Among this week’s most widely discussed developments are Prime Minister Andris Kulbergs’ announcement of a 30-day moratorium on major information and communication technology (ICT) procurements and the Ministry of Smart Administration and Regional Development’s plans to overhaul the state’s ICT governance system. Another hot topic has been the controversy surrounding the rebranding of Latvia’s Public Media (LSM), as well as OECD recommendations suggesting that Latvia should increase taxes.
BNN asked political analyst Filips Rajevskis, co-owner of the media company Mediju Tilts, to explain what these developments really mean and what consequences they may have.
“One thing is procurement, but another is the change of the governing parties,” Rajevskis says, noting that such a political shift has perhaps not occurred for too long and therefore major reforms have also been absent.
“When governing parties change, people change, perspectives change and ideas change. This is how democracy moves forward. Where there are no changes for a long time, there is a tendency for things to become stuck and stagnant. Parties that remain in power for many years are generally not inclined toward major reforms. Those that come to power fresh are more interested in significant change. Eventually they, too, become entrenched, and then the next group comes along. This is the natural process of democratic development, through which democracy both renews itself and moves forward. We simply have not experienced this process for some time, which is why many things have become stagnant.
Hopefully this change in power will bring some real changes.”
Asked what the controversial rebranding of Latvia’s Public Media indicates—despite objections from employees of Latvian Television and Latvian Radio and earlier promises that their identities would remain unchanged—Rajevskis said the situation largely resembles a case of spending available funds without a clearly justified purpose.
“To this day it remains unclear why LSM needed to change its logo.
For years there have been discussions about merging Latvian Radio and Latvian Television, something that employees of both organizations have largely opposed. Then, apparently, someone came up with the ‘clever idea’ of approaching the merger from the other direction. Instead of merging the organizations themselves first, they started with the logo. The idea was to place everything under one brand and then complete the process by replacing Latvian Television and Latvian Radio with a single LSM identity.
It was a very naïve expectation that employees would not notice or understand what was happening.
Therefore, the resulting scandal is quite logical. I have never heard employees express enthusiasm about the merger itself, so why would they be enthusiastic about replacing their names with LSM?
It seems the idea of ‘cleverly merging things from another angle’ has ended in scandal—money has been spent and now it looks as though it may simply have to be written off as a loss,” Rajevskis commented.
According to him, the issue has already reached the highest levels of government, where politicians are taking journalists’ opinions and dissatisfaction seriously.
“It is extremely important that someone now determines who was responsible for spending this money in such a manner.
Was it really necessary? We are talking about more than 100,000 euros — a huge amount of money. This is money taken from taxpayers’ pockets. We are constantly told that we need independent public media and many other priorities, yet in the end the money is spent on a logo redesign. That is simply not right,” the political analyst stressed.
Another major topic this week has been the OECD’s recommendation that Latvia should increase taxes because public debt has grown and government revenues need to increase accordingly.
“The first thing we need to understand is that OECD recommendations are not binding. They are simply advice.
The second question is where that advice comes from.
The people at the OECD who produced this recommendation essentially do not believe that Latvia can achieve sufficient economic growth or manage without raising taxes. That is point A. Point B is that they do not believe we are capable of reducing government spending. If you believe neither of those things is possible, then of course the only option left is to impose higher taxes and take more money from society. In reality, however, this approach is a way of distancing oneself from the real problem. Raising taxes also produces negative consequences. It is not as though you raise taxes and everyone immediately pays more.We know Latvia’s experience. Taxes can be increased, but government revenues do not necessarily rise because people generally pay only what they are able to pay. You cannot simply take money that people do not have.
We also have Estonia’s experience. Taxes were increased, economic activity slowed, and the result was two problems at once—higher taxes that people were reluctant or unable to pay, and lower economic activity, which reduced the tax base itself. That is why we must hope that politicians treat these recommendations as recommendations rather than trying to convince society that tax increases are unavoidable. They should genuinely work on reducing government spending and do everything possible to ensure economic growth compensates for rising expenditures by expanding the economy itself, rather than by placing an ever-heavier tax burden on it.”
Rajevskis concludes that Latvia’s future prosperity depends not on higher taxation but on stronger economic growth, improved efficiency in public spending and the willingness of policymakers to implement meaningful reforms.
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