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Foreign investors call on government for real reforms

An annual assessment of the mood of foreign investors in Latvia, released December 5, suggested little progress has been made in the last 12 months in improving the investment environment.

It is the second such report produced by the Foreign Investors Council in Latvia (FICIL) and is actually rather impressive, stretching to more than 100 pages and cataloging numerous case studies along the way, a notable departure from some similar pieces of research.

"The key aim of the Index is to foster more evidence-based policy decisions to further promote a favourable investment climate in Latvia," author Dr. Arnis Sauka says in his introduction. 

You can read the full report via the Twitter link below.

The report really is worth reading in full (particularly for the direct messages from investors to Prime Minister Maris Kucinskis, which FICIL has promised to pass on), however some of the main findings are that in both the 2015 and 2016 foreign investors in Latvia mostly evaluate potential drivers of the economy as above average.

"To the same extent as in 2015, in 2016 investors are most satisfied with soft infrastructure, measured as “business culture in Latvia” (3.4 out of 5), but they are less satisfied with demography. For demography, the evaluation has decreased from 2.0 out of 5 in 2015 to only 1.8 in 2016. As in 2015, foreign investors still see major problems in the quality of the health and social system (a decrease from 2.6 to 2.5 in 2016) as well as in the quality of education and science (a decrease from 2.8 to 2.6 in 2016)," the report says

"Foreign investors seem to be relatively satisfied with one of the components of the indicator ‘attitude towards foreign investors’ – ‘policies towards foreign investors’." 

Tackling Latvia's demographic crisis, and improvements to the legal and tax systems were the key changes demanded by FICIL members.

"In particular, investors highlighted the need to REDUCE UNCERTAINTY in the tax system, some of them also highlighting this need in the legal and court systems," FICIL urges.

Investors also pointed to a lack of strategic vision and long-term planning from officials and policymakers as a problem.

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