Latvia regards Saudi Arabia as a high-priority market, says the economy minister of the Baltic states
RIYADH: Latvia is keen to strengthen trade ties with Saudi Arabia, enabling Latvian companies to contribute to Kingdoms Vision 2030’s social reform and economic diversification agenda, Ilze Indriksone, Latvia’s minister of economy, told Arab News .
Speaking after the conclusion of the Saudi-Latvian Business Forum in Riyadh earlier this month, Indriksone stressed the need to expand economic cooperation, increase bilateral trade and increase investment in research, development and technology.
The establishment of the joint economic committee will not only be the execution of this specific bilateral agreement (signed in Riyadh) but will also develop several links not only between businesses but also between ministries, he said.
On June 7, the Federation of Saudi Chambers and the Investment and Development Agency of Latvia signed an agreement establishing a joint economic committee designed to enhance information sharing and promote cooperation between Saudi and Latvian companies.
The agreement focused on different sectors, such as trade, investment, finance, transport and logistics, tourism, agriculture and food industry, as well as high-value areas in cutting-edge technologies.
The forum was attended by representatives of government bodies, members of the local business community and 20 Latvian companies.
Speaking at the recent forum, Indriksone said Latvian companies have shown great interest in a number of Saudi sectors, including biomedicine, pharmacy, construction, information and communication technologies and creative industries.
Saudi Arabia and Latvia first established diplomatic relations on March 21, 2003, at the Permanent Mission of the Kingdom of Saudi Arabia to the United Nations in New York. The signatories were then-Ambassador and Permanent Representative to the United Nations, Gints Jegermanis, and former Saudi Ambassador Fawzi Bin Abdul Majeed Shobokshi.
After signing the protocol, both ambassadors expressed the hope that the establishment of formal relations will be followed by concrete steps to foster mutual understanding and trade between the two countries.
Since then, Saudi-Latvian ties have developed into a prosperous relationship, strengthened by cooperation and partnerships in various fields.
Latvian exports to Saudi Arabia were estimated at $149.35 million in 2022, while the kingdoms’ exports to the country amounted to $1.41 million in 2021, according to the UN Comtrade Database.
Latvia’s exports to the Kingdom include $131.6 million worth of grain; $5.6 million worth of mineral fuels, oils and distillation products; $2.8 million worth of electrical and electronic equipment; and $1.2 million worth of pharmaceuticals.
The forum’s recent agreement identified 10 priority sectors for cooperation, including rapidly expanding agriculture, logistics, education and tourism areas in Saudi Arabia under Kingdoms Vision 2030 agenda to diversify revenues from hydrocarbons.
Saudi Arabia and Latvia are now exploring cooperation opportunities in high-value sectors, such as information and communication technology, digital solutions, smart technologies, smart cities, pharmaceuticals and medical tourism.
It is not the first time that business delegations from Latvia have visited the Kingdom.
In 2021, Khaled Al-Yahya, then Secretary General of the Federation of Saudi Houses, welcomed an official trade delegation from Latvia to discuss developing mechanisms for exchanging investment opportunities through private sector institutions and increasing the number of trade delegations reciprocal and group exhibitions.
Officials also traveled from Riga to Riyadh in February this year to attend the second LEAP conference, an annual technology event founded in 2022 by the Saudi Ministry of Communication and Information Technology, the Saudi Cyber Security Federation, programming and drones and by event organizer Tahaluf .
According to Indriksone, the delegation that attended the Saudi-Latvian Business Forum last week was much larger and more diverse than in previous outings, with interests in a much wider range of sectors.
The trade delegation was much larger and the companies came from various fields including biomedicine, pharmacy, medical equipment. There was also a large representation of construction companies, ICT and creative industries, he said.
In 2022, the economy in Latvia, like many countries across Europe, was still emerging from the turbulence of the COVID-19 pandemic when it suffered the fresh blow of rising inflation due to the Russian invasion of Ukraine in February of that year.
However, 2023 saw strong gross domestic product growth, driven largely by consumption.
Latvia is also benefiting from significant support from the EU Cohesion Fund worth $4.5 billion over the period 2021-2027, or about 1.4% of GDP annually in average.
Thanks to the growing business confidence, Latvian companies have shown themselves ready to establish their presence in Saudi Arabia, considering it a priority market in the Gulf Cooperation Council area.
They are also eager to cooperate with their Saudi counterparts to help them expand into Europe by leveraging Latvia’s strategic location, EU membership and robust logistics infrastructure.
When they come to the region, they (companies) consider setting up not only their representative offices, but also production and operational offices (in Latvia), Indriksone said.
Although Latvia is a small country, it has a very strong reach in EU markets, making it an ideal partner for external investors, he said. We are famous for our three ports and our international airport, she added.
Asked about specific strategies to strengthen ties between Saudi Arabia and Latvia, Indriksone highlighted the role of the Investment and Development Agency of Latvia, which is actively working in the region.
He said his government plans to organize trade missions, disseminate information on special business and investment regulations, and promote some of the most developed sectors in his country, such as pharmaceuticals.
Education and information exchange are seen as key to promoting cooperation between the two nations, he added.
Describing the latest deal as a catalyst, Indriksone said she was optimistic about the prospects for further trade and investment.
Indriksone said his country has built a reputation as a friendly country for investors and startups. You said that Latvia’s well-established business ecosystem and special economic zones in particular have attracted worldwide interest.
Another development is Latvia’s Green Channel initiative, which offers efficient tools for foreign companies operating within bureaucratic spaces and provides the necessary training and support to help businesses grow.
The main aim of the initiative, launched by the Ministry of Economy and the Investment and Development Agency of Latvia, is to ease the administrative burden for high value-added investments.
Priority sectors include ICT, bioeconomy, smart materials, photonics, biomedicine and smart energy, as well as construction, transport and logistics related to these smart industries.
We have developed the Green Channel (initiative), which attracts many investors from different countries, especially the United States, Scandinavia, Europe, and they appreciate it for its speed and efficiency, Indriksone said.
Saudi companies are also now well positioned to take advantage of this, by streamlining their access to European markets.
Indriksone said a Saudi delegation plans to visit Latvia in July to follow developments at the Riyadh forum and take steps to set up a works council to deepen cooperation.
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