Invested or Planning to? The 'Attracted Billion' Turned Out to Be Not Quite What It Seemed 0 11

Latvia reported a 'record billion' in attracted investments, but behind the beautiful figure lies an important detail: it is not about real money invested, but largely about investors' intentions. The foreign companies themselves warn that large projects in the country are still hindered by bureaucracy, a lack of specialists, and slow approvals.

The data released at the beginning of the year by the Latvian Investment and Development Agency (LIAA) regarding the attracted billion euros in foreign investments turned out to be not so straightforward. As revealed by the program 'Aizliegtais paņēmiens' and acknowledged by the head of the agency, Ieva Jāgere, this amount consists of investors' intentions and promises for the future, rather than money that has already been actually invested.

The real figures are noticeably more modest. Data from Lursoft shows an increase in foreign capital of only about 300 million euros, while data from the Bank of Latvia indicates an increase of 900 million euros. Compared to Lithuania and Estonia, there is no visible investment leap in Latvia.

'We advocate on behalf of investors. We tell state leaders what needs to be changed to achieve even better results. Often they listen to us, but not always does something fundamentally change,' said Jāgere.

Foreign companies have long been waiting for a clear plan from politicians: how human capital will develop in Latvia, how energy issues will be resolved, and, most importantly, how to accelerate administrative processes in government institutions. This area is also referred to as the 'green corridor.'

'Many enterprises are in this 'green corridor,' however, the process is still not moving as quickly as we expect. Sometimes there are not enough resources — for example, in matters of environmental impact assessment,' acknowledged the head of the Foreign Investors Council and chairman of the board of Schwenk Latvija, Reinhard Schneider.

This is also pointed out by foreign investors interviewed by the program. Although they evaluate the work of LIAA positively, they have concerns: are large projects, especially in energy, being delayed due to bureaucracy and a lack of qualified specialists in the government apparatus?

'In our public service apparatus, such specialists can be counted on one hand, while there were many more projects. For this reason, several projects are still waiting in line and have simply not been reviewed,' said the head of Ignitis Renewables in Latvia, Baiba Lace.

Board member of Pars termināls, Nellija Geiba, also noted that the process does not always go as quickly as investors would like. According to her, there is a noticeable lack of experts both in construction management and in the State Environmental Service.

'Due to a physical lack of capacity in institutions, even the legally established deadlines are not being met,' she added.

Parliamentary Secretary of the Ministry of Economics, Jurģis Miezainis, stated that a bill related to environmental impact assessment is currently being considered in the Saeima. 'It is certainly difficult to advance,' he acknowledged.

Saeima deputy Aiva Viksna believes that Latvia lacks a strategy. According to her, with a clear plan, it would be easier for investors to understand the situation. 'It is not this 'green corridor' or something else that is the reason why, for example, Lithuania is chosen not only in these matters,' said Viksna.

For comparison: in Lithuania, last year, the accumulated volume of foreign investments increased by more than 4 billion euros. Against this backdrop, Latvia's claims of a record billion look much less convincing.