Proceedings of the 3rd European Conference on Intellectual Capital

Maria Simonova
<strong>the</strong> economic, social and ecological context. Thus, <strong>the</strong> return from such investment is expected at
least in three directions: economic, social and ecological sphere (Shuvalov 2008).
Participation <strong>of</strong> <strong>the</strong> state in determination <strong>of</strong> human capital development is very crucial. Taking into
account <strong>the</strong> consequences <strong>of</strong> <strong>the</strong> crisis, for <strong>the</strong> economy <strong>of</strong> Latvia it is required to rapidly change <strong>the</strong>
quality and structure <strong>of</strong> human capital. This situation cannot be solved without <strong>the</strong> help <strong>of</strong> <strong>the</strong> state,
but it is unrealistic to rely only on <strong>the</strong> state.
Functions <strong>of</strong> <strong>the</strong> state in human capital development are:
Drafting <strong>of</strong> <strong>the</strong> policy for human capital development at <strong>the</strong> national and regional level;
Implementation <strong>of</strong> corresponding legislation and administration process;
Involvement <strong>of</strong> NGOs and state-owned enterprises for creation <strong>of</strong> conditions favourable to <strong>the</strong>
human capital development;
Co-ordination <strong>of</strong> cooperation between <strong>the</strong> population, NGOs, state-owned enterprises and social
partners <strong>of</strong> unions and association that represent <strong>the</strong>ir interests.
Since Latvia’s accession to <strong>the</strong> <strong>European</strong> Union, <strong>the</strong> most important instruments in human resources
development are <strong>the</strong> structural funds <strong>of</strong> <strong>the</strong> EU.
3. Human capital development in public administration
In May <strong>of</strong> 2008 <strong>the</strong> basic statements regarding development <strong>of</strong> public administration for <strong>the</strong> next
planning period were confirmed – “Basic statements <strong>of</strong> public administration development policy for
2008 – 2013. Better management: quality and efficiency <strong>of</strong> administration.” A work group was formed
for <strong>the</strong>ir drafting, in which representatives <strong>of</strong> ministries and non-governmental organisations were
included. In accordance with what is said in <strong>the</strong>se basic statements, main directions <strong>of</strong> public
administration development policy are such:
1) Development <strong>of</strong> <strong>the</strong> system <strong>of</strong> policy planning and financial management;
2) Quality <strong>of</strong> administration;
3) Rule <strong>of</strong> law in administration’s operation;
4) Human resources development in public administration;
5) Participation and cooperation <strong>of</strong> <strong>the</strong> society in public administration.
But in <strong>the</strong> year <strong>of</strong> <strong>the</strong> economic crisis at <strong>the</strong> meeting <strong>of</strong> <strong>the</strong> Cabinet <strong>of</strong> Ministers on September 14,
2009 <strong>the</strong> objective was set: till 2013 <strong>the</strong> reduction <strong>of</strong> number <strong>of</strong> employees in <strong>the</strong> general
governmental sector is to be ensured, whereupon <strong>the</strong> number <strong>of</strong> employees in <strong>the</strong> public sector out <strong>of</strong>
<strong>the</strong> total number <strong>of</strong> employed persons does not exceed 8% <strong>of</strong> <strong>the</strong> population. In <strong>the</strong> first half-year <strong>of</strong>
2009 <strong>the</strong> actual number <strong>of</strong> employees in <strong>the</strong> general governmental sector (state and municipal budget
institutions and <strong>the</strong>ir capital companies) on average was 205,263, which is 9.1% <strong>of</strong> <strong>the</strong> total
population, consequently, substantial measures must be carried out to ensure in middle term <strong>the</strong>
reduction <strong>of</strong> number <strong>of</strong> employees to approximately 180 thousand (Table 1). This figure still might
change depending on <strong>the</strong> dynamics <strong>of</strong> population, because <strong>the</strong> set goal is to achieve a particular
specific weight <strong>of</strong> this indicator.
Table 1: Number <strong>of</strong> employees in <strong>the</strong> public sector
(Concept <strong>of</strong> Simplification <strong>of</strong> General and Specialised Public Service 2009)
The number <strong>of</strong> employees in public administration
Number <strong>of</strong> employees (on average % <strong>of</strong> <strong>the</strong> total population
in first half-year <strong>of</strong> 2009)
State budget institutions
(including civil servants and civil
servants <strong>of</strong> specialised public
service
76 804 (9154; 4864) 3.4
Municipal budget institutions 97 848 4.3
State-owned capital companies 17 760 0.8
Municipal capital companies 12 852 0.6
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