Latvia’s total volume of export to Russia reached EUR 1,470,000,000 last year. Import figures are said to have been EUR 1,200,000,000. One year ago, Russian businessmen invested half a billion euro in Latvia. This includes approximately 100 million in electricity and gas sectors and 50 million in real estate sector.
Latvia mostly traded with Russia with food products, the lion’s share of which was alcohol. According to Investment and Development Agency of Latvia (LIAA) – TOP 7 export goods to Russia include whiskey, medicine, cognac, particle boards, sprats, rum and vodka. Import from Russia to Latvia is dominated by oil and gas products, as reported by Nekā personīga (Nothing personal) programme of TV3.
According to the agency, the crisis has already begun.
‘Our agency is certain – Latvian entrepreneurs are suffering losses already. This applies to transit and logistical sectors and trading. Businessmen are concerned about the future. If sanctions are introduced, the losses businessmen suffer right now will be next to nothing compared to what will come after,’ – says LIAA Director Andris Ozols……..
………
‘If Russia ends up being economically isolated, it will likely switch to other countries. And after the end of the sanctions, it may be difficult for the EU to re-establish good trade relations,’ – believes Latvijas Balzams Commercial Director Valters Kaže.
Rīgas piena kombināts is now owned by a Russian businessman – Andrei Bezhmelkitsky bought it along with Valmieras piens in 2011. The growing crisis has yet to impact the company. The fluctuations of the Russian ruble raise some serious concerns. Contracts with Russian companies allow them to pay for supplies within one month’s time. If the value of the Russian ruble falls within this period of time, Russian companies may end up paying less. Banks have become cautious in providing loans to companies related to Russia.
Possible sanctions may freeze multiple important national contracts, including: the sale of airBaltic, Citadele Bank and Liepājas Metalurgs.
Finance Ministry does not plan to narrow the range of possible investors; Russian investors are still welcome.
Sanctions against Russia will likely impact Latvia’s transit sector the most. This especially applies to railway cargo transport. In 2013, 77% of all railway cargo handled in Latvia came from Russia. (more)
Read the whole story here: http://bnn-news.com/agency-latvian-businessmen-suffer-losses-situation-ukraine-111547
Source: Baltic News Network