Ministry readies a finger for the dike

  • 1998-10-01
  • Sandra L. Medearis
RIGA - Jobless rates are on the rise in Latvia. A small jump in nationwide figures, from 7.3 to 7.4 that translated to an increase of 904 registered jobless occurred in August, but economics departments say the rise in unemployment will be much greater for September.

When September figures are compiled, there will be about 5,000 more left jobless by Latvia's loss of export volume and the toll on peripheral industries in packaging, containers and transport, according to Aris Bisers, deputy head of the state Employment Service.

Plants making machinery equipment and coastal areas where industry involves fish processing have been hit.

The biggest decrease of exports in the second quarter of 1998 showed in metal products, industrial parts and machinery manufacture, a sector that lost 27.5 percent of export volume and chemical and related industries that dropped by 43.7 percent, according to figures from Agris Skuja, director of the Ministry of Economy's Industry Policy Department.

To fend off jobless increases and bigger hits to the Latvian economy, the Ministry of Economics has drawn up a two-year, 580,000 lat ($1 million) plan for enterprise support with money from the state budget and from the EU-Phare program. Money would go to Latvian enterprises selected by a competitive procedure. The strategy centers on increasing Latvian export potential by implementing export strategies and exploring new markets in the West, Central Europe and former Soviet countries such as Turkmenia, Uzbekistan, Tadjikistan and Kazakhstan.

The goal is for the government's investment of 200,000 lats to bring back 1.4 million to 2.4 million lats.

But the potential is greater. If Phare throws in 380,000 lats to bring the kitty to 580,000 lats, the Ministry of Economics predicts a possible return of 4 million to 7 million lats.

Carrying the agency's hopes farther, financial support of exports could bring 1,600 billion in export return compared to 795.2 million in 1996 and 971.7 million in 1997. Not only would program participants see an increase of 10 to 20 percent in export volume with government support, but the government would win too, getting 20 percent for the state budget.

Fifty or 60 enterprises selected from the country's approximately 3,000 exporters would receive money to finance marketing activities abroad including brochures, visits to trade fairs and the costs of ISO 9000 for sales abroad.

To qualify for the export assistance, a private enterprise must manufacture products on Latvian soil and select and understand the needs of target markets. A bigger catch is that the company must pay its own expenses up front for the marketing program and then present expense receipts for reimbursement.

In eastern rural Latvia districts, untouched by industry except along the coast, the unemployment rate remains steady; Rezekne has 27.1 percent, Prelli, 22.6 percent and in Balvi, 22.2 percent. In Riga where banks and bureaucracy help to meet payrolls, the unemployment rate is 3.6 percent.