The political elite of Latvia has created a unique perversion: bureaucratic perfectionism without results, writes Uldis Osis on the Pietiek.com portal.
These data are not just statistics; they are a verdict on the management of Latvia over the past two decades. While Estonia sells itself as a digital future and Lithuania becomes a new engine of Europe's industry, Latvia is stuck in complacent provincialism. We are merely watching as our neighbors' backs recede. We are not just lagging behind — we have consciously chosen stagnation.
The political elite of Latvia has created a unique perversion: bureaucratic perfectionism without results. We have created an environment where it is safer for a bureaucrat to say "no" or demand ten more approvals than to take responsibility for allowing a major investor into the country. Our legal environment has resembled a swamp for years — the "golden age" of insolvency administrators and slow court processes have scared away any reasonable capital that has a choice between Riga, Tallinn, or Vilnius. Investors are reluctant to invest in countries where justice is either bought or has to be waited for decades.
The so-called "capital repair" of the banking sector has become an excellent example of how, in trying to wash our dirty laundry, we burned down the whole house. The fight against money laundering has turned into a hysterical nightmare, where any foreign entrepreneur is automatically considered a criminal. While our neighbors opened doors for fintech companies, we closed doors even for basic lending, turning the banking sector into a sterile but incapable mechanism for development.
Our tax policy has not been a strategic tool but a patching of a constantly leaky budget. We punish entrepreneurs for wanting to pay salaries (high tax burden on labor in the low-income segment) and change the rules of the game after every election. What signal does this send to investors? We tell them: "We don’t know what we will do tomorrow, but we will definitely want to take more from you."
We continue to ignore demographics. We talk about attracting investments and high technologies, but we do not have people who will work in these enterprises. The political courage to open the labor market to truly qualified specialists and limit the flow of unskilled labor is replaced by populism, while real businesses simply move to where there are available hands and minds.
What needs to be done? (If, of course, there is enough courage.)
Eliminate bureaucratic terror: introduce the principle of "silence means consent" — if a government agency does not respond within the established time, the permission is considered granted. Responsibility must be shifted from entrepreneurs to bureaucrats and politicians.
Tax moratorium: fix the immutability of the tax system for 10 years. Period. Stop pulling the business every new budget cycle.
Investment diplomacy as warfare: the investment agency and embassies need to stop "handing out brochures" and start aggressive lobbying. Each major investor should be provided with a personal representative from the state who is responsible for every delay.
Realism in education and immigration: if we are unable to train 3,000 engineers a year, we must "buy" them abroad starting tomorrow. Without prejudice and unnecessary delays.
Latvia can no longer afford the luxury of being a "middleman." If we continue on this course, we will turn into a beautiful but empty museum between two thriving states. It is time to stop fearing capital and start fearing the poverty created by our own cowardice and indecision.
