Regional Policy Priorities of
Latvia until 2020
Ilze Goba
Ministry of Environmental Protection and Regional Development
State Development Planning Department
Regional Development Planning Division
Senior Expert
Contents
1.
Regional development trends in Latvia
2.
Regional policy priorities of Latvia until 2020
Regional disparities in the European
Union
Latvia has the most pronounced
regional disparities in the
European Union
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
Latvia
Bulgaria
Hungary
Estonia
Romania
Poland
Slovakia
European Union…
United Kingdom
Ireland
Finland
Portugal
Lithuania
Germany…
Belgium
Czech Republic
Italy
France
Austria
Slovenia
Spain
Denmark
Sweden
Dispersion of regional GDP per inhabitant, %,
2008 (NUTS 3 regions)
Regional disparities – GDP and nonfinancial investment
Ne-finanšu investīcijas uz vienu iedz.(LVL)
3500
3000
2500
Rīga Vidzeme
2000
Kurzeme
1500
Zemgale
1000
Latgale
500
GDP difference in
2008: 2,5x
0
2005
2006
2007
2008
2009
Non-financial investment
difference in 2009: 3,4x

During the growth period non-financial investments were attracted
much more succesfully in developed regions (Riga)

There is a need for additional incentives to facilitate increase of nonfinancial investments in territories that are remote from capital city
Unemployment: lack of jobs in the regions
Unemployment, 2010
Unemployment, 2011
Population decrease – depopulation of remote
areas
Changes in population in local
government territories 2006-2011
Over the last five years the population has increased mainly in
areas surrounding the capital city
Unequal financial resources at disposal of
local governments for development
Personal income tax revenue in the local
government budget per capita in 2008
Personal income tax revenue in the local
government budget per capita in 2010
Distribution of EU funds investments in planning
regions of Latvia 2007-2010 (mln. EUR, %)
2. ERDF investments
for entrepreneurship
1. ESF investments
Vidzemes reģions;
Kurzemes reģions;
1,7; 2,7%
5,4; 8,6%
Zemgales reģions;
Latgales reģions;
5,7; 6,1%
7,3; 7,9%
Zemgales reģions;
6,5; 10,4%
Latgales reģions;
8,0; 12,8%
Vidzemes
reģions; 7,9; 8,5%
Rīgas reģions;
47,2; 50,8%
Kurzemes
reģions; 24,8;
26,7%
Rīgas reģions; 41,3;
65,6%
3. ERDF investments
for infrastructure
Rīgas reģions;
197,6; 26,7%
Zemgales reģions;
126,4; 17,1%
Kurzemes
reģions; 129,6;
17,5%
Latgales reģions;
154,8; 20,9%
Vidzemes
reģions; 131,8;
17,8%
Disadvantages of the present investment
planning approach
• Sector approach dominates, municipalities and regions have to
adapt to centrally determined support conditions
• Investments are not concentrated in development centres –
limited effect on diminishing of regional disparities
• Investments are not based on real needs of territories - the
importance of planning at local level is reduced
• It is not possible to coordinate in time investments related to
different sectors
• Municipalities do not have the opportunity to implement
activities related to different sectors in a single project using the
integrated approach
• It is not possible to timely and flexibly react and adapt to
changes in local situation (availability of financing for implementation of
projects etc.)
Spatial development perspective Latvia
2030
Policy directions:
 accessibility and mobility
 polycentric structure of
settlement
 development of spaces
of national interest –
development centres, rural
areas, Riga agglomeration,
Baltic Sea coastal area,
Eastern border area
 At the moment National
development plan and
Regional policy strategy
are being drafted
Key statements of the draft Regional
policy strategy
Strengthened capacity of regions and local
municipalities
 A new public investment planning system
 Entrepreneurship and innovation
 Wider circle of stakeholders involved in promotion of
regional development (sector ministries, entrepreneurs,
NGOs, local community)
A new system for public investment
planning/provision of support for territorial
development
Key principles:
 Latvia 2030 target areas (specific support directions)
 Regional and local development programmes as an
investment request for territories (place-based approach)
 The “basket” of public services at each level of settlement
(criteria)
 Earmarked amount of public investments to each local
government and region (limiting competition between
municipalities)
Key support directions for target areas
 Transport infrastructure
 Provision of public services
 Business infrastructure
communications etc.)
