Economics Ministry works on mitigating sanctions impact in Latvia

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The consequences of the Ukraine war will affect the countries with economic relations to Russia and Belarus. The The Ministry of Economics (EM) is working on a number of solutions to minimize the impact of sanctions on the Latvian economy, Latvian Radio reported March 21.

Ilze Lore, director of the Department for Business Competitiveness at EM, said three things are important at the moment.

“First and foremost, we are currently working on issues of problems presented by Latvian companies, which concern issues relating to raw materials and market reorientation. We are trying to find, for example, other partners in EU Member States. The second thing is that we are also financially trying to find additional elements in existing aid programs that would be necessary to enable these companies to operate. And another of the directions is the energy issue and thinking about how to help in the long term, so that businesses and households would not suffer from the effects of this Ukraine crisis,” Lore said.

Aigars Rostovskis, President of the Latvian Chamber of Commerce and Industry (LTRK) reiterated the need to reduce bureaucratic barriers, and one of the sectors where red tape is all over the place is construction.

"What is important at the moment is that those people, those entrepreneurs who are willing to invest, can start their investment process as soon as possible. This would lead to the inflow of money into the economy, jobs, taxes, and so on. If, for example, there is a project, some big house or factory, and if we have to wait 2 years to wait for the bureaucrats to arrange it, then the money does not go into the economy, the builders cannot work, there is no job, and the production plant does not open. If this case is de-bureaucratized, the site can be constructed after six months, so the acceleration of this rate can greatly offset the impact of the sanctions," the President of the LTRK said.

Executive director of the Council of Foreign Investors, Linda Helmane said:

"At the moment, it is important to ensure energy independence [from Russia] as soon as possible, so it is also necessary to review the existing regulation at all levels. This is not about supporting entrepreneurs, but just about removing barriers so that we can get to real business faster. It is not illegal to do it quickly, but it is necessary to continue to respect the principles and rules of fair competition.

"Of course, sanctions will affect the availability of materials and prices across Europe, and in this respect, it must be understood that some projects may not move forward within the deadlines laid down previously, and this should also be taken into account by the public sector, which must be dynamic and flexible and look at the substance, not so much by letter in the execution of the various projects. In such circumstances, it is important that there is good communication and cooperation with the public sector," said Helmane.

It is planned that this week a meeting of the strategic management group, in which the LTRK, Latvian Employers' Confederation, Latvian Association of Local Governments and other non-governmental organizations will be present.

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