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Latvia in Europe and the World the and Europe in Growthlatvia Strategy for a New Centennial

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Latvia in Europe and the World the and Europe in Growthlatvia Strategy for a New Centennial EUGENE ETERIS Latvia in Europe and the World Growth Strategy for a New Centennial a New for Strategy Growth EUGENE ETERIS Latvia in Europe and the World Growth Strategy for a New Centennial EUGENE ETERIS LATVIA IN EUROPE AND THE WORLD: GROWTH STRATEGY FOR A NEW CENTENNIAL Scientific Editor: O. Sparitis, Latvian Academy of Sciences, President and section 2.4 in Part II Editor: I. Dovladbekova, RSU, European Studies Faculty, International Business & Economy Department, Head and section 3.5 in Part III Layout: Oskars Stalidzāns © Eugene Eteris, 2018 ISBN 978-9934-549-55-7 © Oskars Stalidzāns, layout, 2018 CONTENTS Introduction: Latvian narrative for a new centennial .............................. 9 PART I. GLOBAL AND EUROPEAN CHALLENGES FOR LATVIAN SOCIO-ECONOMIC DEVELOPMENT ................................ 15 1.1. EU’s political and economic guidance: EU-2020 strategy and European Semester .................................. 15 1.1.1. Introduction ........................................................... 15 1.1.2. EU-2020 Strategy ....................................................... 16 1.1.3. European economic planning ............................................ 17 1.1.3.1. Commission’s annual working programmes: effect for the member states and Latvia ............................. 18 1.1.4. European economic integration: legal aspects .............................. 19 1.1.5. European guidance for the economic sectors: division of competence .......... 20 1.1.6. Economic activity in the Baltics and Latvia: vital sectors ..................... 21 1.1.7. European Semester as an instrument in economic integration ............... 21 1.1.8. Active financial support to SMEs in the Baltic States ........................ 23 1.1.8.1. European Investment Fund ....................................... 24 1.1.8.2 Programme for Employment and Social Innovation .................. 24 1.1.9. Financial perspectives for the EU and the Baltic States: EU’s draft budget for 2021–2027 .......................................... 25 Resume ..................................................................... 27 Notes and references .......................................................... 28 1.2. European Strategy for the Baltic Sea Region: effect for Latvia ................ 29 1.2.1. Baltic Sea strategy for 2030 (EUSBSR) ..................................... 30 1.2.2. Baltic strategy for growth ............................................... 31 1.2.3. Baltic Development Forum .............................................. 31 1.2.4. Competitiveness in the Baltic Sea area .................................... 32 1.2.5. Nordic-Baltic cooperation ............................................... 33 1.2.5.1. Latvian “economic breakthrough”: National Development Plan 2014–2020 ............................. 34 1.2.5.2. Coordinated growth efforts in Latvia . 36 Resume ..................................................................... 37 Notes and references ......................................................... 37 1.3. OECD recommendations and assessments for Latvian development .......... 38 1.3.1. OECD: history and functions ............................................ 39 1.3.2. OECD assessment and recommendations for Latvia ......................... 39 1.3.2.1. OECD assessment on Latvian growth perspectives ................... 41 1.3.2.2. Attention to tax reforms in Latvia ................................. 42 1.3.2.3. On Latvian shadow economy ...................................... 42 1.3.2.4. On rising tax revenues in Latvia .................................. 43 4 E. Eteris. LATVIA IN EUROPE AND THE WORLD: GROWTH STRATEGY FOR A NEW CENTENNIAL 1.3.2.5. Latvian energy policy: contributing to green-growth and environment ................................... 43 1.3.2.6. OECD recommendations: effect for Latvian economic development ........................... 44 1.3.3. Baltic States’ problems: the need to increase prosperity . 45 1.3.4. Latvian feed-back issues ................................................. 45 1.3.5. Growth patterns in other Baltic States and Latvia .......................... 46 1.3.6. Global economic outlook . 47 1.3.6.1. Latvia in the global economy ...................................... 48 1.3.6.2. Economic and financial conditions for growth ...................... 49 1.3.7. OECD Better Life Index and Latvian wellbeing issues ....................... 50 Resume ..................................................................... 50 Notes and references ......................................................... 51 1.4. UN sustainable development goals: implementation in Latvia ................ 