end of 2008.[7] It is also envisaged that the settled liabilities to the debtor will not be treated as income and will not be subject to capital gains tax. At present, some credit institutions already implement various settlement programs by concluding a mandatory bilateral agreement in writing. The proposal for unilateral debt forgiveness is encouraged because the current practice is considered to be a significant impediment to full or partial repayment.

Conclusion

In order to mitigate the effects of Covid-19 and to improve the regional unemployment levels the borrowing limit of funds for municipalities have been increased by 150 million euros, which will allow to invest in high-readiness projects. To strengthen the capacity of the most current significant fields like medicine and export-capable and profitable companies, modernization by the approval of the European Commission the available European Union funds will be reorganized. To amortize the caused social and economic consequences by the outbreak of global pandemic the Parliament of Latvia enforced new amendments, focusing on companies that are actively involved in providing social support during an emergency situation.  Additional focus has been put on municipal capital companies, which have been deeply affected by the Covid-19 crisis meaning increasing the company’s share capital in order to finance its maintenance costs. The public discussions were raised regarding the State Idle payments as the created support system showed to be ineffective in several ways.

[1] https://www.nva.gov.lv/docs/31_5ea6a81ed129f1.00708681.pdf

[2] https://spkc.gov.lv/lv/tavai-veselibai/aktualitate-par-jauno-koronavi

[3] https://www.statista.com/statistics/1111779/coronavirus-death-rate-europe-by-country/

[4] https://www.nva.gov.lv/index.php?cid=6

[5] https://www.saeima.lv/lv/aktualitates/saeimas-zinas/28894-saeima-apstiprina-papildu-pasakumus-covid-19-radito-sarezgijumu-parvaresanai

[6] https://lat.bb.lv/raksts/ekonomika/2020/04/17/dikstaves-pabalstus-vid-atsaka-gandriz-puse-gadijumu-kads-pamatojums

[7] https://www.saeima.lv/lv/aktualitates/saeimas-zinas/28917-saeima-konceptuali-atbalsta-likumu-grozijumus-par-2008-gada-krizes-laika-hipotekaro-paradsaistibu-dzesanu

Latvia political briefing: The political strategy of Latvia – recovery from the Covid-19 crisis and innovation

During the Covid-19 crisis Latvia has become globally recognizable for the successful approach to amortize the consequences of the global pandemic while the restrictions were comparatively loose in comparison to other countries. Overall the total cases per 100 000 have been reported as one of the lowest in Europe while the total tests conducted per new confirmed case of Covid-19 is one of the highest in Europe.[1] The testing capacity together with informing the society about the importance of the prevention measures has led Latvia to start a gradual transformation to ease the restrictions. 

The Cabinet of Ministers supports the Covid-19 Governance Law           

In May, the Cabinet of Ministers supported the draft law “Law on the Management of the Spread of Covid-19 Infection” jointly developed by the Ministry of Justice and other responsible institutions, which aims to establish a general legal order after the end of the emergency by providing appropriate precautionary measures.[2]

The responsible authorities have compiled and consolidated the necessary aspects in one law, which will help to comply with epidemiological safety measures and prevent the spread of Covid-19, as well as provide the public administration and citizens with clear rules during Covid-19. In turn, the Ministry of Finance and the Ministry of Health will regulate significant changes in the law regarding economic and epidemiological issues.The draft law determines the basic principles of the activities of state institutions, including the provision of services by courts and local governments after the end of an emergency situation. Appropriate precautions and restrictions for individuals, including special conditions for the provision of educational, sports, social and health services during the Covid-19 deployment period following the lifting of the emergency.Given the changing and unpredictable nature of the spread of Covid-19, the draft law provides for the possibility for the Cabinet of Ministers to decide on practical implementation measures to control Covid-19 in case of spread or threat of Covid-19 infection in order to respond in time to changes in the country and abroad.The new Covid-19 infection control law will be applicable as long as there is an epidemiological safety threat related to the spread of Covid-19 infection. After the approval of the Cabinet of Ministers, the law will be able to be repealed by the government by a separate decision.

The Cabinet of Ministers approves the Strategy for Latvia to Mitigate the Consequences of the Covid-19 Crisis

Although Latvia has been globally recognized as one of the most successful examples to adapt and come to solutions regarding pandemic, nevertheless it has led to new challenges. Because of the internal and external restrictions, it is seen that the Covid-19 will leave
inevitable consequences to the economic, social, political and other fields. However, as the most pressing epidemiological point of Covid-19 had already reached its peak during the beginning of April and since then experienced recession as the cumulative cases have dropped by 7 times a strategy to mitigate the created difficulties caused by the outbreak of the virus  has been developed. [3]

