Foreign investors in Latvia concerned about demography, workforce availability: survey

RIGA, Jan. 10 (Xinhua) -- Negative demographic trends and workforce shortage are the main concerns worrying foreign investors in Latvia, Marta Jaksona, executive director of the Foreign Investors' Council in Latvia (FICIL), said on public radio Wednesday.

The FICIL Sentiment Index 2017, which was presented at the Stockholm School of Economics in Riga (SSE Riga) on Wednesday, shows that the foreign investors' overall mood improved last year in comparison with 2016.

The investors interviewed in the annual survey believe that Latvia's ability to attract investment has improved and policymakers' efforts to improve the Baltic country's investment climate have yielded some positive results.

During the first nine months of 2017, for instance, Latvia managed to attract five times more FDI (foreign direct investment) than during the same period in 2016, Arnis Sauka, an associate professor at SSE Riga and author of the FICIL Sentiment Index 2017, said in an interview with public television.

Latvia received 35 percent of all FDI flowing into the Baltics last year, while 36 percent of FDI went to Lithuania and 29 percent to Estonia.

In Latvia, foreign investors have been putting money mainly in construction and real estate, as well as IT companies, professor Sauka said.

The FICIL Sentiment Index 2017 identifies a number of issues causing concerns for the foreign investors and are likely to deter them from investing more in Latvia.

Demographic trends and scarcity of workforce are the investors' greatest concerns, as respondents in the survey have reported labor shortages across all sectors of the Latvian economy.

Latvian Economics Minister Arvils Aseradens, meanwhile, said that the government is working on a number of solutions to the workforce shortages that do not involve immigration. First of all, investments are being planned in lifelong education, and secondly, the government intends to encourage movement of people to the areas where workers are needed the most.

Other issues worrying foreign investors in Latvia include problems with insolvency rules, the judicial system, healthcare and unpredictability in the business environment, including taxes.

As professor Sauka said at the presentation of the survey, the investors just cannot believe Latvia's latest tax reforms are here to stay. Enditem