During the first half of 2011, 160 investment project requests have been received, thereby the foreign countries’ interest in investment opportunities in Latvia is much greater than in 2008 when 158 applications for investment projects were received, said Māris Ēlerts, representative of the Investment and Development Agency in today’s meeting of the Coordination Council for Large and Strategically Important Investment Projects.
Moreover, in the first half year, already six investors have made decisions on the implementation of investment projects in Latvia, which amount to EUR 170 million and will result in more than 150 new jobs.
“After overcoming the crisis, the main emphasis should be on the investment attraction that will strengthen the production and export as the main driving forces of the Latvian economy as well as will create new jobs. Along with increasing investors’ interest also the competition for investment among the countries has increased, therefore, Latvia should act purposefully to successfully compete for investment attraction in Northern Europe and the Baltic region,” emphasized the Head of the Council, Prime Minister Valdis Dombrovskis.
Therefore, on the initiative of the Council, a Strategy for Attraction of Foreign Direct Investment for 2011-2017 has been developed and its advancement for consideration at the Cabinet of Ministers was supported in today’s meeting. The strategy aims to change the structure of the national economy of Latvia, developing the external demand and innovation based economy as well as attracting foreign direct investment to external demand oriented sectors in order to achieve the highest productivity level among the Baltic countries.
The strategy defines the following priority sectors where to encourage investment: metal working and machinery, transport and logistics, IT, life sciences, health care, wood processing, green technologies and food industry. The strategy identifies the countries on which each sector should focus.
“To encourage investment attraction, the strategy provides five key activities – improvement of the business environment, improvement of the education system, linking it with demand of the labor market, improvement of business infrastructure, improvement of the court system and reduction of the terms for hearing the case as well as provision of investment incentives. In addition, it is necessary to purposefully work towards creating a positive image of Latvia in the international environment by positioning Latvia as an attractive country for investment,” said V.Dombrovskis.
To attain the objectives of the Strategy for Attraction of Foreign Direct Investment, it is necessary to increase the proportion of export up to 60% of GDP by 2015 (in 2010 – 53.4%), to increase the proportion of the valued added of the external demand oriented sectors in the total value added up to 35% (in 2010 – 29.3%) as well as to increase productivity in manufacturing up to 40% of the average level of the EU-27 (in 2010 – 27.5%).
Assessing the most important accomplishments of the Council, it was stressed that a substantial progress has been made to enhance the cooperation between investors and Latvenergo regarding industrial electricity connections. The investors mentioned the problems related to the available electricity voltage and their stability as one of the most important obstacles to the development of new production facilities and that by the support of the Council a substantial progress has been made in this area.
In the near future, the government will consider the implementation of the EU standards in the area of industrial electricity connections, which require lower permissible amplitude of voltage fluctuations. The entrepreneurs have pointed to the fact that modern production facilities require fixed and continuous voltage and fluctuations or interruptions could result in substantial losses.
The Investment Council was developed in 2010 with the aim to coordinate cooperation among public institutions, local governments, educational institutions, infrastructure enterprises, boards of special economic areas and free ports, municipal infrastructure companies, ensuring solving of problem issues to promote successful implementation of the investment projects which are important to the Latvian economy. The Investment Council involves the Prime Minister, his deputy – the Minister for Economics. The Ministers for Transport, Finance, Environment Protection and Regional Development, Education and Science, Agriculture as well as Foreign Affairs also participate in the Council.