Baltic Business Quarterly Special Edition 2020 by German-Baltic Chamber of Commerce

S P E C I A L E D I T I O N 2020

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28 | COV E R S TO RY

Adapting to the stay-at-home economy Growing business despite the lockdown: While some industries are suffering like never before during the coronavirus crisis, business in other sectors is in full swing.

40 | Baltic Start-Ups Hack the crisis

48 | Catering Industry Keeping the lights on

76 | Photo Series

Diary of the lockdown

B LO C KC H A I N | 1

Crisis as an opportunity

MAKING INDUSTRY 4.0 REAL THE FIFTH INTERNATIONAL INDUSTRY 4.0 CONFERENCE IN LITHUANIA OCTOBER 27, 2020, KAUNAS, ŽALGIRIO ARENA, KARALIAUS MINDAUGO PR. 50 w w w.industrie40.lt

elcome to the first (and hopefully last) “corona” edition. We would like to show you some positive examples and stories from the Baltic states, how the corona crisis is affecting business and how companies are coping with the crisis. The corona crisis has hit the world. We have seen many graphs showing dramatic developments like the exponential growth of infections and the extreme rise in unemployment in the US (from 4 to 30 million in 3 weeks). Many commentators are not shy to use analogies to describe the situation, such as the worst economic crisis since World War II. One thing is for sure: the current crisis is demanding changes. Changes to our social behaviour, changes in the way we work, changes in the way our children learn, even changes to the way we communicate with our family. The crisis has also had an accelerating impact on overdue projects, such as digitization in business and administration. Within days or weeks, many teachers in Germany have implemented technical tools that they had been avoiding for more than 10 years, including e-mail communication and online teaching – no joke! In this regard, the Baltic states were digitally ready and are ahead of Germany. I can say for my organization that we have experienced very little friction in switching from office to corona mode through working from home. We are trying to use this as a new opportunity and have therefore decided to work on a new AHK app, which will serve as the new membership tool adding powerful networking opportunities for our members and a one-stop shop for all that the AHK has to offer. Let me conclude on a hopeful note. This crisis is not a systemic economic crisis; it is a deliberate shutdown that can be reversed as soon as the medical crisis becomes manageable. Let us hope that this will soon be the case. Best regards, Florian Schröder – Executive Board Member

organizers of the event

supported by

Baltic Business Quarterly is a publication of the German-Baltic Chamber of Commerce (AHK) and is released four times a year. For questions or subscriptions, please contact info@ahk-balt.org

Deutsch-Baltische Handelskammer in Estland, Lettland, Litauen German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania

2 | CONTENT

4 Business in Picture 10 Guest Commentary: The Crisis Teaches: Taxes are Worth Paying

12 Baltic Business News 16 What’ s hot during

Coronavirus pandemic

20 My (Home) Office: Krišjānis

Kariņš, Latvian Prime Minister

22 Coronavirus Economy:

Where we are heading

COVER STORY

Big business for the stay-at-home- economy

Who will drive the economy also aftermath of coronavirus?

26 Baltic Stock Exchanges: Market in the shadow of pandemic

38 Interview Donatas Zaveckas: We have more work and more opportunities

40 Baltic Start-ups:

Hacking the crisis

56 Food industry: Challenging

Become an AHK Member and get from network to net worth!

times also provide new opportunities

64 Aviation: For the airlines, it’s apocalypse now

66 Logistics: Transport and

logistics to be restructured

68 Law & Tax: Baltic Business support mechanisms

CATERING INDUSTRY

Keeping the lights on

We offer: • close contact network in the Baltics, Germany and more than 90 AHK locations worldwide;

The gastronomy and catering industry is hit hard by the crisis. Yet some have found a silver lining.

• quick access to local markets and reliable business contacts;

73 AHK Members: Who’s new in AHK’s Baltic network?

76 Photo Series: Diary of a lockdown

86 Trend Analysis: The

post corona world by Matthias Horx

88 Culture: You cannot put culture in quarantine!

90 Shooting Star: Jurijs

Perevoščikovs, the national epdemiologist

Special edition 2020

PEOPLE TODAY

Working from home? No chance! Some impressions of people who keep things going at their places of work

• important information advantage through different media and publications;

Estonia Suurtüki 4b 10133 Tallinn Tel +372 6276 940 info.ee@ahk-balt.org

• numerous events;

Latvia Strēlnieku iela 1-4 LV-1010 Riga Tel +371 6732 0718 info.lv@ahk-balt.org Lithuania Vilniaus g. 28-201 01402 Vilnius Tel +370 5 213 1122 info.lt@ahk-balt.org

• professional service at favourable conditions; • individual answers to members individual requirements. We work with our partners to establish a dynamic trade environment and foster wealth and growth, while being sensitive to local customs.

www.ahk-balt.org German-Baltic Chamber of Commerce (AHK), at your service

BUSINESS IN PICTURE | 5

The rapid increase in online shopping has put an unusually heavy burden on the network of parcel delivery companies, which have reported a dramatic increase in business since people were advised to stay at home. The Estonian state-owned postal service company Omniva has recorded a significant increase in parcel volumes that is about to pick up even more after Estonia’s government has now also closed shopping centres. “In Lithuania, where shopping centres were closed some time ago, our parcel volumes have increased by 70% compared to last year and 15% compared to the last Christmas record”, says Andre Veskimeister, the Head of Omniva’s parcel business. He also expects a similar increase in the company’s home market where the number of domestic parcels has already reached record levels. “We can say that another Christmas is coming.” Ruta Pole, Head of Marketing at Omniva in Latvia, added, “The parcels sent via Omniva parcel terminals in Latvia reached 350 thousand consignments in March, which is 56% more than for the same month last year. The turnover has also grown significantly by a similar amount, exceeding the amount of the Christmas turnover in 2019, which was the highest of all time.” LM

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Spring 2020

Photo: Omniva Latvia

ANOTHER CHRISTMAS IS COMING

6 | BUSINESS IN PICTURE

BUSINESS IN PICTURE | 7

Riga International Airport

AIRBALTIC CARRIES URGENT MEDICAL SUPPLIES After a request from the Republic of Latvia’s National Health Service, the Latvian airline airBaltic has carried out two special cargo flights in March and April to and from Ürümqi Diwopu International Airport in China, bringing face masks and respirators to Latvia. The Airbus A220-300 aircraft covered the 4,815 km non-stop distance one way. Overall, 1240 boxes as 10.5 tonnes of cargo were carried, which included approximately 900,000 face masks and 80,000 respirators. Three pilots and two technicians were on board the aircraft to undertake the flight. In order to meet increasing demand for the delivery of cargo from China to Europe during the COIVD-19 crisis, airBaltic in cooperation with its cargo representative – logistics company Wish Global – and the technical support of Airlink Aviation Services has developed supply chain solutions for cargo shipments from practically any big city in China to the Baltics and beyond using the passenger aircraft as cargo charters. LM

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8 | BUSINESS IN PICTURE

BUSINESS IN PICTURE | 9

PRESIDENTS VIRTUALLY ADVISE ON CORONA PANDEMIC

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Robertas Dačkus/ Office of the President of Lithuania

The Presidents of the three Baltic states discussed the corona pandemic in a video conference. Heads of state Kersti Kaljulaid (Estonia), Egils Levits (Latvia) and Gitanas Nausėda (Lithuania) exchanged views on the measures taken by the EU and its countries to combat the spread of coronavirus. They also discussed how the economic effects of the corona crisis can be reduced, as the presidential office in Vilnius subsequently announced. The free movement of goods within the EU is essential for this. “We will do our best to make the Baltic region a successful example of a return to sustainable economic growth after the crisis. We agreed to use all national and European financial and political instruments”, said Nausėda after the virtual meeting. “We will focus on research, digital and internal markets in the EU and on strengthening all these areas”, he added. SD

10 | C O M M E N T

JOURNALIST OF NEWSPAPER DIENA

The Crisis Teaches: Taxes are Worth Paying

economic shock with significant long-term consequences – this is how the impact of the COVID-19 crisis could be characterised regarding the economy of Latvia. A significant decrease of GDP, deflation expected at the end of the year, a significant rise in unemployment and the complete termination of activity in certain sectors, such as tourism, hospitality and air transport, is a reality that society must take into account. At the same time, the relatively good news is that all countries, including Latvia, are investing quite a lot of funds into the economy. Latvia has allocated more than one billion euros from the state budget to mitigate the effects of the crisis, and another 1.5 billion euros have been borrowed on the international financial markets at a very attractive interest rate (close to zero). This means that support is being received by companies, including large exporting businesses, as well as by citizens. A very positive factor is the downtime allowance, which is available to a fairly wide range of citizens, including the self-employed, those working in microenterprises, as well as the recipients of royalties and creative persons, who receive copyright income. However, the Bank of Latvia offers to extend the application of downtime allowance even further to employees, who are forced to switch to part-time work. It should be mentioned that such compensation is provided in

Special Edition 2020

almost all Western European countries. Both the government and economists emphasise that currently the most important thing is to keep the economy alive and to prevent the mass bankruptcy of companies. Businesses can receive tax holidays, as well as a variety of financial instruments are available to them, and they can also apply for downtime allowances to retain their employees. As sectors of a highly seasonal nature such as tourism and hospitality have been hit hard by the crisis, which may result in tax debts during the “offseason”, upon agreement with the State Revenue Service on the extension of the tax payment term, tax debtors can also qualify for downtime allowance. In general, when comparing the support measures implemented by Latvia for companies and citizens with support instruments of other countries, it must be said that we are not lagging behind in terms of the intensity of support, and the applied instruments are the same. And, when compared to the United Kingdom for example, where the self-employed can only hope to receive support in June, our selfemployed are already receiving support. At the same time, this crisis is like a litmus test, which also allows one to state various vulnerabilities. First of all, the insufficient funding of the health care system is already manifesting itself acutely. Also, when it comes to public services, the downsides of the low tax collection of Latvia are now apparent. Hence, in Latvia,

Publicity photo

by RŪTA KESNERE

the tax revenues are only 30% of GDP, while in the European Union they total 40% on average. Low tax revenues result in the lower availability and quality of public services, the effects of which manifest negatively, particularly during the crisis. Thus, one of the main tasks of the planned tax reform is to ensure higher tax collection. The economists at the Bank of Latvia emphasise that this does not mean raising the standard tax rates, but rather refusing various alternative tax regimes and eligible expenses. The time of crisis has highlighted the downsides of various alternative tax regimes, such as the self-employed, microenterprise taxpayers, and as the main deficiency, weaker social protection should be mentioned. Namely, those working in these tax regimes make significantly lower social contributions, so the support provided during the crisis, which correlates with the social contributions made, is significantly lower for these people than for those working in traditional tax regimes. According to the State Revenue Service data, the lowest downtime allowance paid, which is 75% of the average contribution salary, slightly exceeds 4 euros. This is the case due to the fact the social contributions of the person working have been much lower than the minimum wage. Theoretically, in normal conditions this has not caused any problems to the person, but the crisis highlights an entirely different social vulnerability. Therefore, in the context of the planned tax reform, one of the most sensible proposals is to ensure that the social contributions must be equal to the minimum wage. To summarise, there are two main lessons that the crisis has already highlighted. The first one is that it is worth paying for public services, and the public sector, and especially health care, must not be chronically deprived of funding. The second lesson – making social contributions is worth it. Social vulnerability is highlighted in times of crisis, which, as is evident in the case of COVID-19, may manifest itself unexpectedly and affect everyone.

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B A LT I C B U S I N E S S | 13

12 | B A LT I C B U S I N E S S

InkheartX/ Adobe Stock, Kęstutis Kurienius, Tupungato/ Adobe Stock

Local furniture maker to manufacture for Estonia The Minister of Public Administration Jaak Aab said that the state will sign a contract for protective masks with the Jõgeva-based furniture maker Softcom OÜ which can manufacture 400,000 masks a month. He said that while the new masks do not have a European certificate yet, they have been approved by the Health Board and the Technical Regulatory Authority in Estonia.

Bolt requests loan support from government The founders of Bolt, Martin and Markus Villig, have asked the Estonian commercial bank KredEx for a direct loan of €50 million. The founders explained their request by citing high corporate losses due to the corona crisis, needing a minimum of €15 million a month. However, the total loan sum by Kredex is only €5 million. The company is one of Estonia’s most successful start-ups with a market value of €1 billion and offers an app for taxi rides in over 150 cities.

airBaltic further reduces about 50% of planned flights until end-October

Raul Siem is the new minister of foreign trade, IT Estonian President Kersti Kaljulaid appointed Raul Siem to office as the new minister of foreign trade and information technology in the Juri Ratas Cabinet. The foreign trade and information technology portfolio belongs to the Estonian Conservative People’s Party (EKRE) under the coalition agreement of the three parties governing Estonia. The chairman of EKRE, Mart Helme, recalled Kaimar Karu from the ministerial post allegedly over insufficient cooperation with the party and its political leadership and proposed to appoint Siem, his adviser and a member of EKRE, as new minister of foreign trade and IT. Karu was not a member of EKRE. Siem is the fourth minister of foreign trade and IT in the cabinet that took office after the general elections of March 2019.

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Bark beetles endanger Estonian forests

As the coronavirus crisis continues, airBaltic is forced to further decrease its overall capacity between 15 April and 31 October, cancelling approximately 50% of its flights. Currently, the airline is in the process of adjusting its network and flight schedule according to a temporarily reduced fleet for restarting the scheduled operations once the crisis is over. In addition, airBaltic has made a decision to delay the launch of the new routes it had planned for the summer of 2020 as well as temporarily discontinue a number of additional routes.

Vitenbergs confirmed as Latvia’s new Minister of Economics Latvia’s parliament, the Saeima, has approved Jānis Vitenbergs (KPV LV) as the new Minister of Economics. Vitenbergs is a newcomer and was elected to the Saeima for the first time in October 2018, serving as the Head of the Saeima Commission for National Economy, Agricultural, Environmental and Regional Policy. He made a statement on the ministry’s website saying that his main priority is to provide state support to companies impacted by the Covid19 crisis, as well as to develop an economic recovery plan.

The dangerous bark beetles outbreak is leading to massive damage in Estonian forests. Hundreds of hectares need to be cut down to prevent a larger increase. The State Forest Management Center (RMK) has stated that to limit the spread of bark beetles, up to a thousand hectares of the damaged forest should be additionally removed in 2020 and that 200,000 cubic metres of wood should be processed quickly.

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14 | B A LT I C B U S I N E S S

Spanish companies selected for €20 million Rail Baltica design contracts RB Rail AS has decided upon two contracts for design and design supervision services for the remaining two sections of the Rail Baltica main line in Latvia. The first section from Vangaži to the Latvian-Estonian state border has been assigned to the company consortium INECO-ARDANUY and the second section of the line from Misa to the Latvian-Lithuanian state border has gone to another company consortium called IDOM Consulting, Engineering, Architecture S.A.U. They will be responsible for site investigations, value engineering, development of the master design and detailed technical design for construction of the railway track, and author supervision during the entire construction period.

Measures for overcoming Covid-19 crisis to be financed from state budget The direct measures for overcoming the Covid-19 pandemic will be financed mainly from the state budget, while the economy will be stimulated with European Union funds after the crisis. The Finance Ministry will set up a task force together with partners’ representatives that will consider further proposals on the redistribution of EU funds. In order to mitigate the impact of the new coronavirus Covid-19 on the economy, the Cabinet of Ministers has so far taken a number of decisions, including paying sick leave for employees from the state budget, postponing personal income tax advance payments in 2020, and extending tax holidays for businesses from one year to three years.

Initiatives against Covid-19 in Lithuania

Vilnius controls corona regulations with drones

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Givaga/ Adobe Stock, Kaleb Kendall/ Unsplash, Bayery

The drones will be used in the capital to fight against the further spread of coronavirus. With the help of the remote-controlled aircraft, parks, playgrounds and public areas can be observed and show people neglecting the corona regulations. The drones used during the day are equipped with loudspeakers to remind people of the rules or to notify the police. Public events are prohibited, while gatherings of more than two people are no longer permitted.

Production change due to coronavirus Lithuania’s companies reacted very quickly to help against the corona pandemic. The textile company Utenos Trikotažas, which usually produces clothes, has started manufacturing face masks. Masks are currently in short supply in Lithuania and all over the world. Furthermore, a protective mask requirement has been in force in Lithuania since 10 April to prevent the further spread of coronavirus. Utenos Trikotaža plans to produce over 70,000 masks and wants to donate one of the first batches to the local hospital in Utena in north-eastern Lithuania.

The project “Learning Does Not Stop During Quarantine” encourages Lithuanian companies and individuals to donate computers which are no longer used but still functional to children who need them. More than 35,000 children in the country need a computer to continue their learning process, which is currently only taking place online. AHK member Bayer also donated 100 laptops for pupils so that they can learn efficiently at home. Bayer is one of the largest donors to the School at Home project.

Rubedo Systems develops disinfection robots The Kaunas-based company is working on an automatic disinfection robot. The robot can be used to stop the spread of coronavirus through the disinfection of medical equipment, walls and tables. The result is a clean and sterile room. Most importantly, the disinfection vapour from the prototype is harmless. In future, the robot can be used to clean and disinfect public areas, hospitals and offices to fight the virus. Special Edition 2020

W H AT‘S H OT | 17

16 |

Paratriathlete Christiane Reppe wearing self-made face masks ONE TEAM #stayathomechallenge

The members of ONE TEAM show how you can enjoy exercise at home even in times of crisis: Need a way of coping with the current lockdown? Do it like us! We are ONE TEAM – a Germanybased NGO empowering children and young people worldwide through sports and education. We stay active indoors with the #stayathomechallenge! If you are interested in finding out what we do, in joining us in the challenge, or in supporting us, you can check us out on our website www. oneteam.social or on Instagram @oneteam.social.

Portraits of Quarantine How do families in Vilnius spend their time at home during quarantine? Lithuanian photographer Adas Vasiliauskas took portraits with his flying drone and captured amazing moments behind windows. Despite the lockdown, parents and their children can be seen dressed in colourful costumes, wearing pyjamas or in their bathrobes. They were playing music, dancing and skateboarding on their balconies. The portraits prove that quarantine can also be an enjoyable and relaxing time with plenty of creative ideas to avoid boredom.

