Increasing of capital flows to the republic of Latvia: illustration of an investment project portfolio

Abstract

Small open economies, such as the Republic of Latvia, are dependent on financial and capital flows to the economies to ensure their development. Due to the existing financial and economic crisis, capital flows to Latvia have significantly decreased in some times even reversed. In such circumstances, new ways of attracting investment flows to the country must be sought.

Aim: the aim of this paper is to illustrate the possibilities of attracting financing, including exemplifying an alternative way of attracting financing for business projects in the private and public sector, by joining them in a project portfolio, undertaking an initial due diligence, and presenting them to international investors in a structured and cost-efficient manner.

Materials and methods: analysis of existing literature on achievements of other countries in the domain of investment attraction and use of investment project portfolio, analysis of available information on countries, focus group method, expert interview method.

Main results and conclusions: fostering of investment to the country is necessary, especially in the wake of global economic and financial crisis. Although investment is being promoted already, more can be done in this domain. The paper illustrates the possibility of institution of investment project portfolio, which would show the demand for investment that is currently unknown and which would enable investment promotion actors promote investment to Latvia proactively.