More than 2 billion to be invested in regional development in Latvia

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More than two billion euros are projected to be invested in regional development over the next seven years according to Environmental Protection and Regional Development Ministry (VARAM) policy guidelines passed by the government on November 19.

The document was developed to minimize economic inequality between municipalities. Regional economic development inequality in Latvia is one of the highest in Europe. As a result income varies greatly between the Rīga region and, for example, those working in Latgale. The over two billion euros of planned investment includes not only state and local government funds, but also European Union and private investor resources.

"We will strive for export companies to move to the regions and invest there. Let them develop their factories there,” says VARAM Minister Juris Pūce.

"To do this we need the state and local government to invest together in supporting the entry of such private investment – road construction, electrical connectivity construction, water management construction," says Pūce.

However the Latvian Association of Local Governments (LPS) and the Association of Large Cities is withholding support of these guidelines. Local authorities are worried that the promised two billion will most likely stay on paper.

"First of all, we haven't accepted this document because parallel work on the National Development Plan is in progress, but unfortunately the plan doesn't include regional development as one of the main goals,” says LPS Regional Development Advisor Ivita Peipiņa.

“We don't see a possibility where this great amount of projected funding… that there will be this funding," says Peipiņa.

Local governments are suspicious about regional development at the expense of Riga, which is already losing its position in the international competition with Vilnius and Tallinn.

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