International Discussion “Latvian Export Markets: Experience and Alternatives” Was Held in Turiba University (11)
On 29 April in Turiba University international discussion “Latvian Export Markets: Experience and Alternatives” was held. It was organized by the university in cooperation with the Latvian Chamber of Commerce and export consultation company “Gateway Baltic”. In the discussion three alternative export markets were considered: USA, European Union and Asia. Experienced entrepreneurs, economists and politicians shared their opinions on export development.
Discussion was opened by the Rector and Chairman of the Board of Turiba University Aldis Baumanis and President of Latvia Chamber of Commerce Aigars Rostovskis, who emphasized that in any crisis situation and complications opportunities and challenges have to be seen, namely also the current geopolitical situation must be considered as new growth opportunities.
The former Prime Minister of the Republic of Latvia, financier Ivars Godmanis underlined: “Latvia’s export has always have two wings – Eastern and Western. Geographical position of Latvia provides that we have to orientate in both directions. Although the latest statistics show that Russia is not among the first five export partners more, it should be taken into account that it will not last forever. Latvian government speaks of instruments for export promotion, I don’t believe that the government can promote export now, it can only try not to hinder it.”
Coordinator of Enterprise European Network in Latvia Inga Valdmane presentedtheinformation available in LIAA: “Last year Latvian companies were working in increased stress conditions, but there are also many success stories. LIAA actively works in the field of export promotion – for acquisition of external markets 9 million Euros have been directed, including also organization of national stands. The previous participation in international exhibitions, for example, in Singapore and Germany have borne fruits, therefore we invite every entrepreneur to think in broad terms and to confront challenges.”
When looking closer to the Asian market as an opportunity for Latvia’s export entrepreneurs, participants of the discussion had the opportunity to listen to the opinion of the Manager of Global Leadership Forum, Professor Low Siew Thiam, who gave brief trips for successful operation in the Asian market. “When Singapore regained independence, nobody wanted to maintain trade relations with us; Latvia’ trade relations does not succeed only in Russia, therefore there is no reason for concern. If you want to conquer the Asian market, accept the Asian thinking – search harmony in business, not balance. Remember that in Asia mutual trust, loyalty, respect and reputation are rated higher than just agreements and regulations. And more, do not try to export to Asia what you want to export! Experiment with the things necessary for Asia!”
Chairman of the Board of JSC “Brīvais vilnis” Arnolds Babris shared export experience:“Our experience in Asian markets shows that in China it is possible to falsify everything except sprats! Since China has big problems with ecology, we have understood that cheap products are not binding for this market – they are interested in quality. Latvia does not have such capacity to feed all the Chinese people, but we have capacity and all possibilities to offer high quality, ecological niche products.”
Also Chairman of the Board of JSC “Rīgas Piena kombināts” Normunds Staņēvičs shared experience of his company in Asian market: “Latvia, unlike the majority of European Union countries has good relations with China and we have to use it. Our key to the Asian market is ecological products.”
By focusing on the European Union as home market, investment banker Ģirts Rungainis emphasized: “Latvian – Russian economic ties have not and will not be broken, but we have to take into consideration that Bolsheviks are still in power in Russia. There will be no political stability in Russia for the following 100 years, so our companies, of course, have to look in other directions. Although our country still lacks market and engineering knowledge, products of our metalworking, woodworking and textile processing companies are with a high added value. Latvia is a superpower of lingerie manufacturers. Let’s use what we have better than others! ”
One of the success stories in Latvia’s export in EU markets is JSC “Sakret Holdings”, which Chairman of the Board Andris Vanags told: “It is very difficult for Latvian companies to achieve brand recognition; our experience shows that also franchises have many benefits. I invite to start with closest markets, to gain experience, to learn and open broader opportunities for yourself, namely, if you want to lock the doors to Scandinavia, start with Estonia. Be aware of peculiarities of each country and culture; involve national representatives in work maximally, thus coming closer to the consumer. Don’t be afraid of facing problems and be original; it will help you to be noticed!”
In the round table discussion a number of interesting ideas about future of Latvia’s export were outlined. I. Godmanis reminded that “we should not rely on national patriotic slogans; with them we could hold no industry.” A. Babris outlined that “the supermarkets are biggest thread to Latvian entrepreneurs. They invite to sell their products under the trademarks of supermarket.”
When sharing his experience, Manager of LTD “New Rosme” Edgars Štelmahers told: “Export can be developed through education. This industry requires large investments, but they will positively affect industries of the niche. ”
The former Minister of Economics of the Republic of Latvia Vjačeslavs Dombroviskis explained: “Productivity, high salaries and profit in Latvia can be achieved only by export. We have to think more broadly, because there is no one solution for all industries. In export promotion politics Ministry of Economics is currently working on the principle – one approach and one justice for all – which is actually worth for nothing. We have to remember that we can export not only goods; Turiba University is a successful example for education export. To my mind, in case of Latvia we have to think also of cinema industry revival. If we would have a film studio, USA and Scandinavian companies will arrive to Latvia, because here filming costs are lower.
A. Babris added that “Latvia has a deformed labour market. It has not been defined, which are priorities, what are the most important goals and instruments for achieving them. The government has no political will to start something and to rectify the situation.”
Speaking about government influence on export development G.Rungainis was categorical: “Latvia has the most stupid government in Europe, its decisions and draft laws submitted by it are in extremely low level. The same happens also in public administration. Our education system “buries” the brightest minds, but without educated people, for example, engineers, country with the added value is not possible. Unfortunately, currently in 21th century we live like in 20-30ies of 20th century.
Economist of “Latvijas Banka” Daina Pelēce invites the audience to be more optimistic; it is also justifiable by static predictions: “Latvian companies are relatively small, of course, but take into consideration that with small cars it is easier to manoeuvre and to find their place. The same situation is with companies!”
Economic expert of DNB Bank Pēteris Strautiņš outlined the following: “Russia – it is only 2.5% of the world economics, and in future the number will decrease. We have to look into other directions – promoters of Latvian growth are mechanical engineering and metal processing.”
Economist also noted that although Latvian exporters indisputably patriots; theoretically they are interested in greater poverty in Latvia. “Exporters want workers in Latvia to produce goods of German quality for Congo-level salaries,” outlined P. Strautiņš.
During the discussion also optimistic export development visions crystallized, mostly by the views of economists. Managers of the largest exporter companies mainly kept to reasonable advice, which are based on their own experience, whereas, politicians invited Latvian government to focus to export development also in works, not only in words.