Spring 2019 Special Edition 2020

This is, of course, an exceptional situation for the whole family. Everyday shopping is done by just one family member to minimize the risk for everybody. Christiane has been staying at home for the past 2 weeks to protect herself and her family. Meanwhile, there are many committed people who sew masks by themselves at home. Christiane has supported a Dresdenbased sewing shop with sewing material and was inspired by it. Her mother and grandmother then downloaded some patterns from the internet and tested them. Now everybody gets a personalized mask! (Instagram/christiane.reppe)

photo: Publicity photos, Adas Vasiliauskas, screenshot/ Mo Museum, Screenshot/ Video Montage: Veljo Sakkos

what‘s hot

Virtual Tour: MO Museum

Have you ever dreamed of being alone in a museum, enjoying art without getting distracted by a noisy crowd? MO Museum in Vilnius makes your wishes come true by giving you access to its virtual tour of an exhibition entitled “The Origin of Species: 1990s DNA”. In the 360-degree virtual tour, you can explore the museum, discover the highlights and watch video documentaries. The information is presented in Lithuanian and English. Although the museum is closed due to the corona crisis, visiting the exhibition from your home is still inspiring.

Estonian National Symphony Orchestra

The musicians from the Estonian National Symphony Orchestra are not used to playing alone at home. Despite concerts being cancelled, the musicians came up with a great idea to reunite and make music for an audience without having real contact. Every single member of the orchestra was recorded on camera while playing Estonian composer Heino Eller’s ‘Homeland Tune’ to remind everyone to stay at home during the lockdown. At the end, the individual music video parts were put together on YouTube and created an atmospheric concert.

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18 | W H AT‘S H OT

photo: Publicity photos

Latvian ultramarathon competitor Diāna Džaviza runs 37km in her apartment

Estonian Storytelling

If you are missing social and cultural activities, you can find many creative options online on social media. For example, spend your lockdown evenings listening to Estonian fairytales read by the actress Mirtel Pohla. A repertoire from her favourite classic stories can be found on her Instagram account. The magical world of storytelling is a perfect activity for you and your family to leave daily troubles behind and relax your mind.

Iveta Simsone makes the best of the situation at home with her children

Many parents currently have the same problem: How do they organize their everyday life with children? Iveta shows how. She is a 24/7 mother of four. Since the state of emergency was declared, they have developed a new awareness of their home and appreciate it very much. The situation is most difficult for the children. The older girls can learn independently and get support from their parents, while the first grader needs more attention. The working days are very structured, which helps everyone. They try to do sports 3 to 4 times a week – either running or riding a skateboard and bike. In the meantime, they have come to terms with the situation, but they find it a real pity that they had to cancel their planned holidays. (Instagram/mrssimsonart4u)

Online Yoga

Gyms closed their doors, but lockdown time isn’t an excuse to be lazy. Thankfully, plenty of workouts can be found online and for free. Fitness equipment is not required, only your motivation. You can choose from pilates, aerobics, dance and yoga. The yoga teacher Camille (camiyogair) from Kaunas already teaches her classes on YouTube. Everyone can watch and follow her 1-hour lessons to stay active and healthy.

Spring 2019 Special Edition 2020

Every year in March, a charity run takes place in Austria, where she currently lives, whose donations go to the Sterntalerhof children’s hospital. “I love running and when there is a chance, I take part in many charity runs”, she said. Since she was unable to participate last year due to an injury, she was all the more determined to take part this time. Unfortunately, the run was cancelled because of Covid-19, but she was invited to participate virtually anyway. And of course she accepted without thinking about it. Since there is a curfew in Austria, she decided to run the 6 hours in her apartment, with laps of about 22 metres. Many runners decided to run any kind of distance or time up to 6 hours wherever they could. The organizer of this run was even crazier – he ran 70 km around his kitchen table. (Instagram/runningdiana)

#stayathome or #paliecmājās is a movement of volunteers who care about those suffering the most during the current crisis. The project is a website, www.paliec-majas.lv, where all those in need and those who can join as volunteers can meet and help the most vulnerable to solve their daily needs – either shopping, walking a dog or simply chatting on the phone. With the assistance of more than 300 volunteers across Latvia, we are able to deliver help even in the most remote places. As you read these lines, a number of new volunteers have been joining the movement all across the country awaiting their order to help. Would you like to help too? With a simple click, everybody can help those in need, become a volunteer or help medical personnel on the frontline of the fight against COVID-19.

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20 | M Y ( H O M E ) O F F I C E

Business as usual – remotely Home alone: Latvian Prime Minister Krišjānis Kariņš had to spent two weeks in self-quarantine. Leading a government remotely from a home office and in times of social distancing. How does it work?

by ALE X ANDER WEL SCHER

othing is as it was before the coronavirus crisis. Empty streets, closed shops, home office. Politicians are now particularly requested to assume responsibility – and at the same time are affected themselves. In Latvia, the virus has even directly impacted the whole government and most of the cabinet members isolated themselves temporarily following exposure to an infected person. This has prompted a radical work-from-home experiment and threw the ability of the government to manage the response to the outbreak into question. “Let’s stay calm and continue to work. Together we can do it,” Prime Minister Krišjānis Kariņš wrote on Twitter, announcing that the government will work remotely without meeting in person but continue to operate as planned. He himself went into self-quarantine on 21 March, after learning that a member of the Latvian parliament tested positive for the coronavirus. Several ministers followed – and like Kariņš, immediately complied with medical advice with regard to testing for the coronavirus. Kariņš tested negative for the coronavirus, but nevertheless decided to complete the twoweek quarantine and continued to work from outside the office,

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limiting his public appearances to videoconferences. By doing this, he has been leading by example in an attempt to persuade Latvians to take the threat of the virus seriously. “All of us need to change our habits and reorganise our work processes in line with health protection requirements”, reminded Kariņš.

“You simply have to get used to it!” While it was not officially revealed from where he led the country during self-isolation, Kariņš seemed to have carried out his duties from his home in the capital Riga. This could be determined from an interview that the 55 year old bespectacled head of government gave the private Latvian radio station SWH –where he shared some colourful and lively insights into what it is like to be in selfquarantine and to work from home. Talking about the new remote working regime, Kariņš was frank about his daily routine that was anything else but usual. “In the morning I was very happy, I spent almost 40 minutes outside in the garden. Wonderful weather! My God, how beautifully the sun was shining. I walked through the garden a bit, breathed fresh air and then started several remote meetings on site,” he said, indicating that he spends a lot of time in video conferences and telephone group chats.

Government still goes virtual

As opposed to many other Latvians that are reportedly finding it hard to get used to working from home, Kariņš did not seem to have any trouble adjusting and staying focused for the duration of his selfisolation. I somehow do not feel these difficulties at the moment, because I am all by myself and I do not have anyone to keep me busy otherwise. You simply have to get used to it!”, he said, replying to a question about how he maintains self-discipline. Locked away from his family because of self-isolation, Kariņš had little contact with his wife and children, and thus mainly concentrated on work. Due to the numerous online meetings that sometimes even last for several hours, he even worked much more than usual and was “surprisingly productive”. “I did not really expect this,” said Kariņš. However, he figured out that he is now saving time that was previously spent getting from one place to another for physical meetings.

Upholding etiquette Despite working from home, Kariņš keeps up appearances. The U.S.-born former member of the European Parliament can only be seen dressed formally on the screen, mostly wearing a dark suit and tie. “I have been dressing myself in this way for many years, and if I am not dressed like this, it seems to me that I would feel slightly uncomfortable,” he replied when asked if he was not at least sitting in more comfortable clothes below the waistline when in front of the computer. “I am always in uniform”, he said with a smile and without showing any sign that cabin fever might have been setting in. Unlike some of his ministers and many others who were setting up their home offices in living rooms, studies or kitchens and appeared

Despite initial doubts, the shuttering of the Valdības māja – as the building that houses the cabinet of ministers is called in Latvian – has had little impact on the work of Kariņš’ five-party government that is arguably facing its biggest challenge to date since taking office in January 2019. While being in selfimposed isolation, the government announced stricter limits on public life and stepped up restrictions to contain the virus, winning plaudits for its matter-of-fact approach.

in front of bookshelves, pictures or photographs, Karins has been sitting in a bare room with white walls. The main feature of the scene behind him is a low sideboard with the red-white-red Latvian flag and the flag of the Prime Minister of Latvia on it. No family pictures, no flowers, no memorabilia. Nothing. Business as usual.

Kariņš’ assessment was seconded by Foreign Minister Edgars Rinkēvičs, who on Twitter described the virtual cabinet meetings as “good and effective”. Due to the positive experience, the Latvian government is now about to regularly use technology to keep in touch. “In the future, cabinet meetings will not be held remotely on a day-today basis,” Kariņš said. Not all work can be done this way after all. “But I think that we will use it often”.

The same can be said about government meetings that, according to Kariņš, have been going smoothly. “I am personally surprised at how easy it is for the government to work remotely and hold cabinet meetings. I thought it was going to be very difficult, but the software that we are all using is actually very convenient,” he explained. “On the screen I see all government members at the same time, and there you can also make yourself heard by voice, or in the case that there is a video connection, also by using hands or the chat.”

In the wake of the pandemic, the European Union has also switched to video-conferencing for key meetings. “There were no big differences”, said Kariņš, sharing his impression about the first remote held summit of EU leaders. The only thing he felt was lacking, was the personal encounters and discussions with his European counterparts during breaks and on the sidelines in Brussels. “This informal part is missing, but other than that you can work this way”, the Latvian Prime Minister stated.

Latvian Prime Minister Krišjānis Kariņš during a virtual press conference that was broadcasted by the State Chancellery on Facebook

For public health purposes the government has continued to work remotely, even after Kariņš’ two weeks of home quarantine ended. The Latvian leader now regularly provides updates on the government response to the virus in virtual press conferences – to reassure viewers his cabinet is doing everything it can to see the nation through a testing time. In direct pleas to the public, he urges citizens over and over again to stay at home when possible and to stick to social distancing guidelines and hygiene recommendations. Otherwise the country will not be able to successfully fight off the virus, Kariņš warns. While managing the crisis, Kariņš is strictly adhering to the epidemiological and medical advice given by experts. He neither trusts nor believes in any urban myths and popular claims about the coronavirus. “My folk remedy is sleeping at night”, he replied when asked whether he was consuming garlic, lemon, ginger or similar herbal teas that are said to protect against the virus. “I try to sleep seven to eight hours. If I can, I sleep”. Being in selfisolation has been a rare chance to safeguard this sleeping routine – and to meet the crisis well-rested.

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Economy vs. Virus: Where We Are Heading The economy in the Baltic states is heading for its worst year since the financial crisis of 2008 and will be hit harder than elsewhere in Europe. Or maybe not? No one should know better than the economists of the leading private banks in the region. Baltic Business Quarterly asked some of them for their opinion on five theses regarding the effects of the coronavirus pandemic. by ALEXANDER WELSCHER

MĀRTIŅŠ ĀBOLIŅŠ

DAINIS GAŠPUITIS

TÕNU PALM

LĪVA ZORGENFREIJA

CHIEF MACROECONOMIC ANALYST AT CITADELE BANK

CHIEF ECONOMIST AT SEB BANKA LATVIA

LUMINOR BANK CHIEF ECONOMIST IN ESTONIA

SWEDBANK LATVIA CHIEF ECONOMIST

The coronavirus outbreak and its long-term economic impact will be worse for the Baltic states than the 2008 financial crisis MĀRTIŅŠ ĀBOLIŅŠ: Economic contraction is likely to be severe in the Baltics, but we will not repeat the experience of the 2008 financial crisis. At least we do not expect it. In 2008, the Baltic states had very large imbalances such as huge trade deficits, a credit bubble and overvalued real estate. Currently the overall economic situation is much better. Trade is balanced, lending growth is moderate and financed by domestic deposits, while real estate is relatively adequately priced. At the same time the global situation is likely to be worse, so it very much depends on what happens in Europe and elsewhere. That said, small and open economies are usually more vulnerable to external shocks so we cannot give any definitive forecast. DAINIS GAŠPUITIS: The global economic and euro area’s outlook appears worse than during the global financial crisis. However, for the Baltic economy, the crisis could be less severe than it was ten years ago, although this may be scant consolation. TÕNU PALM: There is no doubt that Covid-19 will be a major challenge for all economies and the Baltic open economies are no different. But when comparing it to the previous crisis, we have to keep in mind the recent strong years of growth with good fundamentals, including fiscal discipline and surpluses in current accounts during

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the past years, which have all facilitated strong labour markets. Baltic open economies are well integrated into the euro area and entered the current crisis with sound macro balances and a much stronger banking sector than in 2008. Assuming that euro area countries will gradually be back in business in the second half of 2020, the crisis will be sharp and comparable to 2008, but with less long-term impact than the global crisis, which deteriorated the balance sheets. The combined EU and national response on the financial side will be crucial in mitigating the significant damage caused by the virus. LĪVA ZORGENFREIJA: Hopefully not. The 2008 crisis was ignited by a global financial squeeze, but the extent of fire damage was largely of our own making. Imbalances were the key feature of pre-2008 times – booming private debt, a real estate bubble, unsustainable current account deficit, high inflation and pro-cyclical fiscal policy. As a result, it took many years (ten for Latvia) to recover and reach pre-crisis GDP levels. This time is worse in terms of the severity and abruptness of the global shock. But euro membership and the soundness of Baltic economies suggest that we are much better prepared to fight this crisis; therefore, the long-term impact should be less pronounced. Although ultimately it depends on how quickly the world gets the virus under control.

The small open economies of the Baltic states will be hit harder by the coronavirus crisis than European economic superpowers such as Germany or France. MĀRTIŅŠ ĀBOLIŅŠ: Not necessarily. So far the spread of the virus is less than we feared and lockdown measures less severe than in Spain, Italy or France for example. It is too early to tell if we can contain the spread of the virus without more severe lockdown measures, but in such case we could be somewhat less affected. Overall I think the most exposed countries are those with a large tourism and hospitality sector such as Greece or Spain. In the Baltics, the tourism sector is not large and the relatively less sophisticated manufacturing base with large food, wood and metal product sectors could also be more resilient to the downturn in demand, although more than 60% of our manufacturing is export orientated and dependent on European demand. DAINIS GAŠPUITIS: In general, the severity of the crisis could be relatively similar across EU countries. The Baltic economies have become more competitive and resilient over the past decade, household savings have risen, and there are no imbalances that were the major cause of the severity of the previous crisis. In addition, countries are members of the euro area. This is a very important factor; currency risks are gone and governments are actively taking action, providing support to both businesses and households. Yes, governments have limited power compared to more wealthy partners in the EU, but our society could be more resilient in overcoming economic difficulties. Therefore, we will only be able to conclude which country will manage the crisis more successfully, after the crisis has ended. TÕNU PALM: Open economies are more dynamic with regard to both the downside and the upside, so the fall in GDP will be larger than in Germany. The past euro debt crisis did not impact the Baltic countries much at all, since there were no structural problems to correct. Covid-19 is a different challenge and headwinds will be substantial since fighting the virus requires shutting down large parts of the economy. The fall in exports will hit the Baltic states relatively harder, given the openness to trade. Tourism, hotels and catering, but also transport are

among the most exposed sectors. While agriculture, the food industry and the larger ICT sector are in a relatively better position. No one is immune to the lock-down. The recovery will be dependent on the opening up of foreign markets notable among the key trade partners in the EU. The Baltic economies have demonstrated high flexibility in the past to deal with crises. LĪVA ZORGENFREIJA: Yes. The Baltics are much more open, which makes the impact of a global shock via the export channel relatively larger. But the shock of the virus is not just global – it is also internal. In fighting the virus, the advantage of the Baltic states may lie in being less densely populated, potentially more nimble in response to the crisis due to their size, as well as them being relatively digitalised (especially Estonia). The low government debt in the Baltics helps, but the trust of financial markets in European superpowers is unlikely to waiver, even if their debt is higher. European superpowers seem to be in a better position than the Baltics in other aspects: larger healthcare spending, wider existing safety net, as well as a more impressive additional fiscal stimulus.

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The coronavirus crisis will ultimately change the way of doing business and working conditions MĀRTIŅŠ ĀBOLIŅŠ: Some changes will definitely happen. More remote working and maybe less travelling, but I think it is too early to tell. This is a natural disaster and life usually returns to normal after recovery. Although this is very big and there could be political consequences. I think the big question is to what extent current events lead to big shifts in the global economy such as the realignment of supply chains and maybe less globalisation. Politics could favour such a situation and it would probably mean some reshoring from Asia. In this situation Eastern Europe could be in a good position to compete. But it is probably too soon to say anything definitive about this. DAINIS GAŠPUITIS: The transition to digitalisation will only accelerate and the process is already underway. And, given the developed infrastructure, the Baltic states could be in a good position in the digitisation process. Shared service exports and start-ups could be some of the Baltic success stories. However, the

environment still needs to be strengthened to make the positive impact on the economy more significant. TÕNU PALM: Covid-19 is indeed likely to speed up the digitalisation process of the European economies and perhaps also the shortening and simplification of supply chains, bringing them closer to the customer. The EU could produce more goods and services of their own, relying less on China. SMEs in particular will realise the importance of becoming more digital. Remote working and studying are great examples of dealing with the current challenges. Meanwhile, online learning can be further improved with new technology, so in the future virtual reality will allow one to host conferences in a new format. This will save some mileage due to less flying. LĪVA ZORGENFREIJA: Yes, if we learn from the experience. First, the urgency of the crisis brings out the very best of human ingenuity. Myriad ways are discovered to fight the pandemic and keep the economy going – and the discoveries made today can improve our lives in the longer term. Second, this is an unplanned test of digital capabilities of all economic actors. It is the time to either reap the benefits from previous investments in technology, or to realise that a lot more investment is needed. It can therefore provide a boost to the many economies suffering from low rates of productivity growth. Finally, the global nature of the crisis requires international cooperation, which, if maintained, can help in addressing other global crises – like climate change.

The economic measures and stimulus packages of the governments in Tallinn, Riga and Vilnius to tackle the coronavirus crisis are too little and too late MĀRTIŅŠ ĀBOLIŅŠ: Current measures are probably sufficient if the situation with the virus can be resolved quickly, but are unlikely to be enough if the economic downturn is severe and protracted. At the same time, budget resources in the Baltics are limited and we have to consider budgetary constraints. Deficits are likely to increase due to automatic stabilisers and it is important to

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maintain access to financial markets. In 2008, Latvia had an A- credit rating and government debt was less than 10% of GDP, but we were locked out of financial markets and had to turn to the IMF and EC for a rescue package. Now we are in the euro area and it helps, but in general I think it would be good for the Baltics to have more support measures at the euro area level.

DAINIS GAŠPUITIS: Governments have responded in a timely and proactive manner. Volumes relative to GDP are solid enough compared to developed countries. However, aid volumes are likely to be increased and conditions fine-tuned to minimise the negative economic and social consequences. However, it must be taken into account that the longer the crisis goes on, the less power there is to support the economy.

