 City
economy
Since
1991, when Latvia
regained its independence, the primary goal for the development of
the capital of the Republic
of Latvia,
has been to see Riga
as an economically vibrant, modern and dynamic city, maintaining its
natural and cultural heritage. The City of
Riga
is attempting to create an open Western style economy that complies
with EU standards.
Like
all economics in transition,
Latvia
as well as Riga
suffered economic recession immediately following separation from
the Soviet
Union in 1991, but managed stabilize situation (see
Table 23
). At present
Riga
accounts for 49% of the total industrial output of
Latvia.
The
Riga's
economy is driven by the following six engines of growth -
Riga
as the capital of Latvia,
transportation centre, financial centre, industry centre, trade and
service centre and Riga
as tourism centre. The most important industrial branches now are
transit, finances, power industry, food industry, pharmaceutical
industry, wood processing, printing and publishing, furniture
manufacturing, textile industry, communication equipment
manufacturing.
 RIGA
AS THE CAPITAL OF
LATVIA
The
state's political, judicial, administrative and military
headquarters and the specialists working there are found in
Riga.
Riga
is location for foreign embassies, various international
organisations. Riga
is also the location for libraries, museums, hospitals and other
institutions of national stature. The most significant international
contacts are established in Riga;
congresses and exhibitions of various levels are held in
Riga. Various international visits, ceremonies take
place.
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TRANSPORTATION AND
COMMUNICATIONS
Riga's
geographic situation between East and West has been both privilege
and unfortunate for 800 years. Throughout history
Riga has been between East and West and has grown
large and glorious and has also been ravaged by wars.Now
Riga is moving into its new
period of development when it becomes a city of western standards
and contacts with neighbouring and other world cities give
Riga great opportunities for
economic development. Therefore, an especially important role in the
economy of Riga is played by the
seaport, the airport, the railroads and arterial roads, which
connect Russia with the countries of
Western
Europe. The international and local
communication and transportation systems are two of the most
significant of Riga's economics sectors.
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INDUSTRY
In the long history
of development in Riga
industry has had an important role and it has been based on
technologically advanced solutions.
Unfortunately during the
fifty years of Soviet rule industry in
Riga slowly lost its
European level technology and deteriorated to the Soviet standards.
But in Riga
there still is strong intellectual potential and manufacturing
infrastructure that could be the basis for the development of new
high technology manufacturing.
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all...
BUSINESS AND FINANCES
A
new form of economics in the city is business and finance that for
the last fifty Soviet times years was under state control.
Within the last years
Riga has become the largest financial centre in the Baltic Region.
The
largest banks, insurance companies and brokers companies are
situated in the city. International auditors and consultation
companies such as Price Waterhouse Coopers, Arthur Andersen and
Ernest & Young operate in Riga.
Riga`s credit-rating BBB/Stable/A3 reflects the stable financial
situation and low debt-level in the city.
Riga has received significant investment for
development over the last years (see Figure 55 ).
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TRADE AND
SERVICES
Retail trade and personal services is not a
primary driving forces in city's economy but it provides a level of
employment that is directly related to the number and prosperity of
the city inhabitants. This part of the economy was the first to show
signs of recovery and adaptation to the changing requirements in the
beginning of 90ies.
Nowadays,
the share of the wholesale and retail sale industries in GDP has
increased from 8.7% in 1994 to 16 per cent in 2000. This trend is
often seen as an evidence of the growing level of consumption, which
also indicates that the overall level of well-being is increasing in
Riga.
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TOURISM
Riga's
geographically advantageous location and its cultural-historical
heritage ensure it the potential to be a significant tourism
centre. As many European cities have shown, tourism can be a driving
force for city economics. Tourism today is one of
the largest sectors of the world economy. However, specialists of
tourism in Latvia admit that the potential of tourism resources is
not fully used. In 1999, tourism equalled to only 2.4% of GDP of
Latvia, which can be seen as an unimportant component of the
economy.
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