The only way to attract people to the regions is to create jobs. If there are no jobs in certain areas, there is no way we can stop depopulation, said Smart Administration and Regional Development Minister Raimonds Cudars (New Unity) in an interview with LETA. The depopulation trend in the countryside has been observed for 30 years. At the moment, this depopulation is slowing down, but it is not stopping. The minister stressed that this should be discussed honestly, because it is a reality that is reflected in statistical data.

Local governments are worried that EUR 58 million will be taken away from them in savings in the national budget - one third of the total budget. But municipal budgets account for one fifth of the total national budget. This is not right.

Savings have never been thought of as part of the municipal budget. It is the idea of making up the shortfall as a result of the tax reform to the previous level, which would have been the case if the personal income tax reform had not been introduced. From that point of view, this cannot be seen as a reduction in municipal budgets. It is primarily a reduction in compensation for the reason that it is no longer necessary to compensate as much as was foreseen last year.

You mentioned that there are no plans to cut funding for services next year, but we hear that there are plans to cut regional passenger services, which is a publicly funded service. Does this not mean, however, that the state is reducing its services for citizens?

The situation you have mentioned is very complicated. Three years ago, tenders were held for the rights to operate services on parts of the network. There was a debate about the level of the requirements that carriers had to meet. At the same time, there was a promise from the operators to meet these requirements, naming also prices. At the moment, the subsidy relating to public transport exceeds EUR 50 million, and the question is whether this subsidy should be increased. The passenger transportation companies are saying that the prices must be reviewed and more subsidies should be paid as it is no longer possible to provide services for the price agreed on earlier. So perhaps we need to be careful about the promises that were made three years ago in open tenders. There is also the aspect of how we define routes in specific regions in relation to what people need. Of course, there can be a debate about that, but it is not about cutting the subsidy. It is about the money that we have that is intended to meet public transport needs.

However, the current official position is that no more funding will be provided and the number of bus runs will be reduced.

At the level of regional policy, public transportation services in specific locations is of course crucial. The question is whether public transport is provided rationally in all places and whether there are enough people on all routes to keep all services running.

Does not this turn on the negative spiral? If there are few people and there is no public transport, it could end up with people slowly leaving the area altogether. For example, Janis Baiks, the chairman of the Valmiera Regional Council (Valmiera and Vidzeme), has said that Valmiera is growing economically, seven new plants have opened, but there are three municipal centers in the region with no public transport links and from there it is impossible to attract labor. What is happening in other municipalities?

Yes, this will continue to be a problem. The question of whether all this can be provided by a public subsidy is a challenging one. Municipalities may have to identify the needs that they have. At the moment, we are in a situation where municipalities are already participating in the provision of public transport. That is the reality.

So how far can we go like that?

It is very decisive in regional policy that we defined our last line of defense in the regional development centers and in the national cities. National cities are larger settlements, but regional development centers are crucial in maintaining the population as a whole. The trend towards depopulation in rural areas is now 30 years old. We are now seeing a slowdown, but we cannot say that depopulation in rural areas in particular has stopped completely. We have to be honest about this, it is a reality that is reflected in the statistics.

Do we have plan to prevent it? Or do we say, yes, our countryside is dying, and do nothing about it?

I mentioned the regional development guidelines and also the fact that regional development centers are crucial for us to be able to provide for the urban environment, but above all to provide the conditions for business and industry to develop in particular places, because we know very well that the only way that people decide to live in relatively sparsely populated areas is if there is a job. If we do not have jobs in certain areas, then we will not stop depopulation in any way, especially for young people.

Nor can we stop it by creating public sector jobs in these remote areas, because that is simply not economically viable. Therefore, if we are talking about this planning period 2021-2027, there is a support program that directly supports the creation of entrepreneurial projects in the regions. We are talking about industrial parks and the development of infrastructure related to the activities of enterprises. This is producing results, because we can define statistically the number of jobs created. The preconditions are in place and the entrepreneur enters a relatively ready-made environment and does not have to make additional investments in infrastructure, roads or, in some cases, industrial buildings. It is an instrument that is producing results in terms of jobs in the regions.

