Presentation of the OECD Economic Survey of Latvia

2019 OECD ECONOMIC SURVEY AND ENVIRONMENTAL PERFORMANCE REVIEW OF LATVIA

Towards strong, inclusive and environmentally sustainable growth Riga, May 29th 2019 http://www.oecd.org/economy/latvia-economic-snapshot/ http://oe.cd/epr-latvia

@OECDeconomy @OECD_ENV

ECONOMIC GROWTH IS ROBUST

2

Economic growth is broad-based GDP and major components, growth and contribution, % and % points Investment

8

Consumption

GDP growth

8

6

6

4

4

2

2

0

0

-2

-2

-4

Q1 2015

Q2

Q3

Q4

Q1 2016

Q2

Q3

Q4

Q1 2017

Q2

Q3

Q4

Q1 2018

Q2

Q3

Q4

-4

Note: The chart plots the GDP growth (in %) and the contribution to GDP growth by investment and consumption (in % points).

Source: OECD (2018), OECD Economic Outlook: Statistics and Projections (database).

3

Income convergence continues The gap of GDP per capita to the upper half of OECD countries, % -40

-40

-50

-50

-60

-60

-70

-70

-80

1995

1998

2001

2004

2007

2010

2013

2016

-80

Note: Percentage gap with respect to the weighted average using population weights of the highest 17 OECD countries in terms of GDP per capita and GDP per hour worked (in constant 2010 PPPs).

Source: OECD (2019), Economic Policy Reforms 2019: Going for Growth (forthcoming).

4

The labour market is tight Unemployment rate

Number of job vacancies (right scale)

% of labour force

Thousand

25

25

20

20

15

15

10

10

5

2010

2011

2012

2013

2014

2015

2016

2017

2018

5 2019

Source: OECD (2019), OECD Economic Outlook: Statistics and Projections (database).

5

Inflation is moderate despite strong wage growth Wage and price inflation, % Average monthly gross wages, 3-month moving average

Harmonised index of core inflation

10

10

9

9 8

8

7

7

6

6

5

5

4

4

3 2

3

1

2

0

1 0

-1 2014

2015

2016

2017

2018

-2 2019

Note: Harmonised index of consumer prices excluding food, energy, alcohol and tobacco.

Source: Central Statistical Bureau of Latvia; Economic Outlook Database; OECD Productivity Database.

6

Credit growth remains close to nil Bank loans to the non-financial private sector, % change of credit stock Households

Non-financial corporations

6

6

4

4

2

2

0

0

-2

-2

-4

-4

-6

-6

-8

2015

2016

2017

2018

Note: Data are adjusted for one-off effects related to the structural changes in the Latvian banking sector (e.g., due to withdrawal of credit institutions’ licences). Source: Financial and Capital Market Commission.

-8

7

Foreign deposits have been wound down amid efforts to fight money laundering Share of foreign deposits in the Latvian banking sector , % of total deposits 60

60

55

55

50

50

45

45

40

40

35

35

30

30

25

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

25

Source: Financial and Capital Market Commission.

8

CHALLENGES REMAIN

9

Poverty is high Share of population with disposable income below the poverty line, % 18

18

15

15

12

12

9

9

6

6

3

3

0

CZE

FRA

SVK

DEU

POL

GBR

OECD

EST

LVA

LTU

Note: The poverty threshold is 50% of median household disposable income. Household income is adjusted to take into account household size.

OECD average is the unweighted average of available countries.

Source: OECD Income Distribution database (IDD).

0

10

Very high out-of-pocket expenditure results in unequal access to healthcare Share of households' out-of-pocket expenditure in health care, % of total current expenditure on health care, 2017 or latest available year 50

40

40

30

30

20

20

10

10

0

0

FRA USA LUX NLD SVN DEU JPN IRL NZL DNK NOR CAN CZE GBR SWE BEL ISL TUR SVK AUS FIN EST POL ISR ITA ESP AUT PRT CHE HUN LTU CHL KOR GRC MEX LVA

50

Source: OECD Health Statistics Database 11

Many households live in substandard housing Severe housing deprivation rate, %, 2017 or latest available year

HUN

LVA

POL

LTU

ITA

GRC

PRT

EU28

SVN

AUT

SVK

EST

SWE

FRA

0

DNK

0

BEL

3

CHE

3

GBR

6

LUX

6

CZE

9

DEU

9

ISL

12

NLD

12

ESP

15

IRL

15

NOR

18

FIN

18

Note: Severe housing deprivation rate is defined as the percentage of population living in the dwelling which is considered as overcrowded, while also exhibiting at least one of the housing deprivation measures (leaking roof, no bath/shower and no indoor toilet, or a dwelling considered too dark).

