Zlata Elksniņa-Zaščirinska, Chairperson of FICIL, gave an interview to the newspaper IR, discussing strategies for Latvia to promote economic growth and to avoid stagnation in various sectors, such as health and education. 

Although Latvia can present some success stories and its growth has been relatively good compared to neighboring countries, many opportunities remain untapped. According to the Eurostat data, Latvia’s GDP per capita based on purchasing power parity was 70% of the EU average in 2023, compared to 81% in Estonia and 86% in Lithuania. These figures indicate that a strategic approach and clear priorities are needed to speed up Latvia’s economic growth. 

Zlata Elksniņa-Zaščirinska emphasizes the importance of finding a grand vision for the nation to strive toward. She highlights that the most crucial task is to identify a niche, where Latvia can excel, while maintaining fiscal discipline and promoting innovation. As an example, she mentions Latvia’s “green oil” – forests, with potential in chemical production and woodworking. She also underscores the potential in robotics and prosthetics manufacturing, which could aid those injured in conflict zones. 

Zlata provided ideas on how to promote economic growth: 

Minimal State Intervention in the Economy: While theoretically it is a successful solution, in Latvia the public sector plays a significant role in procurement and development projects, and the economy is too small to function in isolation. 

Tax Reduction: In theory, lower taxes could stimulate faster development, but a small country like Latvia must consider the necessity of a higher tax burden to ensure the state’s existence. 

Fiscal Discipline and Bureaucracy Reduction: Zlata stresses that fiscal discipline and reducing bureaucracy are critical for rapid growth. 

Low Labor Costs: Latvia is no longer a low-wage country and lacks population to continue competing in this area. 

State Support for Priority Sectors: Zlata believes that the state should support priority sectors, as Latvia does not have the scale and resources to compete in all industries. 

Such steps could help Latvia stand out in the international economy and achieve a higher standard of living for its citizens. 

Full interview version can be found here.