Latvia/ 6. Financing of culture  

6.1 Short overview

See  chapter 6.2.1,  chapter 6.2.2 and  chapter 6.2.3.

Inflation in Latvia in 2008 was 10.5%, while in 2009 there was deflation. Once again in 2010 there was inflation of 2.5%.

The tendency towards an increase in the budget was still evident up to the year 2008. There was a significant increase in salaries for cultural employees during the years 2006-2008. In 2008, the average monthly salary for public administration employees was LVL 564 (EUR 806), while in public cultural institutions it was LVL 504 (EUR 720). In 2009, salaries in public administration decreased by 11%, while in the public cultural sector – by 35% if compared to 2008 (see chapter 4.2.9).

In 2009, there was a dramatic drop in public financing for culture. It was followed by an even deeper crisis in 2010 when the budget of the Ministry of Culture was reduced by 43% if compared to 2008. The majority of cultural operators are concerned with the critical reduction of the budget for the State Culture Capital Foundation – the grant-giving body to secure the diversity of cultural activities all over Latvia. In 2010, its budget was reduced to 2.1 million LVL (3 million EUR) which was 72% less than in 2008 (see chapter 2.1).

In 2011, the budget of the Ministry of Culture has been increased due to the additional funding for the construction of the National Library. If not counting these costs, the budget for 2011 is at the same level as in 2010. The budget of several public performing art institutions in 2011 has even slightly increased. See chapter 6.2 about the budget of the Ministry of Culture.

On a national level, a significant construction project – the building of the Latvian National Library was started in 2008 and it is estimated to be launched at the end of 2012 and be opened to public in 2013. In 2011, the costs of constructing the Latvian National Library reach 32.6% of the total budget of the Ministry of Culture (see chapter 4.3).

Household expenditure for recreation and cultural activities is decreasing since 2009 (see chapter 8.2.1).

The increase in VAT has left a significant impact on the cultural industries. See chapter 4.2.3, chapter 5.1.5 and chapter 8.2.1.

The budget of the Ministry of Culture increased until the economic crisis in 2008. In 2010, the budget of the Ministry of Culture (including earmarked subsidies) was 81 692 LVL.

Figure 7:    The expenditure of the Ministry of Culture, in thousands LVL, 1995-2010

Source:     The Ministry of Culture, 2011.

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