Source: EU statistics on income and living conditions (EU-SILC).

12

Regional inequalities are high Gini index of inequality of GDP per capita, Scale from 0 "perfect equality" to 1 "perfect inequality", latest year available 0.35

0.30

0.30

0.25

0.25

0.20

0.20

0.15

0.15

0.10

0.10

0.05

0.05

0.00

0.00

GRC NLD SWE BEL JPN FIN ESP SVN PRT NOR DEU CZE FRA NZL USA AUT DNK ITA OECD CHE AUS LTU CAN GBR POL EST KOR HUN TUR IRL LVA SVK MEX CHL

0.35

Note: Inequality across TL3 regions Source: OECD (2016), OECD Regions at a Glance 2016 13

Latvia faces demographic challenges Change in population aged 15-64, 2000-2050, % 120

120

100

100

80

80

60

60

40

40

20

20

0

0 -20

-40

-40

-60

-60

LVA LTU JPN PRT EST GRC POL HUN SVN ITA SVK CZE KOR ESP DEU AUT NLD FIN FRA DNK BEL GBR CHE SWE IRL CHL CAN ISL USA NZL NOR TUR AUS LUX MEX ISR

-20

Source: United Nations, Department of Economic and Social Affairs, Population Division (2017), World Population Prospects: The 2017 Revision, DVD Edition

14

Outmigration remains substantial Net immigration, thousands 0

0

-5

-5

-10

-10

-15

-15

-20

-20

-25

-25

-30

-30

-35

-35

-40

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

-40

Source: Central Statistical Bureau of Latvia.

15

The large shadow economy weighs on productivity and wellbeing Estimated size of shadow economy, % of GDP 30

30

25

25

20

20

15

15

10

10

5

5

0

0

Source: Schneider, F. (2017) “Implausible Large Differences in the Sizes of Underground Economies in Highly Developed European Countries? A Comparison of Different Estimation Methods� CESifo Working Paper No. 6522, Munich.

16

Trust in national institutions is low Shares of nationals trusting their government and judiciary, %, 2017 A. Trust in government

% 90

B. Trust in judiciary

% 90

80

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

EU bottom

Latvia

EU28

EU Top

EU bottom

Latvia

EU28

EU Top

Note: Some 28,501 EU citizens were interviewed face-to-face and were asked whether they trust the national government and the national legal system. Shares reported in panel A are shares of nationals responding they tend to trust their government. Shares reported in panel B are shares of nationals responding they tend to trust their legal system.

Source: European Union (2017), Special Eurobarometer 461 “Designing Europe’s future�.

0

17

Car traffic increased substantially, due to inadequate public transportation services Principal means of going to work, Riga 2009

80

2015

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

car

public transport

walking

bicycle

Note: Respondents were given the option to mention more than one means of transport for going to work (shares may rise to over 100%).

Source: Eurostat.

0

18

Policies for improving well-being and inclusiveness •

Strengthening social protection  Increase the guaranteed minimum income and consider tapering its withdrawal further.

•

Increasing access to healthcare  Increase spending on healthcare to reduce out-of-pocket payments.  Ensure that all residents have access to the full healthcare package as envisaged.

•

Improving housing conditions  Provide more public funding for affordable rental and social housing

•

Increasing the size of municipalities by merging local administrations.

•

Reducing the shadow economy and bolstering the rule of law  Continue the engagement of social partners in the fight against informality through sectoral agreements.  Ensure the accountability of judges, including by extending the deadlines for dealing with disciplinary cases.  Ensure continued commitment at the highest level of the government to swiftly implement the government action plan, strengthening the anti-money laundering and counter-terrorist financing framework.