TÕNU PALM: The first response of the governments has indeed been rather prompt and also focused, but there will likely be a need for more liquidity and wage support as the transition from the quarantine period will be challenging in Europe. In European terms, the 7-8% of GDP initial package is a good start. The composition and implementation of the measures varies for each country, but the core need today is to provide bridge loans, credit guarantees and financial support to the most vulnerable. There are risks of overstimulation during the coming years when growth is well founded. There is less need to stimulate next year’s growth and more is required to keep the labour market as resilient as possible

The Baltic states, with their digital nations and lively startup scenes, are more resilient than other countries in coping with the economic consequences of the coronavirus pandemic

MĀRTIŅŠ ĀBOLIŅŠ: It is very hard to answer this. Funding for the start-up scene in Latvia was already limited before the current crisis and it is likely to decrease significantly. It very much depends on what is going to happen globally. DAINIS GAŠPUITIS: The resilience of the Baltics will be tested for sure, and I am confident that we will use opportunities successfully. Although we are still in a very low position as a digital society. But I assume that the crisis will boost efforts from businesses and government to find a breakthrough.

to offset the adverse effects of Covid-19. The difference from 2008 is that the banks have indicated a willingness to be part of the solution. LĪVA ZORGENFREIJA: The stimulus packages of Baltic governments will likely need scaling up. The speed of spread of the virus and the magnitude of economic shock that the restrictive measures imply, have been hard to comprehend. Therefore, what was regarded as a prompt and impressive fiscal boost just a couple of weeks ago, now seems insufficient to sustain the economy. Governments everywhere are fine-tuning existing measures and adding new ones as they go along. The mantra these days seems to be “do whatever it takes”.

TÕNU PALM: Digitalisation has clearly helped businesses and private individuals to transact using the digital ecosystem and the benefits are obvious. Subscriptions for medication can be received electronically and there is no need for face-to-face contact with merchants or even with doctors in the case of simpler medical cases. The possibility for businesses to communicate with the state in a secure manner is absolutely crucial, and is where we will greatly benefit. Digitalisation in the world will get an extra boost. The world after coronavirus will look different, as we need to be prepared for similar events in the future. LĪVA ZORGENFREIJA: Being digitalised and creative certainly helps. Both in this crisis and in general. But are the Baltics digital enough? The Digital Economy and Society index ranks the Baltics highly on digital public services, but there are several areas where their performance is actually below the EU average (especially for Latvia and Lithuania). So digitalisation needs to be enhanced and, as previously stated, the crisis can be a good catalyst for this. The vibrant start-up scene in Lithuania and Estonia can be an asset – there is an ecosystem in place for new crisis-fighting ideas to flourish. Latvia is unfortunately lagging behind in these matters.

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Market in the shadow of the pandemic Latvia, Lithuania and Estonia are small and open economies, who are often very dependent on the state of the world’s and Europe’s economic ocean. As it becomes clear that there already is and still will be vast amounts of damage in many forms and places from this pandemic crisis, the value of publicly traded Baltic companies has fallen sharply. by JĀNIS ŠĶUPELIS

he Baltic countries’ three stock exchanges are operated by Nasdaq, commonly known as Nasdaq Baltic. The OMX Baltic Benchmark index has been corrected by 30% since its February 2020 historical high. Currently it is trading at around the November 2016 levels. These price swings are similarly awful, if compared to other European stock markets, for example, in Germany, where the stock price decline has been even more dramatic.

Time for unity

The CEO of Nasdaq Riga and the Head of the Nasdaq Baltic Exchanges, Daiga Auziņa-Melalksne, acknowledges that Europe has been the epicentre of the COVID-19 outbreak for some time with markets, and in the long term - entire economies - at risk of an extreme negative impact. At the same time - while southern Europe is being hit harder right now, she doesn’t see any real differences in how the markets are performing. “We have seen both - volatility and trading – activity also reaches peak levels on a regular basis on the Nasdaq Baltic markets. An exchange plays an important role in the economy. In times of high volatility, it is particularly important to offer investors a chance to both get in and get out of positions, and to be a platform, where companies can continue to raise capital. We will continue to work together with our clients and local authorities to ensure the continued successful operation of our markets,” says Daiga Auziņa-Melalksne, and

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adds that we need to realise that these are unprecedented times for everyone – this includes politicians, business leaders and everyone else. “We trust the governments, and all the expert agencies and organisations supporting them, to make decisions in the best interest of Europe’s societies, and all who are a part of them – both individuals and companies. This is a time for unity, not polarisation,” stresses Daiga Auziņa-Melalksne.

State of emergency

If we look at the three Baltic market indices individually, then we see that OMX Tallinn had the biggest correction - down 28% from its peak, followed by OMX Vilnius - down 19% - and OMX Riga - down 15%. Total market capitalisation for the Baltics remains tiny at EUR 6.4 billion. LHV Bank Head of Institutional Markets, Ivars Bergmanis, says that the Tallinn Stock Exchange is one of the few exchanges that has better visibility of shareholder changes. “Based on this, we have seen institutional money outflow in recent months, while retail-

based investors have rather been on the buying side. There is also one exception in the institutions, where local pension funds have increased their positions in various local blue chip companies such as Tallink, Port of Tallinn, Coop Bank, Merko Ehitus, etc. The March statistics of Nasdaq Baltic on the market showed an increase in turnover of 83% and the number of trades was 134% higher compared to February. This can also be significantly attributable to the recently introduced 0% trading commission in Baltic markets for retail investors by several banks, and more free time due to quarantine/homebased working,” believes I. Bergmanis.

Biggest declines

He also says that as we have seen globally, the biggest sufferers from the pandemic are leisure and travel services, cruise liners and particularly passenger transportation companies. So in “Baltic terms”, the biggest fall has been for Novaturas, providing tours and travel services mostly in the Mediterranean region. The company, which had its IPO in spring 2018, has lost nearly 50% of its value from the start of 2020 and nearly 82% from its peak in the summer of 2018. Also, in terms of market capitalisation and the number of shareholders, the biggest companies listed in Tallinn also have much synergy – the leading cruise provider in the Baltic Sea - Tallink and the biggest port in Estonia - Port of Tallinn, have also seen very difficult times in recent months due to the travel restrictions. Tallink has lost 37% in 2020, and Port of Tallinn 21% from its market value.

OMX Baltic Benchmark stock price index value, points Deutsche Boerse AG German Stock Index DAX value, points 1 000

942,1 826,87

800 600 400 200 0 09.04.19

09.04.2020

15 000 12 000

11 850,57 10 570,75

9 000 6 000 3 000 0 09.04.19

09.04.2020 Source: Nasdaqbaltic.com, Investing.com

Retail businesses such as Apranga, Silvano Fashion Group and Tallinna Kaubamaja have also been seriously hit after the lockdown of shopping centres. I. Bergmanis calculates that Apranga has lost 40%, Silvano Fashion Group 35%, and Tallinna Kaubamaja 16% in 2020 so far. Also under heavy pressure, is the real estate sector. Estonia’s Pro Kapital Group, a local real estate development and investment company, has lost 51% in 2020, and Merko Ehitus, the leading constructor, 30% from its market value. “The uncertainty has also made its mark in the financial sector – LHV Group in Estonia has lost 20% in 2020, Coop Bank, that had its initial public offering (IPO) in late 2019, has lost 13%, and Lithuanian bank Šiaulių bankas has lost 34% from its value. It can be speculated that the banks might have a slight lag compared to other sectors and might reach their low points once the key dates for loan payments approach. However we need to see the level of public sector support that has been promised. Companies such as Tallinna Vesi [Water] should be considered defensive, which has already been reflected in the less than 1% price decrease since the beginning of the year,” believes I. Bergmanis.

IPO’s in the fog

As economic prospects darken, the hope of some IPO activity also remains in the fog. “The IPO market is closely tied to macroeconomic events and we are by no means immune to what is going on in the world. As a result, we expect some IPOs and new listings to be postponed in the near term, particularly with regard to the Main Market. This however does not necessarily mean that they won’t happen at a later stage. We do expect continued – although slower – activity on Nasdaq First North [alternative stock exchange for smaller companies], and particularly the bond market. The Baltic capital market has proven to be resilient in previous volatile periods and our conversations with prospective issuers suggest that they would like to proceed,” says the CEO of Nasdaq Riga and the Head of Nasdaq Baltic Exchanges.

The worst is possibly not yet over

By ALE X ANDER WEL SCHER lobal stock exchanges have been plummeting and suffering historic crashes as coronavirus panic has gripped the financial world. Due to persistent fears over the economic fallout from the novel virus, markets worldwide have retreated and shares have gone down sharply since the end of February. Trading was even temporarily halted on Wall Street, where all major indexes tumbled, and the escalating coronavirus outbreak sent stocks to their worst losses since the Black Monday crash of 1987. Stock markets across Asia and in Europe – including the Baltic bourses – also experienced some of their worst drops on record, and have been on a weekslong downward trajectory as days of volatile trading have continued. Stocks began to rapidly rise again for a while after governments and central banks worldwide agreed on largescale financial stimulus packages. The efforts and massive amounts of money available to tackle the coronavirus crisis have helped to alleviate the panic of a collapse of the economy and capital markets. For investors and stock marketers, the ‘corona crash’ presents the opportunity to buy stocks at bargain prices – in the hope that they will be the first to benefit from an economic recovery. However, where there is opportunity, there is also risk. No one knows for sure when a stock has fully bottomed out. Financial experts consider it too early to conclude from the recent rally at the end of March and beginning of April that the worst is over. Quite a few of them even anticipate another plunge and warn of what traders call a ‘dead cat bounce’. The phrase refers to the rather morbid idea that even a cat that falls and hits the ground from a great height

will briefly fly up, only to remain dead because it has broken its neck. In other words, it describes a temporary recovery in a market that is destined to keep on declining due to a negative investor sentiment and bleak economic prospects. A look into the history of stock market crashes shows that investors indeed might have some time of uncertainty ahead of them. The US investment bank Goldman Sachs and the broadcaster CNBC have recently investigated how long stock market corrections on Wall Street lasted and how bad they could get. Historical analysis showed a decline of 13.7% on average and that it takes about four months to recover to prior levels. These figures result from 26 crashes of the S&P 500 – the index of the 500 largest listed companies in the US – since World War II. Whether history will repeat itself and certain patterns will recur again, remains unclear, as the coronavirus is having an unprecedented effect on the global economy. Not least because in many sectors of the western world production has been almost or completely stopped – a scenario that has never occurred before. Except for in times of war. How soon the ‘corona crash’ on the stock markets can be overcome will depend on whether the virus triggers a major global economic crisis or not. If the world economy experiences a severe downturn, it may take several years for the losses to be made up. This is also shown by the analysis of Goldman Sachs and CNBC: If the market falls by more than 20%, into bear market territory, then there’s more pain ahead and a longer recovery time – two years on average. Historically, there have been 12 bear markets since World War II with an average decline of 32.5%. Thus it seems there is still a long way ahead before getting the all-clear on the capital markets. A dead cat remains a dead cat after all.

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Photo: Arina Solntzeff

Growing business despite the lockdown: While some industries during the coronavirus crisis are groaning like never before, business in other sectors is in full swing. Will some of them maybe even drive the economy in the aftermath of coronavirus? by ALE X ANDER WEL SCHER

Big business for the stay-at-home economy

The

coronavirus pandemic has forced the Baltics into a lockdown to prevent the spread of infection. Assembly lines are at a standstill, trade fairs cancelled, order calendars empty, and many companies simply closed down. The economic damage for some industries is immense and its representatives are outdoing each other with warnings about the decline and collapse of the whole sector. For companies in other sectors in the meantime, the crisis is giving a powerful boost – their business is booming like never before. At least for now.

ONLINE RETAILING AND PARCEL DELIVERY COMPANIES

The coronavirus pandemic has provided a boost for online retailers in the Baltics. With shopping malls and many stores closed amid the lockdown, many people staying at home have turned to digital options to satisfy their shopping needs and circumvent physical shopping environments. Many of them have also shopped online for the first time in new categories during the emergency situation, particularly for

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groceries and household essentials, according to a survey by the pollster Kantar Emor in Estonia. Adapting to the new reality, consumers are making significantly fewer visits to large supermarkets and hypermarkets and instead prefer neighbourhood shops. Or even stay completely at home and order from their couch. The study shows that ready-to-eat food was the most popular item among online purchases at the end of March, followed by groceries, electronics, clothes and books. Online delivery has gone from being a luxury to a necessity in a matter of a few weeks. This can also be seen by data provided by SEB bank about the increasing demand for mobile payment terminals. E-commerce experts predict that online shopping in the long term will get a boost from the lifestyle changes being forced on consumers because of the coronavirus. Selfquarantines and consumer fears about public places will provide opportunities for the e-commerce business to thrive over the next few months. “We can presume that online purchases will grow severalfold based on residents’ interest and willingness,” says Kersten Jõgi,

A food delivery courier passes a sign put up outside an eatery in Riga centre which reads „Paņem līdzi vai pasūtīt ar piegādi“ (Take with you or order with delivery)

shopper behaviour expert at Kantar Emor. As a result, the share of e-commerce could be much higher than before the coronavirus crisis – not least because the online channels will be much more present in the public consciousness in the future. Many businesses have diversified to meet the current demand to buy online. Grocery stores especially, have been pushing their online activities. But the crisis has also forced many companies in other sectors to go digital since the e-channels are currently the best or sometimes even the only option to sell their goods and services. The rapid increase in online shopping is resulting in several new challenges. The parcels and packaged meals ordered online are resulting in a growing number of deliveries. This has put an unusually heavy burden on the network of parcel delivery companies, that have reported a dramatic increase in business since people were advised to stay at home. Estonian

state-owned postal service company Omniva has recorded a significant increase in parcel volumes that is about to pick up even more after the Estonia government now also closed the shopping centres. “In Lithuania, where shopping centres were closed some time ago, our parcel volumes have increased by 70% compared to last year and 15% compared to the last Christmas record,” says Andre Veskimeister. The head of Omniva’s parcel business now also expect a similar increase in the company’s home market where the number of domestic parcels has already reached record levels. “We can say that another Christmas is coming.” Other parcel delivery companies in the highly competitive market also report that their terminals currently have heavy demand for loads across the Baltics. Domestic delivery volumes grew especially in rural areas. “The lockdown prompted the residents of small towns to shop online and use modern methods of delivery”, states Norbertas Zioba, marketing and sales director of Lietuvos Pastas. Despite the rapid growth that saw parcel volumes across the country surge by 90 percent yearon-year, the regions account for less than a third of the total parcel volume, whereas the capital Vilnius accounts for approximately 40 percent. In Estonia and Latvia the situation has been similar. In turn, international deliveries both to and from the Baltics went down because schedules have become more erratic. Border closures and the disruption of air routes worldwide make the collection and forwarding of international shipments more complicated and they take longer than usual. The last-mile fulfilment of door-to-door deliveries in the meantime has somehow become easier for couriers: people are

currently more likely to be at home, according to the delivery companies. Not to mention that the newly offered option of contactless home delivery has risen to record levels.

GROCERY AND FOOD DELIVERY SERVICES

In connection with the coronavirus outbreak, delivery services from supermarkets are seeing a significant increase in demand. The number of orders received has skyrocketed during the emergency situation and the price of an average order has also increased several times, according to the online stores of the biggest Baltic retailers. Delivery slots have to be booked days in advance, and many e-groceries have had to recruit additional personnel to fulfil the orders and reduce prolonged times of home delivery. Online customers have also had to wait in line for the pick-up option at the store of the customer’s choice. Before the crisis, there was only limited interest in the Baltics in buying food online. Although e-stores have been a growing business for several years, they were only used by comparatively few customers. A survey commissioned by the biggest Baltic retailer Maxima showed last year that only 6% of consumers in Lithuania regularly order food and household goods online. In Latvia (2%) and Estonia (1%), their number was even lower. Despite their general openness for digital solutions, the Baltics are lagging behind compared with other countries in Europe and elsewhere, as an international comparison of the pollster Kantar Emor shows. Kersten Jõgi, shopping behaviour expert at Kantar Emor, is convinced that this is about to change. “The current situation is a great opportunity for online food retailers

to get out of their niche. E-commerce is about to play an even bigger role once the crisis over, because many customers are now realising that it is convenient to buy food online and will change their buying pattern”, she predicts. While fresh food will be again more sought after in near-by supermarkets, goods like packaged drinking water and toiletries could be ordered via online channels more in the aftermath of the lockdown. The main precondition for this, however, is that online retailers sort out their biggest current problem. “Delivery times of up to 10 days are far too long. This may work now in the times of crisis, because many consumers are buying online to avoid any contact with other people and stay healthy. But in the long run, such waiting times will not be tolerated”, says Jõgi. Besides delivery speed, the assembly capacity also proved to be a bottleneck, prompting Baltic retailers to hire extra manpower to cope with a surging number of orders. Demand for food delivery services from nearby restaurants has also been on the rise. More and more people are turning to home delivery options as Estonia, Latvia and Lithuania have shifted into partial lock down. “The most popular time frames are 11:30 14:00 and 17:30 - 20:00, corresponding with lunchtime and dinner”, a spokesperson for the pan-Baltic transportation platform Bolt said. The Tallinn-based ride-hailing company has seen its food delivery service Bolt Food growing and receiving more orders. Responding to the increasing demand for delivery services, the start-up is now also serving groceries and helps vendors fulfil their orders during the coronavirus crisis. And even some traditional taxi companies have started providing delivery services to generate business in a time when the coronavirus prevents them from transporting people.

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30 | S TAY- AT - H O M E E C O N O M Y Both Bolt and its similarly-named competitor Wolt offer no-contact delivery options to decrease the possibility of the infection spreading from person to person. The courier will then leave the bag with food at the doorstep and alert the customer that their order has arrived – similar services have also been added by parcel and e-groceries delivery companies. All of them underline that their drivers are instructed to follow all the precautions prescribed by the World Health Organisation and health authorities.

IT AND SOFTWARE COMPANIES

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Home office is possible mostly for people working in the capital Tallinn and the second-biggest city Tartu, while in other regions of Estonia approximately one-fifth of workers are able to do their part from within their own four walls. “It clearly appears from the study that remote work can be performed by executives, marketers and workers in the financial and IT sectors. Also by office workers and assistants in the area of sales,” explained CVKeskus.ee marketing chief Henry Auvaart. There are no estimates for Latvia and Lithuania yet but the situation is supposed to be similar due to a comparable economic and regional structure.

