RIGA REGION - Economy
Focus on trade and industry
A number of factors have led the stabilisation of the economic situation in Riga region. Among these are the strengthening of the macroeconomic situation, the promotion of the privatisation process, improvements in the investment climate and a satisfactory infrastructure. The region's contribution to the total value added of the country in 2001 was 60.6%, while per capita GDP exceeded the country's average by 49.9%.
This is the largest industrial centre in Latvia both by the volume of production output and the number of employees. In 2002, the region accounted for 62.7% of the gross industrial output and 52.8% of the total employees of Latvia.
In 2002, 26 661 or 3/5 (three-fifths) of all Latvian economically active enterprises operated in the region of Riga, with the majority located in Riga city. There were 28 economically active enterprises per 1000 population in the region, which is 1.5 times higher than the average in Latvia.
While the food industry is the main manufacturing industry here, the manufacture of wood and wood products, publishing, manufacture of wearing apparel, manufactures of furniture and the chemical and pharmaceutical industry also play an important role. Of the new industries, the assembly and production of computers have witnessed the most rapid development.
Agricultural production in the region of Riga differs essentially from farming in the other regions of the country. This can be explained first by the proximity to the capital Riga and the area of agricultural land, which constitutes only 3% of the total agricultural land of the country. Although various kind of farming are developed in the region, the emphasis is laid on those industries, which do not need vast land resources and are not directly dependent on the quality of the soil that varies strongly across the region. Farming products such as vegetables and flowers of all varieties, grown both in the open and under cover, can be marketed easily, therefore production is to a great extent concentrated around the major cities with better market possibilities.
The region of Riga offers the best-developed infrastructure and a wide supply of products for the tourist industry. Of the total number of tourists arriving in Latvia, 90% visit the region of Riga. Jurmala is also a popular tourist destination.
Due to liberal legislation and a strict monetary policy implemented throughout Latvia, the region of Riga has become an attractive place for foreign investment. Direct foreign investment increased between 1997 and 2000 and the majority of all registered limited liability companies with foreign capital participation are situated in Riga. In 2000, 60.3% of the total foreign investment capital was placed in the Riga region. Inward investment in trade, transport, real estate and manufacturing has come from Scandinavia, Germany, the UK, and Russia.
The region of Riga is quickly becoming one of the most important venues for international trade exhibitions in the Baltic, with various types of exhibitions being held in the International Exhibition Centre of Riga Technical University, in the Olympic SKONTO hall and other venues. The number of visitors per year already exceeds one quarter of million and is still growing.
Largest airport in the Baltic States
There is a sharp contrast between Riga region and other regions of the country in respect of the comparatively high population density, concentration of industrial enterprises, education and cultural establishments and the ensuing everyday mobility of the population within the borders of the region. The majority of foreign travellers also begin and finish their trip in Riga. For that reason, the situation regarding transport in the region has some specific features.
For more than 7 centuries the sea has been the main source of Riga's wealth and the port served as a gateway to the whole world. Even today one of the biggest Latvian ports is in Riga where transit cargo from Russia are reloaded. The main export cargoes are metals, wood and chemical goods.
The passenger port of Riga has been growing in recent years, and construction of a new terminal should soon begin. Lielupe, one of the minor Latvian ports, is situated at the mouth of the Lielupe River.
The international airport 'Riga' accounts for 99% of the passenger and 100% of freight transportation by air in Latvia. Since 1994, the number of passengers has been steadily rising with direct flights to 21 cities in 15 countries. 'Riga' airport is the largest in the Baltic countries. International agreements to open up Latvian air space should see substantial increases in passenger flows in the years to come.
The region of Riga is the only region in Latvia where acute problems in transport congestion persist, causing environment-related problems. In 2002 53.2% of all road traffic accidents registered in the country are accounted for by the city of Riga. The comparatively high intensity of public transport should also be taken into account: roughly half of the total passenger transportation by bus is carried out in Riga. Furthermore, there is also tram and trolley bus traffic in Riga and a large number of people working in Riga use railway transport. In 2002 approximately 75% of the railway lines in the region of Riga were electrified.
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