“Sit – two!” Foreign investors evaluate the investment environment in Latvia / Article

On a five-point scale, Latvia’s investment environment is currently rated 1.9, and compared to the 2022 measurements, the investment climate rating has decreased by 0.4 points. The work of politicians in attracting investments is also rated low – only 2.4 points.

“On the sidelines, I had conversations with people who had filled out these questionnaires, and some two or three people said: “I thought after filling out the questionnaire that maybe I was in a bad mood or something, maybe I shouldn’t have been so sharp. And then I thought – well, I couldn’t have put anything better,” said Arnis Sauka, professor of the Riga School of Economics.

On the other hand, Economy Minister Viktors Valainis (Union of Greens and Farmers) admitted: “The assessment is quite clear. It is: “Sit down, two!” But of course, this should be taken very seriously, and we know quite well why that reason is so .”

Latvia has not been able to sort out the main problems and reasons for the low rating of investors for years. These are, for example, the unavailability of labor, low quality of education and the lack of investment attraction mechanisms.

“Let’s be realistic. I discovered this sentiment index here for several years. And the feeling is that the topics we talk about return to the same ones every year,” stated Zlata Elksniņa-Zaščirinska, the chairman of the board of the Council of Foreign Investors.

The most pressing problem, and the one that the Council of Foreign Investors emphasized in the study, is bureaucratization and the work of the state administration.

“The potential to change things and turn them for the better is very large. We actually see such potential from audit to audit. I will mention one example. Literally recently we concluded an audit on such a small matter as the enforcement of fines for administrative fines. More than 1,500 people are engaged in this in our country in different degrees of intensity. We calculated that 30 would be enough,” explained state controller Edgars Korchagins.

Regarding the investment environment, politicians also mentioned other objective reasons that are currently hindering the desire of foreigners to invest in Latvia. For example, the security situation, high interest rates and very conservative bank lending.

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