More recommendations in the 2019 Economic Survey of Latvia

19

STRONGER PRODUCTIVITY GROWTH IS NEEDED FOR FAST INCOME CONVERGENCE

20

Productivity growth has slowed down Average annual growth in labour productivity, % Capital deepening

Total factor productivity

8

8

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0

2002-08

2011-17

LVA

2002-08

2011-17

2002-08

EST

2011-17

SVK

2002-08

2011-17

LTU

2002-08

2011-17

0

EU

Source: OECD (2019) Going for Growth 2019 Edition.

21

Productivity is held back by weak innovation and inefficient resource allocation The labour productivity of the manufacturing sector, 2005 PPP USD IRL BEL NOR DNK SWE NLD AUT FRA FIN AUS JPN LUX CAN ITA HUN PRT CHL LVA

Mean productivity Allocative efficiency

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

200 000

Note: Mean productivity is the average productivity of firms in the manufacturing sector. Allocative efficiency captures to what extent more productive firms are larger, indicating the extent to which resources are allocated to more productive firms, allowing them to grow. Data refer to 2011 and are converted to USD using the 2005 Purchasing Power Parity.

Source: Latvia data are from Benkovskis, K., O. Tkacevs and N. Yashiro (2019), “The role of resource allocation in Latvia’s productivity”, OECD Economics Department Working Papers, OECD Publishing, Paris, forthcoming.. The Ireland data are from: Papa, J., Rehill, L., and O’Connor, B., “Patterns of Firm Level Productivity in Ireland”, OECD Productivity Working Papers, 2018-15, OECD Publishing, Paris.

Other countries’ data are from Berlingieri, G., et al. (2017), "The Multiprod project: A comprehensive overview", OECD Science, Technology and Industry Working Papers, No. 2017/04, OECD Publishing, Paris.

22

Latvian firms lag behind in digitalisation Enterprises using specific digital technologies, % of enterprises, 2017 or latest available year OECD median

OECD maximum

OECD minimum

Latvia

100

100

80

80

60

60

40

40

20

20

0

0

Broadband Website

Social media

ERP

CRM

Cloud Computing

e-sales

SCM

Big data

RFID

Note: Data cover 26 OECD countries and correspond to the share of businesses with ten or more employees with broadband connection (fixed or mobile); with a website or home page; using social media; using Enterprise Resource Planning (ERP) software; using Customer Relationships Management (CRM) software; purchasing cloud computing services; receiving orders over computer networks; sharing electronically information with suppliers and customers (SCM); using Radio Frequency Identification (RFID) technology; and having performed big data analysis (2018 data).

Source: OECD ICT Access and Usage by Businesses Database and Eurostat.

23

Weak debt recovery holds back lending Average debt recovery rate, cents per a dollar of credit, 2018 100

90

90

80

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

TUR GRC LTU EST LVA CHL LUX HUN CHE SVK POL ISR PRT MEX ITA CZE OECD FRA ESP SWE AUT DEU USA AUS NZL KOR ISL GBR IRL CAN FIN DNK SVN BEL NLD NOR JPN

100

Note: The recovery rate is calculated based on the time, cost and outcomes of insolvency proceedings and is recorded as cents on the dollar recovered by secured creditors. The calculation takes into account whether the business emerges from the proceedings as a going concern or the assets are sold piecemeal. The costs of the proceedings are deducted. The value lost as a result of the time the money remains tied up in insolvency proceedings is also deducted. The recovery rate is the present value of the remaining proceeds.

Source: World Bank, Doing Business 2019 database.

24

The efficiency of insolvency procedures could improve further OECD insolvency regime indicator, 2016 0.7

0.6

0.6

0.5

0.5

0.4

0.4

0.3

0.3

0.2

0.2

0.1

0.1

0.0

0

GBR JPN DEU PRT RUS ESP USA CHE FRA ISR IRL CRI GRC CHL FIN SVN NZL OECD ITA CZE POL MEX LVA AUT NOR SVK TUR SWE LTU AUS CAN BEL NLD HUN EST

0.7

Note: A higher value corresponds to an insolvency regime that is most likely to delay the initiation of and increase the length of insolvency proceedings. Composite indicator based on 13 components: time to discharge; exemption of assets; early warning mechanisms; pre-insolvency regimes; special insolvency procedures for SMEs; creditor ability to initiate restructuring; availability and length of a stay on assets; possibility and priority of new financing; possibility to 'cram-down' on dissenting creditors and dismissal of management during restructuring; degree of involvement of courts; distinction between honest and fraudulent entrepreneurs and the rights of employees.

