According to economists and government officials, the Latvian economy is in a state of rapid recovery and the country’s financial outlook is better than in many years. But the Latvian people see things completely different, according to the latest consumer confidence survey by the major Baltic bank, DnB NORD. And this puzzles the economic experts; either do the Latvians not understand how the economy works or they just don’t care, the officials conclude. 87% of the Latvian population are not satisfied with the government’s performance, 84% still finds it extremely difficult to find a job and more than half the population is thinking about leaving the country.
“Latvian economy right now produces positive and sometimes even super-positive hard data.”
The consumers confidence indicators for Latvia took the steepest dive in February since the end of 2008, according to the latest “DnB NORD Latvian barometer”. The survey displays drastic changes in public opinion with regard to all indicators related to economic development of the country, plummeting as rapidly as in the spring of 2009. Despite all encouraging public forecasts foretelling economic recovery, all measurable indicators of the survey after extended ascent have instantly returned to the position recorded one year ago. Economists and government officials are desperately trying to convince the Latvian population that the economy actually is recovering, and fast.
The drastic decline is observed in all indicators – without a single exception: Present and future outlook of the economic situation, present and future outlook of the family’s material standings, opinions on the government’s performance and chances to find a good employment.
The overall public sentiment index in February as compared to January has dropped from -36 to -44.
Particularly the decline by 12 points in the consumers assessment of the overall development scenario is remarkable. In other words; the number of residents who are of opinion that the situation in the country has taken wrong turn has grown considerably in February.
The only period the drop in this index has been bigger, was by the end of 2008 – down 16 points.
The number of residents in whose opinion the current economic situation is poor has also grown considerably: by 8 per cent points and has curtailed the share of respondents considering the current economic situation unaffected, i.e. neither deteriorating nor improving.
Likewise, the number of respondents considering that the economic situation will improve over the next 12 months has declined by 4 per centage points.
40% of the respondents are expecting that over the next year the situation may aggravate further.
Similar trends can be observed in the residents’ opinions on the present material standings of their families and forecasts in one-year prospective, DnB NORD writes in its report and consider the growth in pessimism as “moderate”.
84% of the Latvian population finds it currently extremely difficult to find employment.
The “” Reality
However, one of the biggest declines in the department of constant indicators of “DnB NORD Latvian barometer” applies to the residents’ opinion on the performance of the current government.
87% of respondents are dissatisfied with the government’s performance – up from 80% a month before. Moreover, particularly drastic differences display the estimation “very dissatisfied”, as in January such answer was chosen by 35%, whereas in February – by 43% of respondents.
(Positive assessment of the government performance has, in turn, dropped further by four percentage points.)
But here’s the funny stuff – the commentaries.
First: DnB NORD Banka’s expert of economics, Pēteris Strautiņš:
“Latvian economy right now produces positive and sometimes even super-positive “hard” data; e.g. in January the export of goods as compared to the last January has grown by 51%, which is the all-time record. Varying sentiments within the domestic market will not affect the export rates; however, exports can not be the only driving force of economic prosperity: domestic consumption also must display an ascending trend. Therefore, there still persists the peril that negative public sentiments may considerably impede improvement of the “objective” reality. This is why the observers of public processes should juggle, i.e. inform the general public about risks in gently and cautious manner to avoid any scary effects. Yet it actually almost precludes taking of strategically required decisions that might have unpleasant short-term consequences.”
And what exactly is the “objective” reality?
Anyway – in the experts’ opinion, the pessimistic assessment of the overall situation is logically related to the results of the second part of “DnB NORD Latvian barometer” regarding the respondents’ views on emigration and the possible inflow of foreign workforce.
79% of all respondents admit that emigration of Latvian population seeking work and reside in other countries is a serious problem that bears long-term implications for the state future outlooks.
Here’s some more from the report:
- Just the third position is occupied by overloading of the state social budget, as the persons remaining behind from their limited income must support incapable residents who are on the receiving side of pensions, allowances and other preferences paid out from the tax budget. Supportive of this opinion have been 55% of respondents.
- Just slightly less – 52% of respondents have indicated that the emigration robs Latvia of capable and intelligent people who might facilitate the prosperity, should they stay.
- Among other eventual loss one that has been stressed less frequently (by 18%) is the consideration that thus is lessened the pressure on the state government, as many dissatisfied persons leave.
