Creating a climate for future growth and expansion in the Latgale Region and Rezekne City
Latvia, officially known as the Republic of Latvia, is a country in the Baltic Region of Northern Europe. Latvia has five planning regions: Kurzeme, Zemgale, Vidzeme, Rīga and Latgale. The so-called land of blue lakes in the Eastern part of Latvia is Latgale. It takes up 14,547 km2 territory, which may seem like a small area, but is known for rich history, primal nature, sincere people, and promising economic growth. Latgale has approximately 1200 lakes, including Lubans (largest by area) and Razna (largest by water volume). Here you will find kilometres of forests untouched by humans, beautiful meadows, and alternating terrains. The Daugava old valley “Daugavas Loki” nature park extends from Krāslava to Daugavpils, with nature trails along the steep, picturesque banks that lead visitors around and over ancient Latvian castle mounds.
The Heart of Latgale is Rezekne. Rezekne excels in comparison with other multiplicities in Latgale due to modern university, well-thought-through city infrastructure and Rezekne Special Economic Zone which helps entrepreneurs with the application of tax incentives and creates a business-friendly environment to provide enterprises with better opportunities and advantages in the global market, in the process strengthening the national economy. The only Region in Latvia that does not have direct access to the Baltic Sea Port is Latgale. However, Rezekne and Daugavpils, are significantly important railway and road transport hubs, set at the crossroads of the transport corridors, with a common border with Russia, Belarus and Lithuania, creating an immense opportunity to transit produce by rail and road.
From 2013, various initiatives were set in place to raise living standards in the Region of Latgale. From 2018 to 2021 Latgale Development Plan saw an extra €30 million invested into the Latgale region boosted by Norwegian grants for small companies of up to €50 million. Furthermore, projects worth more than €288 million have been given the green light to the EU Cohesion Fund in the 2014–2020 period. That is more than any other region, with the planning Region of Kurzeme, trailing behind by €243 million. The significant impact on the economy of the Latgale Region has been the agricultural sector transformation. From 2013 to 2017 the total added value of this sector has doubled. That was an outcome of significant investments in the companies from the agricultural division — a 55% increase in the value of fixed assets in 2014–2020, while in the industry only 5%. Another part of the industry that shows positive development trends are ICT (information and communications technology) companies. Although still relatively small, the ICT sector in Latgale has doubled its total added value since 2014. As a result of digitalisation, ICT networks are replacing transport networks in many sectors, meaning that the on-site effect may not be necessary even in the production of physical products. Advanced ICT infrastructure can allow the Latgale region to become the most developed transportation region in Latvia.
That said, it is undeniable that the population of the Latgales region, which has begun to decline since the restoration of independence, has continued over the last ten years. However, the increase in a share of the population with higher education has been documented with the unemployment rate at the end of 2019 being the lowest since 2009. Furthermore, there is an increase in self-employed individuals, which exceeds the number of commercial enterprises per 1000 inhabitants (35 and 25 per 1000 inhabitants, respectively). With 4% of the total gross capital investment by the state to the Latgale region, producing 7% of the total value added in the country. In 2018, there were 75 innovative active companies in the Latgale Region out of 1,558 in the country. Their number increased by 11 since 2016, while in Vidzeme and Zemgale decreased.
The different municipalities of the Latgales region offer a wide range of business opportunities, which are implemented, through several national regional and sectoral policies. The expert group analyzed various business support mechanisms available in the Latgale Region, intending to assess the suitability and potential impact on different areas, throughout the process, potentially strengthening the economic growth. The analysis concluded that the SEZs (Special Economic Zones) are an effective support mechanism that considers the specific details of the Latgale Region and makes a significant contribution to its development. The long-term operation of Rezekne Special Economic Zone has contributed to significantly faster expansion of the Rēzekne city and Latgales Region. Prediction is that the Rezekne Special Economic zone will continue to be strengthened by the increase in public investment, set out by government decisions, with approximately 35% of enterprises expecting an improvement of economic conditions shortly.
There are many possibilities for business development in the Latgale Region. That makes it an attractive place for future investors and residents. The agricultural sector in Latgale has become more productive — with the growing number of employees, its total added value in the region has doubled in the last five years. By implementing innovative solutions, Latgale can quickly adapt to new settings in the industry. It is necessary to use Latgales Region location at the external border of the EU by attracting the private capital of the eastern neighbours, offering opportunities for processing and manufacturing in Latgale and selling “Made in EU” products. The existing number of leading entrepreneurs allows local and regional development structures to work closely with them, offering personalized support. The focus of high-value production is concentrated in the development centre of Latgale — Rezekne city. ICT companies have doubled their total value added over the last five years, providing good job opportunities for educated young people in the Region. Furthermore, there are extensive educational opportunities provided by modern and well-equipped universities and vocational education institutions, creating a climate for future growth and expansion of the Latgale Region.