RIGA - Latvian Foreign Minister Maris Riekstins (People's Party) met with Austrian Foreign Minister Michael Spindelegger Aug. 25 to discuss bilateral relations between the two countries, as well as other issues on the European Union (EU) agenda, reports news agency LETA. The two ministers reviewed the process of preparing the European Union Strategy for the Baltic sea region, which is the EU's first internal long-term strategy for a 'macro-region' that is based on an integrated approach to the implementation of EU policies.
The Austrian minister said that the strategy for the region "is like a pilot project for other European macro-regions," and he emphasized the possibility to transfer this experience when developing a strategy for the Danube region. Riekstins said that he "commends Austria's interest in bringing the experiences of the Baltic sea region to other regions of Europe" in the context of overall EU strategy.
European Energy Commissioner Andris Piebalgs said, at the opening of the Economy Ministry's conference 'Latvia. Growth. Welfare,' that "setting out priorities in the national economy is the right decision by the government." Latvia's National Development Council is currently discussing formulation of the country's long term development strategy, looking out to 2030.
Piebalgs offered that Latvian business should concentrate on EU markets, which offer broad possibilities for growth. At the same time, he said that "Banks must take moral responsibility for the economic situation in the country, because the government has invested huge amounts in the stabilization of the financial system, but without co-financing from banks, the economy's recovery will be difficult."
The energy commissioner stressed that Latvia's development must be based upon utilization of [its] renewable energy resources, but notes that "The government is working on increasing competitiveness."
Latvia's GDP for 2013 is forecast to be about 15 billion lats (21.4 billion euros), according to the Strategic Development Plan for 2009-2013, against GDP in 2007 of 14.8 billion lats. This medium term regional plan prioritizes three areas: economic development, the strengthening of social security, and the improvement in effectiveness of public services.
It includes an emphasis on improving workforce skills through better education, which will stress competence in areas such as mathematics, science and technology. It is hoped that this will lead to high tech industry exports out of Latvia increasing from 4.2 percent in 2006, to 5.4 percent in 2013.
Simultaneously, there should be an increase in financing for science-based industry, research and development in the country, from 0.6 percent of GDP last year, to 1.5 percent by 2013. Combined private industry and government spending in the U.S. on research and development is approximately 2.6 percent of GDP; in Germany it is about 2.5 percent of GDP, reports the National Science Board.
The plan also calls for exports, in both goods and services, to outpace private consumption over the period, which would serve to maintain a sustainable, positive current account balance.
Latvia's government, however, is still dogged by the perception that it is "not doing its job," due to poor communication with the public, says a recent report from Swedbank. The report says that it is "extremely important [for the government] to plan the 2010-2012 budget and structural reform implementation process over the next three months, as short-term government actions determine business and public confidence, and [affect] longer-term development".
