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«INFORMATION AS FACTOR OF THE POLITICAL ECONOMY OF BUSINESS ENVIRONMENT Inese Spica University of Latvia Introduction Problems of information are ...»

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The Commercial Law gained effect on January 1, 2002 marking a fundamental reform of the business environment. It will systematise in one place all the issues regulating business that until now were scattered in various legislative acts and will revoke series of outdated legislative provisions and will establish a safe system of protection of creditors and minority shareholders.

Protocol on European Conformity Assessment and Recognition of Industrial Goods (PECA) signed in Brussels in May 2002 plays a significant role in regulation of business environment. The protocol will provide Latvian producers the opportunity to export on easier terms their products to markets of the EU member states without additional conformity assessment procedures (certification, testing, etc.).

The Development Programme of Small and Medium-Sized Enterprises of Latvia 2003-2006 is being worked out. One of the most important tasks for the present moment is streamlining of the complicated and until now poorly co-ordinated system of state support funds so that businesses have clear understanding as to where and in what cases they can receive state support to enhance competitiveness of their business.

The Mortgage and Land Bank of Latvia will have an important place in the system of state support. The Government wants to convert this bank into a Development bank.

A lot of important state supported target programmes already now are implemented through this bank. In 2000-2002 the Mortgage and Land Bank of Latvia received state guarantees to support SME projects for the amount of 10 million LVL. In October 2002 the Cabinet of Ministers passed the decision on further development of the SME crediting programme for the next three years and provided state guarantees to the bank in the amount of 20 million LVL.(11) Also the Latvian Guarantee Agency might become an efficient mechanism of SME support. In 2003 the agency is going to receive 250 thousand LVL of state budget funds to support its work.

One of the key objectives of the government in the area of structural reforms is to improve regulation of services and reinforce competition in the energy and telecommunication sectors. On September 1, 2001 the Public Utilities Commission (a united regulator) started its work. The authority is responsible for all public services, telecommunications, postal services, railway transportation and power industry (except local heat supply where electricity is not generated in the production process). The law says that the Regulator is independent to perform functions prescribed by the law and that the decisions or administrative acts made by the Regulator may be challenged only by the court.

After January 1, 2003, in conditions of liberalisation of the public telecommunication network, new undertakings will be able to enter this market and use the existing infrastructure for offering additional telecommunication services.

State-owned property privatisation is in the phase of completion. Only some largescale public monopolies are not yet privatised. Privatisation of these enterprises is politically and economically significant and complicated. Certain advancement of privatisation of large-scale enterprises was reached during the last year.

The government carries out different measures to improve the situation in the area of employment. These measures are included in the annual National Employment Plan (NEP). NEP for the year 2002 contains a list of 119 employment promotion activities attracting resources in the amount of 16.6 million LVL. Measures contained in NEP are mainly focussed on perfection of working skills and support to business activity.

In line with requirements of the Accession Partnership document, the government of Latvia jointly with the DG on Employment and Social Affairs of the European Commission has prepared the Joint Declaration on Priorities of Latvia in the Area of Employment. The declaration reflects the totality of employment and labour market targets to implement the Employment Strategy for adaptation of the state labour market for functioning in the European Union.

From January 1, 2003 the minimum wage in Latvia is raised from 60 LVL till 70 LVL. The previous increase was in July 2001.(11) Latvia has started several important reforms to address social issues. State funded or the 2nd level pension scheme was launched on July 1, 2001 and is one of the most progressive in the countries of transition. This marked the end of introduction of a 3tier pension system. Pension reform in the area of legislation is completed. The pension age will be gradually increased. In comparison with the previous system where the pension age for women was 55 years and for men – 60 years, the new system will equalise the pension age (62 years) between men and women by the middle of 2008.

Better mechanisms of providing and channelling social assistance are being introduced within the scope of the reform of the welfare system to ensure efficient integration of people in social and economic life and to provide better social protection.

In June 2002 the Cabinet of Ministers accepted the concept on education for 2002The concept is the foundation for the third phase of development of education aimed to increase quality of education on all phases of learning, to ensure access to education in the context of life long learning and to increase cost efficiency of education. Declaration on the Intended Activities of the Cabinet of Ministers foresees promoting growth of the role of education in the society and training of new specialists in line with the needs of the Latvian business environment.





Long Term Economic Strategy of Latvia defines basic positions of the economic policy. The aim of the strategy is to reach the average level of per capita GDP of the EU member states in the next 20-30 years. It is planned to change the currently dominating model of the Latvian economy as it is mostly based on the use of cheap labour and production with low value added. The offered way: intensive use of knowledge and high technologies, transition from labour-intensive economy to knowledge-intensive economy. This may be reached by simultaneous revival of traditional sectors of national economy on a modern technological base and the development of new, post-industrial knowledge-intensive sectors. Latvia will create the new economy and the importance of knowledge as a resource and wealth will grow in all sectors, also in traditional sectors, products or professions.

