In mid-November, Ieva Jagere took up the post of the Director of the Latvian Investment and Development Agency (LIAA), and her task will be to lead the agency after the reorganization. In an interview with LETA, Jagere stressed that the main focus of LIAA's work remains investments and exports, but in the future much more emphasis will be placed on the results of LIAA activities, so that Latvia does not participate with its national stand in an international exhibition just formally, but there are no tangible benefits from it. The number of LIAA staff tasked with attracting investment will be significantly increased. Jagere also emphasizes that LIAA will focus on the priority sectors defined in Latvia's Smart Specialization Strategy.

What will LIAA look like after the reorganization? What will be the agency's operational focus?

The two big lines of focus are, of course, investment and exports. Previously, LIAA was perhaps more like a marketing agency for Latvia and focused more on the process than the outcome. With the reorganization, which also completely changes the structure of the organization and the responsibilities of employees, the work of every employee who works with clients will be measured by results. This will apply to both the 22 foreign representations and the 25 Latvian regional representations. LIAA regional offices will no longer work only with the incubation program but will also represent LIAA on investment and export issues, providing the necessary support to regional entrepreneurs and investors.

The number of people working on investment attraction at LIAA will be also significantly increased. Whereas previously there were nine employees, now there will be 33. We will also proactively look for global opportunities that are in line with Latvia's needs and the sectoral priorities outlined in Latvia's Smart Specialization Strategy, namely knowledge-intensive bioeconomy, biomedicine, medical technologies, pharmaceuticals, photonics and smart materials, technology and engineering systems, smart energy and mobility, information and communication technologies.

Are there things that LIAA will no longer do or will do less? For example, will regional offices continue to work with incubation projects as actively as before?

None of what LIAA did in the past is being discontinued. We will continue to work on the national image, tourism activities and incubation programs. But we will assess the usefulness of each activity and the added value we get as the result. If we see that one of the activities is not working so well, we will look for alternatives. This does not mean that the focus of our activities will change, but rather that the emphasis could be placed on those activities that provide the greatest benefit to entrepreneurs. For example, we will evaluate participation in exhibitions, conferences and other events, looking specifically at which ones bring more added value.

A Digitalization and Data Analytics Department will be set up with the main task of collecting data so that new programs are designed on the basis of a thorough data analysis. We do not want to continue with an activity just because it has been carried out for the last 20 years. Our aim is to use data to make sure that the companies that took part in a particular exhibition increased their exports significantly or gained many new partners. If this is the case, we will certainly participate in the future. But if we see that an activity has not had the desired effect, then we will look at alternatives, because there are trade fairs, trade missions and a huge range to choose from all over the world. We have to find the right ones. We also need to focus on the sectors that we have defined as priorities so as not to lose our focus.

The Economics Minister also said at a press conference on November 13 that a number of LIAA employees will have to decide within a month whether to take up their new responsibilities or leave the agency. What does the situation look like now? Is it clear yet how many employees will leave LIAA?

The decision has been taken to cut 31 jobs, but it should be kept in mind that these include some that were vacant, and no new staff were recruited knowing that the reorganization was taking place. However, there are also some where staff are offered another post in the new structure, and it is their choice whether to accept it or not. There are a number of staff members who did not accept the positions offered to them and their employment will be terminated.

At the same time, I must emphasize that with the change of structure, new managerial positions have also been created which did not exist in the previous structure of LIAA. For example, the Investment Attraction and Enterprise Development Department will have three divisions - the Investment Attraction Division, the Enterprise Development Division and the Investment Services Division, where we are already recruiting managers in an open competition, and we have also launched a search for a strong manager in the Digitalization and Data Analytics Department, as well as in the International Marketing and Communications Department. We plan to conclude the recruitment process in February next year so that we can continue to work on our priorities with a full complement.

December 16 will be the last day of work for those who are leaving, so the new structure will officially take effect after that date. At the moment, everything is still a work in progress.

The total number of LIAA staff will be 288, including both foreign and regional representations.

Coming to LIAA from the outside, how do you assess the capacity of the agency and its ability to fulfil the tasks?

I come from an investment background myself, and it is clear that the number of staff working directly on investment attraction is insufficient. If out of almost 300 employees only nine are dealing with the main task of LIAA - investments - then it is understandable that it is impossible even to serve the incoming investment projects in a qualitative and efficient way, let alone proactively. Moreover, in the past, the staff turnover in the Investment Department was around 70 percent per year. With constant staff turnover and training of new staff, how much time is left to work on investment projects? With the reorganization, this situation will certainly change.

As far as export services are concerned, I think the situation is good. The department is efficient, and the basic systems are well established in all areas. We plan well in advance which exhibitions we are going to with national stands and the trade missions are also very well organized. It is a huge job to organize these events and we do it in close cooperation with our missions abroad. We see that the returns are also good, but, as I said, we will look more closely at the economic viability of each activity.

