RIGA - In three or four years, when the privatization process is concluded, a new agency for the management of state assets could be created on the basis of the current Latvian Privatization Agency (LPA), recently-appointed LPA Chairwoman Iveta Zalpetere said in an interview with the business portal Nozare.lv. According to Zalpetere, there are two possible scenarios for restructuring of the LPA for the government to choose from. “The first is that shares in several state companies are put under the management of the LPA. The second is that the government decides that the LPA’s resources are no longer required once privatization is complete, and the agency is abolished. In my opinion, the LPA’s resources should be utilized for the administration of those state-owned shares which are currently held by ministries’ state secretaries,” explained the LPA chairwoman.
The current model, where the ministries simultaneously create state policy and manage companies, is rated by Zalpetere as inefficient, as these are completely different functions. She points to the example of Finland, where companies of a commercial nature which belong to the state are placed under the administration of a single institution.
“Only specific companies which fulfill significant social functions are left under the management of the ministries. Otherwise, a conflict of interest arises, as ministries administer companies’ shares with the aim of making a profit, and at the same time often decide on carrying out social tasks which are in contradiction with the commercial interests of these companies,” said Zalpetere.
The LPA director indicates that in reforming the agency as an institution for the administration of state assets, restructuring would be necessary, as would the attraction of new specialists, as more extensive knowledge of business, economics and the banking sector would be required, as well as the English language, due to the LPA’s close cooperation with the European Bank for Reconstruction and Development.
The idea on reforming the LPA for this purpose could be implemented once the government decides on what state-owned shares are to be privatized and which are to remain in state ownership, a decision which could be taken this year.