One of the basic priorities of the government is establishment of the information society. There are plans to establish the Information Society Bureau under subordination of the Cabinet of Ministers. The Bureau will develop, co-ordinate and supervise implementation of a uniform information and communication technology policy in the state.

Quite clearly, the further development of Latvia is linked with the process of European integration and only the accession to the European Union may ensure further and irrevocable strengthening and growth of the state. On December 13, 2002 at the summit of the EU Council in Copenhagen Latvia officially closed accession negotiations and was invited to join the European Union. Provided that all EU member states ratify this decision and the outcome of the referendum is positive, Latvia may become a EU member state already from May 1, 2004.

Conclusion In this work are explained the main aspects of the political economy of information, accentuate the role of asymmetries in the forming processes of the political economy and proved the affect of information to political economy of business.

According to the theory of the political economy of information the content of the contemporary political economy of the Government of Latvia has been researched and it cleared up that one of the Governments priorities is formation of information society and knowledge-based economy and improvement in availability of the information of the business environment in Latvia.

The author draws the conclusions that availability with information increases the political economy of the business environment and furthers making successful decisions in the micro business environment as well as in the macro business environment.

References

1. Akerlof, G. A., “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism," Quarterly Journal of Economics 84, 1970: pp. 488– 500.

2. Akerlof, G. A., “The Economics of Caste and of the Rat Race and Other Woeful Tales”, Quarterly Journal of Economics 90, November 1976: pp.

488–500.

3. Akerlof, G. A. and J. L. Yellen, “A Near-Rational Model of the Business Cycle with Wage and Price Inertia”, Quarterly Journal of Economics 100, Supplement, 1985: pp. 823–38.

4. Akerlof, G. A. and J. L. Yellen (eds.), Efficiency wages model of the Labor Market, New York: Cambridge University Press, 1986.

5. Arnott, R., B. Greenwald, and J. E. Stiglitz, “Information and Economic Efficiency”,Information Economics and Policy 6(1), March 1994: pp. 77– 88. (Paper prepared for the New Orleans Meeting of the American Economic Association, 1992).

6. Spence, M., Market Signaling: Information Transfer in Hiring and Related Processes, Cambridge MA: Harvard University Press, 1974.

7. Stiglitz, J. E., “The Role of Government in the Economies of Developing Countries,” in E. Malinvaud and A.K. Sen, eds. Development Strategy and the Management of the Market Economy. Oxford:Clarendon Press, 1997b, pp. 61–109.

8. Stiglitz, J. E., “Towards a New Paradigm for Development: Strategies, Policies and Processes.” 9 th Raul Prebisch Lecture delivered at the Palais des Nations, Geneva, UNCTAD, October 19, 1998b.

9. Stiglitz, J. E., “Knowledge for Development: Economic Science, Economic Policy, and Economic Advice”, Proceedings from the Annual Bank Conference on Development Economics 1998. World Bank, Washington D.C. Keynote Address, 1999b: pp 9–58.

10. Stiglitz, J. E., “Information and the change in the paradigm in economics” (Prize Lecture), December 8, 2001c.

11. “Economic Development of Latvia”, Report Ministry of Economy Republic of Latvia, December, 2002. Ministry of Economy Republic of Latvia, Riga, 2003: pp 11-15.

Zusammenfassung

INFORMATION ALS FAKTOR DER POLITÖKONOMIE DES MILIEUS DER

UNTERNEHMERTÄTIGKEIT

–  –  –

Das Ziel der Arbeit ist, den Einfluss der Information auf die Politökonomie des Milieus der Unternehmertätigkeit zu erforschen.

Zum Erreichen dieses Zieles sind folgende Aufgaben gestellt:

1) Das Wesen der Politökonomie der Information festzustellen.

2) Die Analyse der modernen Politökonomie der Regierung der Republik Lettlands durchzuführen.

3) Das Milieu der Unternehmertätigkeit Lettlands und seine Politökonomie zu charakterisieren.

In der Arbeit sind die Hauptaspekte der Politökonomie der Information erklärt, die Rolle der Informations- Asymmetrie im Prozess der Bildung der Politökonomie betont und der große Einfluss der Information auf die Politökonomie der Unternehmertätigkeit bewiesen worden.

Auf Grund der Theorie der Politökonomie der Information wurde der Inhalt der modernen Politökonomie der Regierung der Republik Lettland erforscht und festgestellt, dass eine der Prioritäten der Regierung ist, eine informierte Gesellschaft und eine auf Wissen basierte Wirtschaft zu bilden, ebenso auch die Verbesserung des Informationsumlaufs im Milieu der Unternehmertätigkeit Lettlands zu verbessern.

Infolge des Obenerwähnten schlussfolgert die Autorin, dass die Versorgung mit der Information die Politökonomie des Milieus der Unternehmertätigkeit verbessert und die Fassung erfolgreicher Beschlüsse in der Unternehmertätigkeit wie im Mikro-, so auch im Makroumfeld der Unternehmertätigkeit fordert.



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