Yet the experts point out that it does not mean that the menace of social conflicts has dissolved – most likely, on the contrary, DnB NORD writes.
“It is true enough that the people admit possible benefits from emigration as well: in addition to short-term gains, like subsiding of unemployment and poverty level, reinforced by additional funds let into Latvian economy by emigrants to support their families in Latvia, 37% of respondents have also indicated that departed persons acquire new competencies and expertise abroad to contribute to the development of Latvia in the future. At the same time more than 50% of all respondents have mentioned that their acquaintances who have left for other countries are still living and working there, whereas relatives or acquaintances of mere 29% of all respondents who have tried out this option have returned to Latvia. When asked to voice their opinion on emigrants 54% of respondents to “DnB NORD Latvian barometer” have asserted their support, 23% sympathy, and just 3% disapprove or can not understand such choice.”
Moreover, 32% of respondents have stated their readiness to leave for another country, as they either can not see any future perspectives in Latvia (15%), consider the local living conditions unbearable (14%), are convinced that in other countries is better social security (11%), or want to live in more civilized country (10%).
Among the reasons mentioned are also higher earnings in other countries.
Despite the fact that in other European countries, including one of the most popular destinations for Latvian emigrants, i.e. in Ireland is observed high level of unemployment, 45% of respondents reckon that their wages are still higher than in Latvia, and, should the efforts to find an employment fail, other countries provide by far better social guarantees (27%).
“One fifth of all respondents admit that anywhere would be better than in Latvia.”
However 24% acknowledge that there are economic problems in other countries as well, and therefore emigration might not offer the best solution to improve one’s financial standings.
When considering the prospective solutions to preclude emigration of capable workforce, the residents first of all have mentioned the necessity to facilitate entrepreneurship to create new workplaces – this opinion was supported by 67% of respondents to “DnB NORD Latvian barometer”.
At the same time, 51% as a solution have indicated reinforcing of social guarantees to the employed persons (37% have expressed similar opinion with regard to unemployed, indigent persons and other socially less secured groups), and 43% – the need to provide particular support to rural regions to motivate people to stay and work there.
“The need to stimulate national unity and harbor patriotism feelings in this regard was stressed by mere 7% of respondents.”
Unlike supportive or tolerant attitude towards emigrants much critical attitude in the survey was displayed against potential foreign immigrants who in the experts’ opinion may represent a solution for replacement of missing workforce following the economic recovery in Latvia.
21% subjectively do not support arrival of representatives of other nations and races with the intention to stay, 17% indicate that it might constitute menace to further existence of Latvian culture, whereas 22% speculate that it might further disturb already emasculated social budget.
Some third of respondents are of opinion that Latvia as a potential living and workplace would not be interesting to foreigners.
Well, here’s the Director of Market and Public Opinion Research Center “SKDS,” Arnis Kaktiņš, spinning the best he can:
“I must admit that I am surprised about the fact that the emigration problem at personal level is largely disregarded by the residents of Latvia. For instance, more than one half of the respondents (54%) admit that their initial reaction when thinking about people who leave Latvia is support, and only 1% disapprove of them. Unfortunately, it indicates that those who have decided to stay either are not quite aware of causal relations implicating that every capable person who has left Latvia means loss to everyone who has stayed behind, as it entails drop of the living standard in the future, or we have largely accepted and approved of seemingly inevitable fate – slow and dull extinction of both the state and the nation!”
Jepp, either the people are stupid, or they just don’t give a damn… Well said.
And here is the social anthropologist Klāvs Sedlenieks:
“Currently there is no reason to assume that emigration might subside. However, positive changes could appear as soon as the government will disclose its resolution to facilitate entrepreneurship (instead of development of “trusted relative” business), thus implying shortly expected positive developments on the labor market. At the same time we should bear in mind that actually emigration blossomed even back then when the unemployment level in Latvia had reached its nadir. It also tallied with the actions of government that undermined the confidence level, and therefore fair and encouraging endeavors from its part may be of utter importance.”
Careful, Mr. Sedlenieks! transparency is a dangerous thing… juggle the information, remember?