In order to overcome the crisis caused by the Covid-19 virus in Latvia, as well as return to the pre-crisis level as soon as possible, the Cabinet of Ministers together with entrepreneurs, industry experts and organizations representing entrepreneurs developed plan for mitigating the consequences of the Covid-19 crisis, which  consequently was approved by the Cabinet of Ministers during May 2020. The short-term goal of the strategy to mitigate the effects of the Covid-19 crisis on Latvia is to achieve as little negative impact on the economy and business operations as possible, while in the long run to achieve structural changes in the productivity-driven economy in favor of knowledge-intensive exports of goods and services. At the same time, it is important to reduce unemployment and the share of low-skilled workers, to develop and increase innovation and research capacity, to promote digitalization solutions and the availability of financial instruments for entrepreneurs.In the current challenges, the political strategy of Latvia is primarily to stabilize the Latvian economy, while maintaining a strategic course, in order to accelerate the structural reorientation of the productivity-based economy. Currently it is seen to be implemented by adapting the economy to global trends in a timely manner and creating new comparative advantages. At the same time, the economic stabilization phase includes actions aimed at boosting export capacity and productivity, as well as improving the business environment.The current political strategy of Latvia includes 5 directions of action – human capital, innovation, business environment for export capacity, access to finance and infrastructure, in which measures are planned in the three following steps and in respective time periods.Economic stabilization period – measures to be implemented in 2020 aimed at stabilizing the financial situation of the population and entrepreneurs in the conditions of the Covid-19 crisis and limiting the spread of the virus in Latvia.Reorientation period – measures to be implemented in 2021-2022, which, taking into account the changes in the global economy caused by the Covid-19 crisis, as well as using the advantages and challenges of the Latvian economy, create new opportunities for entrepreneurs and citizens, focusing on innovation, digital transformation, lifelong learning , and focusing on structural changes in the economy through targeted adjustment of state aid mechanisms.
Growth phase – from 2023 onwards measures for economic transformation based on dynamic development of exports of goods and services, ensuring economic growth through productivity growth, automation, digital transformation, support for business growth and fast-growing industries and ecosystems.

Parliament of Latvia – one of the first in the world ready to work in the e-Parliament mode

The Parliament of Latvia is one of the first parliaments in the world that is ready to work completely remotely during the crisis caused by Covid-19. Because of the new e-Parliament tool, parliamentary sittings can now be held remotely, with deputies also staying outside parliamentary premises. At the same time, the work of the Parliament will still be open to the public, and everyone interested, as before, will be able to follow the proceedings of the remote sitting live on the Parliament website and on the Parliament’s social media accounts.[4]

The new tool is a unique information technology solution created specifically for the needs of the Parliament of Latvia. It provides the most important functionalities of the parliamentary sitting – an opportunity for deputies to both debate and vote on the issues on the agenda of the Parliament sitting. Both of these features work online in real time. The e-Parliament tool has been developed in an emergency mode in just a few weeks, in response to the restrictions on assembly caused by the Covid-19 crisis and the need to switch to remote work, as well as the call of the heads of state constitutional bodies to use parliamentary work.
If the e-Parliament technological solution developed for the needs of an emergency situation proves itself and allows to ensure the quality of the work of the parliament, there is a possibility to use it for the daily work of the Parliament sittings, respectively, deputies working on the spot in the Parliament.

This project not only proves Latvia as a country of technological innovation, but also opens a new direction of political governance. Parliaments, in cooperation with IT specialists, have been able to create a modern technological solution that allows the parliament to work successfully in emergency situations even when the deputies are outside the parliament. The tasks set by the heads of the constitutional bodies together with the President of the Latvia have been implemented – all branches of power are able to work fully in exceptional circumstances, following the objectives and basic principles of regulating judiciary.

The implementation of the e-Parliament project has also received criticism from the members of Parliament as some of deputies do not have sufficient amount of knowledge to operate in e-Parliament platform. In addition to that other member of the Parliament of Latvia have stressed that there is no practical need for the e-Parliament and the government should return back to the previous working system.

Summary

As the number of active cases of Covid-19 has been decreasing, during May 2020 the Cabinet of Minister supported the Covid-19 Governance Law, which aims to establish a general legal order after the end of the emergency by providing appropriate precautionary measures Additionally, the Cabinet of Ministers have created the Strategy for Latvia to mitigate the consequences of the Covid-19 Crisis mainly putting focus on productivity-driven economy, reduction of unemployment and the share of low-skilled workers to stimulate the fields of innovation. The Covid-19 has contributed to the creation of new innovations in fields of politics. During May 2020 the Parliament of Latvia became one of the first Parliaments in the world, which could ensure its operations fully online. The e-Parliament tool has been developed in an emergency mode in just a few weeks, in response to the restrictions on assembly caused by the Covid-19 crisis, it provides the most important functionalities of the parliamentary sitting – an opportunity for deputies to both debate and vote on the issues on the agenda of the Parliament sitting.

[1] https://ourworldindata.org/coronavirus-testing

[2] https://www.mk.gov.lv/lv/aktualitates/ministru-kabinets-atbalsta-covid-19-parvaldibas-likumu

[3] https://spkc.gov.lv/lv/tavai-veselibai/aktualitate-par-jauno-koronavi

[4] https://www.saeima.lv/lv/aktualitates/saeimas-zinas/28981-parlaments-gatavs-darbam-e-saeimas-rezima