National Action Plan for employment approved

In August 2004, a government committee approved Latvia's 2004 National Action Plan (NAP) for employment, drawn up in response to the EU employment strategy. The plan, which includes 45 measures for promoting employment, will now be submitted to the European Commission. The Latvian Employers’ Confederation has made a favourable assessment of the NAP.

On 23 August 2004, a government committee approved Latvia's 2004 National Action Plan (NAP) for employment, which was prepared by an interministerial working group. The government has been preparing such documents for the last five years (LV0407102F), but in 2004 the NAP will be submitted to the European Commission for the first time, following Latvia's EU accession in May.

The NAP provides for 45 measures to promote employment. It seeks to comply with the three key objectives of the European employment strategy: full employment; quality of working conditions and productivity; and social cohesion and reduction of social marginalisation. To promote social cohesion in Latvia, a National Action Plan on reducing poverty and social exclusion has also been developed, in line with the relevant EU strategy., which is coordinated with the employment NAP. The priorities recommended by the EU have been observed in this poverty plan.

Some EUR 30.9 million from the state budget is earmarked for implementing the 2004 NAP for employment, 9.6% more than in 2003. Some of the NAP's measures will be funded by the European Social Fund and the European Regional Development Fund. The main provisions of the NAP cover:

  1. active and preventative measures for job seekers and inactive people, with special attention paid to involving young people in the labour market;
  2. job creation and enterprise development - it is planned to increase the number of enterprises per 1,000 people to 32 by 2010 (the figure currently stands at 19);
  3. improvement of flexibility and mobility in the labour market;
  4. stimulating the development of 'human capital' and lifelong learning, paying special attention to improving vocational education;
  5. increasing the capacity of the labour force and stimulating economic activity among older people;
  6. ensuring gender equality - there are plans to promote change in the structure of employment to reduce the differences between male and female employment;
  7. promotion of the labour market integration of groups at risk of social exclusion, and eradication of all forms of discrimination - action in this area is also oriented toward involving young people in the labour market;
  8. improved payment for work to make work more attractive, focusing on the overall effect on employment of the tax, benefit and minimum wage system (eg it is recommended that the tax-free earnings threshold should be raised and tax rates on low wages reduced);
  9. transformation of undeclared employment into officially reported employment; and
  10. reducing regional disparities by providing support from regional funds and supporting the preparation and implementation of local employment support plans.

Some of the NAP's measures must be approved by the cabinet in order to gain the status of 'normative documents'. Several of the measures - such as increasing the tax-free earnings threshold and cutting tax rates on low wages - have already been debated for a long time, without result. It is possible that the support of EU institutions will help the Latvian government implement the planned measures.

Elīna Egle, the general director of the Latvian Employers’ Confederation (Latvijas Darba Devēju konfederācija, LDDK), evaluates the new NAP positively. However, she states that 'without improving and maintaining human resources business cannot survive', pointing out that Latvian society is ageing rapidly while young people increasingly look to make their careers overseas, and so ways must be found to improve human resources in the labour market. The NAP appears to be oriented toward this objective.

Several other measures have been adopted in 2004 that could have a long-term favourable effect on employment. A decision has been taken on procedures for childcare support, which will increase childcare benefits and, it is hoped, encourage people to have children and thus reverse population ageing. Student grants have been raised considerably, but access to them has been reduced - they will only be available to around 5,000 high achieving, non-employed students in specific groups. In the 2002/3 academic year there were 118,900 university and college students in Latvia, of whom 32,200 received tuition funded by the state budget. The Ministry of Education and Science hopes that this decision will improve the quality of studies by dissuading students from working while they are studying.

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