Analytics, Corruption, Financial Services, Latvia, Legislation, Markets and Companies, Shadow economy
International Internet Magazine. Baltic States news & analytics
Friday, 19.04.2024, 09:54
Money laundering, shadow economy shrink in Latvia, problems with corruption, contraband remain
Arnis Sauka, Associate Professor at the Stockholm School of Economics in Riga, said
that prevention of money laundering was still important in Latvia and
represented a great challenge to almost all world countries.
However, the situation in Latvia has significantly improved, as shown by
the latest Basel AML Index 2017. The progress is largely due to Latvia's
preparations for accession to the Organization for Economic Cooperation and
Development (OECD) and implementation of the recommendations by other
international organizations, Sauka said.
The Shadow Economy Index produced annually by the Latvian Chamber of
Commerce and Industry in cooperation with the Stockholm School of Economics in
Riga and other surveys indicate that the shadow economy in Latvia is shrinking
by one percent on average with every year and currently represents around 20-23
percent of GDP.
The survey presented today suggests that corruption in the public sector is
a major problem in Latvia, although Sauka said that the studies on the subject
were based mainly on the corruption perception by people or groups of people,
such as business representatives, which might have been influenced by low trust
in public authorities in Latvia.
The survey also found that Latvia was still having trouble fighting illegal
alcohol and cigarettes. The problem is that those goods are much cheaper in
neighboring Belarus and Russia.
However, serious efforts have been made in Latvia to fight contraband, and,
compared to other countries in the region, drug trafficking is not a huge
problem in Latvia, Sauka said.
Janis Endzins, the board chairman of the Latvian Chamber of Commerce and Industry, said
that Latvia had made good progress in fighting the shadow economy but must keep
up the efforts, focusing on curbing the contraband as it makes up a large share
of the shadow economy. The officials should also make all effort to increase
people's trust in the public sector, reducing the negative public attitude and
the risks of corruption.