Latvia or Republic of Latvia is, with Estonia and Lithuania, one of the three countries of the Baltic States and member of the European Union since 2004. Also, Latvia is member of the World Trade Organization since 1999. This country has worked a lot in improving economy as well as quality of life. As a result, Latvia belongs to the group of very high human development countries. Furthermore, Latvia has had a rapid growth of GDP during the las 10 years, except when the 2008 crisis affected the global economy. Despite this episode, Latvian GDP growth was better than expected after the crisis since, Latvians focused on exports as the motor for the economy. Besides, the geographical location makes Latvia a landmark for transportation and international commerce, where transit services are highly developed. In brief, Latvia is the major commercial hub between east Europe and west. Hence, Latvia is the center of the world’s first Free Trade Area, the Hanseatic League.
What Latvia import the most is both, machinery and mechanical appliances, electrical equipment and wood articles. Each one of this sector has constituted in 201 the 17% of the exports in Latvia but, other products such as prepared foodstuff, base metals, articles of base metals and mineral products followed the main exportation products. The following chart, taken from Central Statistics Bureau of Latvia, indicates in percentages Latvian exports by sector during 2014.
This list may not illustrate how exports-dependent is Latvia but, with the 83rd place of largest exporters in the world and with an exports’ increase of 3.5% per year, one can have an idea about how exports contribute to the Latvian economy. In addition to this, according to the Economy Complexity Index (ECI), Latvia has the 35th most complex economy in the world.
An expanded list of the seven products per area Latvia exports the most is below; the numeration corresponds to the numeration of main products given in the previous list.
- Broadcasting equipment, video displays, telephones, electrical control boards, machinery having individual functions and audio alarms.
- Sawn wood, rough wood, plywood, particle board, fuel wood, wood carpentry, and wood crates.
- Hard liquor, wine, rolled tobacco, baked goods, animal food, pasta, and processed fish.
- Scarp iron, raw iron bars, iron structures, other iron products, scrap copper, ferroalloys, and hot-rolled iron.
- Refined petroleum, peat, coal briquettes, petroleum gas, coal trail oil, cement, gypsum.
- Packaged medicaments, Industry fatty acids, oils and alcohols; ammonia, potassic fertilizers, cleaning products, nitrogenous fertilizers and candles.
- Wheat, rapeseed, barley, other live plants, wheat flours, frozen fruits and nuts, and coffee.
- Cars, vehicle parts, passage and cargo ships, trailers, delivery trucks, tractors, and planes, helicopters and spacecraft.
- Milk, cheese, non-fillet fresh fish, concentrated milk, bovine meat, processed fish, and pigs.
- Retail wood or animal hair yarn, non-knit men’s suits, non-knit women’s suits, knit sweaters, house linens, felt or coat fabric garments, and used clothing.
- Precious metals, arts and antiques, leather footwear, explosive ammunition, other measuring instruments, paper goods, and plastic and rubbers.
Hence, the rapid growth on exports has been possible thanks to the cooperation the Investment and Development Agency of Latvia (LIAA) that promotes business development and increase the competitiveness of Latvian entrepreneurs. As long as Latvian entrepreneurs have the LIAA assistance, exports will be continuing rising and Latvia’s economy will become stronger. Furthermore, in order to help finding Latvian suppliers to increase their competitiveness, LIAA offers the following activities:
- Provision of information on Latvian exporting companies, export products and services
- Search of Latvian suppliers according to buyers’ requests
- Distribution of incoming business proposals to Latvian companies directly and through the Internet
- Organization of trade seminars and foreign trade missions to Latvia
- Consultancy and foreign market studies for Latvian enterprises
- Assistance to Latvian companies at international exhibitions and trade missions, export promotion campaigns and business matchmaking
- Provision of information on workforce availability and skills’ evaluation.
Therefore, Latvian entrepreneurs do not work alone and thanks to LIAA, Latvian economy has been seen as a stronger economy that might serve as model for other countries’ economy.
And when activities have been accomplished, LIAA has also their follow-up service for supporting entrepreneurs or investors after any implementation related to information about the EU common market and internal laws.