Foreign investment in Latvia continues to increase day by day. Although the total amount of foreign investment in 2020 exceeds 15 billion euros, it is still less than our Baltic neighbours Estonia and Lithuania. Meanwhile, investments continue to come from countries such as the USA, Switzerland and Canada, which are not members of the European Union. But we can say that trade competition and other global economic uncertainties remain.
Foreign investment in Latvia continues to increase. Compared to the last century, foreign investment in Latvia has increased tenfold. Mārtiņš Panke, chairman of the Council of foreign investors in Latvia, said growth would continue.
Under a major trade deal this year, German manufacturer Schwenk is buying the northern European operation of cement maker Cemex and food producer Orkla is building new manufacturing plants in Latvia.
As in Latvia, Foreign Investment has increased in our Baltic neighbours Lithuania and Estonia over the past decade. Panke acknowledged that, compared with these two countries, Latvia attracted the least foreign capital.
According to 2019 data, investments in Estonia are almost € 24 billion, in Lithuania € 18 billion and in Latvia € 16 billion. Potential needs greater and more effective action in order to be more effective in this competitive market. Because a foreign investor who invests in our region compares the three Baltic countries.
There are some reasons for this condition. Estonia, Finland and Poland are countries with closer economic relations with Lithuania. But one of the main problems in Latvia is that there is little work force.
Panke noted the role of local governments and noted that the projects were not implemented because of the lack of attention needed to attract openness, hospitality and foreign investment.
Latvia’s most important advantages for foreign investors are the quality of human capital, professional experts and Latvia’s flexibility as a small economy and its ability to adapt to various changes. So which regions are foreign investors investing in in Latvia?
That’s hard to discern. There are some sectors where the Latvian economy is closed to foreign investment for various reasons, such as waste management and the extensive construction sector. But there are many possibilities in the service, manufacturing and retail sector.
Panke said: Latvia’s long-term competitiveness should be assessed. That is, transportation to Latvia, with lower labor costs, attracts investors. Therefore, in the long term, we should look for new investors who have higher added value and have a different investment quality.
Among the countries where Latvia receives the most investment, Sweden ranks first. States such as Estonia, Lithuania and Russia are also among the most prominent investors.
According to data from the Bank of Latvia, three-quarters of the vast majority of total foreign investment in Latvia comes from EU countries.