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Latvia ’s experience of transition management

Explore Latvia’s transition from socialism to EU membership in a case study encompassing shock therapy vs. gradualism, PF reforms, and effective public fund management, offering insights, institutional building strategies, and EU integration experiences. Discover valuable lessons learned and references for effective transition processes in Latvia.

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Latvia ’s experience of transition management

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  1. Baltic experience in transition, Latvia’s case studyArmands Eberhards, CFCA director 30.12. Belgrade

  2. Latvia’s experience of transition management • From socialism to EU membership -15 yr : • Shock therapy vs gradualism debate • Reforms and better use of national funding • Experience of PF reforms to better exploit EU funds • EU integration, adoption of Acquis • Lessons learnt • References

  3. Reforms and better use of national funding • Public finance –effective management of public funds: policies and implementation –expenditure, revenues; public procurement; planning; no different treatment of internal and external funds • Institutional building- capacity building of MoF, ST, SRS (incl. Customs), PPB, CFCU • Supreme Audit Office- external audits, adoption of International standards, best practices • Effective Internal Audit services; risk management based approach

  4. Experience to reform PF to better exploit EU funds • MoF, ST - no new structures for similar functions- complimentarity, additionality; absorption capacity; co-financing; ownership of reform process • CFCA- financial and administrative management- DIS, EDIS; SFM “innovations” in practice; Phare, ISPA, ERDF etc • Line ministries: policy responsibility, technical competence; PMU- technical management • Incentives to emulate and negative externalities • Reforms first (business plan) then investments • Specialized agencies: LDA- FDI, export promotion, state aid management (ERDF,ESF); NVA-employment promotion (ESF)

  5. EU integration, adoption of Acquis • National program for the Adoption of Acquis – political priority • European Integration Bureau -coordination, supervision, harmonization of legislation • Translation of Acquis- Translation and Terminology Centre • Intra ministerial cooperation and coordination in negotiation process • Prioritization of budget expenditures and technical assistance- institution building (HRD and investments)

  6. Lessons learnt • Noready- made solutions, local solutions for domestic problems – gradual reforms • Objectives of transition to benefit constituencies- transition as domestic political process • Close collaboration with international partners- active dialogue • Institution building - constant process of planned improvements to provide better services

  7. References • State Audit Office http://www.lrvk.gov.lv/ • Ministry of Finance http://www.fm.gov.lv/ • Central Finance and Contracting Agency http://www.cfla.gov.lv/ • State Treasury http://www.kase.gov.lv/ • Latvian Development Agency http://www.liaa.gov.lv/eng/ • Latvian Employment Agency http://www.nvd.gov.lv/

  8. Thank you! Armands Eberhards, MSc, MBA CFCA Director Smilsu Str.1, Riga, Latvia Armands.Eberhards@fm.gov.lv Armands.Eberhards@cfla.gov.lv

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