According to the Rīga-based newswire, with the slowdown of economic growth in the second half of the year, the ministry expects that the labor market would also be recovering at a more moderate rate.

“Compared to 2011, the number of employees may grow 1.5 percent in 2012. The employment rate in the age group of 15-74 years could be 56.5 percent on average, which would be an increase by 1.3 percentage points from 2011. But it has to be said that growth of employment in the coming years will be slower than the economic growth because output will also be based on increased productivity,” the Economics Ministry was quoted as saying in its reported.

This year there might be a slight decrease in the number of employees in the sector of public services as well as in extractive industry and mining, the ministry said, BNS reported.

According to BNS, with the growth of employment in 2012, unemployment will keep shrinking. “The unemployment rate in 2012 is expected to drop by 2 percentage points from 2011 to an average 13.4 percent during this year,” the Economics Ministry was quoted as saying in the report.

“The hospitality industry, the construction industry and the information and communications industry are expected to show comparatively steeper growth in 2012. These trends will also be reflected in the demand for labor in general. Higher demand for labor is likely also in the transport and warehousing sector and in the professional, scientific and technical services,” the ministry was quoted as saying.

According to preliminary information from the Latvian State Employment Agency (NVA), cited by BNS, the unemployment rate in Latvia was at 11.6 percent of the economically active population, in the second half of January.

According to the Riga-based newswire, the number of export declarations grew by 19.3 percent from 2010 to 96,700 declarations in 2011.

The tax authority’s data reveal that judging by their statistical value goods were mostly exported to Russia, Norway, and Belarus, BNS reported. Russia received 170.7 million lats (EUR 242.88 million) worth of beverages, alcohol, and vinegar, and 90.3 million lats (EUR 128.48 million) worth of equipment and mechanical tools. Norway received 31.5 million lats (EUR 44.82 million) worth of timber and timber articles, and 20.8 million lats (EUR 29.59 million) worth of iron and steel products. Belarus received 15.8 million lats (EUR 22.48 million) worth of land transport vehicles from Latvia.

According the State Revenue Service’s information, cited by BNS, the number of import declarations drawn up in 2011 increased by 20.3 percent year-on-year to 102,000 in 2011.

According to BNS, The statistical value of Latvian imports grew by 325.3 million lats (EUR 462.86 million), or 21.9 percent year-on-year, to 1.81 billion lats (EUR 2.57 billion).

Just like the year before, BNS reported, in 2011 Latvia imported goods mostly from Russia, Belarus, and China, in terms of their statistical value. Russia supplied 385.12 million lats (EUR 547.97 million) worth of fossil fuel, 105.07 million lats (EUR 149.5 million) worth of iron and steel, and 35.35 million lats (EUR 50.29 million) worth of timber and timber articles. Belarus supplied 151.25 million lats (EUR 215.21 million) worth of fossil fuel, 86.2 million lats (EUR 122.65 million) worth of iron and steel, and 13.21 million lats (EUR 18.79 million) worth of timber and timber articles. China supplied 65.87 million lats (EUR 93.72 million) worth of electrical equipment and appliances, 35.48 million lats (EUR 50.48 million) worth of machines and mechanical tools, and 12.89 million lats (EUR 18.34 million) worth of furniture, BNS reported.

By doing so, R&I returns Latvia’s rating to the investment level. In general, this is an important assessment of Latvia’s economic development potential. By now the investment-category rating has also been granted to Latvia by the agencies Fitch Ratings and Moody’s.

“We are all witnesses to a unique moment, when the majority of countries all over the world face a reduction of ratings, but for Latvian – on the contrary – it is increased. The ratings agency recognized the achievements of the government and the whole society in order to balance the economy of our country. Therefore this assessment is of double importance to Latvia!” said Finance Minister Andris Vilks.

The rating agency recognizes efforts made to stabilize the economic situation and adjust economic structures in Latvia after being engulfed by the economic crisis in 2008. With the government’s fiscal consolidation also progressing better than scheduled, the predictability of Latvia’s fiscal position and the certainty of the government financing have increased as well.

