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Made in Germany

Opening Europe - Latvia

"There won't be much difference for me after EU membership, since I see my future as being within this company. In terms of money or training, the EU won't be able to give me much more."


Uldis Vilks, an engineer at the Latvian telecommunications firm SAF Tehnika, is more than happy with his job. He helps customers with technical problems and earns some 580 euros a month - more than twice as much as the average wage in Latvia. Uldis left his hometown of just 900 residents years ago, in order to study in the capital.
Once he completed his university degree, he had hoped to
return home, but could not find work there. Many of Latvia's
high-tech companies have set up shop on property formerly used by the Russian defence industry, on the outskirts of Riga. Among those firms is SAF Tehnika, which is giving global players like Nokia, Siemens or Ericsson a run for their money.

Normunds Bergs and his brother started the company in 1999, and it's grown steadily ever since. Turnover rose by 80 percent in 2002, and is expect to double this year. The Latvian market has long become too small for the successful business - now, more than 90 precent of its products are exported abroad.

Just ten kilometres away from SAF is a company called Microlink, which is the largest software firm in the Baltics. Business here is also booming, with growth in the double digits. Still, project manager Martins Reikis is sceptical about the future. "After we join the EU," he says, "people will have new opportunities. They'll be able to move freely from country to country. And when you look at the size of this country, and the size of its market, and at the fact that not very many specialists are trained here, then that's all a considerable threat to our company."
Programmers in Latvia earn about 8,000 euros a year, but they could easily make five times that in Germany. In the last year alone, one in ten of the programmers in Martin Reikis's department left the country for work abroad.
In addition, many foreign firms are hoping to profit from Latvia's low wage costs. Numerous German companies now hire programmers in Latvia. In the IT sector at least, there's no shortage of work.

The economies of the Baltic countries are growing in general. In 2002, Latvia had 6.1 percent growth; neighboring Lithuania, 6.7 percent: and Estonia saw 4.5 percent growth. And observers say this growth trend is set to continue over the next few years. "With EU membership, there will be a big push. The funds from Brussels will help accelerate development of infrastructure," says Robert Stafeckis
from the "Delegiertenbüro der deutschen Wirtschaft".
But not everyone is so enthusisatic. In a recent poll of 300 Latvian business leaders , only 51 percent said they would vote in favour of EU membership in the country's upcoming referendum on the issue. Normunds Berg says he will definitely vote yes. He sees a clear advantage for marketing, saying, "'Made in Latvia'", he says, means nothing to most people. But 'Made in the EU' needs no further explanation."