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Initiatives bring change to less developed part of Latvia

Starting 2013, various initiatives are striving to raise living standards in the cultural and political region of Latgale, Latvia's east. To this end, it receives money from the central government and the EU, reports Latvian Radio March 14. 

Special government plans for 2012-2013 and 2015-2017 granted a total of about €150 million for the Latgale region and the nearby Alūksne municipality. 

Latgale today

Latgale is a vibrant cultural center with Daugavpils, Latvia's second largest city housing the impressive Mark Rothko Center. While Rēzekne, often called the capital of Latgale, is home to the stunning 'Gors' cultural centre that styles itself the 'Latgale embassy' and could give any avant-garde Scandinavian opera house a run for its money.

Latgale has always retained its own particular identity, based on its parallel history that offers a mix where Orthodox, Catholic, Lutheran and Jewish traditions all co-exist. The beautiful region is known for its bodies of water and is poetically referred to as the "land of the blue lakes".

The new Latgale Development Plan for 2018 to 2021 aims to build on these plans, by sparking economic development in the region, creating jobs and raising living standards. 

But do locals feel that these plans are working?

"There's development in improving urban areas only. Everything is tidy and clean, but we need jobs. Because the time is soon coming when there'll be no one to walk these tidy streets," Irēna Voicehoviča, the head of a sewing company in Krāslava told Latvian Radio.

"If you think there'll be an immediate result from the investment, it's definitely not the case. When we left the USSR, big unemployment levels became palpable in cities such as Daugavpils, Līvāni, and Rēzekne. These cities had business and lost factories. 25 years on, we still feel the consequences," said Andris Vaivods, chairman of the municipal council in Līvāni. 

The Rēzekne municipality uses the money from the 2015-2017 Development Plan for infrastructure investments.

"We were able to obtain, if we talk about the ERAF funds, €4.4 million for us. It's projects in the Northern region, and road infrastructure - namely, putting the Maskavas, Varoņu, Noliktavu streets and two properties in order. I think the program works.. we're seeing the demand. We've a company that will take one of the properties. We're seeing the positive results," said Rēzekne vice-mayor Aleksejs Stecs. 

As for the municipality, a total €9 million was granted to it with the two Latgale Development Plans.

"In the first stage, we reconstructed high schools in four regional centers, Malta, Kaunata, Dricāni and Nautrēni," Anna Jaudzema, a municipality official said. 

The money is also used to repair roads in coordination with local companies. "We need them to create jobs and invest into their fixed assets. It's planned to create 109 new jobs in the Rēzekne municipality," she said.

Ambitions weren't low for the 2015-2017 plan, which aimed to create a total 800 jobs and attract private investment of more than €50 million. 

The responsible ministry says the ambitions have come true.

"We're seeing that jobs have grown more than one and a half times than planned.. As concerns investment, it's 101%. We're seeing that.. the processes are happening one and a half times faster in Latgale than in Latvia on the average," said Environment Minister Kaspars Gerhards. 

A Special Economic Zone has also been set up in Latgale. It's been operational for a year now, and seven companies have joined thus far.

One of these is the sewing company IV Plus. Before entering, it had 46 employees and now it has close to 60. In 2017, sales rose 19% on year. The company makes work clothes to export to Norway, and children's clothes sold to Estonia, Russia, and Ukraine, with plans to expand in the US. 

However, the company's owner says more support is in order. 

"The special economic zone only gives corporate tax breaks. But for there to be a positive effect, employee's tax exemptions should be upped. I would like all my employees to have €500 tax-exempted income no matter what their wage. That would be right. That would be a real economic zone," said Irēna Voicehoviča. 

But clearly not everyone is enamored with the 'rescue' plan for Latgale.

"Not everyone can get this support. And the support, as we've discussed with a local farmer, is good for buying four tractor tires. Globally speaking, these support measures won't have any effect on the region. It's more like cosmetic repairs to hook the electorate," said Jāzeps Šņepsts, head of the Preiļu siers dairy company. 

He also criticized large electricity costs, blaming them on government 'green-energy' schemes. These are sometimes seen as only serving to be exploited by fraudsters, which is a thing LSM has reported on in the past). 

While unemployment is decreasing in Latgale, it's still highest in the country. From 2013 to 2017, it shrank by 3% or from 18.8% to 15.8%. 

Mostly unemployment has shrunk in cities like Rēzekne and Daugavpils, while jobs in smaller towns and regions by the border are hard to come by. 

Not everyone agrees on the efficacy of the plans to support Latgale, but nevertheless the 2018-2021 Latgale Development Plan will see an extra €30 million invested into the region. This could be boosted by Norwegian grants for small companies of up to €50 million, says Environment Minister Kaspars Gerhards.

While projects worth more than €288 million have been greenlighted from the EU Cohesion Fund in the 2014-2020 planning period. This is more than any other region, with the region of Kurzeme, Latvia's west, trailing behind with €243 million. 

The years to come will show whether Latgale's people are to see more palpable benefits, like more work and competitive wages, from these initiatives. 

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