Over the next seven years, investments from the multiannual budget of the Recovery Fund and the EU Structural Funds will provide significant support to boost productivity, digitisation, export and competitiveness of our entrepreneurs. At the same time, however, we are still trying to recover from the shock of the rapid jump in energy prices and painfully feel the economic consequences of Russia’s ruthless war in Ukraine. Therefore, additional state funding is needed for activities to strengthen economic security that will not be financed from EU funds,” Minister of Economics Ilze Indriksone says.
When approving the proposals submitted by ministries for the state budget priority measures for 2023 and the budgetary framework for 2023-2025, the Cabinet of Ministers has also approved several proposals submitted by the Ministry of Economics as important measures for the Latvian economy.
The priority of the Ministry of Economics in 2023 will be the economic security of the country. Building a strong national economy requires not only addressing current challenges, but also taking care of future possibilities. Therefore, state budget resources should be invested primarily in the initiatives that will have a long-term effect on strengthening economic security – measures that will enable our companies to become stronger, develop faster and create well-paid jobs,” the minister continues.
In 2023, the government supported additional funding of EUR 2.87 million for innovation, the contribution of science to the economy and human capital development. EUR 2 million are intended for the further development of the Innovation Fund initiative early-stage research projects with commercialisation potential, while EUR 4 million per year are expected to be allocated to this objective from the state budget also in 2024 and 2025. Innovation Fund initiatives have already started at the end of 2022 and, currently, two projects have already been supported, each amounting to EUR 5.7 million with the implementation period until 2024. One of the projects supported is implemented in the field of smart specialisation “Biomedicine, medical technologies, pharmacy” and the other in the field of smart specialisation “Photonics and smart materials, technologies and engineering systems”. The additional funding provided for 2023, 2024 and 2025 is intended for embodying the project approach that would enable long-term planning of project funding, as well as the possibility of setting up project consortia or platforms, using flexibility in selecting the most appropriate sub-projects to achieve the national and mission approach based objective set for the consortium.
The government has also supported the allocation of EUR 200 thousand for the development of the start-up industry ecosystem, as well as the allocation of EUR 675.3 thousand for the improvement of the human capital and employment management model, promoting growth and export capacity of Latvian enterprises, providing highly skilled and professionally prepared workforce.
In 2023, extra EUR 12.19 million is provided for the promotion of growth, competitiveness and access to finance of enterprises. The main activity is the continuation of operations of the Investment Fund. A total of EUR 70 million have been allocated for investments in the development of large export-oriented projects of entrepreneurs important for the economy – EUR 10 million in 2023, EUR 30 million per year in 2024 and 2025. Within the framework of the funding granted this year, it is also planned to support 10-11 large investment projects, creating at least 600 extra well-paid jobs, increase the amount of investments of enterprises in research and development – ~ EUR 10 million per year and achieve additional export volume growth – EUR ~ 70 million per year. Overall, within the framework of the funding granted in the programme, which will reach more than EUR 222 million, it is planned to support 32-33 large investment projects, creating 2000 new well-paid jobs, increase the amount of investments of enterprises in research and development – ~ EUR 30 million per year and achieve export volume growth – EUR ~ 500 million per year. At the same time, this year, EUR 2.19 million is intended for the provision of export transaction insurance services to Latvian companies.
To improve accessibility and quality of housing, the government supported the provision of additional funding for the continuation of the housing guarantee support programme and the support programme “Balsts”– EUR 3 million; as well as for further development of the Construction Information System and modernisation of services – EUR 2.33 million.
However, the government plans to allocate EUR 6.22 million to provide the population with industrial goods of first necessity in case of national threats, envisaging centralised procurement of goods and decentralised storage and distribution of goods in local governments; at the same time providing that public funding for this purpose would be doubled in the coming years. The allocation of EUR 259 thousand for the introduction of a strict monitoring system to assess and prevent threats to critical infrastructure and national security in the commercial companies that are important for national security was also supported, facilitating further development of the business and investment environment.