51 1.4.1. Introductory notes on sustainability: 17 SDGs .............................. 52 1.4.2. Three UN sustainability dimensions ...................................... 52 1.4.3. European Commission’s strategic approach to sustainability ................. 53 1.4.3.1. New European Consensus on development ......................... 54 1.4.3.2. EU’s sustainability efforts on the global scene ...................... 55 1.4.4. Financing the SDGs’ implementation ..................................... 56 1.4.5. Sustainability in Latvia .................................................. 57 1.4.5.1. Reducing city air pollution: fuel-cell transport in Latvia ............. 57 1.4.6. Sustainable business: perspectives for growth .............................. 58 1.4.7. Quality teaching: global and Baltic Sea Region issues through SDG-4 ......... 59 Resume ..................................................................... 61 Notes and references ........................................................ 61 PART II. LATVIAN POLITICAL ECONOMY: TOWARDS MODERN NARRATIVE (INTERNAL CHALLENGES-I) ................... 64 2.1. Introduction to Latvian perspectives: narrative for a new centennial ......... 64 2.1.1. Sweeping differences among the EU states ................................. 65 2.1.2. Eurobarometer: situation in the Baltic States ............................... 65 Notes and references ......................................................... 67 2.2. Latvian narrative challenges: political, economic and social aspects .......... 67 2.2.1. Latvian political economy: background for a new narrative .................. 67 2.2.2. Latvian external trade policy: perspectives ................................ 68 2.2.3. European labour market and Latvia: differences abound ..................... 69 2.2.4. EU guidance for competitiveness in Latvian political economy .............. 71 2.2.5. Modern complex social problems: robotics, basic income and safety nets ...... 72 2.2.6. Basic income’s issue and low-wage ........................................ 73 2.2.6.1. “Adequate wage” issue ............................................ 75 2.2.7. EU “social standards” in Latvian political economy’s narrative ............... 75 2.2.8. European social rights’ pillar as a background for a new EU “social union” .... 76 2.2.9. People’s happiness as a socio-economic category in Latvian governance ....... 77 Contents 5 2.2.10. European “leaders in happiness”: Baltic States can emulate the Nordic system .............................. 77 Resume ..................................................................... 78 Notes and references ......................................................... 79 2.3. Creating perspective national “economic-immunity” system: circular economy .................................................. 81 2.3.1. Introduction ........................................................... 81 2.3.2. EU’s circular economy strategy: effect on Latvian growth pattern ............ 82 2.3.3. Four thematic areas in European circular economy ......................... 84 2.3.3.1. Production and consumption ...................................... 84 2.3.3.2. Waste management and recycling .................................. 85 2.3.3.3. Secondary raw materials ......................................... 85 2.3.3.4. Competitiveness and innovation sphere ............................. 85 2.3.4. Recycling as a priority in circular economy ................................ 85 2.3.5. Global/European aspects in sustainable and circular economy ............... 86 2.3.6. End of fossil fuels and start of “clean energy” . 87 2.3.7. Circular economy’s advantages for the Baltic States ......................... 88 2.3.8. Latvian perspectives in circular economy .................................. 89 2.3.9. Circular economy: changing business patterns ............................. 90 2.3.9.1. Waste management, renewables and circular economy in Latvian business ............................................... 90 Resume ..................................................................... 92 Notes and references ......................................................... 93 2.4. Improving Latvian labour market: global and European trends .............. 94 2.4.1. European approach to employment . 95 2.4.2. Structural reforms in the member states and EU’s assistance ............... 95 2.4.3. Industrial transformations in Europe: effect on labour ...................... 97 2.4.4. Global aspects in labour issues ........................................... 98 2.4.5. World Economic Forum on modern labour challenges ...................... 99 2.4.6. Education for growth and jobs .......................................... 100 2.4.7. Modern “revolution” in employment ..................................... 101 2.4.8. Helping farmers: workforce and agro-food quality ........................ 102 2.4.9. Latvian work
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