However, the Estonian survey result also indicates that there are still companies that do not allow their employees to work remotely in the present situation, even though the nature of their work would permit it. The reasons for this are manifold. Some companies might be unprepared to cope with an entire workforce being remote – be it technically or in terms of organisation. Other hurdles might be related to a slew of privacy and security concerns. The newfound popularity of Zoom came along with a deluge of concerns surrounding user safety after hackers infiltrated private video chats in so-called “zoombombing” attacks. Many labour experts and employment specialists are nevertheless convinced that COVID-19 could permanently shift working pattern. The pandemic has shown more companies and employees alike that much of their work can also be done remotely from home by relying on email, chats, and videoconferencing. This might also stick beyond the crisis and lead companies to ramp up their remote working infrastructure. “We will definitely stay more modern at work – virtual teams, remote work, global cooperation,” Renāte Strazdiņa, Microsoft’s Country Manager Baltics, recently told the Latvian news agency Leta. “Technology will help here for sure.” Other solution providers that have helped set up business clients’ work-from-home-environment for employees said they expect the trend to continue after the pandemic, although it remains to be seen whether this will be a permanent move or a temporary trial period. Similarly, education technology providers are also not banking on a permanent big shift from the traditional model of teaching to online schooling and remote learning. Following the ‘learn-

Hand sanitisers, health products and paper products were shopping categories bought more than before in the Baltics due to the coronavirus outbreak

Photo: Matīss Markovskis

Start-ups and digital nomads have long praised its benefit, but not everyone has yet been eager to embrace the possibilities that modern technology offers to work remotely. Now the coronavirus outbreak has made remote working a sudden reality. The ongoing lockdown has led many companies to encourage their staff to work from home and look for digital ways to stay in touch with them. Effective channels of communication have become more vital than ever and led to a demand surge for collaboration software and chat tools. The video-conferencing app Zoom has seen an especially huge rise in downloads: The number of users has ballooned from 10 million in December to 200 million in March and the programme is used by 90,000 schools across 20 countries. Other companies that make it easier to work remotely such as Microsoft, Slack and Google also added millions of users in response to the coronavirus outbreak. Similarly, manufacturers of IT equipment that is needed to set up a home office have also noted a run on their devices. Laptops and tools for telecommuting like headsets, quality microphones and webcams have seen strong demand lately, and

the same is reported about mobile network equipment, terminals and software, as well as virtual private network VPNs and other security measures. Mobile network operators across the world reported a surge in internet use last month, and in many countries internet companies are being forced to deal with the extra demand generated by remote working and self-isolation to curb the virus. Simultaneously, the demand for devices and software to optimise home networking performance has gone up as well. Home office has become a matter of course for many in the Baltics as well. Before the spread of the virus, only 13 percent of employees in Estonia were able to work remotely, according to a survey by job classifieds portal CVKeskus.ee. Now the option has been made available to an additional 17 percent, so that at the moment close to one-third of Estonians are temporarily working remotely – including the improvisation and time juggling that comes along with it. Not least because schools and universities currently also operate online and have gone pupil-free with distance education and remote learning away from the classroom.

by-doing’ approach during the lockdown, some education and industry experts expect the increased use of technology for instructions in classroom teaching or getting schoolwork done and organised. This will leave the market open for video streaming, educational software, home-schooling, game-based learning and other remote-learning innovations. Estonia was thus quick to announce that it is willing to share all its digital education tools for free to support other countries’ education systems during the coronavirus crisis. Education experts shared practical tips in live webinars for remote learning and showcased their array of online tools to connect pupils, teachers and parents.

SUPERMARKETS AND DRUGSTORES

Anyone who went to the supermarket in mid-March will have had no doubt that business was going well for retailers in the Baltics. People were rushing to amass food, healthrelated items and goods that can be stored for a long time in case the outbreak requires them to bunker and hunker down at home for a long period. Retail sales in week 11 (March 9-15) increased by around one-

third in Estonia and Lithuania and one-fifth in Latvia compared to the same period one year ago, according to data provided by the market research company Nielsen. The most sought-after goods in supermarkets following the confirmation of the first cases of coronavirus in the Baltic states, state level emergencies and calls of the government to stay at home were groceries, personal care hygiene products and household and pet care items. Buying has shifted to products that keep people healthy too. Nielsen attributed the sales spike to increasing stockpiling amid health fears related to Covid19 – a consumer behaviour that the international research firm describes as “pantry preparations”. Indicative for the consumer sentiment at this unique time are the sales numbers for shelf-stable food that saw a year-on-year increase by 63% in Lithuania, 51% in Latvia and 84% in Estonia in week 11. Frozen food sales were up 48% in Lithuania, 41% in Latvia and 56% in Estonia compared to the same period in 2019. The demand for other categories such as clothing and footwear, personal

accessories and toys in the meantime showed a considerable downward trend in the Nielsen data. Pharmacies and drugstores were also initially inundated with people stocking up on medications, health and household items. Toilet paper and hand sanitiser especially seemed to fly off the shelves just as soon as they were stocked. An online survey of consumer by Nielsen showed that hand care, health products and paper products were shopping categories bought more than before in Estonia, Latvia and Lithuania due to the coronavirus outbreak, confirming anecdotal evidence that some retailers across the Baltics had experienced unprecedented traffic levels for some items. Retailers and suppliers were quick to report that they have sufficient stocks of food and hygiene products that meet the average consumption demand in a period for several months – not least because state and consumer protection authorities are also monitoring the situation in the market closely. Nevertheless, many supermarket chains came under significant pressure to serve consumers, as supply chains were stretched in order to keep up with the high demand from shoppers that were purchasing more of the same items. Online grocery sites have also experienced hikes in traffic and sales activity, prompting food retailers to intensify their digital business and tweaking online and offline operations to adapt to the growing demand. While there are indications that the rush has quietened down as people have prepared for quarantine living and adapted to the restrictions of public life, the effect on food retailers and drugstores will clearly depend on how long the lockdowns in the Baltics continue, according to industry

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experts. Shoppers have now started using up their stockpiled supplies, with many people unwilling or unable to go out. The demand peaks because of the initial hamster purchases should thus not be confused with additional sales: Those who stock up on pasta, buckwheat and toilet paper simply buy less of it later. At the same time, people eat and need more food at home since many restaurants, cafes and canteens are closed – certainly a plus for food retailers.

MANUFACTURER OF PROTECTIVE GEAR AND MEDICAL EQUIPMENT

Any company that is now somehow able to contribute to combatting the coronavirus pandemic, is more in demand than ever. The World Health Organisation estimates that 89 million medical masks will be required every month during this crisis, yet many countries including the Baltics are facing a shortage. A similar situation occurred in the market for alcohol-based hand sanitiser in homes and healthcare settings to prevent infections.

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Business across the Baltics helped to fill the local market shortage caused by a surge in demand and have dedicated part of their manufacturing capabilities to producing muchneeded protective items. For this they were often issued the necessary permits by state authorities under a facilitated procedure. While in Latvia, the daily Latvijas Avīze supplement Latvijas Bizness noticed a “face mask production boom” in the local textile industry; in Lithuania dressmakers of the national opera and in Estonia, even the prison inmates, turned to sewing face masks. Specialised manufacturers and suppliers of medical devices such as the Lithuanian branches of the global corporations Thermo Fisher and Intersurgical have already reported strong demand for their product. Both were also contracted by the government in Vilnius: Thermo Fisher Scientific Baltics will produce 100,000 coronavirus tests for Lithuania and Intersurgical is about to make 1 million respirators for the country’s medical workers.

Photo: Arina Solntzeff

Before the crisis, there was only limited interest in the Baltics in buying food online. This is about to change now.

To further foster local production, state authorities also concluded contracts at short-term notice with other companies that were expanding or re-launching the production of medical and protective equipment against Covid-19 – often in return for price guarantees and guaranteed sales of certain volumes. Importers have also used their contacts in China to find necessary medical equipment and aviation companies assisted with shipments of individual protection equipment. In Lithuania, the government-backed Agency for Science, Innovation and Technology (MITA) launched a contest in March for innovative ideas to fight the virus. Innovators, technology developers, startups and innovative companies are invited to participate and offer solutions based on modern technologies. By the time of the Easter holidays MITA has received 121 ideas of both market novices and leading companies in the area of new technology and innovation, according to its acting manager Gintas Kimtys. Among them is the telecommunication solutions provider Teltonika that is about to launch the production of medical lung ventilation equipment. “We hope the production of the prototypes will start in May. If the tests are successful, we will be able to produce larger quantities of such products in June or at the latest in July,” Teltonika-CEO Antanas Šegžda told the Lithuanian business daily Verslo Žinios. One step further ahead is the Kaunas-based robotics company Rubedo Sistemos that has designed a disinfection robot, a prototype of which will shortly begin working at a hospital in Hong Kong. The robot is reportedly able to eradicate 99.99% bacteria, viruses and fungi, including COVID-19.

Medical Mask for Everyone AHK Baltic member Mikron, together with partners, design scalable open source mask production equipment which fits a shipping container

ue to the COVID-19 pandemic, there is a critical shortage of respiratory protection masks. In the upcoming weeks and months, this shortage is expected to remain and even increase. As of now, the majority of masks have to be imported from foreign countries such as China, but other geographical regions are even completely cut off from supplies. Mikron Berlin GmbH, together with pi4 robotics GmbH, Festo SE & Co.KG and Wikifactory Ltd, has developed the project Carola which tackles this problem in a simple and direct way. Project Carola offers to install a modular manufacturing plant in a 20 ft / 6 m shipping container, in which the raw materials (polypropylene, delivered in the form of rolls) are processed into respiratory protection masks, bringing the production directly to where it is needed. With such a container, approximately 50 masks per minute can be produced, which translates to approximately 2 million masks per month. 45 such containers could cover the present needs of Italy for example. “We offer free access to copy our technology. We really want to make it open source, so that these masks can be produced locally and you don’t need to import them from China or from other manufacturers. And we also don’t say you can buy

the system from us, we say you can build the system yourself,” says Nils Rödel, CEO at Mikron Berlin GmbH, explaining the idea behind this project. “You can still order the equipment from us but our approach is to get as many containers as possible into the world. So you can copy all the data from the open source site and build a machine yourself and then produce the masks. The next step is, because there are countries in the world, e.g. in Africa, which can’t build such a machine themselves, to try to get money by fundraising, and then we can send containers to these countries and give them away, so that they don’t depend only on the shipments of protective masks, and can produce them. With our technology it’s relatively easy,” he adds. There are currently acute shortages of protection materials worldwide, not least because of hoarding. Based on modelling by the World Health Organisation (WHO), an estimated 89 million medical masks are required for the COVID-19 response each month. Governments are tasked with developing incentives for industry to ramp up production. This includes easing restrictions on the export and distribution of personal protective equipment and other medical supplies. There will most likely be

additional supply-chain problems within the upcoming weeks or months. Prior to the COVID-19 pandemic, worldwide respiratory protection mask production per day amounted to roughly 40 million masks per day, 20 million of which were produced in China. At the end of February, China started producing 116 million masks per day, an increase of 400%. In mid-March 2020, this figure increased to 200 million masks per day, an increase of 900%. “The price issue is also important. Now people have to pay around 1 euro for a mask, but from this machine the mask only costs 6 cents,” says N. Rödel. Mikron is a premium member at the German-Baltic Chamber of Commerce and works together on this project with the partner organisations CADUS e.V., Open Source Ecologz Germany e.V. and r0g agency for open culture and critical transformation GmbH. Strategic communication for this project was created by the Creative Agency New! and Digital Agency SuperYou. “It’s an honour for us to contribute to such a significant initiative. We hope it will be noticed worldwide and will have a significant impact on fighting the Corona virus crisis,” says Maksim Kuzmin, managing director of New! Agency.

MORE INFORMATION ABOUT THIS PROJECT

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by ANDA A SERE

Even in a time of crisis, there is an opportunity to build a solid foundation for business transformation and competitive advantage.

he strategic purpose of Baltic Amadeus as a business is to simplify the digital world by creating valuable experiences. “In these unusual conditions, this purpose gains an incredible importance. For quite some time now, we have been talking about business digitization and its significance while facing the challenges of the digital present. The national and international lockdown has accelerated digitization, so even in times of crisis we can see an opportunity to react and build a solid foundation for business transformation and competitive advantage. This crisis is an opportunity for those who will assess the benefits of technology, will adapt to the changing business and social conditions, will be keen to look for new platforms and niches, and will pay enough attention to their customer experience”, says Irmantas Bankauskas, Baltic Amadeus Chief Sales Officer.

Remote consulting

As a technology partner for different businesses, Baltic Amadeus sees plenty of scope today to share its skills, knowledge and expertise to help businesses not only to survive this crisis, but also to grow in the long perspective. The company had an intense time of R&D activities to develop solutions that can help businesses to stay alive, transform their business and move into a digital space. It

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has developed a solution to help medical professionals provide remote consulting. “We have noticed that until now there has been no system in Lithuania that allows patients to register for an appointment, consult directly in video format and, if necessary, immediately pay for the service. Such a system will be used by any business providing consultancy services, both public and private, from family doctors to psychologists or even legal entities”, says Bankauskas. The minimum viable product was introduced at the beginning of April. The company is now already talking with a few medical entities, pharmacy chains and publishing houses. “As always, our purpose is to tailor the solution to support our clients’ business goals”, he emphasizes. Currently, Baltic Amadeus is working and developing some more solutions – the company clearly sees an opportunity to use its knowledge and expertise to create solutions for business digitization.

Pandemic impacts all

“Just a few weeks after the start of the lockdown, we can observe how business is transforming in Lithuania. Of course, all of the business sectors will feel the impact of the pandemic sooner or later”, says Bankauskas. Globally, the downturn in market capitalization indicators is observed in almost all sectors. The largest is in the segments of commercial aviation, tourism, fashion and luxury goods. The average comes in the automotive, real estate and insurance sectors, while the lowest is in the pharmaceutical, health services and telecommunications services sectors. “In assessing the resilience of a business to coronavirus, we not only consider the sector to which it belongs, its size, capital structure and model, but also the ability of managers to manage the crisis systematically, professionally and at the same time creatively and make quick decisions. It is the managers who must ensure the continuity of the business at such a difficult time. This means adopting changed circumstances, as well as assessing potential risks and taking measures to prevent them”, says Bankauskas. Talking about Baltic Amadeus’

challenges today, Bankauskas adds that the company’s biggest challenge is that for the first time in its history more than 200 employees are working remotely.

Companies will transform

“It is likely that the large companies that mastered new technologies well before and during the crisis will become even stronger and more influential. Disappointingly, small and medium-sized businesses, which have so far struggled to implement IT solutions, may have problems long after the crisis. Unfortunately, the use of some enterprise technologies becomes not only a solution or an opportunity, but also an additional burden: how to ensure security, avoid drops in productivity, as well as maintain and ensure the development of digital products and services? These and similar issues afflict many firms, so IT and telecommunications companies are currently faced with a strong demand for advice and consulting”, says Bankauskas. He suggests that the inevitable outcome of the crisis could be that businesses will be more conducive to the benefits of technology and the opportunities they are opening up. “We can certainly foresee companies feeling that digitization has had a positive effect on business, and they will continue to work in the digital space even after the lockdown. Companies will transform, so we will see changes in business models and operations”, says Bankauskas.

Working for more than 30 years Baltic Amadeus is a technology partner. The company’s goal is to simplify the complex digital world by creating valuable experiences for its clients, users and employees. It is a one-stopshop provider of a full spectrum of IT services and strategic consulting. The company started its operations more than 30 years ago. More than 200 employees now work in three offices in Vilnius and Kaunas, and their goal is to develop custom IT solutions and provide strategic IT consulting to empower technologies for business growth. Baltic Amadeus has extensive experience in working with finance, logistics, energy and shipping industries. Among the company’s clients are the biggest Nordic and Baltic banks, and a Scandinavian shipping corporation.

Photo: Publicity Photos

Lockdown Accelerates Digitization

Health Also Moving Online DoctorOnline has already been offering telemedicine services since 2017, but the greatest interest from customers has been observed under the current conditions of crisis. by ANDA A SERE

“M

any are currently leading their lives online – work, learning, business meetings and now also treatment. An increasing number of private medical institutions are transferring a large proportion of outpatient consultations to the online environment. Online consultations of physicians are currently very important, considering the Order of the Ministry of Health regarding Covid-19 and the limiting of scheduled medical services. Earlier, we could not imagine that a gynaecologist could provide an online consultation without a personal examination. However, it is possible, and the first consultation with recommendations on urgent issues and on what must be done before a personal visit, assessment of the examination reports, issuing a prescription, etc. are currently conducted online”, says Santa Batuhtina-Banga, Development Manager at DoctorOnline. With the emergency situation, a change in habits has occurred in the consciousness of physicians, as well as patients, and she assumes that even after the end of the emergency situation, in accordance with the technological requirements of our time, the daily use of online services will be assumed to be understood by our platform users and will not cause any superstitions.

1,000 New Users Over a Couple of Days

Every hour new patients and physicians are getting registered on the www.doconline.lv system; in

general, the figure amounts to more than 1,000 users over a couple of days, which is a considerable indicator in the small market of Latvia. The work load of physicians is considerably high. Currently, the highest demand is for consultations of the following physician specialities: general practitioners (13%), dermatologists (10%), gynaecologists (8%), endocrinologists (7%), ultrasound specialists (7%) and paediatricians (6%). S. BatuhtinaBanga emphasises that the company is not using the moment as a “harvest time”, but is a socially responsible company, providing its services at prices below cost price, which makes telemedicine services available to any medical institution or medical practice. “Within the framework of the crisis, we have detected another significant need; namely, with the support of the government, to achieve the required regulation, which would enable one to receive state funded medical consultations online as well. This will be our next step – to start a dialogue with the government to make us heard,” says S. Batuhtina– Banga. Currently the company is also addressed by foreign partners, who wish to receive assistance in the development of individual solutions.

Gain Experience Abroad

DoctorOnline started its operation in 2017 to develop telemedicine services in Latvia, which were new for the country. “We have accumulated a huge wealth of experience, we are robust, and our vision is in accordance with those who are starting something like this at present,” says S. Batuhtina–Banga. Being aware of the size of the Latvian market, the company addressed foreign markets as well, where it is implementing a different business model. Co-operation with partners in Europe, the Baltic states and Central Asia enabled the company to gather information on the medical models of other countries, which provided a much wider perspective. “Over recent years, we have been constantly developing the platform and gradually elaborating new models of development. We offer white label solutions, as well as licences and connection to the global platform, etc.,” she said. “In comparison with other superpowers of telemedicine, for instance, the USA, we are a comparatively young company at an early stage of our development, but we are systematically moving forward. Our strength is our flexibility and ability to create solutions that are individually tailored to our customers,” believes S. Batuhtina–Banga.

