Unfortunately, it turned out that way – if you want to achieve great success, then you just have to leave Bauska, and this is the way of life for the former Bauškė resident, president of the Confederation of Latvian Employers and board member of the fish processing company SIA «Karavela» Andris Bit, whose opinion was asked by «Bauskas Dzīve» about Latvia’s 20 years in the European Union.
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SIA “Karavela” once had to endure the loss of the Russian market, and currently the largest export market of the company is the countries of the European Union. What would the situation be like if we were not in the European Union, what are Latvia’s current economic and political challenges in the overall context and future development scenarios?
What would we be if we did not join the European Union?
– How the country would have gone bankrupt. We would be locked into a very small market or even part of Russia. In addition, in the financially very small internal market of Latvia, because the surrounding large markets would be separate. We would be a third world country for the European Union market. Now we have the opportunity to operate in an open and huge market.
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The second thing is that life shows that our government needs supervision “from above”, otherwise it fixes problems in three seconds. Good thing there are rules to follow. Another thing is whether we have used all the resources we could use.
What changed after joining the European Union?
– It became much easier from a business point of view. Before that, each country had its own requirements, its own customs system. The shipment to the Czech Republic had to be formed in one way, to Slovakia in another. Now load the goods and forget. We got a big and free market where everything depends on financial ability, activity, process and in most cases the market is not regulated.
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There were many restrictions on fisheries?
– There were nuances, such as the regulation on benzopyrene smoking, but we showed that we can fight in Europe to change the regulation. There were no other restrictions. The European Union has a common fisheries policy, but it is not wrong – it is bureaucratic, cumbersome, but not wrong. We promote the story about the ship being cut, but nothing crazy happened – they used the money either for themselves or for the modernization of other ships. We lost the deep sea quotas, but it happened in a short-term process because of ourselves.
Was there a benefit in gaining knowledge and experience?
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– If you are in the free market, in large circulation, then it is an opportunity to work with the largest European companies, traders, networks, gather information. If you are a professional, you can be on the same level as the players of old Europe. The availability of European funds made it possible to “take” technologies that they themselves did not have the financial opportunity to buy. In my opinion, as a country we did not use it very successfully, but those were opportunities.
It is a mistake that funds were often used for the process rather than the purpose. For example, they studied how to build a factory instead of actually building it. This is a big difference with Lithuania, which was able to build new factories without demolishing the old ones, used funds to increase its strength and entered the European market with greater capacity.
If you look at it from the point of view of movement?
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– Before that, it was the same world, but with borders, expectations and visas. We still lived in a time when you couldn’t even dream of going to Poland. It is a value that you can now get into a car and drive to the edge of the African continent without stopping. There are also formal borders with countries that are not in the European Union. It is a great value.
There are also cons in this system?
– The stronger economies took over the weaker ones. It is normal, it is a natural process, when Western European companies, taking care of preserving or growing their market, bought Latvian companies, which were liquidated immediately, in order to maintain their place in the market. It was a negative side, although completely normal from an economic point of view.
The other side – “sucked” a very large amount of labor, but this is also normal, because in the free market you have to pay with something. If you count the number of people who left, add their contribution to the budget of other countries – these are huge amounts. But this is the reality of life all over the world.
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Do we have to think about bringing labor into Latvia?
– In the confederation, we divided the issue into two large parts. We must actively start working on the involvement of the resources we have here in the labor market. People with disabilities, employment of pensioners, greater involvement of young students in the labor market. If the policy is changed, we can return, at least partially, 70 thousand people to the labor market. And every ten thousand involved is about one hundred million euros in taxes.
The attraction of labor from third countries is inevitable. The question is how do we do it – smartly and reasonably, or by letting immigrants in and not making them work. You have to trust the employer, determining the regions from which we want people, or determining the regions from which we definitely do not want them, and on fixed terms – work and go back home. Do not root them here for a long time. Currently, the process is chaotic, non-transparent. Coming in through Poland and Lithuania, there is no order.
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That imported labor will be a reality and everyday is inevitable. In the history of Latvia, entrepreneurs have always lacked employees. It is possible that we can live with a smaller number, but then we must concentrate 80 kilometers around Riga, and the rest of Latvia must simply be left to grow. Then it can be done.
We are currently a family of five, grandmother is retired, living in a house with an old-fashioned heating system, and we think everything will be very good, and one of them all works. It won’t happen. It is not a viable system if less than half of the country’s population is employed.
Were the European Union and NATO good for us as security systems?
– If we had not joined the unions in some fit of insanity, we would be in Ukraine’s place. Would walk with tricolor flags even without shooting and big war. Enlisting was absolutely the right path. True, Europe still does not realize that it is necessary to take care of its security, it is only beginning to realize. You can’t always rely on the USA – there it’s a game of interests, for us it’s survival. Strengthening your military capabilities is important.
On the other hand, if everyone is going to be in Spain that day, NATO is unlikely to help. As a nation, we must want to stand up for our land and fight on our own. If necessary for security reasons, a war tax can be made for two or three years. At least let’s understand what we are paying for. From what is happening in Ukraine, one can understand that security is not a guaranteed thing.
There was an idea that there could be a Council of Ministers of the Baltic States to equalize taxes and the requirements of the business environment.
– Theoretically a good idea if it happened 15 years ago. Currently, we are one generation behind in economic development from both neighbors, we can only lose. The average citizen would feel even better, but the national capital would have a hard time. Lithuania and Estonia are the same potential threat as the Scandinavians were 20 years ago – they come, buy a company, close it, and that’s it. We would be losers right now.
How then can we compete with our neighbors and in Europe?
– Estonia is a good example when, after being successful and rich for a longer period, they started to get “obese”, and the system started not working – business leaves because it becomes too expensive. Our opportunity is to work with still relatively low costs – we need less bureaucracy, less state apparatus. We have more work to do, and the state must invest, find financing, so that entrepreneurs can build, find a new market.
We don’t have enough capital. There are more than ten billionaires in Estonia and Lithuania, none in Latvia. This is where new factories are born. We have no national capital and investors are afraid to come because of politics.
The support of the European Union helped us to grow and sustain, but such a positive development trend is missing?
– It was our internal problem, not an EU problem. We didn’t live up to the potential. The market opened up huge opportunities, the money had to be turned much more into production projects than cultural centers and swimming pools. After that, swimming pools can arise from budget money, but factories will not arise. Estonia took a fast path, became a service base for Finland, where at one point the demand went to a cheaper market, but the big factories could no longer “take” anywhere. Lithuania chose the path of industry and is growing very fast and successfully.
We have to get to the point where we declare that our economic “religion” is export. No matter what kind of export. But for us, all bright minds shared the market and local funds. Many national entrepreneurs chose to sell their companies, exchanging hard but promising work for quick money, which was then often left in banks or in some projects.
Future predictions?
– If we don’t change anything radically, then it’s as if we’re driving in the right direction, only sometimes too slowly. We will be the economic periphery of Europe – something between Romania, Bulgaria or beyond. Nothing crazy will happen, only the standard of living will be lower, young people will continue to leave.
The second option, where both the people and the government must come together, is to work more. As long as there are protests against new factories and facilities, we will not move forward. We cannot build a pig farm or a wind farm. Nothing. In theory, if we are not ready to change, we can also lose our country. If Russia decides to find the weakest link, it will most likely be Latvia.
Photo: Screenshot from jauns.lv video
Tags: European Union bad worse BauskasDzive .lv
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