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RESEARCH PRODUCT

STRATEGIC CHOICES FOR THE ECONOMIC DEVELOPMENT THE REPUBLIC OF LATVIA AS EU MEMBER STATE

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After joining the EU in 2004, came to an end an important phase of the economic development of Latvian, which opened as new opportunities, as new challenges. Accession to the EU can be viewed on the one hand, the transitional period, on the other hand, it can be characterized as the period when Latvia was standing at the new crossroads and was ready for new, fundamental alternatives. Accession of Latvia in the EU contributed to the deepening of economic integration, radically changing the situation, as in financial, as in labor markets. Since 2004 Latvian experienced both, rapid economic growth, with GDP growth exceeded 12% per annum, and a significant recession, when GDP fell by nearly 18% per year. Although the 2011 GDP of Latvia growth rose by 5%, still, the economy of Latvia is in the recovery phase after the economic crisis, the pre-crisis level of GDP has not yet been reached. Given the situation in Latvia, as well as global economic trends, it is important to assess the economic development opportunities and risks of Latvia in order to facilitate the more rapid recovery, while ensuring sustainable growth conditions in the medium term. The purpose of the study is to identify the key factors affecting the economy of Latvia and the development of the possible scenarios of the economy of Latvia by 2030. To reach this target there has been evaluated the influencing factors of the economy of Latvia from the 2000th until 2011, analyzed the strengths and weaknesses, as well as external environmental opportunities and threats. As the result of the analysis there have been developed four economic development alternatives (scenarios) of Latvia, by taking into account two criteria: the strength of the EU integration and economic structure. Based on the given scenarios, there  were created three possible strategies for the development of the economy of Latvia, the first of which provides a rapid restructuring of the economy to high value added sectors and strong cooperation among the EU countries, the second strategy involves the gradual restructuring of the economy to high value added sectors and moderate cooperation in the EU countries others, with a relatively sharp competition with each other, while the third provides a weak economic restructuring on high value added industries, as well as the relatively poor co-operation between EU countries due to the continuing debt crisis and other problems that impede their mutual co-operation. Methods used: For the assessment of the economy of Latvia there will be used scenario development approach (scenario matrix), as well as SWOT analysis (short SWOT analysis) and prognosis. DOI: http://dx.doi.org/10.5755/j01.eis.0.6.1481