Latvians urged to go back to farming

RIGA - Latvians lack a healthy national self-confidence, the famous Norwegian economist Erik Reinert said in an interview with the business magazine Kapitals, reports Nozare.lv. It is planned that Reinert’s book ‘How Rich Countries Got Rich... and Why Poor Countries Stay Poor’ will be published in Latvian by the end of this year.
Reinert believes that, even though the current immigration numbers are “extremely dramatic,” the Latvian government still has several instruments to improve the situation in the country, or at least prevent it from deteriorating further.
“Re-industrialization is the only solution,” emphasizes the economist.

He emphasizes that the government should not allow further privatization of state-owned companies, which would be a “shortsighted solution.” These companies usually wind up in foreign investors’ hands, who are frequently connected with foreign governments. This basically means that Latvians are being told that their country is worse than others because it gives away its companies.

The economist recommends considering turning to agriculture. “During good times, people move from rural areas to cities; during bad times it is the other way around.”
Reinert criticizes banks, which previously served as a bridge between businesses and their goals, but now have become “parasitic organisms.” Theoretically, in case of bad loans, the banks should take the risk and lose. However, at the moment, they are demanding to be rescued.

The expert also criticizes bank bailouts, which are in contradiction with ‘natural self-purification.” If the country’s banking sector greatly exceeds its manufacturing sector, then it is one of the main signs that something is amiss.
Commenting on the current situation in the European Union, Reinert says that Latvia was one of the first member states to be affected by the crisis and among those which suffered the most. However, the situation in Lithuania and Estonia was only slightly better.

At first, it could seem that something was wrong with the country itself; however, now, when the same is happening in Greece, Iceland and Italy, it becomes clear that the system is to blame.

The noted economist emphasizes that Latvia’s main losses are those thousands of residents who have left the country, or continue to leave it. “Those who leave Latvia are socially active. They are the ones who should stay and establish new companies. Capitalism is based on capitalists who create new jobs. What will happen when they mass migrate?”
If a country faces mass migration of doctors, IT and other highly-qualified specialists, Europe will inevitably divide into rich and poor countries. Unfortunately, economic theory could not predict such a twist. “Most of the politicians still do not realize that the EU model is an illusion. They believe that it cannot fail, whereas it has already done so,” claims Reinert.