When it comes to attracting investment, what are Latvia's strengths and where are the main obstacles?

People are definitely our strength. We have skilled workforce, a very high proportion of employees who speak at least two languages, have higher education, and we are very open and flexible.

The second thing we definitely emphasize is our tax framework. We are second among OECD countries precisely in terms of business taxes, including a 0 percent corporate tax rate if profits are reinvested.

Latvia is also in a great geographical location, with excellent infrastructure for easy access, ports, airports and roads.

I should also mention a great initiative such as the 'green corridor'. If the value of an investment project exceeds EUR 5 million in the regions or EUR 10 million in Riga, and we see the investment as strategically beneficial for Latvia, then all decisions are secured more quickly and more efficiently.

On obstacles. I said that people are our strength, but people can also be our weakness. For example, if an investor comes and wants to set up a high-value-added production facility here, we may not have some particularly qualified specialists. But if we know what investors want in advance, we can start working with universities to set up centers of excellence that train specialists in particular specialties.

The bureaucratic hurdles must also be mentioned. Every program of LIAA and also of the Development Finance Institution Altum is implemented on the basis of a mandate from the Cabinet of Ministers. Each program is approved by the Cabinet of Ministers and each program has a corresponding Cabinet regulation at the bottom. Unfortunately, if an investor comes and says that they want something specific that is not in line with the existing programs, we cannot react as quickly as we would in private business. It can take a year or a year and a half to develop a new program. If we start developing a new program today, knowing how fast information technology and artificial intelligence are developing, it may turn out that in a year and a half it will no longer be relevant.

It is all huge bureaucracy, but because there is state aid involved, and because it is also subject to European Union regulation, we have to work within that framework. But that is the case for all the EU member states. That is why it is very important to negotiate with the companies in the sectors to make sure that each new program will be needed and will be used effectively by the business community.

You already mentioned the "green corridor". At the moment, there is only one project in the public domain - Fibenol - which is being promoted through the "green corridor". Is this enough?

In total, we currently have 39 "green corridor" projects approved, with a total value of EUR 2.4 billion. This year alone, 14 projects have been approved. So, it is not just Fibenol. They are simply investor initiatives, often at a stage where they are still confidential, and we cannot talk about them publicly.

It has been said that LIAA aims to attract EUR 2 billion a year in investments from 2030. Do you think this is possible?

Of course, it is an ambitious target, given that we currently attract an average of EUR 700 million a year in investments. But once we get the new structure of the LIAA up and running as efficiently as possible, this should definitely start to bear fruit.

We often compare ourselves to Estonia and Lithuania, and there is a perception that our neighbors are doing much better than us in attracting investment. Do you have an explanation for it?

I would not quite agree that they are doing better. When we look at the total amount of foreign investment attracted over a 15-year period, Latvia had attracted EUR 25 billion in foreign direct investments by the end of 2023, Lithuania EUR 33 billion. If we compare this with gross domestic product, we have a share of 54 percent, while Lithuania has around 45 percent. Here we can conclude that we have done quite well.

However, coming from the venture capital industry myself, they measure venture capital investments raised per capita, and we are significantly behind on this indicator. Latvia reports EUR 37 per capita, Lithuania - EUR 112 per capita and Estonia - EUR 310 per capita. But here, too, we have an excellent track record, and we have every chance of catching up with the Lithuanians and perhaps also the Estonians. But the Estonians are also champions at European level, and this is largely due to the success story of Skype, whose founders made millions and have been investing in the industry ecosystem and founding new companies for 20 years. Our first unicorn did not appear until 2023.

The State Audit Office has just published an audit which found that the use of European Union funds has not made the best contribution to the development of entrepreneurship in the regions, including insufficient cooperation between local governments, LIAA and planning regions. Are you ready to change anything in this respect?

Definitely. This is an emphasis on our regional representations, where we will invite them to work closely with the municipalities, taking into account the priorities of the municipalities, how they see the development of their territories, what is the municipal infrastructure that can be offered to the specific investors with whom they plan to negotiate. At the same time, we are certainly ready to help open doors and to negotiate directly with those investors who have come to the municipality. This is not just a one-way cooperation and, of course, the municipality must also be active in cooperating with us. We cannot say that everything is bad with all municipalities in Latvia, there are municipalities that are more active, more interested, and we have very good cooperation, but with others the cooperation is not so successful.

What can be done now to promote exports in the context of a rather sluggish European economy?

Of course, we are currently doing best in exporting to our closest markets - Lithuania, Estonia, Sweden, other European countries too. We will continue to work in these markets and strengthen our relationships. The untapped potential for Latvian exports is in the distant markets, which are now receiving more attention, and which have also been the focus of recent major visits by officials - the US, South Korea, Australia and Canada. The potential of these markets is certainly not being exploited and there is much work to be done.

