Economist Peteris Straujinsh reflects on the incomes of Latvian residents. In his opinion, it would be good to look at the situation in the country from a global perspective.
"Latvians have weak financial security — their ability to cover unexpected expenses is the second lowest among EU countries," writes Peteris Straujinsh in his commentary.
He explains that since this concerns the inability to cope with short-term increases in expenses, rather than reserves created for old age, it cannot be attributed to the short lifespan in modern capitalism, where there was an opportunity to save. Poland has similar incomes and similar growth rates, yet the financial vulnerability of households there is better than the EU average.
"There is no doubt that incomes need to grow, the government must work tirelessly, banks must lend, and farmers must plow, but in the value system of the residents themselves, financial security should occupy a higher place. There is a feeling that it would not be enough if Santa Claus gave each Latvian an envelope. Real incomes have more than tripled over the past 30 years. Therefore, a large part of society can save more; it just requires making a choice. The increase in savings is clearly hindered by the notion of 'survival' not being set in stone and changing with the level of average incomes. Perhaps self-irony regarding the inherent tendency of people to compete with others can help," writes the specialist.
In his opinion, comparing Latvia with Europe and especially with the Baltics is a popular sport, but we rarely see our country's position in a global context.
"Of the 30 best countries in the world, 22 are in Europe, including Latvia. For context — there are several countries in Africa, as well as some outside of it, such as Papua New Guinea, where the share of people living in poverty exceeds 90%," concludes the expert.
