For the past 25 years, the Foreign Investors’ Council in Latvia (FICIL) has been dedicated to improving Latvia’s business environment and investment climate. Since our establishment in 1999, we have served as a bridge between the foreign investors and the Latvian government, providing feedback and expertise to tackle key challenges. Our Public Sector Reform Work Group has been the cornerstone of FICIL, focusing on improving effectiveness, transparency, accountability and efficiency of the public sector through digital transformation, revision of governance and mechanisms across the policy cycle, public finance management, as well as, by developing systems that boost productivity of public service employees, reduce the administrative burden, and tackle corruption.
Reinis Āzis, leader of the FICIL Public Sector Reform Work Group, and Head of Business Development, Poland and CEE RNG, states: “Throughout the years, FICIL has been focusing on two key pillars of how the public sector influences foreign investors doing business in Latvia: (1) via public services provided by the state and municipal institutions and (2) via policy-making quality in various sectors of the economy. The last years have been particularly challenging, bearing in mind the geopolitical situation in the region, as well as the volatile economic output of Latvia and post-pandemic economic consequences. Even though the cooperation with state officials regarding substantial change in government institutions has not always been easy, the recently launched State Shared Service Center and the initiated formal work with performance-based budgeting by the government are indications of acknowledgment of FICIL initiatives by the government. More importantly, these are steps in the right direction for an accountable, transparent, and goal-oriented public sector in Latvia.”
Recognizing the importance of digital transformation for the public sector, the Work Group is complemented by the Data & Digital Transformation subgroup, managed by Renārs Rūsis, Chief Digital and Customer Experience Officer at BALTA. This subgroup focuses on centralizing IT governance, improving government-to-business (G2B) interactions, and promoting data-driven decision-making in the public sector. Reflecting on the progress made, Renārs Rūsis remarks:
“Being part of the FICIL digitalization work group from its early days, I can look back and recognize that the government has been working hard towards two main areas: e-identity tools and public services. As a whole generation of IT systems has been developed and now needs to be upgraded, while AI models for daily use are on the horizon, there is a clear need for centralized systems and data. This is crucial to gaining efficiency, especially as other high-priority areas have emerged, such as country security and sustainable energy.”
In the early years of FICIL we have been supporting Latvian government in the transition towards internationally integrated, open and market-driven European economy. Over time, our efforts have evolved and resulted in the ambition to make Latvia the most business-friendly public administration in Europe. We are proud that with our support by 2024 over 80% of public services in Latvia have been made accessible via digital platforms such as Latvija.lv, significantly reducing administrative barriers and enhancing transparency. Digital transformation of the public sector, coupled with strengthened anti-corruption measures and legislative reforms, have elevated Latvia’s global reputation. Today, Latvia ranks 25th in the World Bank’s Doing Business index, a remarkable improvement.
During the last 5 years, our Public Sector Reform Work Group has produced 38 recommendations, 21 (55%) of which have been fully or partially implemented by the government. Among our key achievements are listed:
- Introduction of the performance-based budgeting at public sector institutions that maximizes allocation of funds towards measurable goals – a pilot project will start in mid-February 2025;
- Launch of the State Shared Service Center to improve efficiency of various public sector support services through centralization;
- Development of the business.gov.lv “one-stop-shop” platform for entrepreneurs, which aims to facilitate access to information and state services, as well as, to reduce the administrative burden;
- Launch of DAGR – a unified and high-speed data collection and distribution platform that connects information systems across public sector institutions, thereby reducing administrative burden, increasing accessibility of data and efficiency;
- Promotion of the responsible AI governance, working with the President’s Competition Council to ensure compliance with the EU’s AI Act, while fostering innovation in AI technologies.
The Minister of Economics, Viktors Valainis, has praised our contributions, noting that: “The Foreign Investors’ Council is a key partner for the state. I would like to highlight FICIL’s annual study, The Foreign Investment Environment Report [Sentiment Index] which draws the attention of public administration and society to the need to reduce administrative burdens and bureaucracy, as well as, potential measures for doing so. The Foreign Investment Environment Index, developed by FICIL and Professor Arnis Sauka of the Stockholm School of Economics in Riga (SSE), promotes evidence-based policy decisions that foster a favorable investment climate in Latvia. I am pleased to see that the collaboration between the Ministry of Economics and FICIL is reflected in tangible results, namely, in increasing investments. We confirm our readiness to maintain a close and regular dialogue with the Foreign Investors’ Council in Latvia going forward to achieve the goals outlined in the government declaration.”
FICIL’s significant role in driving IT governance centralization and efficient data management practices has not gone unnoticed. The Minister of Smart Administration and Regional Development, Inga Bērziņa, has acknowledged our efforts, stating: “On behalf of the Ministry of Smart Administration and Regional Development, I would like to express my gratitude for the long-standing and successful cooperation with the Foreign Investors’ Council in Latvia. We particularly want to highlight the crucial role this partnership has played in implementing nationwide strategic initiatives in data management and sharing, which has contributed to the creation of a business- and government-friendly digital ecosystem in Latvia, making the country an attractive destination for investment and innovation. By continuing this collaboration, we will strengthen Latvia’s competitiveness and promote the development of the digital economy, ensuring that every Latvian resident can experience the benefits of digital solutions in their daily lives.“
In addition, Director of the State Chancellery, Raivis Kronbergs has acknowledged that: “The representatives of the economy, cooperation partners (LDDK, LTRK), and investors (FICIL) are the ones whose experience and recommendations the public administration must continue to listen to when seeking the best solutions and competent proposals for development planning, corporate governance, and policy outcome monitoring. Targeted and meaningful cooperation between sectors is a tool with immense potential to improve investment flows, promote economic stability, and foster growth.”
Our commitment to the public sector reform and digital transformation reflects our comprehensive approach to strengthening Latvia’s economy and increasing investment attraction. We aim to drive reforms that will lead to greater competitiveness, ease of doing business, innovation, digital excellency, transparency, accountability and trust between government, businesses and its residents. Hence, Latvia will serve as an example of good governance for other European nations and foster creation of new partnerships vital for achieving sustainable growth, innovation, prosperity and leadership!
