Suggestions for the Optimization of EU Funds Programmes 2007-2013 to Promote Regional Development in Latvia

Purpose – the purpose of this article is to make initial evaluation of the allocation of EU funds in Latvian territories in context with regional development strategy and comparing with previous programming period 2004-2006. Design/methodology – comparative analysis of allocation of financing in absolute and relative terms is complemented with correlation analysis between financial and territory development indicators. The analysis is performed in regional (5 planning regions) and local (118 municipalities) level, as well as in such types of territories as municipalities with growth poles of international, national and regional importance, other municipalities and specially assisted areas. Findings – more financing in absolute terms has been allocated to more developed regions with an exception of least developed region Latgale which has attracted second largest amount of financing after most developed Riga region. In relative terms more financing has been received by the least developed regions due to large investments in public infrastructure. Although growth poles have attracted greatest part of financing in activities of local importance, in relative terms major growth poles have received less financing than other territories. Practical implications –in perspective when planning EU funds programmes more attention should be paid to promotion of education, science, entrepreneurship and innovations in regions. Otherwise least developed regions will not grow fast enough to reduce regional disparities. Creation of additional territorial principals to promote investments in major growth poles should be invented in order to facilitate concentration of resources thus increasing the ability of growth poles to encourage development in their surrounding areas. Originality/value – this article gives insight in the allocation of EU funds in Latvian territories both in regional and local level. It analyses the concentration of investments in growth poles, specially assisted areas and other territories. The evaluation is made in context with regional development strategy that is stipulated in Sustainable development strategy of Latvia till 2030