The Expo in Japan next year will be a big event, and we certainly want to find new partnerships there too, to promote the exports of our entrepreneurs and the competitiveness of their products in these markets. It will be a great platform to participate and try to increase exports to this country. Japan is also a good starting point to the rest of Asia.

How large is the delegation planned for Expo?

We are still working on it. The Expo opens in April. A total of 153 countries are participating, as well as major organizations from around the world, including the European Union with its own separate pavilion. In half a year, 28 million people visit the Expo, which is a remarkable figure. Our pavilion this year is being set up as a Baltic pavilion together with the Lithuanians. The organizers themselves also asked us to do this, because this way we can attract more interest in the Baltic region as a whole. The pavilion will, of course, promote the products of our manufacturers. Expo is an excellent way to promote Latvia's image and exportability. There will also be a separate business program, and a total of 13 sectoral exhibitions are planned for this time - IT, technology, construction, medicine, pharmaceuticals, food, cosmetics, etc. A very wide range of sectors will be represented.

We also plan to organize a total of 26 national stands in 2025 to promote exports, including seven in Japan. We are also planning around 30 trade missions next year. There will also be various marketing campaigns, business forums, seminars, we are organizing individual meetings for business people, various types of consultations, visits to Latvia by foreign companies, and a delegation arrives in Latvia every week. I will repeat here that our main focus is on the sectors identified in the Latvian Smart Specialization Strategy and high added value is our priority.

Central Asian countries are also among the countries mentioned by the economics minister where large visits of Latvian business representatives will take place next year. How do you think we should cooperate with these countries, given that they have become a very popular way of circumventing the sanctions imposed on Russia, and Latvian export data also shows that exports of goods subject to sanctions to these countries have increased significantly?

When entering into cooperation, we will certainly assess each potential cooperation partner very thoroughly and will definitely not enter into any relationship that could be linked to any intention to circumvent sanctions. At the same time, we cannot completely exclude these markets from our sights, because there are also many opportunities for our businesses that are not being exploited. So, we will certainly work with these markets. Uzbekistan, for example, with a population of 40 million, is a fast-growing market and we see potential opportunities for cooperation there. Uzbekistan has a lot of interest from the Latvian IT sector in digitization projects, and it is a great export for services. It is worth mentioning that this year, one of the largest Uzbek IT companies, Uzinfocom, also entered Latvia and will open its European office here.

We will certainly keep an eye on the sanctions regulations, we will assess our cooperation partners very carefully, but in general we will certainly not exclude this market from our map.

LIAA is in charge of a huge energy project such as the Elwind offshore wind farm. How far do you think we are from auctioning the wind farm?

At the moment, the project is going through an environmental impact assessment process, which is very time-consuming. It is expected to be completed in 2027, so the auction is planned for 2028. Investor interest is already present and being identified. We also present the project regularly at various industry events and the project team regularly participates in various forums and conferences.

What will you do if it is like in Lithuania, when only one bidder applied for the last auction for the offshore wind park? Will you cancel the auction like in Lithuania?

Given that it will only be in 2028, it is very early to predict the results now. Hopefully there will be more interest.

Tourism in Latvia is still facing problems that started during the pandemic and continued with the Russian invasion of Ukraine. With the biggest military conflict in Europe since World War II taking place relatively close to our borders, is it possible to do anything to increase the number of tourists? The people of many countries are afraid to come here because, after all, this is Russia's border.

I would not say that they are afraid to come, because, looking at the statistics, in the third quarter of 2024, Latvian hostels welcomed one million guests, which is almost 11 percent more than in the same period in 2023. Of the total number of guests, 60 percent were foreign guests and 40 percent were locals.

We have seen the number of tourists continue to grow steadily and we are almost at 2019 levels. I think we are doing quite well in attracting tourists, Latvia is a great country, we have a long history, beautiful nature, quality restaurants and tourists are very keen to choose. We present ourselves at all major exhibitions as a beautiful holiday destination.

We will definitely continue to work more with tourism that can create more value for the economy, such as exhibitions, business travel tourism, where we are already working with more specific tourism stakeholders.

The tourism industry has also complained for years about the lack of regular ferry services to the Nordic countries. Is LIAA also prepared to engage in negotiations, as hotel operators complain that there is a great deal of passivity on the part of the state in this matter and that ferry companies are not being encouraged to take a greater interest in Riga?

I do not have the data to be able to give an objective opinion on whether we need it or not, how much it costs and what the return is. Perhaps we do not always need everything. If the Estonians have a great ferry service and Helsinki is 40 minutes away, we have an airport and airBaltic. That is not the case for Estonians and Lithuanians, who sometimes have to come to Riga to fly to Europe. I think that is more important.