Latvia, Детальна інформація

Latvia
Тип документу: Реферат
Сторінок: 9
Предмет: Економіка
Автор: Маличенко Дмитро
Розмір: 16.8
Скачувань: 1866




Sectoral reform



Efforts in the social sector include the "establishment of an affordable and equitable social security system that preserves work incentives, improvement in the delivery of health care services through more efficient and effective use of resources, and the adaptation of the education system, particularly to vocational education and adult retraining, to the needs of the market economy"(IMF, 1995).







Agriculture...



Agriculture is the second largest sector in the Latvian economy and has been one of the country's main sources of income, employment, and foreign exchange earnings. By the end of 1995, agriculture and agro-processing accounted for nearly 19% of the GDP, employed about 17% of the labor force, and produced 10% of all exports (IMF, 1995). After going through a major downsizing, the production in agriculture stabilized in 1995. "Agriculture has substantial potential to again become a reliable source of income and employment for most of the rural population.". (IMF, 1995). However, adjustments will need to continue through policy reforms, investment strategies, and market conditions. Latvia has already begun to redirect agricultural exports to markets outside the former Soviet Union. The Agricultural Development Project, the first investment project supported by the bank in the Baltic countries, was implemented to encourage agricultural development through the goals of land reform, extension services, and rural business development and marketing. "The primary challenge facing the sector, which currently accounts for 20% of GDP and 16% of employment in Latvia, is to increase its efficiency and export potential and ensure that output markets are competitive and prices are not artificially suppressed." (IMF, 1995).







Industry...



Under Soviet rule, the Latvian economy became deeply integrated with the rest of the USSR. Large industrial enterprises were created, many of them in heavy industry and defense, with production being almost completely dependent on imports of raw materials from Russia. Latvia, as a result, developed a near monopoly in a number of finished goods exports, supplying 93% of Soviet railway passenger carriages, 89% of radio sets, 79% of freezing equipment, 78% of buses, 72% of solid organic fertilizer spreaders, 70% of diesel engines and generators, 69% of tape and cassette recorders, and 66% of rubber footwear (EIU, 1995). Latvian's industry suffered heavily after independence as Russia started charging world prices for energy, resulting in an industrial production fall of 32% by 1992, with the main casualties being machine-building, steel works, food and light industry. Although the decline has slowed, figures showed a decline of another 38% in 1993 and another 20% in January of 1994 (EIU, 1995).



Industry currently accounts for nearly half of the GDP and less than one-third of employment in the economy. The privatization of municipally owned small enterprises has progressed significantly, with around two-thirds of all enterprises being sold. Privatization has been slowed in some cases due to requirements that new owners retain the entire work force and/or the same line of activities for a specific time period or the duration of the lease. Privatization of medium and large scale enterprises has proceeded at a slower pace due to delays in legislation enactment and the process of ministry reviews. It is interesting to note that there has been a 44% fall in state sector employment between 1990 and 1993. However, over half of all industrial production was still accounted for by state enterprises in 1993.



"Restrictions on foreign investment are being eased with preferential treatment being given under the latest tax system structure.".(EIU, 1995). An Anti-Monopoly Committee was also established to supervise monopoly tariffs and possibly recommend break-ups of large enterprises who have large market power. A regulatory body was put together to oversee the activities of the energy sector and to provide for disussion of tariff policies.











Energy...



Latvia currently must import all its natural gas and oil products and about half of its electricity needs. Despite substantial adjustments in energy prices, underpricing still persists, creating a substantial burden on the budget. "Industrial energy prices need to be adjusted to reach economic costs, and a program to eliminate household energy subsidies systematically should be introduced." (IMF, 1995). Latvia has very little domestic resources of energy, and is thus almost entirely dependent on imports from the USSR. This total dependence on Russian energy is a serious constraint on the Latvian economy. Almost 93% of all primary energy was imported in 1990, with 58.5% of imported energy consisting of oil and 33% consisting of natural gas (EIU, 1995). In 1992, Russian exporters demanded hard currency at market prices, as opposed to the before heavily subsidized prices. Imports of gas supplies continue to be disrupted due to Latvian unpaid bills to Russia.



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