Notwithstanding the ongoing Covid 19 pandemic, the Latvian economy continues to show positive results. In the first three quarters of this year, the economy grew by 5.2%, and the growth outlook for the coming year is also good. Despite the remarkable performance and forecasts, I am concerned whether the negative effects of the pandemic will not become stronger at some point. Furthermore, have we duly assessed the challenges that already exist on the road to sustainability and to reducing social fragmentation?
Covid-19 will be here for a while
Although the vaccination coverage rate in Latvia has increased and we have now reached the highest coverage rate against Covid-19 in the Baltic States, the new type of Covid-19 Omicron has made big waves worldwide, including in Latvia. Clearly, the presence of the virus with its constantly mutating kinds will continue to affect the economy. Unfortunately, it will take longer for industries already affected by the virus to recover.
The sooner we recognise that the virus is here to stay, adjusting our policies, the better our epidemiological and economic performance will be. Predictability is important for both businesses and people. Delaying decisions until the last minute, which results in lockdowns, shakes up the economy, and increases dissatisfaction.
The recent rise in inflation, especially rising energy prices, is another challenge. This is expected to not only slow down the economy at the end of the year but also inevitably affect sentiment and purchasing power, especially of the less affluent households.
In addressing these challenges, I do not want to increase pessimism in this beautiful Christmas season. On the eve of the new year, my goal is to call for making tough, and therefore deferred but important commitments.
Following the path of development
The crisis triggered by Covid-19 - now complemented by the energy crisis - are red flags that we have seen fluttering for quite some time now, requiring us to reconsider our traditional patterns of living.
Despite our strong commitment to move forward in line with the European Green Deal, which aims to reduce greenhouse gas emissions by at least 55% by 2030, we remain heavily dependent on fossil resources. In the energy crisis, we are more determined to move away from climate-friendly energy sources than to create alternatives. The direction we all need to take is clear, but I cannot find an explanation for why this is happening so slowly.
I believe that now is a good time to prepare Latvia's national plan for implementing the Green Deal. I will therefore share my view on the specific measures which, in my opinion, will help drive forward the achievement of the green objectives.
1. As part of the national plan, close cross-sectoral cooperation should be established, starting already at the level of public administration, so that we as a country achieve common benefits through synergy between sectors, rather than achieving the green goals at the expense of any single sector. At the national level, an analysis is required of which sectors need organised support to be internationally competitive. This need not always be financial support, it may be supply chain restructuring, support for science and research, and others. We now see that when we pursue a particular goal, we overlook the negative impact on other indicators or industries. For example, the conservation of biodiversity can lead to a significant shortage of raw materials and rising prices in the important sectors of forestry and timber. At the same time, we might help the timber industry by supporting the wider use of wood in construction, the insulation of existing buildings with wood fibre, and the simplification of building regulations.
2. It is also high time to think about setting up green and alternative energy companies. Solar and wind energy may not provide the continuous amount of energy we need, but they certainly reduce CO 2 emissions.
3. The analysis shows that most of Latvia’s emissions are caused by heat generation, transport, and agriculture. I, therefore, believe that there is an urgent need to increase funding for programmes that promote energy efficiency solutions for various buildings, such as the introduction of insulation, solar panels, green roofs, and electricity distribution systems. At the same time, these programmes need to be made less bureaucratic and more accessible, they should also be monitored to ensure that they achieve their goals.
4. The introduction of the long-discussed and widely accepted 'park-and-ride' system in the capital city also needs to be implemented. Such a system will help reduce congestion, improve the quality of the environment and ultimately make the city more people-friendly.
We in Latvia need to finally get rid of our typical single farmstead thinking, "Everything is fine in my backyard, it does not matter that others are not doing well!" I would prefer that we accept what has been accepted in the world for a long time and has shown good results. Development is in full swing and we must go along it.
Lack of education as the division basis
Today, the escalation of the situation in Belarus and Ukraine is causing additional tension. Clearly, not only the national border but also the authorities need to be strengthened. The crisis triggered by Covid-19 has highlighted the excessive tolerance of misinformation. If this matter is left to its own devices, it will be difficult to carry out reforms in the energy sector, as well as in other areas, because there will always be someone who will use our weakness and indecision against us.
People who lack critical thinking skills are the best target for substantiating and proving misinformation. It is therefore increasingly important that we all work together to build an intelligent and educated society that does not cling lightly to populist statements but works with persistent optimism to create value. It is important that people respect the common good of society and not seek only to satisfy their selfish needs.
Therefore, it is recommended that the subjects of critical thinking, debate, and situation analysis be included in school curricula, as well as the teaching of financial literacy by explaining the principles of tax and budget formation. An intelligent and educated society is much less vulnerable and therefore of greater benefit to a democratic state.
Activities aimed at filling the knowledge gaps resulting from distance learning are also welcome. In this context, I would like to make a reference to the recently discussed initiative to create a lyceum that would combine digital and face-to-face learning solutions and allow young people with knowledge gaps in science and technology or the so-called STEM subjects to prepare for general secondary education or university exams. At the same time, the lyceum would also offer adults the opportunity to supplement their knowledge or to retrain.
Build your wagon in the winter and sled in the summer
There are many challenges for the Latvian state and society at the moment. Yet I have always stressed that crises also bring many opportunities - they make us evaluate our performance and think about what we can do better and more effectively. Whether it is sustainability, education, security, or the epidemiological situation, I believe that this is the right moment to act more decisively in all mentioned areas and to move from debate to targeted action.
It is high time to be clear where we want to get and what steps need to be taken to achieve the goals set out in the Green Deal. The year 2030, when we will have to change from old business models to new ones, is approaching faster than we can imagine. It is better to be proactive and understand in good time how we will live in the new world than to try to catch a train that is leaving.