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Lithuanian Libraries printing 3D face shields

Value of TRUST in the postCovid world

by MAGDALENA WOR ST

by JURIS PĒTER SONS

The fight against Covid-19 leads to innovative and problemsolving projects in Lithuania, involving participants from different industries. By printing 3D face shields on a volunteer basis, the libraries in Lithuania joined the Robotics School’s initiative to help healthcare workers.

S TR ATEG Y A ND CRISIS COMMUNIC ATION JA Z Z COMMUNIC ATIONS, A N INDEPENDENT PR CONSULTA NC Y

Prof. Dr Renaldas Gudauskas, Director of the Martynas Mažvydas National Library Lithuania, answered our questions about 3D printing and successful teamwork in times of the corona crisis.

In Lithuania, healthcare equipment to prevent the virus from spreading is in short supply. Therefore, we needed a problem-solving approach. The 3D face shield model was designed and created by scientists, engineers, students from Vilnius Robotics School and experts from the company 3DCreative. It’s great to see people come together to help in this difficult time. A total of 54 libraries throughout Lithuania have joined the project, and we are proud to play an important role in the initiative to support healthcare workers. How did you organise it all? The organisers of the initiative did everything to make the task easier. At the beginning of the campaign, the robotics school coordinated all processes and helped to quickly solve all questions. The specialists of the company 3DCreative prepared the files for the printer. Donatas Kubilius is our project coordinator. Everyone is enthusiastic to work. The libraries started printing in late

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March. In the first stage we produced 1669 protective shields, and in the second week another 1623. We print and send the shields to other professionals working in high-risk areas. The face shields are in high demand for ambulance, hospitals, polyclinics, nursing homes and the private sector. Most importantly, the protective shields are not sold, they are given away for free to the groups mentioned above.

to print and produce. But it was calculated that a total of 115,000 shields are needed for doctors. Therefore, our work is urgently required. Special conditions are necessary to print the protective shields. We work with masks and gloves. Besides, we are testing a new 3D face shield model.

Compared to Germany, the equipment of the Lithuanian libraries with 3D printers is remarkable. How did you do this?

We are used to working from home. But our service employees are now confronted with new activities. Overall, it’s necessary to communicate and be prepared for different activities. There is no longer a Plan A, we need to look for a Plan B and Plan C as well. This will be our biggest challenge.

The timely government investments into the modernisation of libraries are paying off during this time. The National Library of Lithuania has purchased 58 new Zortrax 3D printers for the largest libraries in the country with an EU-funded project in 2019/20. We also conduct further education training for the library’s specialists. What motivates you? The voluntary work of the Lithuanian libraries is very important, although we are only uploading these files

What are the main challenges for your employees in this crisis?

A look into the Future: What’s next? Despite an uncertain future, our employees are highly motivated to help as much as they can. Soon we will start a new project to support young students who are in need of computers for home schooling. Moreover, we rely on support from our government and the ministry of culture.

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You reacted very quickly to the crisis with the production of the face shields. How strong is your desire to help in this crisis?

oday and tomorrow Covid-19 reigns supreme – in media, in political and business agendas, in Berlin, Riga, Vilnius, in Tallinn. We are constantly reminded of the many restrictions, many boundaries, new rules of social distancing, quarantine and isolation. But Covid-19 will not reign the day after tomorrow. Companies, regardless of markets they operate and have vested interests in, will have to understand that and prepare for that day. Today is the right time to plan for the day after tomorrow – so review your client portfolio, review your team’s performance, review the way you act in public, what decisions you tend make – and then think, evaluate, prepare and act. Today may be the only chance you get.

remind them that people and trust between people matters. No business will survive without a dedicated team (people). Neither will it survive without being accessible and trustworthy to consumers and clients (also people). Business won’t survive without an open, honest conversation between the two.

Companies around the world who want to survive and later thrive will have to become more truthful, become more human. They will have to fight for talented employees, they will learn to better appreciate the clients and the products they already have.

“No matter how many stores reopen [after Covid-19 lock-downs], or where they exist, the retailers and brands will need to communicate the very real, tangible, and transparent initiatives that have been undertaken, regarding the well-being of their customers and valued employees. Trust has now replaced convenience, value, price, or about anything else as the retail metric that matters most.”

In these months of global crisis we are constantly reminded that all business is social business. It is first and foremost people who interact. A TV ad can trigger an action, but it cannot nurture a relationship. People, and what they do and say – can. If this critical time will do one thing for companies, hopefully, it will

Companies who know better will learn to erase fancy jargon from their vocabulary, get to the point, make their communication count, while appreciating their client’s time. These companies will do things instead of talking about doing things. Companies will respect their clients not in words, but in deeds. Sanford Stein, a retail industry contributor wrote April 17, 2020 on Forbes.com:

Trust will have a renewed meaning after the crisis. Currently employees are being laid off, companies ar closing up shop, many forever. And consumers have more time on their hands than ever before to evaluate,

think through and make more weighed purchasing decisions. Who can they trust? Consumers will come out on the other side of this crisis more cautious, with a modified set of values, against which to weigh your product and service offers. And they will remember how valuable real relationships really are. The ability to talk openly, deliver on promises and act responsibly – these will be the foundations of trust. So when consumers choose an art book store, they will go to the best and most responsible one they know (think Bücherbogen under the railway tracks, Savigny Platz, Berlin). When they want post-crisis coffee in Prenzlauer Berg, they just might opt for Bonanza Coffee, who’s partnering to make coffee-based soap and “gently flattening the curve” today. Here’s what I encourage my clients and friends to consider, every time we talk about “what’s next”: Tell the truth that matters to your clients, about your products and about what you do today and tomorrow. Do more than they expect, and do it better – if you are supporting your community, rethink if your current approach is the best; consider how you will protect your customers and employees better. Make sure they can hear you. You should have enough ways (online and offline) to talk to your customers and tell your stories yourself. Social networks, dedicated product and initiative sites, public media, your store and office – it’s your call. Not everything must be left to chance. Make sure when your business is online, it really is there - up to date, ready to listen, talk, ready to show and tell. And let’s be clear - we all should be better prepared for the next crisis to have a fighting chance after.

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We have more work and more opportunities

Payment delays. But I would not call it a problem. Partners must help each other. The most important thing is to talk openly. I think a lot of things await. Some businesses will not survive. We must act responsibly. Do not stop payments with suppliers, with employees. Because now the economy is based on mutual trust. We cannot become “obstacles”. Because a small pebble rolling down a hill can cause a major collapse that will be of no use to everyone. “Trust”, this word will have even more deeply meaning now.

When the Covid-19 crisis hit the world, it became more evident that the need for cloud services, remote work options and different IT solutions is more important than ever before. Nowadays, everything what we do, our learning, working and so much more can be done from the comfort of our homes, and not only in specially designated places. But to make this possible, there is much work involved. Therefore, we asked Donatas Zaveckas, the CEO of AHK member BTT Cloud, to share his insights. by SANTA DUNAISK A

DONATAS ZAVECKAS CEO AT BTT CLOUD

During the first week of quarantine, the number of requests to our service doubled. Technicians had to deal with many issues related to telecommuting (work from home). Also issues with safe VPN access, application, additional load in our cloud, network issues and of course security. We know how to do that, so we helped with pleasure. 90 percent of our employees working from home, it was already in the company culture. So, all situation went smoothly. We feel the impact of COVID 19. Our clients include all major Lithuanian hotels, transportation companies, aviation business leaders who are currently going through a very difficult period. There are also some major tour operators. On partnership basic, we were looking for solutions to help them in this difficult time.

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We are a constantly growing (30% per year) managed services company. We are financially disciplined, we have also-called “pillow“ and I believe that the whole team will be able to withstand this crisis. For us, this is a time of opportunity. Because the digital transformation is happening much faster than we could have imagined. What is your strategy to tackle these obstacles (change of market strategy, digitalization, etc.)? Now, I focus on my team. So that even when working from home, they would feel the team spirit, would be disciplined, and would achieve our goals, even during the quarantine. We have more work and more opportunities. Customers need reliable IT service providers. Therefore, well-processed inquiries and assistance to customers is our priority.

We have not changed our strategy yet; we work exclusively with business clients. It may be possible to maintain the planned growth. But on the other hand, it is also a good time to review our internal processes, prepare for the new certification phase, implement new tools that will allow us to provide better services. Also, its huge demand on the training side, so we will allocate our resources for it, it will help our clients to utilize their application properly. And keep strong, maybe survive in this situation.

Photo: Publicity Photos

The first thing we would like to ask is how does your company feel about these changes and what are your inner feelings about these changes inside your company made by the impact of COVID 19? How is your company dealing with the new situation, how does it affect the turnover, your employees?

The BTT Cloud was established 13 years ago. The company provides Cloud and IT maintenance services to customers in Lithuania and around the world. BTT Cloud has implemented over 2000 complex IT solutions and maintain more than 6000 workplaces. They work with all 5 * hotels in Lithuania, large factories throughout Europe. They are one of the first managed Cloud service providers in Lithuania. Donatas Zaveckas rules this company for more than 8 years.

control the situation, business and employees get new ways of cooperation. For us, as IT company is more challenge, we should be ready for the new rules of the game, but innovation, flexibility, and devotion are in our company DNA. So, we work hard and go step by step forward. This is, unequivocally, an opportunity for the IT sector. As I already mentioned, now everyone needs high-quality IT services. If in the past some customers needed additional arguments about IT ROI, now there is no need to explain anything. What are the biggest problems you have faced coming from your clients and what others should take into consideration?

Would you say that this is a chance for your company or a huge challenge? Even one month ago it was difficult to imagine what is happening now. Even I saw the “Contagion” movie 8years ago, the reality is more challenging than you can imagine. Its challenge for everyone: the government should

What are the biggest challenges in your field now as we know that more and more people are going to work from home and most Companies work with confidential information? Security is still topic No1 in our service line: Main data is still sitting in the cloud, we are preparing for this day X for 13 years, now it is bringing back the results. On the client-side, most of our customers use Microsoft software that is balanced both works in the office and at home. Teams make it easy to organize meetings, SharePoint is a secure way to share documents, edit them, etc. In the first days of quarantine, we had to spend some time educating our customers, because not everyone using the software before the crisis. We should not forget our client’s internal procedures and IT company’s educational level; this is the most important staff from the management side. What is the biggest challenge from the side of Cybersecurity?

Donatas Zaveckas (in the middle) and his core team.

The National Cyber Security Center also warned about this. Malicious people, under the name of the

World Health Organization, send emails with malicious software, distribute fake websites, and new social engineering methods attempt to encourage the user to install malicious software and extract confidential information. Its enormous phishing attempts on social media, also local banking eCommerce facing new security issues. We apply a lot of protection methods. All software needs to be updated. Devices and information on the demand must be encrypted. Using a VPN, we configure a secure connection to resources in the office. Still, Employee education is the most important thing. What industries are right now the least prepared for working remotely what is your viewpoint of the current situation and the reasons why it is like that? The technology was ready to work remotely at least 5 years ago, it still was problems in our management heads, they have a lot of different explanations: resources, security, the trust of employees. This Crisis will add some pluses as well - future working culture, education system, the most important thing – it will change management ways if not 180 degrees at least 90. Could you say something motivational for other entrepreneurs in these trying times? Masks fall during the crisis. We can see who is. I wake up every morning with a question: How can I help; how can I be useful? To my customers, my partners, my employees. That way, every day I grow up as a person myself. The crisis will pass, and we can get out of it being better persons. Humanity and compassion are the foundation for personal and business success.

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Selfies of The Global Hack participants

Hacking the crisis by ALE X ANDER WEL SCHER

The coronavirus crisis has shifted a lot of things to the Internet – including the search for solutions to problems that have arisen from the pandemic. Online hackathons around the world have produced new ideas to tackle the damage it is doing to the health system and economy. The global movement started – where else – in Estonia.

Hackathons have been popping up all across the world and people from different backgrounds and countries take their tech talents to the virtual arena to battle the coronavirus with crowdsourced digital ideas. “Now is the time to design, test, and execute moonshot ideas that will help us deal with the crisis and create new, competitive business models for the future“, read the call for the first online hackathon in Estonia. The concepts generated during the worldwide idea-sprints range from innovative long-terms vision to clever solution that can immediately be put into action and help.

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Mobilizing the tech scene in the Baltics – and beyond Starting point and cradle of the worldwide hackathons were the Baltics. Just some days after the lockdown due to coronavirus pandemic, the region took its techsavviness and digitalism to new heights by sparking an international movement that gained positive momentum and subsequently spread all over Europe and beyond. By now more than 50 events were running all across the globe, culminating in The Global Hack – the world’s largest online hackathon. The event took place over the Easter holidays from 9 to 12 April and was supported by numerous international institutions such as The World Bank, United Nation, European Commission, Start-Up Europe and many more. There were more than 12,000 participants from more 98 countries that formed into over 500 teams to develop innovative ideas that could potentially mitigate the current crisis caused by the coronavirus. The credit for having the idea and pioneering the volunteer-led initiative with global impact goes – as so many times with all things online – to Estonia. In mid-March, on the very same day an emergency situation was declared in the country by the government in Tallinn due to

Hackathon is a portmanteau word combing “hacking” and “marathon”. The intense brainstorming sessions are usually mass gatherings of people with different skills that get together in one place to tackle problems in a competitive setting. Respecting social distancing and quarantine measures in times of the coronavirus pandemic, the current hackathons have been conducted fully online, with interactions happening remotely over videoconferencing and chat tools. The basic idea still keeps the same: Over a short limited period of time – usually over the course of 48 hours – the hackathon participants exchange ideas and form teams around the best ideas to work on specific tasks and collaboratively build a unique solution from scratch. Throughout the hackathon the teams are sided by mentors that are usually experts in their tracks and help to develop the idea by providing feedback and knowledge. The generated solutions are generally transformed into reality as prototype in the shape of services, websites, mobile apps, hardware devices and robots.

the COVID-19 crisis, the public and private sector teamed up and in recordtime organized a two-day online hackathon to help address the crisis. It was the first event under the Hack the Crisis banner that inspired sister events all over the globe – and has become another international success story for the digital nation of Estonia. “When we launched our local #HACKTHECRISIS event in Estonia we honestly didn’t know we were going global”, recalls the event head

Act and hack. For Estonian President Kersti Kaljulaid this approach is a proof of the pragmatic can-do attitude and startup mindset that is typical for Estonians. “In difficult times we have always two options: remain seated when the ground is burning or start searching for solutions. We chose the last option“, she threw her support behind the idea, describing the hackathon as a “genuine example of an initiative that leads people to look for solutions to the challenges we face”. Backing the hackathon from the outset was also Estonian Minister of Foreign Trade and Information Technology Kaimar Karu: “The crisis needs quick solutions and at the same time opens up an opportunity for the introduction of innovative approaches. “

Photo: The Global Hack/ Accelerate Estonia

mid fears about the direct impact and long-term effects of the coronavirus pandemic on the health system and economy, bright minds worldwide are in search for smart ideas and new approaches to tackle the challenges ahead. The IT and tech communities have been at the forefront of those business sectors stepping up to share, try and find urgently needed solutions to the socio-economic crisis that is currently unfolding. Among the numerous grassroots initiatives that have come up in response to the crisis are online hackathons whose immediate success proved once more that small nations such as the Baltic States can have a major impact at the cutting edge of technology.

Knock down the lockdown

WHAT IS A HACKATHON?

Yes, we can resolve this crisis. And we can use technology to resolve it Estonian President Kersti Kaljulaid organizer Kai Isand. “But what we’ve achieved in the past month is simply beyond expectation, it feels almost surreal.“ The event series started in Estonia saw more than 100,000 participants from all over the world coming together and solving problems that are usually left to the governments, with a number of the

participating projects are already being put into practice. For event co-organizer Calum Cameron it is thus “a genuine global movement that nobody owns and everyone can participate in”, demonstrating the keen enthusiasm of individuals to contribute and collaborate on solutions to overcome to the crisis.

Set-up and organized within just a few hours, the brainchild of the Tallinnbased start-up hubs Accelerate Estonia and Garage48 went on to become the largest online hackathon in Estonia. More than 1,100 people from over 20 countries and 14 timezones gathered from March 13 to 15 to develop solutions to help Estonia emerge from the coronavirus crisis and create competitive advantages for the post-crisis period. Mentored by renowned entrepreneurs including Martin Villig (Bolt), Kaarel Kotkas (Veriff) and Marko Russiver (Guaana) the participants came up with a number of fast-forward innovations and prototypable ideas. In total, 30 teams presented their working products with a pre-recorded pitch over a webinar. “Among the ideas that have taken part in our

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online hackathon, there are a large number of those who, within 48 hours, have developed solutions that have not only a perspective in Estonia but a global impact,” Viljar Lubi, the idea author of Accelerate Estonia and Deputy Secretary General for Economic Development, praised the outcome of the event that for many participants also seems to be a way to turn their personal anxiety over the crisis into concrete action that might help other people.

the emergency situation and the coronavirus from official sources. “The idea of a nationwide chatbot service circulated even before the crisis, but the hackathon enabled us to quickly put the idea into action,” said Michaela Snopková, one of the creators of Suve. To ensure that also other ideas will have the same impact, an accelerator program helps to carry on viable projects after the hackathon.

Selected by a jury as winners of the coronavirus-themed hackathon were five teams that each got an investment of 5,000 euros to realize their idea and accelerate its potential:

From Estonia to the world

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Zelos – connecting people at risk with volunteers via call centre and task dispatch app Ventit – a breathing apparatus for coronavirus patients who develop the Acute Respiratory Distress Syndrome (ARDS) Vanemuine – a medical volunteer management database Share Force One – a workforce sharing platform that connects B2B sides for temporary workforce exchange Velmio – a corona-tracker to self-monitor the own risk or recovery from home in real time

However, the list of winners does not stop here. The hackathon has produced 8 prototypes that went on to be adopted to fight the pandemic and are already on the market. One of them is an automated chatbot called Suve – a programme that can respond to frequently asked questions of web users in real time. The idea was picked up by the Estonian government that started to develop it further to ease the load on information hotlines. Now Suve is embedded across the websites of state authorities to make sure that everyone gets answers about

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Taking on the Estonian approach, the Baltic neighbours were following suit: Latvia held its hackathon from March 17 to 19 and Lithuania from March 20 to 22. In both countries, the various teams over two days came up with many different solutions in the fields of medicine, social care, and business applications in the digital economy. The world took notice and soon the initiative swapped over to other countries – not least because the Estonian organisers willingly offered support for all the new organisers of hackathon. They put together a playbook on how to set up, schedule and hold an event like this, and created also a landing page to centralise all the local events. Getting the hackathon off the ground so quickly underlines that Estonia with its digital infrastructure might have it easier in times of a pandemic that forces a large part of the economy online and makes it essential to limit human-tohuman contact. “An economy with lots of companies that can deliver their services digitally, and where employees can work from home, should be relatively resilient. This could be Estonia’s moment“, the New York Times recently wrote in a comparative article about how the virus could play out in different parts of the eurozone.

