THE ROOT OF THE PROBLEM

Nov 05, 2008

The Latvian government seems on the verge of launching yet another campaign to bring some of the large number of émigrés that have left the country back home (see story Page 1).
During a recent visit to Ireland – the destination of most Latvians who choose to go work abroad – President Valdis Zatlers said that Latvia needs to take measures to bring back some of the workers that have gone abroad.

The number of workers going abroad has caused numerous problems for the Latvian economy. The country currently suffers from a relatively high level of negative population growth, alongside a shortage of workers – both white collar and blue collar – who are willing and able to do a quality job at prices Latvian companies can afford.

Latvia loses out of its most valuable resource, while Ireland gains a cheap, skilled and motivated workforce. Latvian workers grow in the Baltic states and flower in the West.
Over the course of the past few years, Latvia has taken a number of different approaches to bringing back the country’s émigrés. These strategies have included everything from offering Latvians relatively large sums of money to return to the workforce, to easing citizenship laws for Latvian children born abroad.
So far, however, few politicians have talked about addressing the root of the problem – the country’s quickly failing economy.

Instead of following Estonia’s lead and taking an economic blow early on in exchange for a faster and easier transition back to a healthy economy down the road, Latvia chose to ignore the problem and deal with the consequences as they arise.
The government has known that the current economic crisis was coming for years. It was clear to any economist worth his salt that the country’s fast growth rate – largely based on easy credit – was unsustainable. But instead of trying to cool things down when it would have been easy, the Cabinet chose to ignore the warning signs and let the good times roll.

The most troubling thing is that the government still has not learned its lesson. Passing the most recent budget has been a circus. The government threw something together at the last minute – the finance minister was on vacation until two days before the reading.
The budget was finally forced through parliament on the promise that the finance ministry would tweak it sometime down the road.

To Zatlers’ credit, he said that Latvia would need to “make itself more attractive” in order to bring the emigrants home. This, at least, is a step in the right direction.
Unfortunately, it seems Latvian workers will not return to the country until those in power start making responsible decisions, and based on past evidence this is not likely to happen anytime soon.

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