(industrial
sites,
 Specific support for individual target areas
(renewable energy, harbors, creative industries,
tourism and cultural heritage etc.)
“Basket” of public services
• The desirable set of services as a set of criteria for planning
and providing public investments in territories of Latvia in the
coming years
• Determines services in particular sectors (health, culture, sports,
education, social care etc.) to be provided at each level of
settlement and hierarchy of services
• More services are provided at higher levels of settlement
• “Basket” of public services includes only those services that are
suited for territorial differentiation
Earmarked amount of public investments to each
local government and region
•
Purpose: to preclude unproductive competition between
municipalities for public investment
•
The idea of territorial quotas: to determine the amount of funding
earmarked for each territory (region, municipality) for implementing
investment projects planned and justified in their development
programmes in the framework of territorial development support measures
Principles:
• Distribution of funding between regions, earmarking more funding to
lagging regions
• Concentration of funding in development centres
The implementation of regional policy for target areas
according to support directions is going to be delivered:
• at local level – implementation of local government functions and
projects (including joint local government projects)
• at regional level – implementation of planning regions functions
(planning of public transport in the region as well as other
competencies) and projects of regional significance
• at national level (in the framework of support measures of
sector policies) – infrastructure objects of national significance
and/or objects owned by state which simultaneously are crucial for
development of support areas (e.g. state owned main, regional and
local roads)
European Territorial Cooperation as one of the implementation
tools and source of financing for regional/local projects
Capacity and autonomy of municipalities (I)
• To increase the role of municipalities in promoting
entrepreneurship
– amendments to the relevant legal acts to expand rights of
municipality to deal with its property and simplify the
procedure for lease
– to ensure measurement of administrative burden created to
entrepreneurs by municipalities, elaborating proposals for
reduction of the burden
– to provide support for creation of entrepreneurship specialist
position in every region and municipality
• To expand the set of available statistics
• To provide operation of regional development monitoring and
evaluation system
Developing regional and local innovation systems
•
•
•
•
•
•
•
•
To elaborate and implement pilot projects to create innovation systems at
local and regional level
To promote more active involvement of municipalities in aligning
education with local labor market needs
To train employees of municipalities and regions to deal with issues
connected with promotion of innovation and development of clusters
To provide municipalities/regions support for promotion of innovative
entrepreneurship, by organizing competition of best development ideas,
training courses for authors of innovative business ideas, entrepreneurship
days
To develop local and regional networks of mentors
To provide municipalities and regions with information about
international support instruments for promotion of innovations at local
and regional level
To promote best practice (local, as well as international) in promotion of
innovation
To foster creation of local identity products and promotion in market
Questions?
ilze.goba@varam.gov.lv
The current tools for implementation of regional policy
Target areas
Development
centres
Specially
supported
territories
Support directions
- revitalization of deprived territories in Riga
- support to development of competitiveness,
accessibility and attractiveness factors of urban
environment and city-regions, facitilating revival of
urban
environment,
entrepreneurship
and
development of technologies, social inclusion and
urban – rural partnership
- support for development of entrepreneurship
- tax allowances on personal income tax and
enterprise income tax (special procedure for
writing-off depreciation of fixed assets and special
procedure for covering losses)
Source and amount of funding
ERDF
priority
Development”
2007-2013
„Polycentric
Activity "Co-financing to the investments
in micro and small-sized enterprises
operating in the specially assisted
territories“) (public funding: 30,9 M EUR)
14 103 938; 3%
517 777 458; 97%
Darbības programma "Uzņēmējdarbība un inovācijas"
Aktivitāte "Atbalsts ieguldījumiem mikro, maziem un vidējiem komersantiem īpaši atbalstāmajās teritorijās (ĪAT)"