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A country of old men?

May 24

On May 24, AmCham Latvia together with Friedrich-Ebert Foundation in Baltics and Stockholm School of Economics in Riga (SSE Riga) hosted an Outlook seminar on demographic change and workforce mobility at SSE in Riga. Outlook seminar experts, decision makers and business representatives met to discuss what should be done to address demographic challenges.

Demographic change in Latvia and Europe has recently become a very relevant topic. Latvia remains one of the fastest ageing populations in Europe and, along with many other countries, is undergoing negative population growth and rapid ageing of society. Moreover, according to Friedrich Ebert Foundation's study "Countries of old men?", demographic change has several important implications such as hindering competitiveness, economic growth and increasing direct fiscal spending for pensions and healthcare. Demographic change also has an impact on consumptions patterns - fewer people means less local demand for anything from bread and butter to cars and houses. Due to the changing demographic situation, education and health sectors will have to experience radical changes as well.

The panel of distinguished experts expressed their views on possible solutions to tackle both social pressure and economic development in the face of demographic transition. Joining the debate were the following experts:

  • Arvils Aseradens, Minister of Economics of Latvia   
  • Ilmars Mezs, Head, International Organization for Migration in Latvia
  • Kaspars Rokens, Chief Operating Officer and Member of the Management Board, Rail Baltica
  • Zane Varpina, Assistant Professor, SSE Riga  

The event was moderated by Inga Springe, Founder and Editor of RE:Baltica.

Zane Varpina, Assistant Professor of SSE, author of the study "Countries of old men?", presented ways how the process of demographic transition influence business and society. Among proposed solutions is to focus on policies beyond fertility boosting instruments that are expensive and ineffective. Instead, other policy actions should be considered at affecting migration and transforming the labor market, including increasing productivity and the retirement age, promoting engagement with diaspora and supporting smart immigration. Varpina also believes it is necessary to improve insitutional quality in order to strengthen trust in institutions, judicial system and the protection of rights because these factors also have a significant impact on migration.

Arvils Aseradens, Minister of Economics emphasized that an increase in wages will have a positive impact on net migration. He was certain that by adjusting the level of minimum wage in Latvia to the average salary in EU, people would consider to return or not to leave at all. The minister recommended to take into consideration more positive aspects of internal migration in Latvia as there are many regions and cities where the population is growing because of a healthy ecosystem and job vacancies, such as Valmiera.

Kaspars Rokens, Rail Baltica Chief Operating Officer and Member of the Management Board presented the future plans of the Rail Baltica and also stressed the positive consequences of Rail Baltica project on migration, pointing out that the railway will promote better access to the Baltic universities, airports and other important destinations, thus improving the mobility of inhabitants in the region. However, Rail Baltica also faces negative consequences of the process of demographic change, trying to fill 10,000 vacancies in the coming years, which under the current circumstances seems very complicated due to the general lack of labor force and the availability of skills and education required for the project.

Ilmars Mezs, Head of the International Organization for Migration in Latvia stressed that extending support for the families would be an effective tool to reduce mass emigration and motivate families to stay in Latvia.

Question and answer session is available below:
To view the article on the study “Country of old men?”

To view the presentation of Arvils Aseradens

To view the presentation of Kaspars Rokens 

To view the presentation of Zane Varpina

The event was co-hosted by AmCham, Friedrich-Ebert Foundation in Baltics and Stockholm School of Economics. 

AmCham Outlook addresses business topics of interest to AmCham members and the wider business community in a timely and lively forum. The event program involved detailed remarks from each speaker, followed by a Q&A session.

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