Non-party affiliated businessman, private person and founder and manager of a political party that is now part of the ruling government. The conversation (though remote due to the man’s high political workload) with technocratic Uldis Pīlēns at the beginning of the week passed, it would seem, with the leader of the Combined List holding in his hands the new government’s declaration.
I can only guess what «real» politicians see in this document. But I have a feeling its architect sees a well-put-together blueprint that should eventually take the shape of a new structure.
What is your opinion in regards to political caricatures depicting you as a yellow plastic bath toy? So far these are found mainly in Ir magazine, but I think they could become very popular.
-I am very positive about that. The yellow plastic duck was also our bus mascot during the election campaign.
Oh, I had no idea… But the most important focus of our conversation: what will now happen at Riga and Ventspils freeports, will «Bordāns’ reform» continue there?
I’m not asking who will have political control over sea ports – the state or municipality. Their management should include representatives of businesses working at terminals and docks, find and handle freight, as well as companies that ferry passengers. This is what I got from what Māris Kučinskis said and what Uldis Sesks promised to sea port businesses. What say you?
-There is a section I’ve read in the government declaration. I’ll explain in more detail later. It goes like this: «We will continue and complete the sea port management reform, improve the involvement of municipalities in sea port management, use the socioeconomic potential of Latvia’s sea ports more efficiently, and attract transit freight from new directions.»
What does it say? Only that how different we all are in this coalition. The National Alliance (NA) and New Unity (JV) are members of the previous government and co-authors of the sea port reform. Well, fine – political carriers. Once the Combined List (AS) came along, certain corrections were added to this policy.
This means that JV and NA, refusing to let go of the requirement of 13th Saeima’s initiated reform – creating capital associations at Riga and Ventspils freeports – have no choice but to agree with AS’s vision, which suggests that Liepaja’s model is the most suitable one.
I got this impression during my trip to Ventspils. The sea port workers there told me they find Liepaja’s model as the most attractive one. This is why we are committed, and why the declaration states makes it a duty to «improve the involvement of municipalities in sea port management»…
We believe that without co-involvement from municipalities it is strategically impossible to secure sea port development.
Neither in Riga nor in Ventspils. This should be mandatory even if JV and NA say they want to found capital associations at sea ports.
Excuse me, but I asked about participation of BUSINESSES!
-As I’ve said, Liepaja’s model – with proportional participation from the state and municipalities – is the best one. This was said very clearly and unambiguously. Of course, there is no solution as of yet, but we will look how good the hearing of NA’s new minister of transport really is. Liepaja’s model was reviewed as a potential management model. The coalition is not in full agreement over this, but we will continue insisting on this model, even if a capital association becomes its legal form.
You don’t suppose NA and JV defend the reform only because they consider it necessary and because they could benefit from it? Defend it because they simply don’t want to admit it as politicised legislative failure. Maybe they fear admitting having committed a mistake: oh, but that would impact the authority of the prime minister and both parties…
-I never said any of that. But you do have the legitimate right to put it that way.
There is a general impression that the welfare policy for members of the government is a wolf that is better left unmentioned. This, too, is an important and unavoidable issue in our conversation, since the people really don’t care that benefits and pensions are not a field entrusted to AS.
Perhaps it is odd to ask a millionaire, but maybe for this reason alone it should be: what is your opinion – how to form the welfare policy now and with the money the government may not even have?
-First of all, the welfare policy is one of the cornerstones for Latvia’s, and any country’s, very existence. Secondly – this policy cannot continue without changes, and AS has come as the driver of change.
Of course, JV achieved an impressive victory in elections. We had to options: to remain in the opposition or show respect to the 11% of voters for their support for AS and compose a policy, for the welfare sector included, as part of the ruling coalition.
Let’s start with regions. Their disproportionate development is wrong for a country with sustainable welfare. Regions have to develop in a balanced way so that people live in work there, receive decent wages, are able to provide education to their children and retirement for themselves.
The second topic. The declaration mentions a simplified mechanism for tax calculation for small and medium-sized companies to help promote economic activity. The higher it [welfare] is, especially in regions, the higher the general welfare will be. The higher it is, the more money we will be able to pay in pensions.
