Latvia

Latvia is located on the shore of the Baltic Sea at the center of the Baltic states. The country is connected with Finland and Russia in the North and Central/Western Europe in the South. Latvia has a population of 2.5 million people spread across its main cities of Riga (capital,) Daugavpils and Liepaja. An international airport and Central Europe’s largest container transportation port are located at Riga.

The Information Technology and telecommunications sectors are growing most rapidly in Latvia, with the IT market capacity in the country doubling every six months. Latvia is now looking to develop its sector in software development outsourcing through its home-grown companies such as DATI, Eastern Europe’s largest private contract software developer. Overseas investors in the region include Sonera, Telia, Merita Nordbanken, Vereinsbank und Westbank, ACMA Technologies and PIVOT Group.

The recent boom in Latvia’s software sector has been assisted by an education system that produces a large number of IT specialists. 45,000 people study at the country’s 28 higher education institutes – around 30% of those students graduate with an IT related degree. The two main centers of IT research are at the Institute of Mathematics and Computer Science at the University of Latvia and the Institute of Electronics and Computer Science at the Latvian Academy of Sciences.

Latvia also has one of the highest percentages of scientists and engineers in Europe, available at highly competitive wage rates, contributing to the country’s development as a successful high technology and R&D center.

Regions / Cities

- Latvia Riga

Investment Promotion Agency:

Mr Kaspers Skalbergs

Latvian Development Agency

Perses 2

Riga

1442

Latvia

tel: +371 728 8842

fax: +371 728 0458

Riga

Riga is the capital of Latvia and is located on the banks of the Daugava River. The city is at the crossroads of eastern Europe, Western Europe, Russia and Scandinavia and is the largest industrial center in Latvia and the Baltic States. The international airport, the harbour, a well-developed railway and highway system offer investors an efficient and fast transport infrastructure.

In recent years the city has gone through an industrial re-structuring which has seen a decrease in production carried out in the city and an increase in the service sector, particularly in financial services. The conditions for foreign investment have also improved recently.

The major companies operating in Riga include Lattelecom, which serves the local telephone networks, and both LMT and Baltcom, both telecommunication companies. Riga is the largest education center in Latvia with more than 160,000 students at 220 different schools and 14 public and 9 private higher educational establishments.

Macro economic Profile 2008:

Estonia & Latvia:

Estonia and Latvia have been the greatest economic successes, but even the sun has its spots. They have fixed their exchange rates to the euro. Therefore, their domestic prices have risen with increasing productivity in the export sector, and they have imported substantial inflation—currently 18 percent in Latvia and 12 percent in Estonia.With their fixed exchange rates, these countries cannot pursue any monetary policy, and their huge current account deficits have been financed by foreign direct investment and bank loans. Suddenly, the foreign banks that own the Baltic banks have minimized their loans. Demand, consumption, and real estate prices have fallen. The double-digit growth rates have plummeted to 2 to 3 percent. The question is how large bad debts will be revealed, but so far the Baltic states seem to take the hit well. As in Kazakhstan, their success story is likely to reemerge.