Kariņš: Latvia's economic development should aim for industrialization

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Latvia needs to aim for “smart re-industrialization” in economic development, Prime Minister Krišjānis Kariņš said in his address to the Saeima March 11.

 In order to do this, the funds of the European Recovery and Resilience Facility should be aligned with the national industrialization policy, said Kariņš.

The Prime Minister said that there is already an export-sustainable industry in Latvia, and during the Covid-19 crisis it “holds the country” while the trade and catering sector is partly closed. The list of exporting companies is long, but not enough to raise the overall economy sufficiently high. “If we compare ourselves with other countries in Europe, production as a percentage of gross domestic product (GDP) in Latvia is in 30th place out of 40 European countries,” the Prime Minister said.

He said that Latvian industry sector is currently not productive enough.  “If we want our industry to raise the average wage, then of course the industry must be above average. Unfortunately,  it isn't. (..) The majority is not technologically developed enough, and wages are low there and people's skills and requirements are low,” the Prime Minister said.

Meanwhile, those industries where wages are above the national average are technologically advanced and require a highly educated workforce. “Here we have a place to grow,” he added.

One of the sources for developing the industry is the European Recovery and Resilience Facility. Kariņš said that the vision associated with this fund should be revised and aligned with national industrialization policy so that the "money can be used to serve great purpose". 

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