Positive economic news- LV Econ Minister

  • 2009-07-21
RIGA- The Latvian Institute has released an uplifting interview with the Latvian Economics Minister Artis Kampars, saying that not all news is bad news.

As the Minister of Economics could you give us some good news?

A. Kampars: I truly believe that much is happening for the good, including in the processes we
call the economy. You can measure it and there are justifiable signs that the downturn has ended
and in some sectors we are coming back. Two of our traditionally largest export sectors 's food
production and wood processing 's have seen increases from month to month since February.
They have been able to produce more and export more. That is what this country needs 's an
increase in competitiveness and exports. Our analyses show that the growth of GDP based on
domestic consumption was a brief illusion, not a long term development. We perceived that
borrowed money was our money, and as huge optimists, we spent it. We were used to the fact
that that each year, by a small percentage, this money would increase. Falling into a crisis, the
economic fall seemed like an invincible evil and the situation seemed hopeless. Yes, the downturn
is deeper than in a normal recession, but clearly, this is the only way to overcome excessive

Overcome too much of a good life?
Something like that. To get away from the "belief" that everything will develop very quickly and
that we would have to work less. That we could just enjoy ourselves and in 5 to 10 years jump
into a European standard of living, which other countries have been developing for tens and
even hundreds of years. We would like that, but in reality, such rapid development doesn't
happen. Thus, some other positive news is that the Latvian who in our folk songs praises
enterprise and hard work is slowly realizing that we have certain values and we are returning to

Everyone was delighted that cursed socialism was gone and now, finally, we can live like
real people. Good apartments, good cars…

That's an understandable desire. But we apparently lacked experience and a clear understanding
that allowed us to evaluate the fact that massive advertising campaigns on TV and elsewhere that
say "borrow, borrow!" are followed by a quiet revelation 's this money must be paid back at some
point. It was loudly stated 's enjoy tomorrow today and take credits to buy a bicycle or a trip to
Egypt. In these temptations Latvians lost their cautiousness and didn't evaluate the circumstances
in which they would have to live later. I would like to continue in response to your invitation to
give some good news. During the last 15 years, in a desire to dress well, acquire the best
electronics technology and other consumer goods, imports noticeably exceeded Latvian
manufactured exports. Presently this balance is finally leveling out. In the first quarter of this
year we actually exported more than we imported. That's an important indicator. Also in the
future in the global marketplace we will have to sell things that we are capable of producing and
exporting. The world has become so 'small' that the end goal of manufactured products can also
be lands as far away as Japan, Canada or Indonesia 's and we are working in all these places. The
first projects that were related to guaranteeing our exports were directed to Somalija and
Tajikstan. And that is good that we can trade with such exotic countries, receiving real cash,
regardless of whether it's in pounds, dollars or euros. Today I would like to say that on the
whole, signs indicate that the most serious problems and the deepest crisis period, most likely,
has been survived.

Could you be more concrete about these "signs"?

You see, if the wood processing companies are working at full capacity again, in several shifts and
are hiring employees again, then that means jobs and taxes for the state. Yes, people are losing
jobs in the public sector, which exacerbates the unemployment problem, but we have to reduce
the bloated bureaucracy, where we had twice as many civil servants per inhabitant than Estonia.
Secondly, the food production sector has regained its competitiveness and export ability because
it has increased its productivity. That means that companies have freed themselves of
unnecessary workers and are making products at a lower cost which they can successfully export.
This of course doesn't improve our unemployment numbers, but in the long term this boost in
food product exports will continue as we find and expand our external markets. Then these
companies will start hiring workers again.

What about tourist complaints concerning some night clubs and taxi cabs in Riga?

The Ministry has submitted its proposals to the government. We recommend that the police be
given the authority to curtail the activities of those entertainment establishments which are
known for fraudulent practices. We have identified cases where tourists have been cheated. We
have also recommended that the beer and alcohol licensing commission be allowed to reject new
licenses to businesses that have previously been guilty of violations. We have also planned much
harsher fines for taxi drivers and cab companies that have committed violations, including the
revocation of licenses for a period of time. In my view, those companies that have been caught at
cheating tourists and fined once must face stronger sanctions if these violations are repeated. We
must prevent them from continuing these fraudulent "services". Yes, the process of change is
slow and we have been aware of it for a long time. We are trying to bring about a faster
implementation of new regulations.