October: repeating the benefits of the High Council 2024
October has been a busy and productive month, as FICIL has been reflecting on the High Council results, developing the action points to stimulate a closer collaboration with the public sector organisations, and jumping at opportunities to push forward necessary reforms.
Before moving forward, we would like to once again express gratefulness to the FICIL work group leaders, the Board, especially to the Chairperson – Zlata Elksniņa-Zaščirinska, and to our High Council partners – Ignitis Renewables Latvia, Tech Mahindra, as well as, to two excellent professionals at the public sector that provided great support in preparation to the event: Eva Kalniņa, LIAA senior project manager, and Santa Jirgensone, press secretary of the Cabinet of Ministers:
FICIL Engaged in a High-Level Dialogue with the President of Latvia
On October 8th, FICIL Board met with the President of Latvia, Edgars Rinkēvičs, at Riga Castle. The central theme of the meeting was enhancing the public sector effectiveness. FICIL highlighted the need for a results-driven public administration and stressed the importance of improving the governance of state and municipal-owned enterprises.
The discussion also touched on the country’s long-term development strategy. Based on results of the High Council, FICIL recommended positioning Latvia as an internationally recognized innovation hub. In view of the geopolitical situation and increasing defence spending, FICIL proposed the creation of a Defence Fund to bolster Latvia’s defence industry, while simultaneously stimulating economic growth. The President welcomed all FICIL ideas, highlighting importance of innovation, transparency of defence spending, and of public sector reforms. To learn more about the meeting, please go here.
FICIL Advocates for Criminal Liability in Cartel Cases to Ensure Fair Competition
On 11th of October, Māris Butāns, leader of FICIL’s Fair Competition & Public Procurement work group, participated in a discussion organized by the Corruption Prevention and Combating Bureau (KNAB) and Transparency International Latvia – Delna. The discussion focused on the introduction of criminal liability for companies engaged in prohibited agreements, especially in public procurement.
Māris emphasized that foreign investors advocate for fair competition, as current administrative penalties are insufficient to deter violations, such as bid rigging. He highlighted that most EU countries treat bid rigging as a serious crime, and similar criminal penalties should be introduced in Latvia. In addition, Māris raised concerns about the scale of Latvia’s shadow economy, noting that it undermines fair competition, and called for stricter monitoring of tax compliance and bid rigging violations. At the end of the discussion, all parties agreed that further research is needed before introducing criminal liability, ensuring it will not be misused against honest businesses.
Learn more about this discussion here.
FICIL Urges for Professionalized Management of State-Owned Enterprises
FICIL has long emphasized the role of state-owned companies (SOEs) in the country’s economic growth, innovation and investment attraction. To utilize the potential of these companies, FICIL underscores the need for centralization and professionalization of the management of state-owned companies.
FICIL Chairperson of the Board, Zlata Elksniņa-Zaščirinska, in an interview on Latvijas Radio’s “Labrīt!”, explained that civil servants often face conflicts of interest when they simultaneously shape policy and manage capital shares. She stressed that professional management boards, free from political influence, are necessary to set ambitious targets that drive both company growth and industry innovation. FICIL believes that with stronger, more independent management, SOEs can play a greater role in Latvia’s economic development.
FICIL at BritCham Latvia Members’ Evening
Tatjana Guznajeva, FICIL’s Executive Director, participated in the BritCham Latvia Members’ Evening, organized by the British Chamber of Commerce in Latvia. Tatjana shared FICIL’s key priorities and results from the recent High Council event, also inviting associate members to actively participate in the FICIL’s work groups. Participants were pleased to hear about the commitment of the Latvian government to create the most effective public administration in Europe and the High Council conclusions about the long-term development strategy of Latvia!
We extend our gratitude to the British Embassy and to the Ambassador Paul Brummell for their warm reception, as well as, to Kristīne Zvirbule, BritCham Latvia Executive Director, for organizing the event.
If you would like to learn more about the FICIL High Council Meeting 2024, please go here.
FICIL Calls for Clear and Uniform Guidelines on Compliance with the EU Regulations
On October 11th, FICIL, along with Transparency International – Delna, the Latvian Civic Alliance, and PROVIDUS, met with newly elected members of the European Parliament to discuss anti-corruption and good governance. FICIL was represented by Māris Vainovskis, FICIL Board member and the work group leader on Investment Protection, and by Tatjana Guznajeva, FICIL executive director.
FICIL raised concerns about the high administrative burden in Latvia and across Europe, which hampers investment and business development. One of the key issues is the lack of clear and uniform interpretation of EU regulations across the Member States, which leads to confusion and, at times, to stricter regulatory compliance in Latvia. The latter creates barriers for Latvia-based investors to access EU funding. In view of this, FICIL called for the creation of uniform guidelines on compliance with the EU regulations!
In addition, FICIL urged the European Parliament members to improve awareness of funding opportunities available for Latvia, as it could boost innovation and competitiveness. To learn more about the meeting, please go here.
FICIL’s view: Shadow Economy is a Cancer to Economic Growth
On October 16th, Evita Goša, leader of FICIL’s Shadow Economy Combatting work group, took part in an impactful discussion, titled “Four Conversations on Latvia’s Financial System ‘Capital Overhaul’” and hosted by Žurnāls “Jurista Vārds”. The expert panel addressed pressing issues surrounding Latvia’s financial reforms and challenges since 2019.
