RIGA - Latvia's economy minister has spoken against importing workers as a way of alleviating the country's yawning labor deficit, while analysts have said that the number of residents seeking employment abroad would increase as more EU member states abolished barriers to new member states.
Economy Minister Kaspars Gerhards said that the idea of inviting foreigners to boost Latvia's workers wasn't a good one despite evidence that outward migration of residents is set to continue.
"I agree that some sectors face problems. At the same time, we have to take into account that the situation on the labor market is changing, and there are industries such as construction that will not see such growth in the future," Gerhards told the Baltic News Service.
"I believe that attracting a foreign workforce should be assessed negatively. So before making particular decisions, we should carefully assess possible gains and consequences," he said.
"I do not think such a decision should be based on short-term emotions," he added.
Gerhards' words echo opinions of many ministers, including Justice Minister Gaidis Berzins, who last October emphatically spoke against bringing in foreign workers.
Labor costs have soared in Latvia, far higher than in either Estonia or Lithuania, which are also struggling with a deficit of working hands. In the third quarter last year labor outlays grew at an annual rate of 32.9 percent, according to the statistics office.
Gerhards said the ministry was working on mid-term forecasts for the market and first estimates might be ready next month.
The minister said that he was aware of the problems in the labor market that have been voiced by employers from various industries. Still, he remained skeptical about inviting foreigners to alleviate the dearth of workers.
In his opinion, businesses would be better off opting for long-term decisions on a partial or full restructuring rather than on short-term solutions such as inviting foreigners to work.
Meanwhile, an economist at Hansabanka has suggested that the labor crunch is likely to worsen since Latvian residents would continue leaving the country for better-paying jobs abroad.
"Labor migration will surely continue. It can never stop completely. Even residents of the wealthiest countries sometimes opt for work in foreign countries," Peteris Strautins said.
He said a new major wave of emigration was unlikely unless a very bad scenario unfolds with a steep surge in unemployment and a drop in real income.
"The decision to go to work in a foreign country is not determined by economic factors alone. The emigration wave that started following the accession to the EU, I think, has already partly exhausted the resources of people with disposition for fast changes in their lives and taking risks," the analyst said.
Strautins predicted that Ireland and Great Britain will remain popular host countries among Latvian guest workers, but that the number of those moving to continental Europe and the Nordic countries could also increase.
Citing Latvia's balance of payments, Strautins pointed out that Latvian guest workers' earnings sent home in the first quarter of 2007 reached 214 million lats (304.5 million euros). During the same period in 2006, the figure was 199 million lats.
"It means that either emigration from Latvia has stopped or even a reversed process has started, or links between guest workers and their relatives in Latvia are becoming weaker, or relatives join those working abroad," Strautins said.
No one knows the exact number of workers who have left, with various government estimates ranging from 30,000 to 100,000. The Welfare Ministry has claimed that 50,000 people have left since Latvia joined the EU in 2004.
The largest number of emigrants 's more than 23,000 people 's is in Great Britain, and over 18,000 are working in Ireland.
