The chairman of the Freedom and Solidarity Foundation Atis Lejiņš opened the forum. He pointed out the demographic problems faced by Latvia in the coming years and stressed the need to resolve these problems within the EU context.

He recalled his recent participation in the European Socialist party (PES) meeting in Madrid, where he spoke on the need of utilizing Latvia’s untapped reserves of green energy. A different approach is required in economic development, whereby goods and services can be created with a higher added value.

The first speaker was Mr. Ivars Indāns, a social demography docent at the Latvian University, who spoke about his recent study “Human Resources and Latvia’s Development”, which was carried out with the financial support of the Friedrich Ebert Foundation. His conclusions are not uplifting: even though the drop in population decline is not longer increasing, nevertheless the natural increase in population growth is still negative and will remains so in the foreseeable future.

This means that the population of Latvia in the next few decades can slip below two million. Furthermore, as is the case in many other European countries, Latvia will be faced by population aging and all the social political problems that come with this: the need to work longer, to adjust work places to older people, as well as resolving the problem of implementing the concept of life-long learning.

These problems could, of course, be lessened with a rationally directed immigration policy. The trend for the last few years shows that the number of immigrants, either legal or illegal, entering Latvia has grown. However, these immigrants are mostly low skilled labor, and hence the opening of the labor market under the present political conditions certainly is not facilitating Latvia’s economic competitiveness and development in the direction of innovation.

Latvia’s present position in the EU is weak: together with Bulgaria, Poland, Slovakia and Rumania we have been placed in the “backward” category, which calls into question whether Latvia can come near to reaching the goals and tasks of the Lisabon strategy

During the following discussion the subject of ethnic tensions was raised which could result in increased immigration. Taking into consideration the present problems Latvia has after the uncontrolled immigration during the era of occupation, this possible development was certainly not desirable.

The next speaker Professor Edvīns Karnītis of the National Development Plan Experts’ Forum gave a comprehensive assessment of the Latvian economy, achievements, failures, and future trends. The main point is to transform the National Development Plan adopted by the Saeima (parliament) in 2005 into practice. In many significant areas life for Latvians has improved, still, on the whole, development has not been stable. This makes it more difficult to implement the “fast track” convergence scenario, whereby Latvia can reach the average living standard in the EU in ten years.

Karnītis stressed several problems, which are especially critical for the successful development of Latvia. First, the instability of the governments and their checkered combinations;the ruling coalitions have been formed by political forces that have had very different plans and interests. This makes the life of governments very short. Furthermore, it compels the politicians to concentrate on quickly attainable results by clinging to the so-called “100 day” paradigm. This precludes politicians from following long-term plans, because they will not see the results of their work. This, of course, makes it difficult to implement the many and relatively well-thought out Latvian strategies;the implementation of the plans becomes inevitably patchy or even breaks down completely.

However, it is not only party politics, which hamper development – Latvia has serious problems with regard to human resources corresponding to the development strategies. These range from brain-drain, the low capacity of the Latvian educational system, and raising the growth of the population. The state has several strategies to further innovation, both direct state support, as well as facilitating the need to change from an economy based on cheap labor to that of innovative approaches. Further support is needed with regard to patent registration of public and private partnership patent inventions, scientific research results, and opening of scientific laboratories for enterprises.

In his conclusion, Karnītis touched upon some more general problems, i.e., balanced regional development with the aim to further technical development, and Latvia’s educational and scientific competitiveness in a regional – Baltic and Nordic – context. Latvia’s ability to be included in this highly advanced technological region is key to a further development. But this requires fulfilling long-term goals and not succumbing to tactical internal political games.

The next part of the forum was devoted to the viewpoints of several interest groups. Ilona Kiukucāne represented the Employers’ Confederation as an expert on education and employment. She pointed out the main problems that employers have been confronted with for the past few years. One of these is the growing need for highly qualified specialists in various sectors of the economy while, at the same time, there is a growing need for low skilled labor. Furthermore there is no particular need for middle-level qualified labor, as there was when the construction and hotel business was in bloom.

Significant changes were also registered when Latvia joined the EU with its free labor market. This resulted in the shortage of local labor in the new member states, but his is becoming less pressing now, since wages in the new member states are being raised thereby diminishing the outflow of labor. A contributing factor has also been negative demographic growth.

Latvia’s ability to attract highly qualified labor is very low, most immigration is low and middle skilled labor. With regard to innovation, the state until now has not been able to implement an effective policy. This is compounded by the inability of the educational system to prepare young entrepreneurs with initiative.

Presently with the slow-down in economic growth the mobility of labor is decreasing.. However, in the future employers in Latvia will continue to be dependent on the availability labor resources, and hence work must be carried out on the development human capital resources programme.

Mr. Pēteris Krīgers, the chairman of the Latvian Free Trade Unions, spoke in turn on demographic decline, the labor flight to Ireland, and other developed countries. His proposals included incentives for population growth. But the present policy did this only within the budget framework, where there is no money. Thus, there can be no population growth. Secondly, the mobility of local labor must be raised, including the reduction of the gray economy, increasing the legal labor marked and creating new work places by investments in infrastructure, kindergartens, and housing. The government, however, is not doing this. Wages are being frozen or reduced, as well as unemployment benefits.

Thirdly, the retirement age must be raised in order to keep people in the labor market. However, it is not clear what the government will do when unemployment will grow and the number of enterprises will diminish. Fourthly, improve health care and social benefits. However, the social budget is being tapped for filling holes in the main state budget. Mr. Krīgers spoke of the present government’s reticence in consulting with its social partners, which cannot lead to socially accepted results.

The head of the Latvian Society in Ireland Jānis Kargins was unable to participate in the forum, but he did send his presentation about Latvians in Ireland. The number of Latvians coming to Ireland has diminished recently, but there is still a very large number of Latvians who work in Ireland. About 60% of them do not know whether they will return to Latvia in the near future, hence Latvia in her economical development can play a special role in helping them to decide to return. The main factors are economic problems, unemployment in Latvia and personal considerations. Kargins points out the positive growth that Ireland has enjoyed for the last twenty years and Latvia’s shortcomings and possibilities in furthering an innovative economy.

The last speaker was the only foreign guest, Zenke Schmidt, a migration expert from the European Commission representation in Geneva, who touched upon migration flows in the world and Europe. He concentrated on the issue of politically regulating these flows, which have changing in recent years. Migration can be positive or it can be negative, and hence there is a need to talk about a global approach to this phenomenon. Already there are states such as the Philippines, which specialize in the global labor market, and thereby receive considerable sums of money sent home by their emigrants. In order for this development to be fruitful in a win-win-win situation, and benefits gained would be the country receiving the migrants, the country sending them, and the migrant individually, it is necessary to introduce various global migration measures, as well as a global certification in the education systems.

The present financial crisis will no doubt result in a reduction of EU internal migration, and this has to be assessed in the Lisabon strategy’s framework, which, despite its optimistic goals, nevertheless is worth implementing.

The afternoon session of the forum was devoted to discussion. Two politicians, Mr. Dainis Īvāns of the Latvian Social Democratic Workers’ Party, and Mr. Ģirts Valdis Kristovskis of the Citizens’ Union, joined the morning’s speakers.

The highlights were questions on social responsibility and solidarity since the restoration of Latvian independence since 1991, as well as family support and the future of the political system in Latvia and economic development.