THE ROLE OF LATVIAN PORTS WITHIN BALTIC SEA REGION
Keywords:Latvian ports, efficiency, HHI index
AbstractLatvian ports play an important role in the national economy. Latvia has established itself as a transit country (mainly for the Russian, Central Asia and Belarus cargoes). Transit cargoes account for approximately 85% of the total volume of cargoes in the Latvian ports. The Latvian ports handle on average 60 million tons per year. The transportation and storage account for approximately 13% of the Latvian GDP, and the total revenues from transit cargoes account for approximately 4.4% of the GDP and are equal to 27.7% of the total volume of the export of services. Traditional competitors of the Latvian ports include Klaipeda, Tallinn, St. Petersburg and Primorsk ports. Also Ust-luga has joined the above list as it is developed rapidly by Russia. Thus, there is a threat that Russia might direct its cargoes to the ports of its own region by providing the sufficient capacity of its own ports. Therefore, it is necessary to pay special attention to the requalification of cargoes on the Latvian ports into the cargoes with high value added. The topicality of the issue of this research is determined by the current increased attention to the operation of the Latvian large ports, the efficiency of their operations and the competitiveness in comparison to other ports of the Baltic sea region, as well as the initiative of the European Commission regarding the review of the ports policy and their further operation on the European Union level. The article will be focused on Latvian large ports freight volume proportion in comparison to the Baltic Sea ports: Tallinn, Klaipeda, Ust-Luga. Calculations will be made using HHI index (Herfindahl-Hirschman Index), which describes „market power” division between all the subjects in the current market. Particular attention will be focused on cargo structure analysis of Baltic ports and restructuring of cargo circulation in the Baltic Sea region.
Economics of European Union
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