Latvian Minister Firmly Rejects Privatization of State Forests
Agriculture Minister stresses strategic importance of Latvijas valsts meži
The potential selling of shares in state-owned enterprises has stirred debate in Latvia, but one thing is clear: the Minister of Agriculture is having none of it. Public access to state-owned assets is the core of the dispute.
Key Development
Armands Krauze, the Minister of Agriculture (ZZS), asserted to LETA that Latvijas valsts meži (LVM) must remain fully state-owned, emphasizing that privatizing state forests is not an option.
According to the Ministry of Agriculture, Krauze believes LVM should not be among the state-owned enterprises considered for public offering by 2029, as such a move would effectively privatize a strategically vital company. He added the company is crucial to Latvia’s economy.
Krauze explained that LVM manages around 1.62 million hectares of Latvian land, and is a nationally strategic company, contributing significant sums annually to the state budget, owned by the people of Latvia.
“That is why I am categorically against the privatization of this company. Privatizing state forests is simply not an option,”
—Armands Krauze, Minister of Agriculture
He expressed confidence that the Saeima would also oppose selling LVM shares via public offering.
“I cannot imagine any circumstances under which MPs would want to sell such a strategically important and profitable company,”
—Armands Krauze, Minister of Agriculture
Furthermore, Krauze stressed that other strategic enterprises, including Latvenergo, should not be sold.
He noted that if the Ministry of Finance wishes to list state companies on the stock exchange, it could potentially apply to some telecommunications or utility companies, but not to LVM. As of 2023, the forestry and logging industry contributed 5.2% to Latvia’s total GDP (Trading Economics).
Prime Minister’s Perspective
Prime Minister Evika Siliņa (JV) recently told journalists that public discussion is needed regarding potentially listing state enterprises on the stock exchange.
“In a democratic country, it’s crucial that we openly and honestly debate difficult issues,”
—Evika Siliņa, Prime Minister
Siliņa is closely watching how major energy companies in Lithuania and Estonia have managed to attract additional financing and expand their export capacity through public listings.
Siliņa emphasized discussing potential benefits for society, such as enabling citizens and businesses to purchase shares in large state enterprises, which would also increase transparency. She noted that this practice is common in many Western countries.
She also pointed out that no decisions have been made yet, though politicians advocating for such a discussion are already facing a paid “smear campaign.” The Prime Minister urged politicians and the public to consider how the state and its companies can generate more income.
Ministry of Finance’s Report
The Ministry of Finance has submitted a draft informational report for inter-ministerial review titled “On Proposals for Capital Market Development and State and Municipal Capital Companies for Initial Public Offering.”
The report provides an overview of progress in developing the capital market, analyzes trends, and outlines future steps.
It argues that allowing private investors to purchase shares in publicly owned capital companies could balance public and private sector interests. While 100% state ownership may hinder market development, reducing the state’s stake could gradually involve the private sector, enhance competition, and return public investments into the state budget.
Furthermore, the Ministry notes that, per a Cabinet decision on May 13, 2025, one measure to reduce national debt is to divest minority stakes (no less than 10%) in state-owned companies through public offerings by 2029. This includes commercial state-owned enterprises legally protected from privatization.
Opposition to Privatization
Krauze has previously stated that the Union of Greens and Farmers (ZZS) strongly opposes the privatization of state-owned enterprises—including Latvijas valsts meži, Latvenergo, Sadales tīkls, and Augstsprieguma tīkls—and will block any such proposals. The Ministry of Agriculture also refuses to approve the draft report prepared by the Ministry of Finance. The Latvian Forest Industry Federation has likewise declined to endorse the document.
