The Foreign Investors’ Council in Latvia (FICIL), the Employers’ Confederation of Latvia (LDDK), and the Latvian Chamber of Commerce and Industry (LTRK) urge the government to address significant issues related to the quality and coordination of national policy planning documents.
Foreign investors, employers, and entrepreneurs have been actively involved in developing national strategic documents. However, the work done so far reveals considerable shortcomings. A lack of alignment between documents, insufficient linkage to other planning frameworks, and an inadequate focus on specific outcomes give the impression of an increasing bureaucratic burden in public administration rather than productive progress toward national development goals.
FICIL, LDDK, and LTRK emphasize that developing policy planning documents without clear legal foundations or goal synchronization significantly hampers effective decision-making and implementation. For instance, recent informational reports on Latvia’s Economic Development Plan and the Mid-Term Assessment of the National Industrial Policy Guidelines for 2021-2027 (NIP) contain contradictions and lack synchronization. Regarding export forecasts for 2027, the NIP sets a target of increasing export volumes to €22 billion by 2023 and €27 billion by 2027. In contrast, in 2027, the Economic Development Plan aims for approximately €39.3 billion, and exports target to reach 78% of GDP. Similarly, there is a mismatch in investment goals for research and development for 2027, with the NIP aiming for €600 million, while the Growth Plan sets a target of €756 million. Furthermore, FICIL, LDDK, and LTRK note that the lack of synchronization in policy documents is also reflected in the vast number of priorities. As a result, these documents resemble a to-do list for public administration rather than strategic frameworks with clear goals and actionable plans.
According to FICIL, LDDK, and LTRK, the key issues contributing to ineffective policy planning are (I) poor planning processes, including failure to adhere to document development deadlines; (II) inability to coordinate unified, ambitious national goals and measurable, data-driven steps to achieve them; (III) the lack of integration of goals and responsibilities into national planning documents; and (IV) disregarding recommendations from industry representatives and oversight bodies. These issues are directly linked to the high level of bureaucracy in public administration, which results in a legal incapacity to influence the implementation of political decisions effectively.
Among the previously discussed solutions for reducing bureaucracy, foreign investors, employers, and entrepreneurs emphasize the following: implementing a results-based budgeting approach, introducing review mechanisms for implementing State Audit Office recommendations, ensuring the proper legal application and use of public administration planning documents in line with their purpose and content, improving the efficiency of public sector employees, and reducing government expenditures by at least 5%.
FICIL Public Sector Reform work group leader, Reinis Āzis, commented: “Despite the government’s rhetoric about reforming the public sector and improving the quality of policy documents, effective action is lacking. This year, during the Cabinet of Ministers and FICIL high council meeting, the government committed to becoming the most efficient public administration in Europe. However, without a long-term strategy, documents remain uncoordinated, and institutions lack the resources and synergy needed to achieve multiple goals. We urge the government to ensure clarity, coherence and targeted action in planning documents. February next year will be crucial, as three ministries (Finance, Economics, and Transport) will present expenditure analyses that will facilitate performance-based budgeting and strengthen the accountability of public sector employees while ensuring efficient use of state resources.”
Director General of LDDK, Kaspars Gorkšs, added:“Poor planning document quality is one of the main reasons for the lack of trust in Latvia’s public administration, low execution of these documents, and overall excessive bureaucracy. When there are glaring contradictions in targets, unclear oversight mechanisms, and an undefined implementation process, the results are inevitably disappointing. The preparation of low-quality, delayed strategic documents, and their rushed approval has become a hallmark of this government, which is evident in poor goal achievement rates, such as the absorption of EU fund project financing. We must transition to clearly formulated, data-driven, and results-oriented planning. Otherwise, we remain stuck with poorly translated OECD templates and a cocktail of conflicting and vague tasks spread across dozens of pages, failing the overarching goals of strategic planning.”
Board Chairman of LTRK, Jānis Endziņš, concluded: “We are a nation of planners! We have an excessive number of extensive plans – at least six broad ones covering ‘everything’ and thousands of sectoral plans with goals, priorities, and so on. However, if you ask yourself or others, ‘What is Latvia’s development strategy?’ You might hear different answers, even from those who claim to understand it. Whatever someone does, it will probably fit one plan but not another. If we truly want to achieve at least the average level of prosperity in the EU, we need to radically change the planning system and – more importantly – ensure that we not only plan sensibly but also act!”