The agency emphasizes the fact that following the dissolution of parliament and the snap general elections in September 2011, Prime Minister Valdis Dombrovskis has remained in place, and such a political development has also been contributing to securing the stability of the government’s fiscal management. The European Union and International Monetary Fund international loan program was also concluded on schedule in December 2011.

The rating agency states that the economic and financial situation in Europe, with which Latvia has strong linkages through trading and banking activities, has grown increasingly murky. However, R&I sees it has become less likely that Latvia’s economic and fiscal stability will be greatly shaken even with a further deterioration of the external environment.

Real gross domestic product (GDP), which plunged in the wake of the global financial crisis, has grown on a year-on-year basis since the third quarter of 2010. In the third quarter of 2011, GDP growth of 6.6% was recorded.

According to the government’s forecast, full-year growth in 2011 is expected to be 4.5%, as external demand is expected to be subdued in 2012 due to the economic malaise in Europe, which is Latvia’s main destination for exports.

R&I states that according to government’s forecasts the economic growth rate will throttle down to 2.5%. Even if the growth rate in 2012 falls somewhat below the government outlook because of deterioration in the external environment, R&I sees little probability the economic fundamentals will be deteriorated.

“The assessment of the Japanese ratings agency is important because it increases the recognizability of Latvia in the Asian economic environment and financial market, providing the state and companies with an opportunity to make international cooperation more actively and broaden the scope of investors. This will improve trust and interest of investors in Latvia,” stated the minister.

According to the Rīga-based newswire, Rinkēvičs said that many of the problematic aspects highlighted during the debate today were essential and the Foreign Ministry, the government, and the parliament would have to deal with them when considering Latvia’s national interests in the EU and NATO context.

The foreign policy debate next year probably would be even more interesting and intensive, BNS reported, as the country’s priorities for the EU presidency and more detailed defining of foreign economic interests would be discussed, Rinkēvičs said.

According to BNS, Rinkēvičs thanked the Latvian lawmakers for active participation in the debate, saying that they had demonstrated high-quality debating and understanding of the foreign policy matters.

The second annual foreign policy debate took place at the Latvian parliament on January 27, BNS reported. Nearly 30 lawmakers spoke during the debate, but Rinkēvičs took floor four times, including the opening speech. Latvian parliament speaker Solvita Āboltiņa and Defense Minister Artis Pabriks also participated in the debate.

Link to full text of Rinkēvičs speech: http://www.mfa.gov.lv/en/news/speeches/2012/01-26/.

According to the Rīga-based newswire, Kalniņš said Latvia’s foreign policy priorities have not changed since the previous foreign policy debate in parliament a year ago, and they are based on the development of the national economy and protecting Latvia’s interests in the EU.

What has changed over the past year, BNS quoted Kalniņš as saying, is that Latvia has managed to overcome the crisis and now has to help tackle the crisis on the European scale, protecting at the same time its own interests in the context of the EU budget and farming subsidies.

According to BNS, Kalniņš indicated that on the international arena it is also necessary to reckon with Europe’s southern neighbors, because the Arab Spring, which saw the departure of former Egyptian and Tunisian leaders, “has brought about certain change.”

Kalniņš said that as a NATO member Latvia must continue to meet its commitments in Afghanistan, whose economic growth can be tied to the New Silk Road, which crosses Afghanistan, BNS reported. By carrying on with its work, Latvia will be able to maintain its leading position in this international project.

According to BNS, the chairman of the parliament foreign affairs committee also noted lawmakers’ task to ratify amendments planned to the Lisbon Treaty and new agreements aimed at strengthening Europe’s fiscal discipline.

“If we hope to secure support for farmers, we must help strengthen Europe’s financial stability, which is the foundation of our common economic growth,” the MP was quoted as saying.

Contributing to the discussion were the Ambassador of Latvia to Kuwait, Ilgvars Kļava, the Ambassador of Kuwait to Latvia, H.E. Dr. Musaed Al-Haroun, and, via video conferencing facilities, also the Ambassador of Latvia to the United Arab Emirates, Māris Selga. The ambassadors briefed the participants about the market profile of and export opportunities in the respective states.

