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Friday, 29.03.2024, 16:40
Foreign investors in Latvia show improved sentiment
The expert
noted at the same time that the existing problems largely remain the same and
are mainly related to demographic issues and labor shortages.
The surveyed investors have graded the growth of
Latvia' s appeal in the eyes of foreign investors with 2.5 points out of five,
up from 2 points a year before. Latvian policy-makers' efforts to improve the
investment climate has been graded with 2.9 points as compared to 2.3 points in
2016.
Demographic issues, availability of labor force, as
well as healthcare and social services have been named as the three areas on
which no particular progress has been achieved over the past year. The
demographic situation has received 1.6 points out of five, with 74% of the
surveyed investors saying they saw no improvement in this area.
“True, one cannot expect the demographic situation to
change fast, but you still want to see at least some progress. If it can be
seen, the dynamic will not be negative,” Sauka told LETA, explaining that the
investors do not count births. They analyze the political initiatives aimed at
improving the demographic situation.
The availability of labor force has been graded with
2.7 points, with 71% of respondents in the survey seeing no improvement.
“Significantly, it is not about the productivity of the labor force, but rather
about its availability,” Sauka said, adding that the investors consider the
productivity of Latvia' s labor force to be good enough.
As for the Latvian healthcare and social system, its
quality was graded with 2.5 points last year, with 71% of respondents in the
survey feeling that no progress has been achieved in this area last year. Most
investors, or 57%, see no improvement in the Latvian judiciary, 55% say that
the quality of business legislation has not improved and 52% complained about
uncertainty about various future decisions.
“The investors are talking about extremely lengthy and
complicated legal proceedings which can paralyze their daily work. Others,
meanwhile, note some improvement. But the term 'inefficiency' dominates in
their comment,” said Sauka.
Meanwhile, the Latvian education system and science
has received a better assessment, as the investors have graded this area with
3.1 points, with 17% of respondents fully and 40% partly agreeing that there
has been some progress in this area over the past year.
Support and communication on the part of the
government has also received a better evaluation, with 33% of respondents fully
and 24% party acknowledging improvement.
The survey shows that there is no unanimity about the
quality of the Latvian tax system, as 17% of investors acknowledging
improvement, 40% tending to agree with this opinion, and 43% saying that the
system has not improved over the past year. “You can read between the lines
that the investors just do not believe that everything will remain as it has
been adopted,” Sauka said.
The government's decision not to tax reinvested profit
has earned the highest praise from the investors, followed by export loan
guarantees and support to startups. The “zero bureaucracy” plan is regarded by
the investors as the least feasible.
The FICIL Sentiment Index 2017 has been drawn up in
cooperation with the Foreign Investors' Council in Latvia and covers 42 foreign
companies that have made investments in Latvia.
The full report is
avaible here.