Director of “EuroCivitas” political center, Viktors Makarovs makes the most sensible comment on the confidence drop, (according to this bloggers objective reality):
“Nearly all ratios of “DnB NORD Latvia barometer” are identical to those registered one year back; however their context most likely has changed. We are not on the verge of economical collapse, and budget consolidation measures are yesterday’s news, yet they have been topped by painful awareness of the fact that the present credit crunch is precursory to more profound long-term social and economic problems. The residents’ initial reaction to this awareness implies pessimism, helplessness and paralysis of acting capacities. The future will show, whether it is followed by resolution and courage to draw and realize long-term visions and solutions, or the general public would be doomed to fatality.”
People See Healthcare System As Expensive And Inefficient
According to the “DnB NORD Latvian barometer”, the country’s population is dissatisfied with the quality of the existing healthcare system, pointing out to its noncompliance with the actual needs and costliness of its services.
Moreover, in opinion of respondents, improvements can not only happen by additional funding, but rather by serious changes in the system itself.
(Boy, are they wrong!)
More than 80% of respondents believe that the healthcare system in Latvia does not satisfy the needs of general public, among main reasons behind its inefficiency mentioning costly medicine (72%) and medical services (67%), as well as lacking funding (64%).
Some of the respondents reckons the principal problem as never-ending changes within the system, and inconsistency in decisions (41%), as well as inadequate attitude towards patients by medical staff (38%).
When asked about costliness of services and the medicine in particular the Director of “Ģimenes aptiekas” pharmacy chain, Ilgvars Ķipēns, explains the public opinion by comparing the accessible data on medication prices and wages in Latvia and other European countries:
“Several studies independently conducted by state authorities and private enterprises reveal that medication in Latvia on average is cheaper than in other countries of the European Union, whereas people are convinced about the opposite – 72% of respondents believe that we are the ones paying more on medicine. I think that underlying such assumption is the fact that locally the amount earmarked for medicine from the family’s budget pro rata is higher, as our wages are considerably lower as compared to mean European salaries. Average wages in Latvia according to the Central Bureau of Statistics amounts to approx. LVL 431 before taxes, meaning that the person is paid some 300 lats “in red”, whereas, for instance, in United Kingdom an employed person takes home 1,500 lats on average. Assuming that a remedy costs five lats and the price is equal both in here and in UK, the calculation reveals that Latvian pays for it 1.6% of the salary, whereas Englishman – mere 0.3%. The difference is enormous, and is causing the feeling that we pay more for medicine and other goods, even though the amounts are similar in terms of pricing.”
See! Stop whining!
When asked to assess the quality of the existing healthcare system and to think about possible improvements, more than one half or 58% respondents are convinced that the system must be subjected to radical changes, whereas 33% point out to the need to obtain higher financial assignments.
Yet, regardless of the wish to experience reforms within the healthcare system, more than one half of respondents are not supportive to the currently launched reform of hospitals, believing that its goals do not correspond with the best interests of the population, and other 43% reckon that its implementation is inefficient.
Chairman of the Board of “ARS” Medical Service Company, Māris Andersons, emphasises:
“Already now Latvia falls short of the criteria drawn by the European Union stipulating that emergency services should be accessible within the distance of 70 kilometres or paramedics should arrive within an hour after the call. If accessibility of medical assistance will deteriorate further, prevalence of neglected illnesses and the number of people in need of time-consuming therapy will grow (and treatment of neglected maladies is more costly from governmental point of view). Unfortunately, even actual trends are rather discouraging, as hospitals report that over the last year has drastically augmented the number of pathologies, whereas the number of Group I disabled persons has grown by 50%. Mind you that these people stand no chance in returning to the labour market.”
Hey! No scary stuff – Gently!
Many Latvians would gladly assume the responsibility for healthcare contributions, thus reducing payable taxes (43%), rather than pay higher tax to enable the government to provide wider range of state-paid services.
“Since people in Latvia mostly mistrust the taxation system as such (which was revealed by the precedent “DnB NORD Latvian barometer” survey), it is quite logical that the population would rather opt for greater self-responsibility for insurance and healthcare contributions. However, this assessment is not quite unbiased, as Latvians unfortunately are not accustomed to taking care of their own health or assume full responsibility for it. Besides, to afford health insurance one needs rather high income the majority of population is unfortunately deprived of,” reasons the Chairperson of the Patients’ Ombud Office Liene Šulce.
The survey further detected that the majority of respondents tend to visit their family doctor only in case of serious illness or if self-treatment has failed (44%), as well as in emergency cases or to obtain the prescription for vital medication (40%). Mere 14% of respondents visit the doctor as soon as there appears the slightest concern about their health or that of their family members.