Next – Gini index*. The difference of income levels between the rich and the poor is too high – it needs to change. This can be done with a European, normal labour market policy; successful tax-paying entrepreneurship and proportionality in taxes – in a rational form. This would help us with our taxes to compete in the Baltic region. This is our goal, our commitment as members of this coalition.
The declaration has a total of 213 articles, which appeared in no small thanks to AS: «We will evaluate results of the administrative territorial reform, social and economic influence, provide residents and communities the right to participate in development of Latvia’s territories and management processes.»
The reform is not ideal. We criticise it. We will criticise it, and we will offer solutions. This is because a number of issues remain unresolved. For example, to organise civil protection, we need second level municipalities – perhaps on the level of planning regions. Review of the school network needs to be reviewed in a wider perspective, not just limited to a single region. The road network, too, goes over the borders of counties.
No one will go for a revolution here. The reform will be evaluated based on benefits and losses. If rational corrections are needed, we believe they should happen. […]
Your personal relations with, let’s say, certain Unity politicians are lukewarm, to say the least. It seems to be the same for NA politicians as well. They are professionals. Some of them have worked in politics for two decades. For these people you are an amateur, not a politician of AS. They have practical problems to resolve, people to feed. You, a non-party affiliated millionaire, can afford to think and speak idealistically, dream and voice your visions publicly and not worry about your rating. Do you feel a bottomless abyss between them and you?
-Is it even an insult: to be an amateur, if you see a policy implemented and its results? Where have we ended up with NA and JV tandem in charge these past four years? What we’ve seen in these years is a rapid increase of our country’s external debt…
But there was covid…
-Yes, and there was covid in our neighbouring countries – Estonia and Lithuania, even Sweden. But it did not lose its economic capacity, even covid prevention measures there achieved better results.
I’ve been called an amateur since childhood.
When I, an architect, because a builder. When as an architect I became a businessman. This is nothing new to me.
A fresh look from the side on different government affairs – it has become routine. JV, NA and officials cannot imagine resolving problems any other way. This is true for Latvia’s development in general. These months spent in discussions with conditional political «opponents» – now coalition partners – and officials (who are basically truing to explain their positions, especially in the Ministry of Finance), I now understand exactly what I see: our politics and civil service are too fragmented.
Ministries too much like feudal territories. There isn’t enough cooperation between them. The government has too little «horizontal» cooperation in topics like digitisation, welfare or economics. I’ve always been an optimist. I can see some ideas have reached ears as a result of these talks. We’ve started thinking: yes, until now there’s not been enough inter-ministerial cooperation! I can say Cabinet of Ministers committees that are being formed to ensure this horizontal and more efficient cooperation is good news.
I’m not shy to be the one with a view from the side, to be the differently-minded one. New creative ideas can come only with a new policy. We, AS, came with an idea that the country needs to change. What we’ve had until now – last place among EU member states and the poorest results among Baltic States – cannot be allowed to continue.
I will gladly maintain this look from the side – outside of political traditions – in the future.
There are different traditions in politics. A policy for values, a policy for benefits…
-The policy for value is a very beautiful term I would like to hold it up as a flag up high.
What do you think AS can accomplish in the sectors entrusted to the party – medicine, interior affairs, agriculture, municipalities, the environment and digital policy?
-Let’s start with regional policy. During the term of the last Saeima there was no real cooperation between the government and municipalities. Restoration of this dialogue, putting it on a much higher level is minister Māris Sprindžuks’ main objective. The fact that he comes from the ranks of municipal deputies, as well as the fact that the 14th Saeima has many people from municipal councils, offers hope that the role of municipalities will be much greater in the parliament’s policy.
The level of expectations from people coming from municipalities will be much higher as well.
Latvia’s future development is possible only if the state government cooperates with local governments. This applies to the distribution of taxes and shared problems we have ahead. For example, finding tools to help municipalities develop entrepreneurship in their respective regions. […] Finally there is the implementation of a policy that will help reduce disproportionate development between Riga agglomeration and the rest of Latvia.
