LATGALE REGION - Economy
Huge flax fields
At the end of 2002, there were 3 596 economically active enterprises in the region of Latgale, representing 8.5% of the total number of enterprises registered in Latvia. Of these, 1 548 were in Daugavpils and 600 in Rezekne. The number of operating enterprises per 1000 population in Latgale (9.6) was about half the Latvian average (18.2).
The region's contribution to gross domestic product in 2001 was slightly over 9.1%. Concerning value added, the most significant industrial sectors were trade (25.0%), followed by the transport and communications sector (13.9%) and the manufacturing (12.5%), within it prevailing were the food industry, wood industry and the manufacture of machinery and equipment. In 2002, non-financial investment in the region represented 7.6% of the country's total or 447 EUR per capita at constant prices of 2002 that is approximately a half of the national average. At the end of 2000, only 7.9% of all foreign capital invested in Latvia went to enterprises based here.
In the last four years (1999 - 2002) gross industrial output is standing on approximately 6% of the total industrial output of the country.
Rezekne, strategically located at the crossroads of international road and railways and in close proximity to the country's eastern border, has been designated as a special economic zone and should offer potential for economic growth in the region.
Farming conditions are likely to be among the worst since the soil in the eastern part of Latvia is relatively poor and stony. There are also traces of soil erosion in the region.
Latgale region has the highest number of farms and family holding 48 127 or 34.2% of the total number of the country, but their size is rather small (14 ha on average).
Flax growing has been a traditional industry in the region of Latgale for centuries, and 97% of the total output of flax fibre in Latvia is produced in this region. Centre of Agricultural Science of Latgale in Vilani is engaged in the selection of flax.
The majority of farmers in the region are engaged in dairy farming: in 2002 over one quarter of the total number of cows in Latvia were raised in Latgale and milk production was 25.2% of the national total. As a result, there are many dairy factories in the region.
Latgale's potential for the development of tourism is outstanding and rural tourism has already developed around the lakes, where at the end of 2002, there were 29 hotels and other collective accommodation establishments with 1 240 beds.
Landlocked yet international
Latgale is the only Latvian region without direct access to the sea. Latgale has a common border with Russia, Belarus and Lithuania therefore transit cargo by rail and road that enter the region are further transported through Zemgale, Kurzeme and Riga region to the seaports of Latvia.
Rezekne and Daugavpils are important railway and road transport hubs located at the crossroads of the transport corridors. A transport corridor running from St. Petersburg through Latvia and Lithuania to Warsaw intersects Latgale in a north-south direction (E262). Other transport corridors from Russia and Belarus go through Latgale and then through other Latvian regions to Riga and the Latvian seaports of Ventspils and Liepaja on the Kurzeme seacoast. The railway stations in Rezekne and Daugavpils service domestic and international passenger trains and goods trains. Bypasses have been built around Rezekne and Daugavpils to divert transit traffic away from the streets of the cities. There are airfields in both of the cities, which at present are not widely used, and although Latgale is comparatively far from the state capital, it is convenient to use public transport (train, bus) for getting to Riga. The local bus network has been restructured in recent years. Since several railway lines have been closed due to the small number of passengers, the inhabitants are provided with a bus service, which is economically more viable in sparsely populated areas.
The number of private cars in Latgale has steadily increased in recent years. This has occasioned a significant drop in the indicator of the average number of persons per private car, which has fallen between 1995 and 2002 by 5 persons in Latgale in comparison with a decrease of 3.6 persons in the country as a whole. However, the number of persons per private car remains the highest in the country, at 4.9.
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