Baltic experience in transition Latvias case study Armands

Baltic experience in transition, Latvia’s case study Armands Eberhards, CFCA director 30. 12. Belgrade

Latvia’s experience of transition management From socialism to EU membership -15 yr : -Shock therapy vs gradualism debate • Reforms and better use of national funding • Experience of PF reforms to better exploit EU funds • EU integration, adoption of Acquis • Lessons learnt • References

Reforms and better use of national funding • Public finance –effective management of public funds: policies and implementation –expenditure, revenues; public procurement; planning; no different treatment of internal and external funds • Institutional building- capacity building of Mo. F, ST, SRS (incl. Customs), PPB, CFCU • Supreme Audit Office- external audits, adoption of International standards, best practices • Effective Internal Audit services; risk management based approach

Experience to reform PF to better exploit EU funds • Mo. F, ST - no new structures for similar functionscomplimentarity, additionality; absorption capacity; co -financing; ownership of reform process • CFCA- financial and administrative management. DIS, EDIS; SFM “innovations” in practice; Phare, ISPA, ERDF etc • Line ministries: policy responsibility, technical competence; PMU- technical management • Incentives to emulate and negative externalities • Reforms first (business plan) then investments • Specialized agencies: LDA- FDI, export promotion, state aid management (ERDF, ESF); NVAemployment promotion (ESF)

EU integration, adoption of Acquis • National program for the Adoption of Acquis – political priority • European Integration Bureau -coordination, supervision, harmonization of legislation • Translation of Acquis- Translation and Terminology Centre • Intra ministerial cooperation and coordination in negotiation process • Prioritization of budget expenditures and technical assistance- institution building (HRD and investments)

Lessons learnt • No ready- made solutions, local solutions for domestic problems – gradual reforms • Objectives of transition to benefit constituenciestransition as domestic political process • Close collaboration with international partners- active dialogue • Institution building - constant process of planned improvements to provide better services

References • State Audit Office http: //www. lrvk. gov. lv/ • Ministry of Finance http: //www. fm. gov. lv/ • Central Finance and Contracting Agency http: //www. cfla. gov. lv/ • State Treasury http: //www. kase. gov. lv/ • Latvian Development Agency http: //www. liaa. gov. lv/eng/ • Latvian Employment Agency http: //www. nvd. gov. lv/

Thank you! Armands Eberhards, MSc, MBA CFCA Director Smilsu Str. 1, Riga, Latvia Armands. Eberhards@fm. gov. lv Armands. Eberhards@cfla. gov. lv