About digitisation – it is our entrepreneurship, welfare and competitiveness topic. The objective is large and difficult, as it hasn’t been able to progress lately. We all know about e-health, we know about data incompatibility, we don’t know why we need certificates from different institutions that do not communicate with each other. […] However, AS took responsibility over the digitisation policy. I hope for good results.
Agriculture. During our coalition’s initial coalition formation dispute period AS was categorically against bringing shares of Latvian State Forests to the exchange. We managed to strike this article from the declaration. Forests are our country’s critical resource.
Latvia can do better. The country has an enormous agriculture and forest potential. We can activate the use of peat – it is listed in the declaration. We can make the agriculture policy more efficient with higher exporting potential.
Interior affairs. We have delegated our most experienced politician – Māris Kučinskis. His tasks aren’t simple. First of all, lately the Ministry of the Interior has been left in obscurity, without appropriate funding, whereas the Ministry of Defence has always been provided with sufficient resources even before the Russian invasion of Ukraine.
It is one thing to work with the prime minister and provide law enforcers and interior institutions with 2.5% of GDP. It is a completely different matter altogether to reorganise work with municipalities so that we never hear news about fire departments closing down!
Thirdly – ensuring loyalty among workers of the Ministry of the Interior.
Fourthly – increasing cooperation with municipal police. One such thing – creating a supernational civil protection concept against the backdrop of the ongoing war in Ukraine, one under which Ministry of the Interior, Ministry of Defence, Ministry of Health, municipalities and other institutions cooperate with one another.
The Ministry of Health – which was basically rejected by JV and NA – will be entrusted to Līga Meņģelsone. Her objective is using her experience as a manager to study the enormous pile of problems in the sector. The declaration mentions «ensuring increasing funding towards health protection». There are many challenges there, but I can see that reports coming from medical professionals are generally hopeful, showing the wish to participate and help out our minister.
General practitioners, disaster relief, daycare assistance, rehabilitation, oncology – problems everywhere. Everywhere there is a shortage of resources. We may need to work on health insurance as well. Enormous tasks that require efficient and honest solutions.
As you are aware, we are in favour of horizontal cooperation. While we failed to secure a win in elections and pick our own prime minister, we will try to ensure cooperation through four of our ministries. There are tasks we can resolve together with the Ministry of Environment Protection and Regional Development, Ministry of Agriculture and Ministry of Health. There are tasks VARAM could resolve together with Ministry of the Interior. There are many problems the four ministries can resolve is they work together. We will try to to show our colleagues in the coalition that we can cooperate much more efficiently.
Are you satisfied with your party’s results in elections, the pace of the government formation process, the seats in government your party received?
-We, AS, which formed on the 10th of May and was able to unite three parties and non-party association in a relatively short period of time, have managed to secure the trust of 11% of citizens and 15 seats in the Saeima. This is definitely not bad. […] Now is possibly the time for changes, which is indicated by higher participation from citizens.
Leading political technologists – or the ones who consider themselves that – predicted the Saeima would have eight to twelve parties, and that the parliament would be fractured. I was certain this would not happen. Look: the Saeima has seven factions, and the government is composed of only three, not six or four parties. This, I believe, is the right path towards democracy, and I am happy with that. […]
Could the coalition formation talks been more constructive, with officials agreeing on a three-party government from the start? It was clear to me on election night that this would be the most reasonable – considering both the time we live in and the geopolitical situation – coalition. As for how bumpy and long this road has been lately, I am not happy. Latvia expected three, relatively similarly-minded political parties to have a quicker and more rational reaction.
Unfortunately, colleagues from NA and especially from JV did not want to accept much. It seemed to them the government should work as before. What seemed unsuccessful to us seemed very successful to them, such as reforms. A long time passed in lengthy discussions. But now the coalition is composed – we have received Saeima’s mandate, and we will move forward.
As for the distribution of seats in ministries – I am unhappy how it happened. Without discussions with partners – the prime minister simply put an offer on the table: this will be for us, no discussions! This, I believe, is not team-friendly, not farsighted – because we’re not putting our best in the posts they are most suited to fill.
