On December 11th, 2009, Freedom and Solidarity Foundation held a forum “Public sector reforms: lower costs, greater efficiency – successful examples in Eastern Europe”, which called on government workers, academics, political party representatives, students, and others. Around 100 people attended the event, which indicated the importance of this topic and willingness of our society to contribute to public discussion.

The forum was opened by Freedom and Solidarity Foundation Chairman Atis Lejiņš who stressed the ongoing good works of some public bodies, such as the VSAA (State Social Insurance Agency), KNAB (Corruption Prevention and Combating Bureau), National Audit Office and others, but also spoke of those whose work now is more than negative. During his introductory remarks A. Lejiņš also welcomed all participants, and declared the forum open and ready for work.

As the effective state administration is also the European Union (EU) priority, it is important to hear views of the EU’s representative body, thus the next speaker was the Head of European Commission’s representative office in Latvia Iveta Šulca. “State without good governance, even if it is a EU member state, will find the way to fail,” noted I. Šulca, and informed about the popular beliefs, myths and truth related to the Latvian membership in the EU. In her speech, she also outlined three main directions which Latvia should work on for building an efficient state administration. These are: academic environment measurements, a real dialogue with the public before the decision making, and communication, which constitutes a foundation for good policy.

Next, Baiba Pētersone, the Deputy Director of State Chancellery, responsible for policy coordination and public affairs, outlined the present situation in Latvia in her essay “Public administration reform – the current situation and challenges”. She talked about the elements that should certainly exist in the normal administration: politicians who represent the public interest, the competent government employees, clear, rational and effective administration procedures.

Iveta Reinholde, associate professor of Political Science Department of faculty of Social Sciences of University of Latvia, described Latvian reforms to a never-ending story. Her presentation displayed the challenges that are currently experienced by Latvian society, as well as the state administration. The state administration is fragmented now – such being the case, it is difficult to cope with the problems and challenges already mentioned, for example, globalization, demographic changes, increasing public demand for the quality of state administration, etc. In the conclusion of her speech, I. Reinholde stressed that even in these difficult times it is important to make it possible to inform people and talk openly about things that affect decision making.

Roberts Ķīlis, professor of Stockholm School of Economics in Riga, offered a “voucher system” as one of the optimization tools. Initially he presented the most relevant research data on education system, employment and GDP interaction in Latvia and other important information, which showed that socioeconomic inequalities are rapidly growing in Latvia. Consequently, more and more people have no access to basic services and education. The “voucher system” is already successfully implemented in other countries and could also be introduced in Latvia. “By initially introducing such in education system, we could later find a way to adapt it in other areas as well,” said Roberts Ķīlis and explained the nature of the system. The voucher system could be a tool to promote equality because it comprises individual choices and the principle of solidarity.

Jarno Laur, Former Minister of Internal Affairs of the Republic of Estonia, presented Estonia’s experience in his presentation “Estonian interior affairs system’s reform – the merger of Estonian police, immigration and citizenship services, and border patrol”. He stressed that the reform was a long process and the actual results would likely be seen only after a few years. However, he told that the reform in Estonia was carried out at a time when the country had similar problems like the ones Latvia is experiencing now. Economic crisis and budget cuts, and various environmental changes forced government to search for different solutions. And this should be done also in Latvia. Mr Laur warned about the risks that should be faced while carrying out the reforms, but final results were often even better than previously expected.

Corruption and its prevention issue are related closely to the quality of public administration. Aleksejs Loskutovs, the former Chief of the Corruption Prevention and Combating Bureau, presented his thoughts on the situation in Latvia. Addressing one of the most difficult current problems in Latvia – shortage of state budget funds, he noted that, despite popularity of such idea, introduction of Euro in Latvia cannot be the goal, it should serve as a tool for Latvia’s more effective involvement in the EU. A. Loskutovs named several things that would need to change first, starting with the legislation modifications, upgrading the internal quality control to the executive level, and the need of a formation of strong civil society. Society, which is willing to participate, is very much needed in Latvia, because at the moment we have little influence on state governance and decision-making at state level.

“Latvia through the Danish glasses” – this vision to the forum participants was offered by Morten Hansen, Head of Department of Economics of Stockholm School of Economics in Riga. In his presentation, he stressed that Latvia was willing to pay low taxes as in U.S., but spend as much as the Nordic states. In his comparison of Latvia to the lecturer’s homeland Denmark, he described Danish people as willing to pay taxes because they believed they would get the money back in several different ways through state guaranteed social services. Latvians would not pay taxes fairly and adequately while the lack of such faith and distrust in state administration will continue to exist.

At the conclusion of the first part of the forum, Matthieu Meaulle, Economic Adviser of the Foundation for European Progressive Studies, proposed a little more visionary perspective on the themes mentioned by first speakers and made a presentation on “Public sector reforms: theoretical approaches and policy practice synergy”. He reiterated that Latvia had a huge income inequality which presented the greatest problems. According to Mr Meaulle, Latvia was and could be competitive but it lacked solidarity. “More equality and solidarity will give you more freedom,” said Matthieu Meaulle, and consistently defended his position while answering questions from the audience.

The second part of the forum was a panel discussion which was attended by members from several political parties. Guntis Bērziņš, who represented party Jaunais Laiks (New Era), already in the start of discussion outlined the need of improvement of the efficiency of bureaucracy if we wanted Latvia to recover soon. Ilze Viņķele, who represented party Pilsoniskā Sabiedrība (Civic Union), were focusing on much needed political reform, because the public sector reform could not be effectively implemented within the current political system. LSDSP (Latvian Social Democratic Workers Party) representative Lolita Neilande believed that the public sector reform was rushed and experienced a number of too rapid steps and adopted decisions, which led to confusion and mistakes in the future work. She also noted that “3 Ps” – politics, plans and projects – should not be mixed together, even if they are present in all areas and levels of governance. According to Ms Neilande, executive and decision making functions need to be distinguished carefully. On other hand, Veiko Spolītis, representative of party Sabiedrība Citai Politikai (Society for Different Politics), while backed the positions of previous speakers, also added that so called “breakthrough” approach would harm the development of state administration, and he called for more systematical work. Discussion was lead by Ivars Ījabs, associate professor of Political Science Department of faculty of Social Sciences of University of Latvia.

During the discussion the party representatives answered various questions from the audience and shared their thoughts and intentions in the light of upcoming parliamentary elections. Everyone agreed that education was the priority sector for implementation of reforms and attracting public investment. The need for joint efforts, formulation of common goals and joint agreement on key priorities for the nation’s good was repeatedly mentioned throughout discussion.

Main conclusions from the forum:

For the state administration apparatus to be effective, clear and proper objectives should be defined;
State administration can be effective only if it has a competent political leadership, thus there is a need for substantially reduced role of private investment in election battles and shift the focus on the expertise;
Weakness of civil society has a negative impact on both the political decision making practices, as well as on state administration’s decision quality;
Latvia is investing almost nothing in research which would serve as a base for quality decision making in state administration. It is necessary to conduct regular research in each key sector, and seriously consider decisions based on the results of these studies;
Eliminating the corruption in state administration is a crucial prerequisite for effective public sector reforms. In Latvia’s case, serious re-evaluation of need for such comparatively high proportion of public servants should be done in order to improve effectiveness of state governance and reduce associated costs.

The forum was organized by Freedom and Solidarity Foundation, in cooperation with Foundation for European Progressive Studies.