RIGA - Those beautiful new roads you've been cruising along are there, in large part, thanks to EU structural funds, part of the European Union's vast money transfer program, which in essence provides for a flow of financial support from richer to poorer member states. During the first phase of the program in which the Baltics participated, running from 2004 - 2006, structural funds came from four categories: the Regional Development Fund, Social Fund, Agricultural Guidance and the Fisheries Fund.
The money, intended for both public and private sector projects, was spread around a wide range of interests and included anything from investment in rural health care facilities, to providing work-skill training programs, to promotion schemes for new market outlets for the fisheries industry.
Latvia received an allocation of 856 million euros in structural funds, including co-financing funds, while Estonia procured 370 million euros, and Lithuania 895 million.
In theory, to access the money, the small business owner, entrepreneur, wanna-be crawdad farmer, for example, need only have a plan and apply for the money at the appropriate office.
In practice, however, one had to deal with reading through and understanding all the paperwork, navigating unwieldy bureaucracies 's managing office, payment office, first- and second-level intermediaries, supervisory commission, project approval committees. Even then, if approved, the money was still made available only upon completion of the project, which meant that one would still have to finance the project initially on his own.
Environmental and green tourism programs attracted strong interest and funding. Evija Brante, project manager at environmental consulting group ELLE, cites a project in Kaunas in which they completed a noise map for the area around the airport. They did a similar study for the Riga city planning department.
Policy initiatives in Lithuania covered "development of conditions for lifelong learning, improvement of human resources quality in scientific research and innovations and development of infrastructure of education, vocational training, research and study institutions," reports Rima Martineniene at the division of the EU support coordination. Specific projects toward completion include three new infrastructure objects, the modernization of 1,039 education and science institutions and 651 new jobs.
Sanda Rieksta, head of information at Latvia's Ministry of Finance, claims the first phase of funding a success, with over 5,000 projects approved. One example was Varis Toys, in Renceni, northern Latvia, which secured structural funding of 23,200 lats (32,800 euros) to offset its total 66,400 lat investment in new production equipment and machinery, including saws and storage equipment.
Besides allowing for facility renovation and higher quality output, the funding helped provide new jobs.
Rezekne's Vocational School No. 14 as the final beneficiary secured funding of 81,900 lats from a total spending chest of 102,300 lats to establish a construction technology-training center and to modernize its training equipment and facilities. Together with the State Employment Agency, the school will offer local residents 's adults and students 's opportunities for education and training in higher qualifications in construction. And as everyone knows, Latvia desperately needs new builders.
Not surprisingly, governmental projects took the lion's share of the 2004 - 2006 allocation, with spending priorities concentrated on municipality-directed projects. Much of this centered on policies of promoting competitiveness and employment within the regions, and the development of human resources and infrastructure as designated targets. Money has funded professional schools, social care institutions, dump-site re-cultivation and research center support.
Planning in Latvia for the 2007 - 2013 funding period is nearing completion, with priorities targeted in three general areas, says Rieksta: human resources and employment, entrepreneurship and innovation and, with 71.6 percent of fund allocation, infrastructure and services.
About 4.6 billion euros are scheduled to be rationed out in Latvia over the 2007 - 2013 structural funding phase.
Lithuanian and Estonia will respectively expect to receive 6 billion and 3.4 billion euros for their second phase projects.
Brante says that second phase funding will finish the job of closing down about 500 Soviet era waste dumps around Latvia, work that had already begun under first-round funding, and will help finance completion of 10 new land-fill sites around the country. Environmental priorities will also be to improve waste water systems and drinking water infrastructure for small to medium sized towns in Latvia.
Rieksta says the first period was also a crucial learning process. Lessons assimilated include the observation that there were "too many layers of management involved" in the decision-making process and too many lines of communication that in the end bogged down the approval process for individual projects.
All decision-making on project approvals will this time be done within a three-month deadline. It will also be important for the applicant to be more precise and specific in defining their project.
The new system will also be more transparent, with an equal approach to all applicants. Whereas the old approach in "open call" bidding, in which anyone can bid on a government project (resulting in some parties receiving bidding information before others), now once the conditions for a specific project are announced, there will be a one month silence period for everyone to review the details before bidding begins.
In Lithuania, one of the core problems was the discrepancy between EU structural fund regulations and national laws, which caused difficulties in project implementation. Another was a lack of human resources, mainly around competencies in administration of structural funds on all levels.
Some of the legal discrepancy problems, says Martineniene, have already been solved. Technical assistance under the structural aid has helped with developing human resources for administration of the EU structural support.
And looking to implementation of the next program phase, she adds, "There are plans to reduce bureaucracy in the period of 2007 - 2013 by finding better solutions in some areas of administration of EU structural aid."
A tremendous amount of money has already flowed into the Baltics under the structural funds program, and much more is on the way, though it's not always visible to the average person where the money goes. When it's possible to cross the country on a newly paved highway, or turn on the spigot and have clean water pouring out, you'll agree with Rieksta when she says it's working. In her words, "It all benefits us and has improved the life around us."
