At the 28th of March meeting of the Latvian Port, Transit and Logistics Council (LOTLP), Latvian Prime Minister Evika Siliņa said she highly values what sea ports have done so far to refocus on new cargoes, development of industrial zones and attraction of investments. LOTLP agreed to compose a work group and develop a detailed plan in two months’ time, as well as preserve the transit sector and restructure the flow of freight through Latvia’s territory.
Latvian Stevedoring Company Association (LSA) council member Jānis Kasalis stressed Latvian sea ports are actively looking for ways to replace previous freight volumes. However, there is no support available for that.
Considering the specifics of this sector and how investments and projects are slow and complicated, attraction of new cargoes requires years and a detailed plan, Jānis Kasalis said at a LOTPL meeting.
LSA council member also stressed the importance of Central Asia in the maintenance of Latvia’s transit corridor. “Latvia is only a part of the regional and global commercial corridor. This is why national decisions should be made both with respect to EU and World Trade Organisation’s conditions to avoid breaking transport corridors and putting Latvian entrepreneurs in unfair competition with regional partners,” said Jānis Kasalis. Considering that the European-Central Asian corridor is also one of the priority directions for EU’s directions in the transport sector, strengthening cooperation with Central Asian countries is considered highly important for LOTLP.
LSA notes that businesses operating from Latvian ports are prepared to cooperate to reduce the influx of freight from aggressor countries and assist Ukraine.
This requires time, financial support and tight cooperation of the whole sector. Businessmen hope for support from the state and Europe for development, as well as understanding from society in the transition period.
The meeting also addressed the industry’s future development in the current geopolitical situation. It was decided to ensure tighter cooperation between port and railway companies in the creation of development programmes in order to diversify freight flow.
The role of the transport sector in the national economy was emphasized as well – railway and port companies employ several tens of thousands of people, the transit sector provides a major contribution to the Latvian budget, and these companies provide the infrastructure so important for national defence and military mobility. Latvia’s transport infrastructure is connected to its eastern neighbours, so the sanctions have significantly reduced the volume of cargo in ports, and soon they will no longer be able to maintain the infrastructure necessary not only for transit, but also for the export of Latvian manufacturers and the import of raw materials. Therefore solutions are being sought to preserve the port and railway sector important to Latvia, while at the same time looking for new cooperation partners in Central Asia and the Western direction.
The European Union is united in its sanction policy against Russia, it condemns this country’s actions and does all it can to restructure its activities to lower cooperation with this country. Nevertheless, we have to keep in mind that decisions associated with limiting cooperation with Russia and Belarus have to be balanced with national economy, competitiveness and defence, stevedores say.
All border countries are actively working to reorient to other markets. However, breaking strategically important supplies is not safe or economically justified. Kasalis stresses: “Finland, which has shut down its land border with Russia, continues importing nickel and mineral fertilizers from Russia. Lithuania still maintains cargo flow to Kaliningrad, and Russian goods in Estonia are handled at a private sea port.” LOTLP agreed that sanctions and restrictions should hurt the aggressor country, not the country imposing sanctions and restrictions.
LSA is satisfied that this was the first constructive LOTLP meeting after a long break, which was possible thanks to the Ministry of Economy. Because there were no LOTLP meetings for several years, many critically important port problems remained unresolved for a long time. These problems have since caused chaos and uncoordinated action in the sector.
Stevedores note that over the past several years the management of the transport sector in Latvia has been fractured – municipalities are working off their plan, sea ports are fighting for freight to maintain infrastructure, and the state is trying to balance the tax policy, defence and economic growth.
“To attract international investors, the tax incentives provided for in the Law on Ports were withdrawn by the government before the deadline, thus creating confusion among international partners and rocking the attractiveness of the port business environment. The port management reform on the part of the government has also been delayed for several years, creating uncertainty about future activities both at the port and in the environment of foreign investors. In turn, due to the lack of a unified vision of the development of the city, region and country, there is not enough cooperation between ports and urban municipalities, as a result of which the integrated development of port cities is delayed.”
LSA notes that LOTLP, which is managed by the Prime Minister, is the correct format to tackle such inter-sectoral challenges, and hopes the transport sector will not longer be left unattended.
Also read: LSA: it’s important to make sanctions more effective
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