As one of principle obstacles that preclude from visiting the family doctor the population mention costliness of medical services (50%).
In turn, when assessing their relations with family doctor close to one half of respondents admit that they trust their physician (47%); 41% of respondents in case of health problems turn to their doctor in the first instance, whereas equal proportion of respondents mostly visit their family doctor to obtain assignments to specialists.
When asked about the doctors’ remuneration, this being the question that has stirred occasional public discussions at least over the last ten years, 31% respondents have specified that they are not actually aware of it, whereas 22% regard it as too low. 40% of the poll participants consider the remuneration of paramedics and medics more or less adequate to the current situation in Latvia (24%) or even higher than the average income of other specialists (16%).
“Due to unknown reasons there still persists the notion that doctors’ earnings are quite adequate, even though it is very well-known that taking into account the huge responsibility and knowledge that is tough to master physicians for a workload gain less than the average salary within the economy. Therefore, unanswered remains the question whether the people are aware of the fact that doctors mostly earn their wages being occupied in at least two workplaces and taking several workloads?” asks the President of Latvian Medical Association Pēteris Apinis.
In the “DnB NORD Latvian barometer” people are also asked to describe their position towards the questionable issue of gifts and unofficial payments to medical staff.
The results imply that 51% of respondents consider any further material gratitude in addition to the officially stipulated price for the service inappropriate, whereas 42% of respondents are supportive to at least small gift or presentation of cash.
Chairperson of the Patients’ Ombud Office, Liene Šulce, points out:
“As to the question of unofficial contributions, one must admit that the system and its quality will not improve as long as the people are ignorant of or refuse to accept the fact that such unofficial payments are absolutely unacceptable. It lies also within the responsibility of patients themselves – to abstain from illicit payments and report any requests of such, as well as to be aware that the provided services are covered from the state budget or one’s own pocket. This is the question of values; and let us hope that the situation will gradually change, as this soviet legacy seems embarrassing to many specialists from European countries. It should be advisable to explain to the population that there are also legitimate and positive ways of showing one’s gratitude. If the patient is well-off enough to afford monetary gratification to the medical institution it can be executed as official donation for its development, new equipment or staff bonuses.”
Online Medical Records Skepticism
Last, but not least the respondents have expressed their opinion on launching of electronic database providing for placement of medical records in Internet.
The majority or 58% of participants would object to inclusion of their information in databases due to disinclination to let anybody to read through their medical records.
(Now, ain’t that strange?!)
Supportive to e-healthcare project are 27% of respondents, believing that it would contribute to improvement of treatment quality.
The President of Latvian Association of Countryside Family Doctors, Līga Kozlovska, points out that medical records in Internet entails both ethical and patient’s rights issues, as any medical consultation to the patient actually is very intimate and privileged:
“Confidentiality is one of those factors that secure the patient’s confidence in the doctor, and no treatment can be efficient enough without confidence. Such database might be of assistance in some particularly complicated cases, and therefore all doctors should not gain access to the totality of medical records of every patient.”
Chairman of the Board of Medical Service Company “Mediconsult MS,” Māris Mežeckis, on the contrary, considers people’s’ concerns about placement of their information within unified database as “unfounded.”
“Appropriately executed digital patient’s card (or medical record) will be accessible to the doctor in charge only and just in case it is required for provision of medical services. State-of-the-art information technologies are advanced enough to secure that to no doctor save those directly involved in the treatment process is granted access to the information to make the system leak-proof and ensuring records on the information review history, so that in case of leakage one could easily track down the responsible persons,” explains the expert.
Hey, you Anonymous-people! Why don’t you give this Mežeckis-guy a lesson in state-of-the-art information technology?
Finally, a word from the CEO of DnB NORD banka, Andris Ozoliņš:
“In 2010, we saw gradual economic stabilisation and a new beginning of growth in Latvia, and I welcome the fact that many companies in Latvia which export or work for the domestic market decided to take advantage of the financing opportunities which are offered by DnB NORD Banka. The same was true of individuals. I might also add that during the course of 2010, DnB NORD Group in Latvia managed to increase its market share in terms of lending and deposits.”
And how many new employees did you hire in 2010, Mr. Ozoliņš?
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