Next government must ensure a clear economic development policy - Employers' Confederation

RIGA - The next government must ensure a clear economic development policy focused on Latvia's economic growth and competitiveness, Kaspars Gorkss, Director General of the Latvian Employers’ Confederation (LDDK), told LETA.

He noted that the outgoing government could be described having the right words and slogans, but these were not followed by action. The rhetoric included cutting government spending, reducing bureaucracy, imposing wage caps, and a 4x4 boost, but in reality, government spending increased, the state budget faces negative fiscal space in the coming years, the reduction of bureaucracy has turned into a bureaucratic process, and the national debt has risen sharply.

Decisions got lost in drawn-out, unclear procedures, resulting in rushed and chaotic actions. Many plans and documents were drafted, but implementation got bogged down in bureaucratic red tape, Gorkss noted.

He also noted that no human capital policy was developed or implemented, reducing the ability to compete with neighboring countries for labor and talent. Government spending was not reduced, resulting in negative fiscal space for the coming years, which may limit the implementation of future priorities. Export statistics have stagnated in recent years, and the national economy is largely sustained by public spending.

When asked what he expects from the next government, Gorkss noted that a clear national policy focused on Latvia’s economic development and competitiveness is desirable for the future. For Latvia to be a prosperous and sustainable country, a strong economy is necessary - a larger and more open labor market, a reduced shadow economy, and investments in research and development. This requires the timely preparation of the 2027 state budget, where reducing government spending is essential, along with a clear plan and procedure for reducing bureaucracy, as well as a goal to reduce the number of public sector employees.

Gorkss stated that entrepreneurs expect predictable fiscal and tax policies that promote investment, export capacity, and long-term economic growth.

The LDDK believes it is essential for the government to honor the agreements reached during social dialogue and ensure that key decisions on the budget, tax policy, and labor market issues are made in a timely and predictable manner, in close cooperation with social partners, Gorkss noted.

LETA reported that on Thursday, May 14, Prime Minister Evika Silina (New Unity) announced her resignation. This decision was made following disagreements with the Progressives, a member of the coalition, who on Wednesday, May 13, called on the President to begin consultations on the formation of a new government.

LDDK is an organization representing employers in Latvia. Since 1993, LDDK has represented employers’ interests in social dialogue with the state and trade unions. LDDK brings together employer and industry associations, as well as companies with 50 or more employees.