We believe AS would to a much better job with the complex transport sector. Even in the defence sector we have a much higher degree of professionalism than our colleagues. But AS are treated as newcomers. Perhaps the party is also considered a serious competitor in the coming years. This is why we cannot behave like small children! We are committed to proving with the ministries entrusted to us: Latvian can do better.
There is one topic I find very important, which is why I will use my «official position». Recently business (and other social processes) consultant Armands Gūtmanis dared to criticise the government in a manner that is unusually categorical for him. In an article published on Ir portal, he accused the government of creating illusions among the public and especially among entrepreneurs: that we are allowed not to take EU’s green course seriously, that much of what Brussels demands can be ignored with respect of local situations. This will cost Latvia a great deal.
Gūtmanis – because of the peculiar, multi-European (not usually transatlantic, for our politicians) centered even germanophilic view – is an expert I respect very much. You know him, too. What say you about his concerns?
-The first thing we have to remember: who is in charge in Latvia? The officials in Brussels and their directives? As Didzis Šmits, our Minister of Agriculture, says: I am a lobbyist of Latvia in Brussels, not a lobbyist of Brussels in Latvia!
The topic of climate is reasonable. I’m not against guidelines of the green policy. We live in one world, we don’t have a second one.
The climate topic cannot be resolved in an unreasonable way.
Most of the climate indexes in Latvia are considerably better when compared with western Europe. For example, like in Finland, peat is our national treasure, not a climate topic «as is».
Now that the world is in a state of energy crisis, refocusing from Russian gas towards local fuel sources will cause an increase of CO2 emissions for a short while. However, if we have shared position in the EU to reduce gas consumption by 15%, to cease its use entirely for a short period of time means using local resources. We are free to keep using peat until 2030 [although the green course heavily opposes its use].
This will allow us to develop better smoke filtration technologies, increase the use of regional energy resources, and start burning non-recyclable waste, like Denmark. Blindly following the course set by Brussels without following our own economic interests? We have never done this. The special law on the special economic zone, the freeport laws appear against the «mainstream» set by Brussels. Insisting on our rights and using valid arguments we can reach reasonable compromises.
We are masters of our land, but money dwells in Brussels!
Brussels gives money only towards its own programmes. It’s not like we live off this money alone. Brussels does «inject» enough to stimulate economic activity, and I cannot imagine when the next four years could be like if Brussels decided one day to completely cease financing. But Latvia’s national economy can – which is the primary point of AS’s programme – help compose a self-sufficient country.
We don’t have to produce everything on our own, we are in a good economic network. However, in moments of crisis we have to be self-sufficient in energy, food supplies, health protection and all other critical fields. This is why keeping Latvia’s forests away from the exchange was a very important issue for AS.
I believe making Latvia a self-sufficient country that can take care of itself in a crisis is one of the government’s main objectives. Energy is listed in the declaration. We have to be minimally dependent on imports of energy resources.
What’s the most important thing you would like to tell our readers?
-Reaching out to the people, especially ones living in regions, I would like to remind them: AS has its roots outside of Riga. Our and my personal sentiment is that the disproportion between the capital city’s agglomeration and other regions needs to be overcome.
Balanced development is a very complicated but also very important task to which all of us have to contribute. Regardless of our political affiliation, all people and all politicians living in regions have to contribute. Position, opposition – this is unimportant. Together, we have to raise the self-respect of regions. Together we have to prevent the catastrophe of democratic numbers and people leaving regions. […]
I believe in a balanced development for Latvia. I believe in people’s wish to live and work in regions. I believe in our industry, natural treasures – forests, rivers and fields – and our enormous potential.
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*Gini Index is a way of measuring statistical data used to calculate the unequal distribution of income: the smaller it is, the smaller the inequality. Named after Italian statistician Corrado Gini (1884-1965).
In Latvia it was 35.7% in 2020. In Finland it was 26.8% and in USA it was 48.8%. (Right-wing economists believe such scandalous inequality – the highest among developed countries – is one of the causes of greatness of the world’s biggest economy.)