Source: Adalet McGowan, M., D. Andrews and V. Millot (2017), “Insolvency Regimes, Zombie Firms and Capital Reallocation�, OECD Economics Department Working Papers, No. 1399

25

Regulatory settings are overall competition friendly, but public ownership is relatively high OECD 2018 Product Market Regulation indicator and selected components, Index scale of 0-6 from least to most restrictive (provisional) OECD median

OECD maximum

OECD minimum

Latvia

5

5

4

4

3

3

2

2

1

1

0

0 Economy wide

Public Ownership

Administrative burden on Barriers to Service and start ups Network sectors

Barriers to trade and investment

Source: Preliminary OECD 2018 PMR database.

26

About a half of Latvians lack basic digital skills The share of individuals with at least basic digital skills, %, 2017

ISL

LUX

NDL

NOR

SWE

CHE

FIN

GBR

DNK

0

DEU

0

AUT

10

BEL

10

ESP

20

CZE

20

SVK

30

FRA

30

EU-28

40

LTU

40

ESP

50

SVN

50

PRT

60

HUN

60

LVA

70

IRL

70

POL

80

GRC

80

ITA

90

TUR

90

Source: Eurostat.

27

Participation in adult learning is low Share of working-age population participating in education and training, %, 2017

CHE

SWE

FIN

DNK

ISL

NOR

NLD

FRA

LUX

EST

AUT

GBR

SVN

0

EU28

0

ESP

5

PRT

5

CZE

10

IRL

10

BEL

15

DEU

15

ITA

20

LVA

20

HUN

25

LTU

25

TUR

30

GRC

30

POL

35

SVK

35

Source: Eurostat.

28

The research workforce is small, limiting the innovation capabilities of Latvian firms Share of researchers in total employment, per thousand of total employed, 2017 or latest available year 18

16

16

14

14

12

12

10

10

8

8

6

6

4

4

2

2

0

0

MEX CHL LVA TUR ITA POL HUN LUX LTU SVK ESP CZE EST NZL CHE OECD CAN GRC USA GBR PRT SVN IRL DEU NLD JPN FRA AUT ISL BEL NOR KOR FIN SWE DNK

18

Source: OECD Main Science and Technology Indicators database; European Commission, Research and Innovation Observatory – Horizon 2020 Policy Support Facility, https://rio.jrc.ec.europa.eu/en/stats.

29

Technology transfer to SMEs is limited Share of SMEs collaborating on innovation with research institutions, % of innovating SMEs, 2014-16

GBR

BEL

AUT

FIN

SVN

EST

NOR

ESP

NLD

DNK

DEU

JPN

FRA

POL

HUN

CZE

SVK

0

TUR

0

CHE

5

GRC

5

PRT

10

LTU

10

LVA

15

KOR

15

BRA

20

NZL

20

CHL

25

AUS

25

Source: OECD Science, Technology and Industry Scoreboard 2017.

30

Policies for stronger productivity growth •

Improving the allocation of capital  Improve the quality and speed of judgement through training and specialisation of judicial staff.  Allow creditors to initiate restructuring and introduce early warning mechanisms of financial distress.

•

Enhancing competition  Develop more detailed guidelines and apply them more rigorously for the review of the rationale for state ownership.  Strengthen the authority of the Competition Council to intervene against anti-competitive behaviour by state-owned and municipal enterprises.

•

•

Strengthening skills 

Promote joint training offers involving several firms.



Implement as early as possible the planned financial support for firms providing training to employees with stronger financing for the low skilled.

Strengthening innovation and knowledge transfer  Promote sharing of resources of universities and research institutions.  Improve wages, working conditions and career prospects for researchers in public institutions and provide stronger incentives to collaborate with industry.

More recommendations in the 2019 Economic Survey of Latvia

31

ENVIRONMENTAL PERFORMANCE HAS IMPROVED BUT MORE WORK IS NEEDED TO GREEN THE ECONOMY

32

GHGs, PM2.5 and energy supply have been decoupled from GDP growth, but not waste and fertilisers Primary energy supply Municipal waste generated

PM2.5 emissions Fertiliser use

GHGs (excl. LULUCF) GDP

Index 2005 = 100 180

180

160

160

140

140

120

120

100

100

80

80

60

60 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: IEA (2019), World Energy Statistics and Balances (database); OECD (2018), OECD National Accounts Statistics (database); OECD (2018), OECD Environment Statistics (database).

