Ladies and Gentlemen,

I am pleased to address here today the Swedish business representatives and third East Capital forum.

The good news is that over the past years East Capital has invested in Latvia more than 22 million US dollars, but only 13% of the total East Capital investments has been made in Latvian economy.

The economic relations of Latvia and Sweden have a long history.

They started right after Latvia regained its independence and gradually reached the level where we are today.

Trade within the region was the first opportunity for Latvia to learn what export, free market, currency, and supply contracts mean. It was a very useful school of life where not all lectures were pleasant.

When the situation gradually changed, Sweden became one of those countries that started investing in Latvia thus promoting modernization of Latvian industry.

Today Sweden is number one investor in Latvia.

Over the years Sweden made a further step and opened in Rīga a branch of the Stockholm School of Economics, thus ensuring training of professional economists and high-level managers.

Step by step Sweden has also become involved in the banking and capital sector of Latvia.

Even more – East Capital today is actively involved in Riga Stock Exchange activities.

On the other side, governments of Latvia have systematically implemented a consistent economic policy, and today we can take pride in the highest growth rate in the European Union.

At the same time we can also be proud of the steadily increasing export volumes.

The business environment in Latvia is characterized by liberal understanding of the market.

Also in the EU we support the strengthening of liberal economic policies.

I am sure that in global market conditions only liberal and open economies will be able to ensure necessary growth in the long term.

What are the next tasks for the government of Latvia?

Firstly, the government is paying particular attention to developing the science and education sector.

Secondly, the government systematically works on increasing the competitiveness of the Latvian economy.

These are complex tasks, but their implementation will ensure further development of the national economy.

Over the last 15 years the geopolitical and economic situation in the region has dramatically changed.

Latvia and Sweden together with other neighbouring countries have become member states of the European Union.

Today we are part of a single 450 million-strong market.

This has created new opportunities both for Latvians and for Swedes.

Over these years Latvian businesses have accumulated experience and capital and from simple cooperation partners are slowly becoming investors – also in Sweden.

Latvian businesses have acquired their experience under conditions of tough competition and today when they turn into investors they want to see open markets and open competition.

For this reason the government of Latvia strongly supports liberalization of the service market in the European Union.

How should the economic cooperation of Latvia and Sweden develop further?

In my opinion, the cooperation of both countries still has great potential – not all opportunities have been used, and not all limits have been reached.

Business communities in both countries should promote cooperation with science.

I invite Swedish businesses to create science and excellence centres in Latvia that would serve for developing the technological potential of both countries.

Such cooperation will be beneficial for everyone and would ensure the high rate of competitiveness of our region in long run.

Latvia is rapidly developing as a service centre, including provision of services also to Sweden. I encourage expanding and deepening this dimension.

Latvia can serve the Swedish market and at the same time provide Swedish companies with services, for example, in the CIS countries.

I do believe that working together Latvian and Swedish companies could achieve good results in the Russian, Ukrainian and other markets.

Latvia can provide the necessary knowledge, provide with staff, which speaks the language and additionally provide good base for the logistics.

We all witness the rapid economical development of Asia.

No doubts this development will continue and trade with Russia and Asian countries will increase significantly.

Already today 7% of Swedish export goes to Russia and Asia and 12% of Swedish import comes from Far East.

It means that there is a need to develop new transport schemes to absorb increasing trading volumes between Far East and Latvia, Sweden, Scandinavia and Europe.

My government has developed dialog with Russian, Kazak and Chinese governments and business communities in order to set up the New Silk Road from China to Europe and offer transit route using railway connections. This route would shorten the transit time of goods almost 3 times.

I do believe that Latvian and Swedish businessman can find a common language and try to use these new opportunities.

And even more.

The mutual economic cooperation of Latvia and Sweden will become even more dynamic if we jointly create an increasingly competitive freight transportation system between our countries.

During the recent years particular dynamism can be observed in the development of the Latvian tourism industry.

I see many cooperation opportunities in this segment of the economy.

I would like to stress that in the context of tourism sector Latvia and Sweden must not become competitors.

Our joint efforts should be made to look for ways and opportunities to increase mutual tourism flows between our countries and simultaneously ensure common interest of tourists from other regions of Europe, United States and Asia about Latvia and Sweden, about Rīga and Stockholm.

Finally, no doubt, in the framework of the EU Latvia and Sweden are both partners and competitors.

But at the same time I would like to encourage to jointly think about those opportunities, which businessmen can use for making the goods produced in our countries more competitive on the global market, and to look for innovative solutions in entering new markets.

In my opinion, Latvia and Sweden must look for such forms of cooperation that would provide our countries with export opportunities to the North America and Asia.

Ladies and Gentlemen - I wish you successful discussions during this forum and encourage becoming aware of the economic advantages of our region, which we can successfully use far beyond its borders.

Thank you!

(For information about the East Capital Baltic Summit, please see: http://www.eastcapital.com/popups/riga/popup_en.php)