Local government financial equalization has been under way for several years. Municipalities insist that the state should participate with a bigger share of the equalization fund, because the state's share has not changed in recent years. The Finance Ministry, on the other hand, promises nothing of the kind. What solutions could there be here?

Here I will refer to what I said earlier about the fact that municipal budgets are based on tax revenue. One of the main arguments is that municipalities cannot be seen as a pure part of the public administration, to which the state gives money through a grant to carry out certain functions. Municipalities have a specific mandate, which comes from elections.

If we look at the figures as a whole, Latvia has the highest funding for municipalities in the Baltic states from the general budget. Yes, it is not significantly higher, but we cannot say at the moment that municipalities are underfunded if we look at the total budget figures. The question is how we manage this money. For example, one of the questions is how big is the public sector in each particular municipality, that is, how many people does the municipality employ in relation to the number of people who are able to work in a particular area. These figures do not show a very positive trend at the moment. We can see that the share of the public sector in the regions is not decreasing. That is to say, we are often creating public sector jobs where, in fact, the private sector should be supported and given the opportunity, through procurement procedures, to participate in the performance of certain functions in the municipalities. A municipality can already decide in different ways - it can hire 20 people to clean the territory of the municipality, it can carry out a procurement and find an entrepreneur to do the same thing in a more efficient way. It is all in the hands of the municipalities, and it is a local responsibility.

You mentioned that municipalities can assess which functions to give up, but the heads of municipalities complain that there are new demands coming from the state and that we should rather assess what municipalities are being asked to do and give them the opportunity to reduce the quality of performance or give up some functions.

Yes, municipalities are also talking about a number of functions that are often linked to the implementation of European Union regulations, for example in the area of cyber security. These functions can be provided both through staffing and, of course, through outsourcing. You see, this is why we now have 42 municipalities, down from 114 and previously more than 450. These are large territorial units with an administration that is strong enough to define both the regional development policy part and the absorption of European funds and, of course, the administration part. The idea is to concentrate both skills and functions to an appropriate level.

The ministry you lead needs to save EUR 3.5 million next year. Has not the amount changed?

No, it has not, but that does not include the salary cap. First of all, it is a pay freeze, and second, it is a large reduction in bonuses and gratuities.

The biggest savings for the Smart Administration and Digital Development Ministry concern the National Digital Development Agency (VDAA). What impact will this have, given that the local elections have already failed, the agency has no head, and a tender for this position has been announced?

The National Digital Development Agency manages nearly 40 digital systems of great national importance. These include both Latvia.gov.lv and the data exchange system, which is very important for public authorities to be able to exchange data. There are things that are core services of the VDAA, and they are also provided. But there are things that are linked to the development of future systems, and here, of course, a great deal of emphasis must be placed on European Union funding for the development of digital governance, which makes it possible to develop systems, and here we have quite big challenges. One of them is the introduction of the European Union Digital Identity Wallet by the end of next year. Then there is the electoral situation that you mentioned, which is in focus of our concern, because in the municipal elections in June, the VDAA was not up to the task. This work is ongoing so that we can be sure about next year's elections. I would like to stress that there are no pure electronic elections in Latvia. We are now talking about the need for the VDAA to ensure that data is transmitted directly from the polling stations during the electoral process. A number of mistakes were made in this process, which led to a lack of functionality. On election night, only 40 percent of the polling stations were able to work with the system fast enough. This problem has now been identified and we have an agreement with the head of the Central Electoral Commission (CVK) that we will come up with an opinion on the conduct of the elections this October, which is a year ahead of the parliament elections. The CVK believes that it is possible to use the IT tools we have developed for the parliament elections, but of course we must have full confidence in the functionality and reliability of these tools, which must be confirmed by testing a substantial period of time beforehand. Another nuance is that parliamentary elections are not the same as municipal elections, so the system needs to be adapted. We have the commitment and we have the capacity. We must not allow anything similar to what happened on June 7 this year.