33

The 2020 climate target is easy to meet but not the 2030 target GHG emissions outside the EU Emission trading system (transport, agriculture, waste and small industrial and commercial facilities) Mt CO2eq.

10

10

2020 target 9.5

9.5

Actual GHG emissions 9

8.5

9

8.5

GHG emission forecast

8

8

2030 target 7.5

Source: MEPRD and LVGMC (2019), “National projections of greenhouse gas emissions and removals�, submitted to the European Commission pursuant Commission Implementing Regulation (EU) No 749/2014 of 30 June 2014.

7.5

34

GHG emissions from agriculture, land use and forestry are rising GHG emissions and removal by main sector (actual emissions and projections) Mt CO2eq.

15

15 Industrial processes

10

Waste

5

5

Land use, landuse change & forestry Agriculture

0

0

10

2005

-5

2016

Actual GHG emissions

2020

2030

GHG emission forecast

Energy production & use

-5

Source: UNFCCC (2018), Greenhouse gas emissions data (database); MEPRD and LVGMC (2019), “National projections of greenhouse gas emissions and removals�, submitted to the European Commission pursuant Commission Implementing Regulation (EU) No 749/2014 of 30 June 2014.

35

Latvia is among the OECD leaders in the use of renewables Proportion of renewables in primary energy supply in 2017, Hydro

top 10 OECD countries Geothermal Solar/wind/other

Biofuels and waste

% of Total primary energy supply

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

Source: IEA (2019), World Energy Statistics and Balances (database).

36

Houses still consume much energy Heat consumption per square metre, selected Northern European countries 2016

Kg of oil equivalent /m2

2005

25

25

20

20

15

15

10

10

5

5

0

0 Sweden

Lithuania

Denmark

Source: Odysee-Mure (2019), Key indicators (database).

Finland

Latvia

Estonia 37

The vehicle fleet is old and carbon intensive

Average CO2 emissions per km of new cars,

Number of cars by age,

2017

2017 Thousands

Grams of CO2/km

400

140

350

120

300

100

250

80

200 60

150

40

100

EU best

0

EU28

under 3 to 5 6 to 10 11 to 20 21 years total 2 years years years years and more

Latvia

0

EU worst

20

50

Source: Central Statistical Bureau of Latvia (2018), Transport in Latvia 2018; Eurostat (2019), Average carbon dioxide emissions per km from new passenger cars" (grams of CO2 per km) (database).

38

Quality of roads and railways is among the poorest in the Baltic Region Perceived quality of transport infrastructure, Baltic Region, 2018 Roads Score 0-6 6 5 4 3 2 1 0

Source: WEF (2018), The Global Competitiveness Report 2018.

Score 0-100

Railways

100 90 80 70 60 50 40 30 20 10 0

39

Most of Latvia’s population is exposed to high PM2.5 concentrations Population exposed to PM2.5 ,

shares (%) by concentration levels [ 0-10] µg/m³

[10-15] µg/m³

[15-25] µg/m³

[25-35] µg/m³

[>35] µg/m³

100%

100%

90%

90%

80%

90%

70%

80%

49%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% Latvia (2005)

Latvia (2017)

Source: OECD (2019), OECD Environment Statistics (database).

OECD (2005)

OECD (2017) 40

Green taxes generate high revenue but their effectiveness is limited Revenue of environmentally related taxes, % of GDP, top 10 OECD countries

2016

2005

% of GDP

5%

5%

4%

4%

3%

3%

2%

2%

1%

1%

0%

0%

Source: OECD (2019), OECD Environment Statistics (database).

41

Only a quarter of CO2 emissions is priced at a sufficient level Proportion of emissions priced at or above EUR 30 per tonne of CO2 70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0%

Source: OECD (2018), Effective Carbon Rates 2018.

42

Policies for a low-carbon, greener economy •

Mitigating climate change and air pollution  Develop a climate mitigation plan with expected sectoral contributions to GHG emission mitigation and gradually stricter targets.  Improve the knowledge on mitigation options in agriculture and forestry.  Improve air quality monitoring and control measures, especially in the Riga metropolitan area.