Supporting Latvian exporters’ efforts to enter markets in the Gulf region, the Ambassador of Latvia to Kuwait indicated that “it is vital that entrepreneurs with serious intentions of launching their operations in the Gulf States ensure the presence of their representative in the region.”

The Latvian Ambassador to the United Arab Emirates, Māris Selga, talked about export opportunities to the Emirates and accentuated that “Latvia’s businesses should seek support more actively from the Chamber of Commerce.”

As part of the discussion, the participants heard the Foreign Ministry presentation on Latvia’s economic cooperation with Qatar. The export manager of SIA Evopipes, Māris Melderis, shared the company’s experience to date in cooperation with the Gulf States.

The Ambassador of Kuwait to Latvia, H.E. Dr. Musaed Al-Haroun, encouraged Latvian businessmen to develop cooperation with Kuwait and accentuated that it was important to visit the country in order to build direct contacts with representatives from relevant sectors.

The Ministry of Foreign Affairs organizes the round table in association with the Latvian Chamber of Commerce and Industry. This was the first event in this year’s series of discussions, “Foreign Service for Latvia’s Exports: Entrepreneurs meet Latvian Ambassadors,” which offers an opportunity for entrepreneurs to establish direct contacts with ambassadors abroad and get regular access to the information that Latvian ambassadors have collected and processed to enable its broad use toward promoting economic growth.

The next round table, to be held on February 15, 2012, will deal with Latvian-Japanese trade.

According to the Rīga-based newswire, exports of timber and timber products reached 947.877 million lats (EUR 1.345 billion) in the first eleven months of 2011, growing by 15.9 percent from the same period last year and accounting for 87.1 percent of total Latvian exports of forestry products in January-November last year.

Sawn timber exports grew 2.3 percent year-on-year to 265.744 million lats (EUR 378.12 million), BNS reported, and made up 24.4 percent of total forestry industry exports in January-November 2011. Round timber was exported for 149.484 million lats (EUR 212.69), up 17.2 percent from last year, and made up 13.7 percent of the industry’s total exports during the 11-month period

last year. According to BNS, firewood exports increased by 8 percent to 133.678 million lats (EUR 190.20 million) and amounted to 12.3 percent of total Latvian forestry industry exports.

The newswire also reported that during the first eleven months of 2011, Latvia also exported 93.226 million lats (EUR 132.64 million) worth of plywood at a 23 percent rise from the same period in 2010, which accounted for 8.6 percent of total forestry industry exports. Chipboard exports grew by 4.2 percent to 79.192 million lats (EUR 112.68 million), making up 7.3 percent of total exports in the first eleven months of last year.

In January-November 2011, BNS reported, Latvia also exported 71.154 million lats (EUR 101.24 million) worth of paper, cardboard and their products at a 40.2 percent rise year-on-year, accounting for 6.5 percent of total forestry industry exports. Wooden furniture exports rose 3.6 percent to 55.183 million lats (EUR 78.51 million), making up 5.1 percent of total exports.

According to the newswire, during the first eleven months of 2011, Latvia supplied its forestry products mainly to Sweden (16.2 percent), Germany (11.8 percent) and the UK (11.6 percent). As compared to the first eleven months of 2010, forestry industry exports to Sweden increased by 19.2 percent to 176.659 million lats (EUR 251.36 million), exports to Germany increased by 15.1 percent to 128.247 million lats (EUR 182.48 million), and exports to the UK grew 10.2 percent to 125.988 million lats (EUR 179.26 million).

During the first eleven months of 2010, Latvia exported 932.64 million lats (EUR 1.327 billion) worth of forestry industry products, BNS reported.

According to State Revenue Service (VID) data, cited by BNS, in 2011 as many as 93,600 unemployed people registered with NVA found permanent jobs, including 73,235 people or 78 percent found jobs after participation in NVA activities.