But are you sure that everything will be in order within a year? Or will something new not have to be built?

No, we are not talking about creating a new system, or about major additions. We have a number of technically avoidable circumstances that caused problems in the municipal elections. These are currently being identified and we are not talking about a complete overhaul of the system architecture.

Nature conservation is another very important area in the ministry you head. You have just announced that you plan to merge the Latvian National Botanical Garden and the Nature Conservation Agency. There has already been criticism that this will have a very negative impact on the Botanical Garden. Why will this decision be taken? What will it bring?

There has been, is and will be the Latvian National Botanic Garden. The territory of the Latvian National Botanical Garden - more than 100 hectares in Salaspils - has also been granted the status of a natural monument and there is no change here. I think what is important is to be aware that we now have two institutions that are largely engaged in a similar function, and that is the function of nature education. The Nature Conservation Agency focuses on the natural values that exist in the Gauja National Park, the Kemeri Park, the Razna Park, the Slitere Nature Reserve and elsewhere. A number of improvements are already under way, specifically related to the creation of nature houses and nature education. The Latvian National Botanical Garden has the same function. This is a very important and major function. The other function that the National Botanic Garden of Latvia has is to conserve and develop the plant stock, which, of course, continues and remains. By merging these two institutions, we are optimizing the administration, we are making financial savings.

How big?

At current estimates, it is up to EUR 150,000 per year, but optimization can continue. The functions of the National Botanical Garden, however, remain unchanged, even under the administrative reform that is being proposed in this case, so that we optimize and streamline is the administration of nature education.

Finally, the big battle - economy versus environment - is now about the new amendments to the Forest Law. The Smart Administration and Regional Development Ministry has opposed these amendments prepared by the Agriculture Ministry. How principled is your position and how strongly will you stand up to prevent more deforestation?

The state has approved the amount of timber stock that we will allow to be felled from the forests over the next five years. If this stock is increased, it is very important to define what the impact is and, above all, how it affects the conservation of natural values. The Agriculture Ministry, which has direct responsibility for forestry, is currently still in the process of creating forestry guidelines and consulting stakeholders so that we can agree on whether a significant increase in stock, or the possibility of increasing stock, has an impact on nature conservation or whether it does not have such an impact. We have not done the homework that would allow us to draw conclusions. Therefore, if we are moving very rapidly towards a significant increase in stock, it is only normal that we are fully able to identify the consequences, which will be long-lasting. The same applies to the Forest Law and to the proposal to reduce the cutting ages.

Yes, we know that Scandinavia and our neighbors too have different approaches to tree ages for felling. That is true. These practices need to be compared and analyzed, but the fundamental question is to what extent this has an impact on nature conservation in particular, and we, as the responsible authority, need to ask about this. We still do not have these guidelines, which are supposed to assess what the impact will be.

The second section, which is perhaps not directly our competence, is on the calculation of CO2 emissions in the future in the event of more intensive forest management. This is also an important issue when deciding on a possible increase in felling volumes. At the moment, we do not have data that can give us full assurance that this will not have a negative impact on future increases in CO2 emissions, which in turn means international obligations for the country as a whole. We are talking about a CO2 emissions trading instrument, which means that there are certain deadlines within which countries will have to join this trading system, based on the amount of emissions they produce. The scheme is designed to contribute to the reduction of CO2 emissions in the European Union as a whole. We can discuss the possible revision of the targets and this discussion is currently taking place at European Union level. But when making such decisions, we should know the exact data on the potential impact.

So, before you have the guidelines and the impact assessment on the table, you will not agree?

We have a constructive dialogue with the Agriculture Ministry. Our view on the need to understand the implications of a possible decision is decisive in this case.