Pirated software curbs budgetary income

RIGA - Software piracy costs Latvia 55 million lats ($88.4 million) in lost retail revenues and 15 million lats in lost tax revenues each year, according to research presented in Riga on April 10 by the international market analysis company Datamonitor.

In Latvia, 77 percent of all software used is pirated, the research shows.

"Software writing is one of the most rapidly developing industries in Latvia, with exports exceeding imports, but piracy results in distortion of honest competition and has a highly negative effect on development of the industry," Janis Bordans, a representative of Business Software Alliance, told reporters April 10.

A Latvian system administrator, who asked not to be named, said: "I would have to starve and work for 10-20 years to buy legally all the software I am using."

Director of the Latvian in-box-software developer Tilde, Uldis Dzenis, says that users of pirated software "take money from us and we don't have resources for development."

He also implied that because of the high piracy level large global companies aren't willing to localize their products on the Latvian market.

However, software users from Latvia are not thrilled with the Latvian version of Microsoft Windows, claiming that the language used is ridiculous and adaptations are unsuccessful.

"I just took a look at it once and said 'never again,'" said Artis, a Web designer and HTML programmer.

Gundars Kulikovskis of the customized finance software developer Batsoft claimed that "piracy doesn't give software developers the opportunity to bring profits to their country."

He also compared software market prospects in Latvia to other industries.

"We have all the resources for developing the market, it doesn't pollute the environment, it doesn't destroy our woods, all the products that we make are 100 percent recyclable, you can put the green label on them," he said.

Software industry employees are better paid than workers in other spheres, earning about 77 percent more than the average.

The industry contributed 16.5 million lats to GDP in 2000, with 4 million lats in tax revenue.

Bordans of Business Software Alliance, which fights piracy, stressed the legal point that "Latvia has joined copyright protection agreements and people using pirated software are violating the law."

When asked about the alliance's activities in this area Bordans commented: "There are five criminal cases based on software piracy and one of them is already in court, but the negative thing is that criminal cases take a long time, from six months up to two years. For administrative cases, time is shorter. We have signed an agreement with some lawbreakers, that they will pay the fine which is provided in the copyright law."

He also promised that police raids on companies will continue.

Datamonitor has carried out similar surveys in Lithuania and Estonia, which will be published in four weeks' time. Comparing the three Baltic states, Marc Hardwic, managing consultant of Datamoni-tor said that "Latvia is a little above Lithuania, but Estonia is doing best, probably because of its closeness to Finland, which has one of the most sophisticated markets in Europe."

When asked to disclose figures, Hardwic said that his opinion is not based on figures but on overall performance, which he noticed during his work in the Baltics.