Another Estonian advantage is the close connected start-up scene. Most people in the field know and help each other with contacts and share knowledge, a tight community often collectively referred to by themselves and others on social media as the #estonianmafia. It generated at least four unicorns, starting with Skype, and also pulled in the same direction for the hackathon – together with other tech enthusiasts, business executives, project managers, marketing experts, designers and innovators from around the globe. Strongly involved were also governance leader of e-Estonia, as the country with a population of just 1.3 million brands itself. Seeing how quickly it is possible to find real solutions for dealing with the coronavirus crisis, President Kersti Kaljulaid made a global call and invited other countries to organize hackathons as well. Whereas her predecessor Toomas Hendrik Ilves, who served as president of Estonia from 2006 to 2016, acted as spokesperson and mentor for the global hackathon, so that the Global Hack was also supported by tech celebrities like the Silicon Valley superstars Sam Altman (OpenAI), former world chess champion Garry Kasparov or the Italian ESA astronaut Samantha Cristoforetti. Just to name a few. “This is a unique time when the whole world is fighting the same problem together. If we move fast, the Global Hack can relieve a lot of immediate pain people are suffering as well as sustained social and economic benefits”, Ilves, one of Estonia’s most vocal advocate of the empowering role of digital technology and a longtime driver of its digitization efforts, emphazised. “The crisis is far from over and the fight is real, but the future is now”.

Winning ideas that have no borders by SANTA DUNAISK A and ALE X ANDER WEL SCHER

During the Global Hack and other local hackathons creative teams have been working together remotely to come up with solutions to problems raised by the coronavirus pandemic and its socio-economic consequences. Baltic Business Quarterly presents some of the winning ideas that are not merely reacting to the present crisis but also about to shape the future.

any useful solutions came out of the Global Hack and the hackathons in the Baltic States that are already used or in the process of being deployed. Several other innovation created at the event could be used internationally after some refinement, while others could serve as an inspiration. Here a just a few of them:

The Global Hack WHEN: 9-12 April WHERE: Global ORGANISER: Garage48, Accelerate Estonia, organizers of 40+ hackathons NUMBER OF PARTICIPANTS: 12,000+ people from 98 countries MOTTO: Fighting a global crisis Three top teams were chosen for each different topical tracks such as economy, health care, environment, and on top of that three overall winner teams were selected. The first place went to SunCrafter for its idea of turning end-of-life PV modules into hand sanitizers. Awarded along with the solar-start-up were Act On Crisis, a concept for providing online emotional support that fits the cultural background of the recipient, and Material Mapper, a system

for keeping construction waste out of landfills and inside building. SunCrafter was named the overall winner for its solar-power hand disinfection station that can provide a holistic solution for a hygiene method as a global standard. By coupling UV lamps with upcycled solar generators, the Berlinbased start-up aims to create a sustainable, reliable and inclusive hygiene solution for public spaces. Resembling a conventional hot air hand-dryer, the disinfection station projects far-UVC light on to the user’s hands at wavelengths that inactivates harmful pathogens. Far-UVC light is proven to be a safe and efficient disinfection method, which can be used barrier-free solely by bathing the hands. While current disinfection methods are location-dependent, unsustainable, require maintenance or technical know-how, SunCrafter’s station built from decommissioned solar panel module is self-sufficient and can be used anywhere. This makes it flexible in use and scalable as well as fulfilling the social factor of leaving no-one behind. “We really think our solution is kind of a missing puzzle to having exclusive hygiene

to everyone,” said SunCrafter team leader Florian Heep. By providing easy and affordable access to hand disinfection, the station can help to reduce the spread of viruses like corona, the start-up is convinced. Winning the hackathon meant that SunCrafter receives a prize sum of 15,000 euros to scale the idea further. Headquartered at the Siemens innovation campus in Berlin, the company is now connecting with medical and optoelectronics experts to develop the first prototype. “We are getting serious. A good thing is that we already went into many conversations with our partners and also generated a lot of interests with possible collaboration partners, “Heep explains. “We wanna try it out in Ghana and work with refugee camps, also bring the technology into public spaces.” ACT ON CRISIS: The team Act on Crisis from Lithuania has developed an online platform that offers high-quality psychological support services. Due the COVID-19 crisis currently nearly 3 billion people around the globe are under some form of lockdown – an unprecedented situation that let many people experiencing emotional imbalance and anxiety. The app provides secure personalized emotional support that is designed to meet the cultural background and characteristics of the individuals. It brings those in need together in one-on-one video meetings with certified professionals or in a guarded community room. Act on Crisis hopes to cover at least 1000 hours per week to help at least 4500 people per week. MATERIAL MAPPER: The team led a by the Latvian Ieva Sibilla Strupule has developed an online platform that tackles the issue of keeping construction waste out of landfills and inside building. Starting from

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2020, the building industry is required to follow new EU regulations stipulating that 70 % of materials in new buildings must be reused. Material Mapper the first artificial intelligence-powered search and forecasting tool that allows predicting the availability of re-usable material from demolition site. The solution is to foster the exchange of information stored in different databases and data-structures between real estate developers, construction companies and municipalities.

ESTONIA: Hack the Crisis WHEN: 13-15 March WHERE: Estonia ORGANISER: Garage48, Accelerate Estonia NUMBER OF PARTICIPANTS: 1000+ people from 20 countries MOTTO: Let’s solve THIS wicked problem! The top prize went to Zelos that developed a platform to match at-risk people needing assistance during the lockdown with volunteers who can help them by running errands for them while maintaining social distancing. Self-isolation and quarantine has cut off many people from the access to food and medicines. This includes in particular lonely elderly and people with already existing health conditions for whom COVID-19 is especially dangerous – they should avoid going to public space at any cost. At the same time there are people who want to help, but do not know how to reach the ones in need. Based on their experience of developing location-based team-andtasking management-apps for large volunteers group to self-organize and take responsibilities, the team has created an solution to connect willing volunteers from local communities with members of those communities

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who are in need of practical help. For this they used the Zelos API (application programming interface) that can be connected to other solutions used by other institutions, while volunteers can access their tasks 24/7 via a mobile-friendly app. People in need can submit their needs via the website or a call center hotline – to make sure that senior citizens who might not be techsavvy have access to the service. To streamline and power the task delegation process, Zelos’ team connected its volunteer management app with a task triage board of the list-making application Trello. This has resulted in an easy-to-deploy and scalable solution called COVIDhelp, which was immediately set up after the hackathon to manually accept help requests from seniors living around Estonia. This can entail going to the store, walking the dog or just having a friendly chat. In addition, a corresponding website went online, so that people could find information about the project in Estonian, Russian, and English. COVIDhelp has received over 2000 volunteer applications until the end of March after a call-toaction published via Facebook and Instagram. By now 20 volunteer groups have been established that are organized geographically to serve 16 counties and 4 cities in Estonia. The government-approved COVIDhelp API has also already been used in Latvia by the initiative Paliec Mājās (“Stay Home”). “COVID-help has proven that people really want to aid others. With such a vast number of volunteers signing up in the Estonian community within the first two weeks, there is no doubt on how relevant and useful this solution is right now,” states teamleader Johanna-Mai Riismaa. “We hope that this Zelos integration

additional protection for eyes and nose. Its design also limits access to face from direct touch from possibly contaminated hands. The face shield that can be used on top of face mask and other protective gear was developed in close collaboration with medics and is already in use in hospitals around Latvia. Different to many other alternatives available on the market, it can be used repeatedly after proper disinfection. Not least because the face shield is modular and each component is replaceable in the event of damage.

The top prize in Latvian Hackathon went to Baltic 3D for its 3D printed face shields solution

results in the creation of more community-led movements around the world, which protect vulnerable populations during this health crisis.”

LATVIA: HackForce WHEN: 17-19 March WHERE: Latvia ORGANISER: Volunteers from the Latvian startup community NUMBER OF PARTICIPANTS: 800+ people from 25 different countries MOTTO: Be the one with the force, join #HackForce! The top prize went to Face shields for its solution for 3D printing medical supplies. Described in their pitch as “a face shield to protect doctors and healthcare professionals from virus transmission trough air droplets”, the winning product is to be used in emergency situations to provide

The idea for the 3D printed face protector was inspired by global news about people manufacturing and delivering a variety of medical supplies to hospitals that were missing at the time. Realizing the urgent protective equipment supply problem, the team mainly made up by staff of Baltic3D, the largest industrial 3D printing centre in the Baltics, began working on an improved face shield design. The aim was to make it simplistic with minimal components and manufacturing time. In consultation with specialists from the Pauls Stradiņš Clinical University Hospital in Riga a solution was developed with features that are essential to doctors that wear them for many hours. “We have received requests for the supply of tens of thousands of face shields, and with the end of the virtual hackathon, our work has only just begun!”, Didzis Dejus, co-owner of Baltic 3D, explains proudly. Extensive work started to further improve the design, reduce the required material and optimize the production process. Parallel to this a decentralized network of local face shield suppliers in Latvia within cities with hospitals was established. “Small improvements are being made all the time. But beauty is not the priority, only functionality

is improved“, Dejus says. „One of the biggest advantages is that the materials used are not medical goods, and they are freely available.” From the developing the prototype at the hackathon to the launch of the serial production it took just a few days. “The interest is enormous”, says Dejus. Until Mid-April around 20,000 face shields were manufactured and delivered to almost 400 customers in Latvia and abroad. To meet the ever-growing demand, Shield48 - as the team decided to call their project in light of the events that unfolded within 48 hours – already engaged nearly 40 employees and has increased the production to about 3,500 face shields a day. This was made possible by a 100,000 EUR loan granted by the Latvian Development finance institution Altum.

LITHUANIA: Hack the Crisis WHEN: 20-22 March ORGANISER: Lithuanian Business Angel Network, Vilnius Tech Park, Telesoftas, GovTech Lithuania, RocKIT NUMBER OF PARTICIPANTS: around 1000 people MOTTO: The winner takes it all? Not in Lithuania. No formal winners were nominated in hackathon, but various financial support awards were presented to the authors of the most viable ideas that tackled economic, demographic and socialpsychological challenges. Among the standout projects were : EBRAVI: The ultraviolet active face mask is a scientifically proven solution to help keep doctors and medical personnel safe. The personal respirator protects from viruses in the air exhaled by the

patient – it kills 99% of viruses before exhaled air gets into wards or general-purpose quarters. A prototype is now ready and arrangements to test it in hospitals have already been discussed. SherLOCK @home: Aimed at relieving the workload of medical staff, the solution offers a unified communication platform to help monitoring the health data of registered high-risk people under quarantine. On a visual dashboard the medical staff can check and track the health parameter of quarantined people that are gathered on a daily basis by an automated reach-out in form of a chatbot-based questionnaire. Tracking Virus Not People: The program allows professionals as well as citizens to track and monitor the spread of the virus in real-time. It visualizing the places visited by people who were diagnosed with the virus, and thus make it possible for other citizens to calculate and assess their personal level of risks of getting infected based on the profile of their own movements. Localun.org: Worried that your favourite restaurant or cafés might not survive the lockdown? Localun is a web-based online platform where local communities can purchase gift cards and make donations to eateries in the neighbourhood – to provide them at least with a minimal income to cover their fixed expenses. parduotuv.es: All-in-one-package for business to launch an e-shop. The “starter kit” provides all needed services (getting a domain, server, web design) to sell online, also including the option to add links to shipping and delivery services, instant payments and social media, and customer support in local language.

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Pandemic brought new customers and opportunities for plastics companies Plastics companies operating at the Klaipeda Free Economic Zone (FEZ) in Lithuania have experienced very limited impact by the COVID-19 outbreak so far. On the contrary, they are enjoying increasing demand, opening new product and sales segments, and gaining new arguments in society.

laipeda FEZ is the largest plastics hub in the Baltics, where 5 companies achieved a total turnover of €890 million in 2018, amounting to nearly half of Lithuania’s total plastics turnover. According to preliminary data, the total turnover of Klaipeda FEZ plastics companies stayed about the same as last year: while the production output further increased, the 2019 fall in oil prices impacted other raw materials and, consequently, the pricing of end products.

Growing need for safety and hygiene

Pack Klaipeda, the makers of egg trays and disposable polystyrene foam dishes, probably have the most positive outlook in today’s situation. Curiously, only a year ago the company was uncertain about its future, as the European Parliament approved the single-use plastics (SUP) directive. Today though, Pack Klaipeda already has a new polypropylene packaging production line, that doesn’t fall under limitations set by the EP. The company also has a record number of employees and estimates to have achieved a 30% annual revenue increase in the first quarter of this year.

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“I believe the COVID-19 outbreak, lockdowns and quarantines have brought consumers back to reality when it comes to the safety and hygiene that disposable packaging brings to the food industry”, says Vytautas Butvilas, CEO of Pack Klaipeda. “At the same time, the restrictions for the restaurant segment and hospitals have led to a major jump in demand for PS packaging for takeaway food. We are also seeing some of the customers from the catering industry, who were previously exploring paper laminate packaging and other alternatives, massively returning to the tried-and-tested PS solutions. All these factors have contributed to at least a 30% increase in demand in our main markets of Lithuania, Scandinavia, Germany and Poland.” He also believes that these reasons may impact the sentiment towards the plastics industry by both society and European institutions. “I think it’s naive to believe that we will all return to using ceramic cups and dishes like before the outbreak”, Butvilas believes. “Even today, some European associations think that the new priorities will be hygiene, safety, circular economy, recycling and only then bans or restrictions.”

Limited only by physical factors

impact of COVID-19 will take some time to heal. Nevertheless, we believe we shall handle the situation well. We think that our experience and capital will allow us to make the right decisions to secure our continuity and stabilize the demand for our products in the food and medical industries.” He adds that the company has tested remote work and other new processes during the lockdown and it has worked very well.

The Retal Industries group sees the recent developments from a quite positive perspective. In Klaipeda FEZ, it owns one of the largest European PET producers NEO GROUP, and an HDPE caps and APET film manufacturer, Retal Baltic. “Both of our core products – HDPE caps for drinks packaging and food-grade APET film – remain strategically important, even under the circumstances of business and societal restrictions”, says Viktorija Jurevičiūtė, CEO of Retal Baltic. “Since the COVID-19 outbreak, we have witnessed a slight increase in demand from our existing customers. However, some projects with our new and prospective customers have temporarily stalled. That is because some testing, equipment set-up, auditing, aligning, and other processes are always needed when onboarding new customers.” As Retal Baltic increased its production capacity of caps by 15% and 35% for film, the company expects the revenue from these segments to grow in line with these numbers. “We aren’t concerned too much, as we have been paving long-term relations with our customers”, says Jurevičiūtė. “Nevertheless, we are aware that the pandemic impacts on various processes for both us and our partners. For

instance, we were planning to upgrade some of our equipment, but our suppliers from Northern Italy aren’t operating currently. Another challenge is the decrease of deposit PET bottle collection and recycling: consequently, there are fewer materials in the secondary PET market and the prices are rising. However, oil, as the primary material for PET, is getting less expensive”. In March, Retal Baltic provided more than 3 tons of special APET film to the Lithuanian makers’ community, manufacturing protective shields for medics. The company has even modified some of its production processes to pursue this initiative. Jurevičiūtė says that this contribution was pro bono, although the company sees some temporary demand for such materials from the commercial sector. “Speaking of the long run though, it’s obvious that product safety, sterility and a long shelf life have now become incredibly important factors in society”, Jurevičiūtė contemplates.

Full speed

Retal Baltic has contributed 3 tons of materials to protective shields initiative

Helping the medics

The facility of Pack Klaipeda, a major producer of single-use dishes

NEO GROUP, one of the largest European PET producers, says it currently works at full capacity, though the first days of the lockdown

were followed by some minor challenges in the logistics chain. “The food industry and related activities were highly strategic during the pandemic, and so our production is in full swing”, says Paulius Ambrazaitis, chairman of NEO GROUP. “The demand for packaged food is growing, fuelled by safety and longer shelf life that decreases the number of shopping trips. We are also seeing an increase in demand for segments such as bottles for disinfection liquids and the medical sector. The market needs more test containers, medicine packaging, and other products that use PET.” Another Klaipeda PET giant, Orion Global PET, a member of the Indorama Ventures family, is a little more reserved, but still very confident today. The company says its production, planning, and payments in the supply chain have all been steady, but logistics and supply processes now require a bit more effort from the company. “I’m certain that once the pandemic is gone, the markets will need some time to strengthen”, says Jitendra Kumar Malik, CEO of Orion Global PET. “I believe the negative

Eimantas Kiudulas, CEO of Klaipeda FEZ management company, says he’s happy about the resilience of the plastics sector, as well as its ability to react quickly to this unprecedented situation. He believes the current situation will also increase the interest of young people in studying the plastics and polymer sectors, and in contributing to research and novelties in the circular economy and new product creation fields. In the long run, the amount of qualified specialists will be a crucial factor when companies consider new investment and high-value-added production. “I am also very proud that our plastics companies have helped medics and other people who are now relentlessly fighting for our health and safety”, says Kiudulas. “On top of Retal Baltic’s contribution to the manufacture of tens of thousands of protective shields, ORION GLOBAL PET has delivered generous financial and equipment contributions to Klaipeda’s hospitals. NEO GROUP has delivered disinfecting liquids to the Gargždai hospital, Baltijos high school, as well as financial help and other measures for various hospitals in the Klaipeda region. Finally, Pack Klaipeda were kind enough to provide three Klaipeda hospitals with their takeaway food packages for free, even though it is their core business that now sees a massive increase in demand.”

