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Good evening in Latvia and everywhere else in the world where people think of Latvia and wish it growth!
Good evening everyone!
The last minutes of the year elapse - the year which has brought serious lessons and unexpected changes to Latvia, the year that will become a turning point in the history of our restored state. Each of us has gained a bitter experience. But we have also learnt to help those who experience even more difficult times. We were put to shame for past mistakes made in the economy. But we were also praised for our talents’ achievements in culture and sports. We were proud of the Latvian people in Europe.
This year we experienced the most dramatic economic downturn and the highest unemployment rate in the European Union. Already in late 2008, Latvia had to take the first loan from the International Monetary Fund and the European Commission. In addition, this year, many painful decisions had to be made in the area of health care, education and social sector. Since spring we have been working to ensure the solvency of the country, and we have succeeded.
The previous years’ policy – "Top Gear!" has failed. Also the story about seven ”good years” seems tragicomic. Unfortunately, every single family and enterprise knows the price that we are paying for these mistakes.
Already several years ago, both, home and foreign experts warned Latvia about economy overheating and the "heavy landing" risk. However, they remained unheard.
During the years of economic growth the governments lived beyond their means and did not make any savings. For example, Estonia has made savings, and therefore survives this crisis more easily than Latvia.
The evaluation of the previous years’ economic management leads to a conclusion that we have missed the opportunity that was provided to Latvia after accession to the European Union. Our country had to become a competitive economy. However, the "tiger jump" of Latvia turned out to be only the feast of three cats at a borrowed cream pot.
However, this year has provided also new opportunities. After failure of the ”tiger jump”, we have to start many things from scratch. Latvia should become a competitive economy, built on solid foundations. It is a key to our future. How to do it?
The first and most important resource is the European Union funds. This is the way we can finance many infrastructure projects, transfer the funding in support to entrepreneurship and export that will ensure economic growth. In order to attain this goal, this year we have activated the export credit guarantee mechanism. We are among the first in the European Union regarding introduction of the Micro-enterprise Support Program. Here, I would like to particularly emphasize the importance of micro- enterprises. By the help of economic incentives we encourage the people to be economically active and to become employers for themselves and others.
Second – an essential condition for restoration of economic activity will be investment attraction and investors' confidence in Latvia. The investment is the key to economic development and is directly associated with country’s reputation in international markets. The political stability, fiscal discipline and responsible economic policy are the pre-conditions for restoration of investors’ confidence.
Just a year ago it seemed that internal and external economic factors are responsible for a recession. Now we can talk more and more about the moral factors that affect economic processes in Latvia. It is most apparent in speculations about the usefulness of tax paying. Every time when we doubt the sense of tax paying we also doubt the sense of pensions, health care, education, public security and order. We doubt everything that is financed by the state. This is the road to nowhere. We cannot resolve it only by repressive methods.
Paying taxes also during the crisis will help overcome the difficulties sooner and return to previous tax rates, first of all, in the area of labor taxation. However, the reduction of tax rates will result in increased amounts of tax payments. It is an issue of mutual trust between the state and businesses. In this regard, I positively value and join the recent appeal of the Latvian Employers' Confederation to entrepreneurs not to avoid taxes.
The first signs of stabilization of the economy can already be seen. It’s the first time since regaining of independence that exports exceed imports. Finally, one of the preconditions for stabilization of the financial situation is the 2010 budget that was passed in the beginning of December. There have been many discussions on its pros, cons and implications for the development of Latvia. No matter how hard and unpopular, but this budget is the financial basis for further development of the economy. We should remember that we can spend only as much as we earn.
Paradoxically, the stabilization of the situation also involves risks. In the pre-election atmosphere the politicians of the ”good years” will increasingly interfere with the populist and demagogical advises that have already led Latvia to a standstill. It is unacceptable that a political selfishness and short-term thinking hampers recovery of Latvia’s economy. During next elections, the voters will have to weed a sustainable policy from populist slogans.
A valuable experience of the last year was the development of the social dialogue. It was neither easy nor simple. However, when the government and social partners sit down at one table, it is possible to solve the problems and agree on the values which will be the basis for country's development in the medium-term. This is the way we managed to agree on most of the measures, which ensure solvency of the country. We should continue the dialogue also next year. The experience shows that the social dialogue is a prerequisite for work of any government.
Dear people of Latvia!
Looking back at the year 2009, I am gratified that we can find events and people to be proud of.
The intentions of Latvia to overcome the crisis required painful decisions and significant changes. However, the people of Latvia positively impressed the world by their tenacity in dealing with difficulties. Latvia’s achievements were recognized in international markets. There are positive developments and the business community is the first that notices them.
Despite that fact that there is favorable environment for political populism, the society of Latvia demonstrated pragmatism and the ability to withstand provocations. This suggests a degree of democracy and popular wisdom.
The voluntary charity events and donation campaigns during which even more money was donated than during the growth years are a clear indication of the growing public responsibility for those who are worse off. Meanwhile, the success of Elīna Garanča and Alvis Hermanis outside the borders of Latvia, are only two examples of Latvia’s achievements in culture. We are proud of the brightest minds of Latvia and their assessment in Europe – of recognition that they have received on their way towards the important positions, and the awards received by our entrepreneurs. I am convinced that also next year we will have achievements to be proud of. Let the New Year begin with success of our sportsmen in the Winter Olympic Games in Vancouver!
Dear people of Latvia!
In conclusion, I would like to say many thanks! Let me say thank you to those who trusted and who still believe. Thank you to those who participated and supported. Thank you to those who remained and did no leave. Thank you to those who help others. Thank you to strong families who raise good children. Thank you to old age people. Thank you to teachers and physicians, policemen and soldiers. Thank you to entrepreneurs and farmers. Thank you also to opponents and critics.
In 2010, we will celebrate twenty years since restoration of independence of Latvia. At that time, we struggled for free Latvia, for the Latvian language and a state where the Latvian people would live in prosperity. Next year is a significant point of reference to assess new goals on the way towards values of our country. I appeal to each of you to use this opportunity and formulate precise tasks not only for yourself, but also for next Saeima and the government. Assess carefully what should be done in 2010. Approach critically the things that will be easily promised. And remember all bitter lessons of 2009, and most important – their causes.
Let the New Year be rich in wisdom, strength and unity! Let us be able to correct the past mistakes and be proud of our country!
Happy New Year!
God, bless Latvia!
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