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Since the Baltic states (Latvia, Estonia
and Lithuania) have gained their independence and have joined
the EU, the economics of these countries is said to be
undergoing quite fast and successful development. Alongside
with that a vast number of foreign investments is currently
flowing into each of these three countries. Foreign
entrepreneurs see the Baltic Sea region as a unique
opportunity for expanding their business in the Baltic states
market.
The comparative analysis of the economic
development of the Baltic states can be held on the basis of
the GDP indicators in these countries in the recent years.
Last year, Latvia saw the fastest GDP growth among the 25 EU
countries and this trend will remain also in 2005 and 2006,
outpacing the neighbouring Estonia and Lithuania. There is a
forecast that in 2005, Latvia's GDP could reach a growth rate
of 6.8 - 7.2%, while next year, the growth is estimated to
decrease by a notch, staying at about 7%. Lithuania's GDP
growth, in its turn, is said to reach 6.8% in 2005 and
decrease to 6.5% in 2006, whereas Estonia can look forward to
a 6.2% GDP growth this year and 6.4% next year.
Although the GDP structure of the three Baltic states is quite
similar, Latvia is experiencing the quickest development in
service sector, while the growth and share of industry in the
national economy is much smaller than in the neighbouring
countries.
Germany is one of the countries with strong economic system
and tremendous development potential, which keeps investing
its money into the Baltic states to contribute to the rapid
economic growth nationwide. It is among such countries
investing capital into Latvia, Estonia and Lithuania as
Russia, the USA, Sweden, Denmark and Finland.
It is Estonia’s third-largest trade partner, Lithuania’s
second-largest partner and third-largest investor, and in
Latvia it is number one in both trade and investment.
It has certainly taken its niche in the Baltic states market
and undoubtedly has some influence over it.
At
present, the figures indicate that Latvia is the most popular
choice of the German entrepreneurs. The majority of current
investment projects are focusing on Latvia due to the fact
that Riga is familiar to Germans for historical reasons, which
is an advantage. At the same time, a lot of people in Latvia
speak German. It seems especially important for small
companies which thus can be able to do their business in their
native language.
The following major German companies have established their
local organisations in Latvia:
Ruhrgas AG&Preussen Elektra Karl Danzer
Furnierwerke GmbH&Co KG
Vereins- und Westbank
Glasseiden Oschatz GmbH
Knauf GmbH
Readymix Zement
Norddeutsche Landesbank Kittner
Gruppe
REHO
KölnischeRückversicherungs-gesellschaft
ERGO (ehem. Alte Leipziger Europa)
The GDP indicators in Germany are lower than those of the
Baltic states which can be clearly seen from the graph
presented below:
One of the reasons why Germany is so
attracted to the Baltic states is
quite highly qualified, high-skilled, very efficient and
competitive labour force. Besides it, a very significant
indicator about the Baltic region is its low labour force
expanses in comparison with other EU countries. And finally,
such factors as the lack of the local capital resources, well
developed infrastructure, stable financial policies,
relevantly liberal economic legislation and highly developed
system of communication are other aspects that attract foreign
investments into the Baltic states. Moreover, EU membership
provides certain security guarantees for foreign investors who
are interested in or are already investing their capital into
Latvia, Estonia and Lithuania.
Direct
foreign investments into the
Baltic states and these countries’ willingness to develop and
grow economically in accordance with the EU regulations, as
well as their initiative, ability to adopt Western business
practices and compete in Western markets will certainly result
in successful and useful collaboration for every part
involved. |