NVA said that last year the number of long-term unemployed people who found permanent jobs continued rising, to 29,638 people as compared to 5,135 people in 2009 and 22,345 people in 2010, BNS reported. In the 12 months of 2011 permanent jobs were found by 18,326 young jobless people and 2,341 people in pre-retirement age.

“Most successful last year were qualified workers and craftsmen, such as builders, tailors, locksmiths, pastry-cooks, carpenters, electricians, etc. Jobs were also found by different specialists – salesmen, accountants, nurses, office administrators,” the agency was quoted as saying.

According to the newswire, NVA deputy director Vivita Pūliņa underscored that the agency offers different services, helping job seekers to increase their competitiveness and integrate in the labor market, find a job, become a businessman or a self-employed person. “Events to raise competitiveness — short courses, seminars, lectures – are very popular. NVA offers professional training and informal education programs,” Pūliņa was quoted as saying.

BNS reported that the unemployment rate in Latvia was at 11.6 percent of the economically active population, according to preliminary information from NVA as on January 15, 2012. The number of people officially registered as unemployed in Latvia was 131,011.

The panel of Constitutional Court judges also decided to open a case over the constitutionality of the law regulating referendums in Latvia, BNS reported, but ruled against starting proceedings over the rest of the application filed by 30 lawmakers.

BNS also reported that the case has been opened over provisions of the referendum law under which a legislative initiative must be put to a referendum if the parliament has not passed it without amendments, but it is supported by at least one-tenth of eligible voters.

According to the newswire, Constitutional Court judge Aija Branta said that the court found the request to assess the constitutionality of these provisions grounded from the legal point of view.
The parliament is now expected to submit a written reply on the issue by March 20, 2012.
The panel of judges also decided to ask the Constitutional Court chairman to call a sitting on an issue that is not regulated by the Constitutional Court law, namely, the lawmakers’ request to suspend the referendum, BNS reported.

According to the newswire, Constitutional Court chairman Kūtris said that the judges came to two conclusions upon considering the lawmakers’ request to stop the referendum.

“First of all, the Constitutional Court takes a temporary measure, namely, suspends a process if it can lead to a failure to enforce a court ruling. The Constitutional Court assessed whether the possible court rulings [regarding the constitutionality of the referendum] could be enforced and concluded that they could be enforced in any circumstances and the applicants’ arguments are insufficient to conclude that this would be a senseless court action,” Kūtris was quoted as saying.

Secondly, BNS cited Kūtris as saying, the popular vote is already in process, this is a legislative process, and the people as a legislator will go to polls to express its position on the given initiative. The court would need very significant and substantial reasons to suspend this legislative process, but the Constitutional Court did not find such reasons, Kūtris said.
“Thus the court has opened a case on the particular draft law on referendum but at the same time decided against suspending the referendum as a legislative process,” Kūtris was quoted as saying.
According to BNS, in their application the lawmakers had also asked the Constitutional Court to assess the constitutionality of President Andris Bērziņš’s decision of December 20, 2012, and the parliament presidium’s findings of December 20, 2012, by which the legislative initiative aimed at making Russian a state language in Latvia was sent to the parliament and put on its agenda. The Constitutional Court decided not to open proceedings over this request.

After the parliament rejected the bill, BNS reported, the Central Election Commission announced a referendum on the legislative initiative, slating it for February 18.

“Our countries have many interests in common, including, in the area of the cohesion policy and distribution of direct agricultural payments,” stated Ambassador Šepelák. He congratulated Prime Minister Dombrovskis on the occasion of conclusion of the international loan and expressed readiness to continue joint work to contribute also to economic growth, including promoting investments and trade relations.

The prime minister emphasized that the cooperation between the Baltic States and the Visegrad group countries – the Czech Republic, Slovakia, Hungary, and Poland – has great potential and Latvia is ready for active cooperation within the framework of this format.

Discussing the bilateral political dialogue, the prime minister expressed satisfaction over the visit of the prime minister of the Czech Republic, Petr Nečas, to Latvia planned this year, within the framework of which the parties will continue to look for new opportunities to promote closer cooperation at the officials’ level and at business level.