Andris Vilks: NIB operates in Europe's most dynamic region

The finance minister of Latvia, Andris Vilks, chaired the meeting of the highest decision-making body of the Nordic Investment Bank, the Board of Governors, held on 12 May 2011 in Riga, Latvia. Before the meeting, the minister made himself available for this interview.

How do you see the economic outlook for the Nordic-Baltic countries?

“The Baltic Sea region is the most dynamic region in all of Europe.

The Baltic countries have made painful but necessary decisions to get their economies back on track. We have done what we have promised.

The Nordic countries have been coping very well with the crisis, a fact we can see in how they have quickly returned to the growth path.

I feel confident that we have dynamic development ahead of us and that we will be able to attract investments.”

What are the biggest risks in the current forecast?

“The main risks are external. The future growth of the euro area and its ability to solve its problems is crucial. The euro area is losing its competitiveness and the will to improve the situation is quite weak. Necessary decisions have been postponed and the fiscal policy has not been prudent. There are many countries which are still in a very shaky position.”

Your own country has implemented tough measures in order to stabilise the economy after a deep crisis. What challenges are you coping with now and what’s still ahead? Is it safe to say that the worst is behind? What are the lessons learned?

“Sustainable growth is the most important goal for Latvia in the coming years. Competitiveness is the key here. We have good trends in the manufacturing and export-oriented industries. At the same time it is very important to keep up that trend not just for one or two years but for a longer period.

For that we need a competitive workforce and innovation. I believe that it is possible to restructure the Latvian economy in the same way as it has been done in the Nordic countries, where significant resources have been allocated to research and development.”

The increase of NIB’s callable capital went into effect in February this year. What do the owner countries expect from NIB?

“The capital increase is important as it means that the Bank is now stronger and has more opportunities to lend long-term money in its specific focus areas. These areas are crucial for the region as a whole: environment, energy, transport, logistics and communication as well as innovation.”

How do you see the availability of long-term capital in NIB’s priority sectors?

“In the areas I just mentioned it is not always possible to attract money from private banks. We need some cross-border financial institutions to be involved in long-term projects. The Bank’s role is highlighted especially in regional projects involving more than one country. NIB has a lot of expertise in such projects.”

The Baltic countries regained their independence 20 years ago. In 2005, Estonia, Latvia and Lithuania joined NIB. What are your experiences of this cooperation to date?

“The Nordic presence in the Baltic countries is very strong. Our economies are very small and interlinked. We all need a wider regional market for our activities.

In many ways we want to catch up with the Nordic countries, which are all very successful in international competitiveness rankings. Research and development, governance, education and transparency are examples of important areas for improvement during the next economic cycle.

NIB is a good showcase for Nordic-Baltic cooperation, one which has produced concrete results. Among other projects, in Latvia NIB has financed environmental projects, SMEs, health care and the energy sector.”