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Keeping the lights on Hotels, restaurants and bars are places of meeting, social contact and personal encounters. The gastronomy and catering industry is thus hit hard by the imposed limitations of public life and the introduced travel restrictions – with airlines cutting flights and tourists cancelling business trips and holidays. Yet some have found a silver lining in the crisis. by ALE X ANDER WEL SCHER and SANTA DUNAISK A

RESTAURANTS AND BARS In an era of social distancing, restaurants and bars are doing their part to stop the spread of the coronavirus – and to stay in business. Given the restrictions on gatherings, many events and catering orders have been postponed or cancelled altogether, resulting in a sharp decline in general business. Eateries in Estonia, Latvia and Lithuania, many of whom operate on thin margins, have seen their daily number of customers declining, as

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Boosted by the increased number of meals consumed at home due to remote work and distance learning regimes, the delivery business started off well: In Estonia, readyto-eat meals have been ordered by seven percent over the last two weeks of March, while eight percent are planning to order them in the next two weeks, according to a survey by the pollster Kantar Emor. “Actual growth in users of the service may even be bigger as many smaller cafes and restaurants have also swiftly reacted to the changing circumstances and are now offering home delivery as well,” says researcher Kersten Jõgi. In Latvia and Lithuania, the development of food orders has seen a similar trend.

For bars and pubs – closed even before restaurants in many cases – the outside catering business also seems to be the order of the day. Since there is hardly any way to physically operate a drinking establishment any more, some bars and pubs in Latvia now deliver craft beer or ready-mixed cocktails to their guests’ doors. This has been made possible by a legislative change: To keep people at home and promote self-isolation, the government in Riga has temporarily allowed the online sale of alcohol during the state of emergency – under the same restriction as when selling in a physical trading venue. Those buying alcohol will have to be at least 18 years old and make the purchase between 8:00 a.m. and 10:00 p.m. The usually vibrant B Bar in Riga now provides its trendy crowd with cocktail kits for home drinking, which you can mix and sip while tuning in to your Friday online party with a bartender show and DJ music. In the same fashion, the cocktail bar Omas Briljants is hosting an online masterclass with real bartenders behind a virtual counter – to show you how to make the drinks properly at home. Another known name that is taking advantage of the situation is the brewery Labietis that used to operate a popular craft beer bar in Riga. It has invested about 1,000 euros and started online sales of its brewing assortment that is delivered throughout Latvia, as well as to Lithuania and Estonia. “We use vehicles that were previously owned by the company, and in addition to this, some part of the deliveries is provided by external service partners”, Reinis Pļaviņš, co-owner of the brewery, told the daily Latvijas Avīze supplement Latvijas Bizness. Other smaller breweries, and also producers of strong alcoholic

Bars and restaurants are thus hit hard by the imposed limitations of public life

Photo: Ken Mürk

holidays, no short breaks, no pub nights, no restaurant visits – the rules to prevent Covid-19 from spreading further have put public events and social life on hold in the Baltics. The outbreak of the virus has also led to the cancellation of flights, organised trips and group tours. Conference and event spaces and gathering spots such as nightclubs, theatres, concert venues in the cities are also closed. This is particularly difficult for companies and employees of the travel industry and catering sector that have missed out on an important sales period. How can businesses that are so dependent on getting people together survive?

people are not allowed or are afraid to leave home. Some catering firms like the Latvian food chain Lido – one of the big local names for more than a quarter of a century, that usually serves between 20,000 and 30,000 clients a day – have temporarily suspended operation, while others are looking for new ways to attract or retain customers during the coronavirus pandemic. To maintain revenue and keep up relationships with existing clientele, many restaurants maintain part of their core business and keep their kitchens open by delivering food to homes or offering for the order to be picked up. Others offer ready-made food kits including chef recipes, for the easy preparation of meals at home.

Digital drinking and virtual happy hour

spirits have done the same. Business is also better than usual for alcohol delivery services in Estonia and Lithuania, with people often packing more into their virtual shopping carts while sheltering in place. The temporary changes might help businesses crack into the delivery space during the pandemic. However, for both bars and restaurants it is often scant compensation for the losses caused by the fall in the numbers of bar-hoppers and people eating out. In many cases it is less about turning a profit than about staying afloat. For restaurants, the income generated by home delivery also often does not even cover the fixed costs for rent and other expenses, according to industry experts. This is especially true for prime catering areas in the capitals, but eateries in small towns and rural areas are also facing difficulties. “Fortunately, the

banks came to us and we received a grace period,” Meelis Kirsi, owner of the Kirsimari restaurant in the small borough Ambla in central Estonia, told the Estonian public broadcaster ERR. Asked about the future of the restaurant he said that his business is operating in the red with only limited cash reserves. “I think we have two months, if there is no state aid, that’s all.”

Not a time for profit While for newly opened restaurants the biggest challenge will be finding a customer base that did not exist before, established catering firms have to figure out how to run the kitchen and build up their delivery logistics. “For restaurants it is very difficult to adapt to home delivery, because it is a very specific product,” says Jānis Jenzis, President of the Latvian Restaurant Association, explaining the situation to the Latvian news agency Leta in an

interview. New menus are a special matter of importance – restaurants that so far mainly relied on dinein customers often do not serve food that is delivery friendly. And also, adding takeout dishes to the menu at a restaurant is not as simple as putting food in boxes. Without a physical presence in their customers’ lives, many restaurants now have to rely on third-party delivery companies for taking their food to their clients. This has been a boon for platforms such as Bolt Food and Wolt that both reported more on-boarding requests from restaurants that want to be added to theirs apps, who typically have to pay a commission fee to operate on the platforms. Using these services provides a lifeline and is a good tool for short-term cashflow, but not necessarily for profit, according to restaurant owners and industry experts.

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In Estonia, the two technology companies Voog and Fleet Complete came up with a new order and payment solution to help restaurants launch their own food delivery service by using its existing workforce. One of the first users has been the street food restaurant Kolm Tilli in Tartu. “We have to go along with the situation, and we will do this so that one day the guests can come to Kolm Tilli again,” said board member Mikk Valtna, describing the motivation for shifting to home delivery. “We will try to fight final closure at all costs.” Other kitchens have now turned from feeding customers to preparing meals for medical staff, or have teamed up with a civic initiative to make and distribute meals during this difficult time. In Lithuania, temporarily closed restaurants donated their leftovers to food banks, while others are supplying free food to workers in hospitals, volunteers and those in need or who are in isolation. Similar initiatives are popping up in Estonia and Latvia as well.

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HOTEL AND ACCOMMODATION BUSINESS The coronavirus outbreak has paralysed the Baltic hotel industry: Most of the facilities providing guest accommodation and related services in Estonia, Latvia and Lithuania are currently closed since there is no longer any business. Tallink Hotels – a subsidiary of the listed Estonian shipping company Tallink –announced that it has suspended the operation of three out of its four hotels in Estonia and Latvia due to a slowdown in demand, resulting in the loss of 130 jobs. “Ibis Riga Centre and Pullman Riga Old Town are closed. Mercure continues to work with a minimum number of employees,” the General Manager of Ibis Riga, Pullman Riga Old Town and Mercure Riga Centre Valdis Vanadziņš told BBQ. “We welcome guests from other hotels where they do not have the opportunity to stay. And we have several guests who use the premises

Photo: Kęstutis Kurienius

Many restaurants now have to rely on third-party delivery companies for taking their food to their clients

as a home office because they have to be in a video conference all the time and the home environment is not suitable for this. We make the price for such an offer flexible, because the stay is significantly longer than the standard 2-3 nights,” he adds. “We have applied for downtime, as well as the support offered by Altum. We are waiting for an answer. Of course, it is difficult to estimate how the industry will recover and how long it will take to recover from the usual workload and number of events, but we have good preconditions that our partners will appreciate - a team of the best professionals,” V. Vanadziņš explains. “Normal operations of the hotel have been suspended indefinitely. We are cooperating with medical institutions by providing free of charge services for the self-isolation of medical associates. Possibilities of cooperation are now very limited as national borders are closed and most of the hotels are non-operational. But the recovery we will require strong cooperation of the entire hospitality industry in the future once we become open for travellers again,” says Asta Abišalienė, Director of sales and marketing at Courtyard Vilnius City Center. “Our hotel is included on the list of companies to receive tax reliefs. It is yet to be seen if any other substantial state aid will be provided. COVID-19 has greatly impacted our business with a large percentage of associates on furlough, and others being asked to work in a different (virtual) capacity. During this challenging time, associate development continues to be important and our management company is committed to continuing to provide learning opportunities to all our associates. Our Catering Department is developing a new concept and new services for our future events. Our Management Company’s Development team has created a Catalogue of free digital learning programs for all

our associates on a voluntary basis. This includes a number of on demand digital learning opportunities,” A. Abišalienė notes. “Hotel Telegraaf paused its operations on 18 March 2020, until further notice. We planned to be closed until the end of April 2020, but it will all depend on the situation regarding the spread of the virus and the Estonian government’s decision on the state of affairs in the country. 90% of the hotels in Tallinn have closed their doors due to the virus,” explains Anton Jolkin, General Manager at Hotel Telegraaf with regard to the situation in Tallinn. “Hotel Telegraaf will use state aid in terms of payroll through the Estonian Unemployment Fund for April and May 2020. In cooperation with the Estonian Hotel & Restaurant Association, we are also trying to get business support from the state. However, there is no confirmed plan for this from the government yet. We are all waiting for the borders to open again and to start normal hotel operations. However, we understand that previously set goals for 2020 will not be reached this year. Therefore, it is crucial to minimise costs and “survive” this year, in order to come out strong and ready for 2021,” Anton Jolkin adds. “The Original Sokos Hotel Viru and our restaurants Amarillo and Fafa are still in operation, but the services have been reduced, e.g. the restaurants only sell Take Away food. We cooperate with other hotels through the EHRL, Estonian Hotel and Restaurant Association, board meetings and agreed policies,” says Klaus Ek, the Managing Director at Original Sokos Hotel Viru and Solo Sokos Hotel Estoria. “The main focus of the EHRL has been on state aid for the tourism sector, which is badly needed in this very challenging economic situation. The government has announced a € 25 million support package, but we think it should be

tripled to have a positive impact on hotel and restaurant cash flow. The state supports the wage costs of our employees and has been positively active in these matters. We have not rented our rooms for quarantine purposes, instead we will present a day room concept, where guests can rent a hotel room for a day and use it for office services and the like,” emphasises Klaus Ek. “Our strategy right now depends on the support measures because we understand that we won’t be able to come out with zero layoffs; there will be people who will probably lose their jobs. Some businesses that will not survive will have to close. Looking forward, if we want to maintain the comparative advantages and competitiveness in the hospitality sector, we need to ensure certain hotels and restaurants keep running their business,” says Maarika Liivamägi, General Manager at the Estonian Hotel and Restaurant Association. “Doing business responsibly with regard to local communities, employees and customers has always been there, but now when we see a reduction, it will be crucial to maintain motivators other than money to keep the necessary vibe alive. Flexibility and adaptiveness towards change will prevail, customer behaviour may change, and hotel concepts will evolve because of this. The present time is actually a very good opportunity to revise the positioning of the hotel or restaurant by playing around with different scenarios that might happen in the future,” she adds. “The situation really is very bad,” warns Evalda Šiškauskienė, head of the Lithuanian Association of Hotels and Restaurants. She predicts that the sector will not recover soon and some hotels will have to keep their doors closed after the crisis. The association

is thus – like its counterparts in Estonia and Latvia – lobbying the government for state support measures and downtime benefits for employees of the sector. “Our tourism sector employs 48,000 people and in our sector – hotels and restaurants –30,000 work”, stresses Šiškauskienė.

Self-isolate comfortably for two weeks or more To keep their lights on, hotels and short-term rental businesses across the Baltics have been looking for non-traditional ways to keep cash moving and employees working. Quite a few have been reaching out to those who actually have to stay at home and try to salvage profits through rentals to returning compatriots. A number of cashstrapped hotels in the Latvian capital Riga offered their empty rooms to serve those who must remain in quarantine for 14 days after returning to Latvia or have been in contact with an infected person. “Our hotel is a safe place for your self-isolation. All our rooms are regularly ventilated, hand sanitisers are provided throughout the hotel, staff are trained to work in the current circumstances and strictly observe hygiene rules,” reads the promotion on the website of the Rixwell Terrace Design Hotel. The offer includes a room for 29 EUR per day with breakfast, that like any other food or room service will be delivered without contact and left in boxes outside the door. Other quarantine measures that matter in times of the coronavirus are a private shower and toilet and complimentary WiFi and TV available 24/7. “We can even arrange for a doctor to visit you if required”, the hotel claims. In total, hotel rooms are available for more than 2,000 people, according to the Riga City Council Welfare Department that allowed hotels across the city to apply on their

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The actual demand is at least ten times higher than their availability, according to Birgit Linnamäe, a board member of the operating company Kodasema. But even if there was a market, the company does not want to a make profit out of the situation. The service is offered for a symbolic fee, Linnamäe told the Estonian public broadcaster ERR.

Coronavirus hideouts and comforting refuge

website in order to be allowed to host guests for self-isolation. The rates for rooms range from 12 to 74 EUR, which will be paid by those residing in the rooms, thus ensuring some amount of income for the hotels. The Hotel Roma at the entrance to Riga Old Town even opted for a pay-what-you-can-approach but later had to suspend operation due to the low demand and the tax authority’s rejection of a downtime benefit application. Whether or not the legendary hotel, that has a rich history dating back to the beginning of the last century and was the premier hotel in Riga in former times, will reopen again any time soon, remains open to debate. In Lithuania, the Urbihop hotel in the capital Vilnius, which belongs to the Darnu Group, has also been accommodating returnees from foreign countries that were obliged to comply with the quarantine conditions imposed by the Lithuanian Health Ministry. However, providing the rooms to compatriots for whom

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the ministry has ordered mandatory 14-day isolation at municipal premises was not free of difficulties and tension. “It seems that some of those who find themselves here confuse the necessary isolation with staying in a sanatorium”, noted Sigita Survilaitė-Mekionienė, CEO of Darnu Group, regarding her guests in the hotel, where rooms were offered free of charge by her company to Vilnius Municipality. Tomas Grizas, head of the short-term rental service Houseys, also did not hide his anger about the behaviour of some compatriots, but is at the same time stressing that among the returnees there are many people who deserve to be quarantined in good conditions. “Not all returnees behave like some pigs,” he told the internet portal lrytas.lt, basing the comment on the experience of providing housing to quarantined people in around two dozen apartments. Similar to many other housing rental agencies, Houseys has changed the focus of its business

during the coronavirus pandemic, offering apartments for a longer period of time – from a week to a few months – at more affordable prices. Some of them have even prepared for the “quarantine business”. Thanks to the advice of business partners in Italy, the Lithuanian short-term rental and property management company Urban rent managed to order disinfectants in a timely manner in advance to prepare their housing for returnees from abroad. “The demand has exceeded our expectations. We did not know that so many returning people would focus on rent,” co-owner Ieva Juodpusytė reported to lrytas.lt. Almost half of the 60 objects administrated by the company were at least temporarily occupied by returning Lithuanians. There has also been great interest in the fully-furnished Koda microhouses that were immediately suitable for offering quarantine accommodation because each unit is separate and has its own ventilation.

Surfing the Facebook pages of Airbnb hosts and other holiday home-owners in the Baltics shows that some of them are also trying to seize the moment. “Self-quarantine apartments for very special prices” [sic!], “Prepared for self-isolation” or “Affordable Self Isolation in the Centre” say the posts for their properties – although it remains unclear how much success they are having with advertising them as coronavirus hideouts. Other owners, in turn, offer their accommodation for free to quarantined people that need an equipped place to stay, or to medical personnel afraid of infecting their families. Similar initiatives for healthcare workers have also been taken by many hotels around the world that were shuttered to the public in recent weeks in order to follow the rules set by governments and health experts. In Estonia, the Radisson Blu Sky Hotel Tallinn – a 24-floor glass pillar that boasts lodgings with superb views across the city – has now opened their 280 high-end rooms for use by emergency medical staff. General Manager Kaido Ojapev believes that offering first responders and health workers a place to stay between their shifts will alleviate some of their stress in fighting the coronavirus outbreak. “They work long hours, then sleep for a while and head to the front line again,” he told

the ERR radio show Vikerhommik. “These people are so busy with their daily work that all they want to do in the meantime is rest.” Before accommodating medical personnel, the hotel was in conversation with health and government authorities to figure out the best practices. “Right now, there are a lot of ambulances parked in front of the hotel,” Ojapev said, “This allows us to keep the hotel running, so we don’t have to close our doors. It’s not profitable, however.” In addition to medical staff, Radisson also hosts some customers that are involved in long-term projects in Estonia, which began before the crisis started. Some other hotels in Tallinn are also still having guests of this type, according to Ojapev. He does not expect new corporate travellers to come in soon. “As a purely business and conference hotel, we are not seeing these signs today, but rather a relatively bleak situation in the country,” he said. While the need for lodgings for workers on the front line is about to increase, the demand for quarantine accommodation for returnees will come back sooner or later. Trying to swim against the tide and keep heads above water, several businesses have already directed their marketing efforts to another possible customer group. “Work from another home without worries” – this is how the residential property management company Domillion advertises its rental flats in Vilnius to people who are now working in home office mode and cannot find the necessary peace or space within their own four walls. Also targeting the increasing demand for isolated and secure individual working environments is the Estonian startup MySpotit, which operates an online booking platform for remote workplaces and offsite meeting venues in Estonia and Latvia. “We have created a selection of spaces

that are spacious, well ventilated, and in every case thoroughly disinfected”, the company writes on its website. MySpotit co-founder Hardi Kinnas is convinced that the experience of the crisis will permanently change the way we work and open a new market for customised working areas. “There is a need for space that encourages quiet concentration but at the same time allows you to isolate yourself and stay healthy”, he says, calling on owners of suitable and currently vacant premises to join his platform. “We want to help ensure that people are efficient in their work and that the spaces left by tourists continue to be profitable for their owners.”

TOURISM AND TRAVEL All three Baltic countries have restricted inbound travel by banning foreigners including tourists and short-term visitors – measures that are likely to badly severely damage trade and travel-dependent economies. Taking a snapshot of coronavirus-induced losses or estimating the future damage is difficult, as the data changes as quickly as the virus spread. But it is clear that few industries have fallen as deep and as fast as tourism. “Tourism was hit first by the crisis and will take the longest to recover”, the Estonian Hotel and Restaurant Association board chairman Peter Roose wrote in a letter to the government, according to Estonian media. He indicates that business has come to a halt for the accommodation and catering sector in Estonia and provides dramatic figures: 95 percent of accommodation establishments and restaurants have already closed their doors, and 98 percent of employees are currently at home. The Association has thus called on the government to grant

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a tax moratorium to the around 3,000 companies operating in the Estonian tourism sector and apply a zero VAT rate to accommodation and catering services until the end of 2021.