•

Greening the system of taxes, charges and subsidies  Reduce tax exemptions and discounts.  Raise tax rates on energy, CO2 emissions and air pollutants, and close the petrol/diesel tax gap.  Revise vehicle taxation to account for air pollutants in addition to CO2 emissions.  Extend road charges to cars and link them to emission standards and distance travelled.

•

Investing in low-carbon infrastructure and eco-innovation  Reduce dependence on EU funds; streamline support mechanisms for business investment.

 Continue to improve residential energy efficiency and extend heat metering.  Establish an integrated public transport system linking Riga to surrounding municipalities; extend the charging facility network for electric vehicles.  Further increase environmental R&D funding; strengthen measures to stimulate demand for cleaner products, technology and services.

More recommendations in the 2019 Environmental Performance Review of Latvia

43

Municipal waste is growing and mostly landfilled, although recovery is improving Municipal waste generation and disposal Thousand tonnes 1 200

Index 2005=100 Waste per capita (index)

140

1 000

120

800

100

600

80 60

400

Material & energy recovery

Special landfills with anaerobic digestion Landfills

40 200

20 0

Source: OECD (2019), OECD Environment Statistics (database)

Generation index per capita (right axis)

44

Low landfill taxes encourage landfilling Percentage of landfilled municipal waste and landfill tax rates, 2016

Landfill tax USD/tonne 200

% of landfilled waste 100% 90%

% of landfilled waste

Tax rate (right axis)

180

80%

160

70%

140

60%

120

50%

100

40%

80

30%

60

20%

40

10%

20

0%

0

Note: Subnational data (local taxes) are used for: Mexico (Mexico City), Spain (Catalonia), United States (California), Australia (Western Australia) and Belgium (Flanders).

Source: OECD (2019), OECD Environment Statistics (database); CEWEP (2017), Landfill Taxes and Bans Overview.

45

Policies for waste management and circular economy • Review waste-related taxation in line with the waste hierarchy.

• Improve the transparency of extended producer responsibility systems, and encourage investment in high-value domestic recycling.

• Fully integrate the objectives of closing material loops and waste prevention into innovation and procurement policies.

• Improve waste governance by deepening co-operation across ministries, cascading national waste targets at local level, and using synergies within the Baltic Sea region.

• Set up an integrated information system that covers all waste and materials management steps and treatment routes.

More recommendations in the 2019 Environmental Performance Review of Latvia

46

Latvia has exceeded the 2020 Aichi targets on protected natural areas Protected areas, 2018 Terrestrial areas: % of total land area

Marine areas: % of Exclusive economic zone

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

54%

50%

50%

40%

40%

30%

30% 18%

20%

97%

17% 10%

10%

16%

20%

10%

10%

0%

0%

0% OECD top

Latvia

2020 Aichi target

OECD bottom

OECD top

Latvia

2020 Aichi target

OECD bottom

Source: OECD (2018), OECD Environment Statistics (database).

47

The conservation status of many habitats and species is poor and declining Conservation status of habitats and species, % by category Favourable

Unfavourable/inadequate

Unknown

EU average (favourable)

Habitats

Unfavourable/bad

Species

100%

100%

80%

80%

60%

60%

40%

40%

20%

20%

0%

2007

2013

2007

2013

Source: EEA (2019), Habitats of European interest (database); Eionet (2019), Reporting under Article 17 of the Habitats Directive.

0% 48

Policies for biodiversity conservation and sustainable use • Develop a national biodiversity strategy, supported by adequate human and financial resources for implementation.

• Assess the economic value of biodiversity and ecosystem services and the cost associated with their loss.

• Develop management plans of protected areas.

• Develop a strategic policy framework for green infrastructure and improve wildlife corridors to reduce habitat fragmentation.

• Extend the use of economic and voluntary instruments for biodiversity management, especially for the sustainable use of forests.

• Further untie payments to farmers from production; promote organic farming to achieve the national 2030 target.

More recommendations in the 2019 Environmental Performance Review of Latvia 49

For more information

http://www.oecd.org/economy/latvia-economic-snapshot/ http://oe.cd/epr-latvia Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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