Latvia Considers Partial Privatization of State-Owned Firms

Acknowledging potential economic benefits, **Latvia’s** government is weighing the possibility of partially privatizing some state-owned enterprises, a move designed to attract investment and boost transparency.

Prime Minister Advocates Open Discussion

**Prime Minister Siliņa** believes open and honest discussions about complex issues are vital in a democracy. She noted the success of energy companies in **Lithuania** and **Estonia** that have attracted financing and expanded export capabilities by listing on the stock exchange.

**Siliņa** suggested that offering shares to residents and other companies could benefit society. She asserted that this approach, common in many Western nations, would provide greater transparency compared to solely public ownership, allowing citizens to better understand company operations.

**Prime Minister Siliņa** urged both politicians and the public to “get rid of prejudices” and consider ways for the state and companies to increase revenue.

Report Highlights Potential Benefits

The **Ministry of Finance** has already presented a report exploring the potential of listing publicly owned companies on stock markets. The report concludes that allowing private investors to purchase shares could balance the interests of public entities and private market participants.

Internal Opposition Remains

Despite the potential benefits, the proposal faces resistance. Unanimity is lacking within the ruling coalition regarding the need to privatize public companies, even partially. Opposition parties and the Greens and Farmers’ Union, part of the ruling coalition, are against the plan.

Global Trends in Privatization

The concept of partial privatization isn’t new. In fact, governments worldwide have utilized initial public offerings (IPOs) to unlock value in state-owned assets. For instance, in 2023, global IPO activity saw proceeds of $128.3 billion across 1,298 deals, although this represented a decrease compared to previous years, indicating fluctuating market conditions (Ernst & Young 2023).

Transparency and Public Awareness

Increased transparency is a key argument in favor of the partial privatization plan. According to **Siliņa**, “Our people would be able to get to know even more about what these companies are doing,” implying that greater public awareness could foster trust and accountability.