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RIGA - The Latvian government on Tuesday upheld the bill drafted by the Ministry for Environment and Regional Development (VARAM) about creation of the Latgale Special Economic Zone (SEZ) in eastern Latvia.
The Latgale SEZ is to be established to facilitate development of the Latgale region by attracting investments for development of production and infrastructure and creation of new jobs. An expanded special economic zone in Latgale is an appropriate solution to improve the economic situation in the region which is currently socially and economically underdeveloped, the VARAM said.
The bill lists a number of criteria that would make territories eligible to the SEZ status, including ownership, existing infrastructure, planned investment in infrastructure development and expected benefits from the SEZ status.
The right to determine the territory of the Latgale SEZ will be delegated to the Cabinet of Ministers, but the ministry has prepared a preliminary list of the municipalities that could be included in the new SEZ. The total area of the Latgale region is 14,549 km2 but the maximum size of the Latgale SEZ will be restricted to 5 percent of this total or 727.45 km2.
VARAM said that socioeconomic development in Latgale was much slower than the average rate in Latvia. GDP per capita in the Latvian capital Riga is nearly three times higher and the country average is almost two times higher than in the Latgale region. Unemployment in the region also remains high at 12.1 percent as opposed to the Latvian average of 8.3 percent in 2014.
It is planned that the Latgale SEZ will exist until December 31, 2035.