OECD: Latvia needs "inclusive growth" and affordable housing

The Organization for Economic Cooperation and Development (OECD), of which Latvia has been a member since 2016, on September 15 presented an overview of the state of the national economy. 

Presenting the report was OECD secretary general Angel Gurria who gave a long list of areas in which policy could be practically improved.

The prepared text of his speech can be read HERE.

The full overview can be found HERE.

"The way for LV has to be for mre knowledge based, more sophisticated education," Gurria said.

"Latvia needs to boost productivity by moving up the global value chains... it's less integrated to the global value chains [than its peers]."

"Latvia also nees to boost inclusive growth by improving access to health services and affordable quality housing," he added, with a special emphasis on providing low-cost rental housing in areas with "job possibilities" which he said was sorely lacking and meant that at present it is very difficult for jobseekers to move from place to place.

Gurria also placed emphasis on an unsatisfactory situation in which many people simply cannot afford healthcare and therefore so do not seek treatment.

He also issued a strong call for the use of "fiscal policy to promote inclusive growth", praising Latvia for having one of the lowest debt to GDP ratios in the OECD but saying that the same prudence which allowed that should now trigger more ambitious preparations for the future.

"Latvia should make full use of the available fiscal space... I'm not saying go crazy. You have one of the lowest debt to GDP [ratios]... but maybe by spending a bit more in the public sector you can bring in more private sector money," he advised.

Responding to the recommendations, Economy Minister Arvils Aseradens admitted that some of the recommendations, such as the call for low cost affordable housing were completely new to him.

"The housing approach was a new approach which we didn't have on our agenda... we hadn't thought of it before," he said.

"We must not stop our reforms... I am delighted that our vision about the development of the local economy coincides with the position of the OECD. However there are some differences and we will make the necessary adjustments."

However, in a subsequent question and answer session with the press, ironic smiles among the Latvian audience were prompted when Gurria explained that city mayors should not be mixed up in big business as it creates a conflict of interest situation in which they are both regulator and regulated. The most obvious example of the type is Aivars Lembergs who manages to combine the job of mayor of the port city of Ventspils with being one of Latvia's richest businessmen and chairman of the transport and transit industry's representative body. 

 

 

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