Riga is gradually becoming a centre of business in Eastern Europe
Globalization is sometimes embodied in unexpected forms. For example, a Swedish taxi company call centre has found a home in an attic on Tērbatas Street in Riga. Swedish passengers in Riga, most likely, have no idea that their calls are answered by operators in Riga. It has remained a secret for me as to how so many Swedish speakers were found in Riga, but it is and remains a fact that, in order to get from one part of Stockholm to another – you have to call Riga.
This is just one example of a business relocating to Latvia. Then there is also the Norwegian company Statoil, whose accounting department with around 400 employees is based in Riga. By the start of August, American chemical giant Cabot will open a transaction service centre for Europe, the Middle East and Africa. Approximately 120 jobs will be created within the parameters of the project.
The service centre of the oil and chemical holding company Cytec (USA) has been based in Riga for the past four years. The Riga branch of SEB AB handles currency and stock exchange transactions for clients of the whole of this Scandinavian banking group. Calls from anxious clients of the South Korean consumer electronics giant Samsung are also taken in the Latvian capital city...
The call centres, internal offices and transaction service centres that have been opened in Riga in recent years, sprouting up like mushrooms after the rain, have provided thousands (maybe even tens of thousands) of jobs, and become a real saviour in the post-crisis battle for increased employment.
Why Riga? Firstly, because compared with Oslo, Stockholm, New York and Moscow, low salaries of Riga’s residents seem almost attractive.
Moreover, despite the great diversity of Europe, there are no particular alternatives to Riga. Russia? The biggest minuses are the overwhelming dominance of Moscow and the unpredictability of Russia’s fiscal agents. Germany? Huge competition for educated specialists; and, as a result, very high salaries. France? High tax rates. The United Kingdom? The main mass of specialists is “collected” by America. And organising your business in the United Kingdom is very expensive.
Companies that choose Riga all seriously compare the opportunities offered by all three Baltic countries. Latvia can be proud; firstly, of its well-developed IT infrastructure; secondly, because of the huge number of empty offices built during the height of the economic boom. Thirdly, Latvia has sufficient high quality specialists. And the main plus is the fact that Latvia has Riga International Airport and airBaltic. The heads of overseas companies attach a great deal of significance to the existence of well-developed air traffic in a country that is home to their representative offices, because this makes them easier to control. In this sense, we have an advantage over both Vilnius and Tallinn.
This is Latvia’s opportunity. It seems that our country is making the most of it. Of course, Riga is not yet Singapore or Luxembourg. Nevertheless, such migration of white collar business to Latvia can be interpreted to be a serious movement towards the creation of a large Eastern Europe business centre.