Evita shared key insights on the shadow economy, likening it to a “cancer” that weakens Latvia’s economic potential. She highlighted the detrimental impact of illicit funds on fair competition, the discouragement of foreign investment, and the burden on honest taxpayers. Evita’s remarks underscored FICIL’s unwavering commitment to innovative solutions that aim to support Latvia’s economic growth, making it a more attractive environment for foreign investors. For more details about the event, please visit here.
FICIL urges to utilise investments in the Defense Industry for driving innovation and economic growth!
In view of FICIL, investments in defence should be allocated in such a way that can fuel economic growth and foster innovation, while strengthening national security. This requires strategic planning with a well-thought-through defence industry strategy and creation of a separate defence fund that would serve as an investment fund, accumulating resources across years and ensuring transparency and purposefulness of funding.
FICIL’s key recommendations to the Latvian government:
- Strategic Planning: develop a clear, ambitious strategy of the defense industry to align security and economic goals, avoiding fragmentation of policy instruments and wasted resources.
- Defense Fund: establish a dedicated defense fund for sustainable, long-term financing, inspired by models in other countries (e.g., Estonia, Lithuania, and the Netherlands).
- Innovation and Job Creation: integrate local industries into the supply chains of the defense industry, thereby creating jobs and positioning Latvia as a leader in defense tech in Europe.
- Transparent Communication: foster public trust and business engagement by maintaining open communication around defense investments and highlighting business opportunities.
The full article is accessible in English and Latvian.
FICIL’s involvement in critical Climate and Energy Discussions
Dace Cirule, leader of FICIL’s Energy and Green Economy work group, recently appeared on the TV show “Kas notiek Latvijā?” to discuss Latvia’s progress on the Green Deal and climate neutrality, two years after the establishment of the Ministry of Climate and Energy (KEM). Key Highlights:
- Progress & Challenges: While KEM has made positive strides, FICIL notes the need for a stronger strategic direction to fully harness the Green Deal’s potential.
- Beyond Obligation: Latvia often sees the Green Deal as an EU mandate, overlooking the benefits it can bring. FICIL advocates for a broader view that highlights how the Green Deal can drive economic growth, job creation and sustainability.
- Climate Adaptation & Neutrality: Achieving climate neutrality requires both emissions reductions and adaptation measures. Transparent, predictable policies are essential for sustainability and for boosting investor confidence.
- CO2 Storage & Legislative Changes: FICIL is actively promoting CO2 storage technologies and legislative support for the carbon capture, utilization, and storage (CCUS) value chain. Such innovations align with Latvia’s climate goals, while unlocking new economic and job opportunities.
More information about the discussion is available on our website.
Improving Labour Law: FICIL’s proposals at the Human Capital Development Council
Irina Rozenšteina, leader of FICIL’s Labour Force & Requalification work group, presented key proposals for amendments to the Labour Law at the Human Capital Development Council meeting. Our proposals are designed to modernize Latvia’s labour regulations, enhancing flexibility for businesses, while ensuring protection of employees.
To learn about the meeting, please visit our website, and access the full list of FICIL’s proposals in English and Latvian. In the coming weeks, FICIL plans further discussions with key stakeholders, including the Ministry of Economics, Ministry of Education and Science, Ministry of Welfare, the Latvian Employers’ Confederation, and the Free Trade Union Confederation of Latvia.
FICIL Work Group update
The Energy & Green Economy work group has been discussing issues related to the natural resources, including the natural resources tax in Latvia and calculation of the CO2 footprint. The work group leader, Dace Cīrule, has participated in several important meetings. Among them is the discussion on Latvia energy strategy until 2050 with the President of Latvia, the meeting with the Ministry of Economics on the administrative burden in the construction sector, and the Saeima sustainable development commission.
The Shadow Economy Combatting work group has been focusing on the discussion of the real estate and natural resource taxes, as well as, on the feeling of impunity for illegal tax-related activities that continues to exist in the society. The group has met with the Director General of the State Revenue Service to discuss FICIL recommendations and to highlight issues related to SRS data collection. Besides this, Evita Goša, the work group leader, participated in several important meetings, including with the Ministry of Finance on implementation of measures, presented in the Shadow economy restriction plan for 2024-2027.
The Public Sector Reform work group prepared a response to the Mid-term evaluation of the implementation of the guidelines of the national industrial policy for 2021-2027, which highlights economic priorities for the upcoming years. In addition, Reinis Āzis, the work group leader, developed a strategy for pushing forward FICIL recommendations on reforms in the public sector, while Tatjana Guznajeva, FICIL executive director, provided comments on the draft development strategy of State Chancellery until 2029.
The Labour Force & Requalifications work group has organised several meetings with the Ministry of Economics this month. During these meetings important upcoming initiatives have been discussed, such as innovative funding mechanisms for requalifications and upskilling, labour law amendments, green coridor that supports workforce attraction to Latvia. In addition, the group has reviewed several amendments and draft legislation in the focus areas.
The Investment Protection work group leaders participated in several key events that raised issues on good governance, fair competition and public procurement, and reviewed amendments to the commercial law.
In you want to join the FICIL work group, please click here.