A terrible toll on tourism Amid the state of emergency that has been introduced in Estonia, Latvia and Lithuania over the Covid19 crisis and international travel restrictions, travel companies have helped travellers both to change or postpone their trips and get back home. Following the complete halt of all organised passenger traffic, thousands of customers are entitled to refunds for their cancelled holidays. Tour operators are struggling to meet this legal obligation – it has even brought some to the brink of bankruptcy. “In tourism, so-called debt traps have emerged, where the debt chain sweeps through a network of many intermediaries”, explains tour operator Baltic Tours Group representative Rasa Levickaitė on the Lithuanian internet portal Delfi. “The problem has become not the business

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Right in the middle of it are tour operators and travel agents that are being asked to provide full refunds for holidays to their customers, while they themselves are waiting to receive money back from grounded airlines and hotels that have closed because of the pandemic. “Where should a tour operator today find the means to pay back the prepayments within a very limited time, if the service providers holding the prepayment are only offering the possibility of using the service at a later date and not refunding the money?,” Mariann Lugus, secretary general of the Estonian Travel and Tourism Association, asks rhetorically. The situation is being further exacerbated by the typically small size of the travel businesses, especially in the Baltics. Many of them do not have the financial resources to weather hard times, let alone pay immediate cash refunds on a mass scale and stay solvent. Tour operators have been pleading with customers to postpone instead of cancelling and the travel associations in Estonia, Latvia and Lithuania have urged their governments to take immediate action, warning that mass cancellations will lead to a meltdown of the sector. “The mood is undoubtedly pessimistic”, says Levickaitė. The situation is not better elsewhere. Worldwide the travel industry is

than realistic. Not least because the situation in the main source market for the Baltics – the Nordic countries, Germany and Russia – does not allow much optimism about a quick rebound in international visitor numbers. Travel restrictions have hit the tourism industry and the key player in the Baltics’ sourcing markets hard, and holiday travel has ground to a halt – be it inside or outside the countries. “It is already clear that the 2020 travel season will suffer losses and that that the annual holiday of the majority of Germans is probably not taking place as planned”, states Ulrich Reinhardt of the Hamburg Stiftung für Zukunftsfragen that also conducts scientific and statistical research into current attitudes and behaviour in the tourism sector.

Inbound tourism has come to standstill and there are no new bookings. From inexpensive hostels to five- star resortsno one has been spared.

in freefall. The World Travel & Tourism Council (WTTC) estimates that a million jobs are being lost every day in the travel and tourism sector because of the pandemic. “From waiters to taxi drivers, tour guides to chefs and caterers, pilots to cleaners, the relentless cascade of job losses is plunging millions of families into terrible hardship and debt”, said WTTC president and CEO Gloria Guevara. “The domino effect of Covid-19 is having a massive impact right now, wiping out an entire economic sector.”

When can we, and will we travel again? There are a lot of different opinions and theories about how the recovery will take place and how this pandemic may change the world of travel in the long term. But nobody really knows, because the virus is in charge. “Travelling is closely related to close physical contact, which people will avoid for some time”, says Levickaitė, giving a general assessment. In

Photo: Matīss Markovskis

The situation is not much better further south. “Inbound tourism has come to a standstill,” Inga Kavaca, president of the Latvian Association of Tour Agents and Operators, told the Latvian news agency Leta in an interview. All inbound tourist trips in April and 60 percent of the ones in May have been cancelled, and there are no new bookings. From inexpensive hostels to five-star resorts – no one has been spared. “The Latvian tourism industry is therefore on the verge of collapse,” she warned, adding that the workload of tour operators and travel agents has been extensively high for weeks as re-booking and cancellations have accumulated over a short period of time.

models but the closing of borders and the global liabilities chain reaction that occurred within one week.” This has left a high financial burden on the sector that is going through “the most difficult period in its history”, according to Levickaitė and other travel experts. It has weathered problems from natural disasters to terrorism to recession, but nothing comes close to the Covid-19 crisis.

the near future, people will thus tend to travel more carefully, keep a greater distance, and observe greater hygiene. But the Lithuanian expert is convinced that in the long run, previous travel habits will return. “While technology makes it possible to reduce travel for business or business meetings, leisure and recreation travel is an indispensable experience. It’s a way of life, it makes dream come true, and it’s the most meaningful thing people can do in life”, Levickaitė claims. “Travel cannot be replaced by anything.” Tourism experts and industry observers expect the recovery to be a gradual resurgence and to start with domestic short trips to small hotels in the nature and coastal areas, while large meeting and resort hotels will be initially avoided by travellers. International and corporate travel will only return later and might be less than before, and hotel conference rooms and other event venues are also not likely to be filled anytime soon – be it in the Baltics or elsewhere.

However, any future travel activities depend on continued success in flattening the curve of transmission of the virus – and this could change rapidly in the event of a new spike in infections. The situation in China, where the pandemic began, might provide a glimpse into the future. Now that the spread of the coronavirus is reportedly under control there and restrictions are being lifted step-by-step, there are early signs of recovery in the tourism sector. The upswing is largely based on domestic tourism – as China strictly limits the number of foreign visitors to ensure that the virus does not resurface again. The Baltic states are currently following China’s trajectory in terms of their anti-coronavirus strategies. Whether they will also do this in the tourism sector still remains to be seen. China’s domestic tourism market is many times greater than those of Estonia, Latvia and Lithuania put together – so the comparison might be more hopeful

Yet the head of the Hamburg-based foundation is sure that German outbound tourism will rebound sooner or later. Whenever the travel restrictions and other limitations are eased, it is just a question of time regarding when Germans are going to start hitting the road and flying around the world again. “We know from the past that neither the European debt crisis nor the financial crisis, epidemics such as Sars nor natural disasters, such as tsunamis, earthquakes, hurricanes, or terrorist attacks, have permanently prevented German citizens from packing their bags and travelling”, says Reinhardt, offering an optimistic outlook. The most important thing for the Baltic travel industry is to be ready for when that moment comes and international travel picks up again. Visit Estonia, the state-run agency responsible for promoting Estonia abroad, in a smart move, has already adapted and changed their campaign slogan on Twitter from “Visit Estonia” to “Visit Estonia... later. #stayhome”.

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Challenging times also provide new opportunities Despite the fuss and uncertainty about expansion regarding the emergency situation caused by Covid-19, experts indicate that the Baltic states have enough food by ANDA A SERE

“We can provide ourselves with the basic food products and, if the need were to arise, we do not have any difficulties in the Baltics refocusing on growing some missing culture. With regard to flour, meat and dairy products, we are completely able to provide for ourselves. We grow vegetables for approximately 65-75% of consumption, and we grow fruits and berries for 20-30% of domestic consumption. We have to mention that restrictions introduced in the HoReCa segment will leave an impact on consumption and self-provision. Therefore, we will even be able to provide the volume of fruits, berries and vegetables cultivated in Latvia much better than before. Enterprising people in the countryside help very much in such situations, providing neighbours with different home-produced products; therefore, we do not have any concerns about the lack of food,” says Raimonds Miltiņš, Agriculture Expert of Swedbank. Also Normunds Staņēvičs, Head of the Food Union in European Countries, expects that there will be enough food for everyone, if the situation remains at the current level. “We have also performed analysis and customisation of the supply chain of raw materials and packaging, in order to provide reserves in the sufficient volume for a longer period of time. However, we should take

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into account that if the situation were to worsen or continue, there are certain risks of exhaustion of stocks and disruptions in supply,” says N. Staņēvičs. In general, he currently assesses the situation as satisfactorily stable - demand for retail goods remains without any statistically important changes. In turn, the suppressed HoReCa sector and the completely exhausted School Dairy programme serves to a certain extent as a capacity buffer for the operation of the company - if it were to be necessary, it will be possible to produce more dairy and other food products for daily consumption at the expense of this. “Rīgas Dzirnavnieks has sufficient stock of raw materials in order to provide supermarkets, bakeries and others with products. The company currently operates at full capacity, even exceeding the production plan. The specifics of the company currently enables one not to worry about cereals. Purchases of them from farmers are performed in sufficient volumes, in order to ensure production for a sufficiently long period of time further on up to the new season of cereals and even longer,” says Gundega Breģe, Sales and Logistics Director of AS Rīgas Dzirnavnieks, emphasising that the company takes care of sustainability to ensure continued production; for example, the majority of processes are automated and a detailed plan on the replacement

of employees has been developed, which will enable one to ensure continued production, even in the case if sickness with the novel virus is established for any employees. “Baltic countries are food producers. Exports have slowed down because of the logistics problems, therefore more food is staying in the area. There could be problems with certain specific products, but these will probably be replaced with others. To my mind there could even be overproduction because the HoReCa sector is not operating,” believes Jorinta Zolubaitė, AB Linas Agro Group Head of Corporate Communication. Maira Burmistre-Dzelzkalēja, the Deputy Chairperson of the Union Farmers’ Parliament, indicates that farmers will be able to fulfil the demand for all basic products - milk, meat, cereals, potatoes, carrots, red beetroot, cabbages, onions. But if we talk about berries and fruits, then the amount will be as much as the plantations produce and how much can be picked and sold. “Currently, in Latvia we produce two times more dairy products, almost three time more cereals and one and a half times more eggs than we consume,” she says. Active work is currently being performed on the development of direct sales channels between the Latvian vegetable growers and consumers. There will be enough food for everyone, if the situation remains at the current level, Normunds Staņēvičs, Head of the Food Union in Europe

Comparatively slightly affected industry

“Currently we see that the situation is changing not only by the day, but even by the hour. We can currently say that the crisis has affected agriculture minimally, if we compare it to the situation in transport, tourism, HoReCa and other fields. The purchase price for milk is reduced for dairy producers by 5-10% and purchase prices of live weight for beef livestock producers have fallen by 10-15%. For cereal growers, there is still a long way to go before the autumn and the sale of the harvest, so it is too early to say that this sector will not be affected by the crisis. The overall situation in the agriculture market will depend on myriad factors - the spread of the virus, currency exchange rate, export bans, transportation restrictions, weather conditions, etc.”, says R. Miltiņš. M. Burmistre-Dzelzkalēja says that dairy cattle breeding is feeling the negative impact of Covid-19 the most. At the beginning of April, the purchase price of milk decreased by 10-15% in comparison with the beginning of March. The price decrease in export markets also adversely affects the livestock sector in Latvia, because the demand for beef is decreasing in international markets, while in the pig breeding industry they are still managing to sell practically all animals suitable for slaughter. “In the current situation the egg production industry, which exported the majority of their products until now, is also suffering. Vegetable deliveries to schools and public catering have decreased to almost to 0. This means, if the company thus far sold 50% to stores and 50% to schools, then currently this 50% is accrued in stocks,” she indicates. G. Breģe says that the winter has been beneficial for winter crops, which is a positive message. While farmers are now preparing for the sowing of summer crops, rye and oats. “Currently our cooperation partners have confirmed their readiness for

the new season according to the regular course, therefore, we hope for beneficial weather conditions for growing cereals,” she says. Elizabete Andersone, eAgronom Latvia Country Manager, has observed that the dairy cattle field has the biggest issues - it is the most severely affected field in agriculture. “There is tough competition in the food agriculture market, prices are low. Milk prices have always been low, but now they have decreased by 10 to 15%. While farmers, who have their own dry-houses and warehouses, may store grains and wait for a better purchase price, dairy cattle breeders do not have such possibilities. Purchase prices of milk start to decrease below the prime cost or remain on the level of prime cost, for as long as the regular ways of export are not available ,” she indicates.

Without physical contact

“Taking into account that this year plant vegetation requires works to be commenced approximately 1-2 weeks earlier than other years, we may say that in this area nothing has changed this spring, all seed materials, mineral fertilisers, plant protection means have been ordered and produced in a timely manner. Therefore, 95% of product deliveries to agriculturists are on time. Purchases in internet stores for such products and volumes are not available. This work is performed by trade specialistsagronomists,” says R. Miltiņš. J. Zolubaitė explains that the company doesn’t have retail stores, and sales are made over the phone via the network of its salesmen that are agronomists as well and have always worked remotely. The goods are brought to the farmstead or to some other safe place without physical contact. “Some grass and lawn seeds are traded online (smaller packages) in Lithuania, as it was before. AB Linas Agro had plans to launch a new online shop in March, but hit a delay, therefore the old one was quickly re-opened to complete the sales of seeds. The only changes in

A digitally more progressive society is definitely a good side effect of this crisis, Elizabete Andersone, eAgronom Latvia Country Manager

the daily routine are additional means of protection, constant disinfection, etc.,” says J. Zolubaitė. She adds that the longer the lockdown lasts, the more flexible business becomes. The main bottleneck is logistics, because of the quarantines and material for packaging – as it comes from China. “Farmers, food producers and retailers have to put more efforts and maybe rethink their chain, change suppliers or packaging,” says J. Zolubaitė. E. Andersone says that agriculturists do not have any problems with seeds and mineral fertilisers, but there have been some problems in relation to spare parts of the equipment.

Planning in the longterm perspective

When speaking about the problems faced by Food Union in its supply chains, in particular in work with farmers, N. Staņēvičs says that uncertainty about the future causes certain worries for as long as successful dairy production is based on long-term planning. Farmers have to ensure that their investments made in the spring will pay off in the autumn of the current year. “Therefore, it is important to know price trends for auxiliary materials and services, estimates for the price of dairy sales, provisions of the state and EU support. Although there is currently a certain risk, we

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recommend farmers to continue commercial activity, at least in the minimum volume, as we definitely cannot stop the process,” he indicates. It is hard to forecast anything for the future now; however, N. Staņēvičs indicates that we have to scrupulously follow the local and global events and flexibly adapt to them. Currently, one of the key tasks of Food Union is to analyse and customise supply chains and production processes, adapt to the remote work regime and stricter safety measures for work in person. M. Burmistre-Dzelzkalēja says that currently all logistics are slower, we have to pay for compliance with additional safety, and distancing at the place of work also reduces work efficiency. “Food consumption is not decreasing in the country in general, only traditions are changing. We need some time for processing and logistics to adapt to the change in market demand, but there are no issues that cannot be solved in general,” she says, Volumes of orders on the Baltic market have remained at current volumes. Regardless of the situation in the country and the world, Rīgas dzirnavnieks continues the oat growing programme and has continued providing oats for seeds to participants of the programme this year as well. This programme is important as it provides higher quality food oats, which is important for the production of Herkuless products. The manufacturer is holding to its plans in relation to new products and is responding to market demand. For example, in April the assortment of products of the company was supplemented by new rice and durum pasta of the Herkuless brand name. “This crisis has made us understand, how much we consume foreign products and how much we rely on external suppliers. Many of us still think more about supporting the local farmers and suggest consuming local products. This situation reminds us of how good soil and conditions are

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for food grown in the Baltics, which is clean and has not travelled from far away. It is a huge privilege to eat local food,” says E. Andersone.

Situations are different

For example, in Germany there are currently many vacant positions in agriculture, because the closed borders prohibit guest workers from performing these works. When talking about how the current situation affects agriculture in Latvia and the Baltic states, and whether we have enough people wishing to perform seasonal work in agriculture, R. Miltiņš says that it differs depending on the field. For example, in dairy cattle-breeding, farms entrusted the milking works in the industry to guest workers, who arrived in Latvia for a certain period of time from different countries. Currently, when the current prohibitions on travel exist, it is probable that a lack of hands may occur. As a result of the crisis, thousands of people, including Latvians, are unemployed in Europe. The majority of them have returned to Latvia in order for it to somehow be easier to survive this unemployment crisis. “I would say that hard-working hands and responsible minds in agriculture in Latvia can earn well today. Therefore, this is a possibility for agriculturists to fill the gaps for seasonal work,” says R. Miltiņš. E. Andersone says that there was a fuss in Estonia about the availability of workers in as much as quite many seasonal workers from Ukraine previously worked there in agriculture, but the latest news shows that borders will be opened for the attraction of new agricultural employees. “It could be complicated for certain companies in Latvia, which have established good cooperation with guest workers, to find employees, but our industries have mostly not relied much on the imported work force. During previous years approximately 3700 people were employed in the seasonal agricultural worker tax

regime, while seasonal workers from abroad in Latvia are usually slightly above 1000. Therefore, we do not expect such a crisis like in Spain, Italy, France, etc., where these sectors are based on foreign workers to a large extent. So far we have been short of hands in agriculture in Latvia and farms of the industry were not able to make up all the necessary staff, but with this crisis many people are currently losing work and their income, therefore, the interest of people in working in agriculture has increased. If the Latvian people will wish to work manually, then agriculturists will be able to substitute the missing hands and unemployed people will be able to provide additional income for themselves,” says M. Burmistre-Dzelzkalēja.

Side effect - digital development

“Currently the overall goal of the use of technology is safe mutual communication and the operative movement of information. At the same time, if farmers follow up on the online information flow and analyse it, that will make it easier to adopt further decisions for their commercial activity. When cooperating with farmers, we consider it our duty to provide our partners with all the information necessary for them to the extent possible - we do it, for example, with the help of the digital tool Smart Dairy Producer and regular e-mail communication, summarising the most important current events of Food Union as well as the industry,” says N. Staņēvičs. He admits that this crisis will serve as an incentive for agriculturists and farmers to become technologically more developed. “In the digital environment it is possible to acquire information in the most rapid way; therefore, it is a vitally important resource, which is necessary for the viability of farms. Besides, farms quite often face a lack of performers of manual work; therefore, technologies may also help them in this regard. In other words - a digitally more

progressive society is definitely a good side effect of this crisis,” he believes. E. Andersone indicates that there is a fuss among farmers regarding the impact of the crisis on the economic situation. “Each technology means new investments in order to introduce it in the farm, and they are currently afraid to invest while they are concerned about prices and the future. Several potential customers have said that they like our product, but they are afraid to invest while they are worried about the prices of grains and future demand. Concerns exist about the increase in demand for lower quality and accordingly also grains of the lowest price, as long as the purchasing capacity in Europe and the world is decreasing within the framework of the crisis. In the Baltics, farmers have comparatively high-quality harvests that they do not wish to sell for low prices,” she says. E. Andersone adds that this crisis has made agriculturists think about risk diversification and the possibility to expand activities in other fields. A part of them already combine, for example, forestry with agriculture or dairy cattle-breeding.

New channels are coming

Developers of the agriculture management computer programme for cultivators of grain eAgronom, created in Estonia, have established a new way to sell their solution under the influence of the crisis. “Our previous sales model determined that the sales representative went to the farm and demonstrated to the farmers on-site how eAgronom works, but quite often during the sowing period in March, April and May, farmers had a lot to do and quite often the meetings were cancelled at the last moment. Now we have moved to online sales - via the phone or by using the programme, where we can demonstrate our software. These online meetings usually take place during the morning or later evening hours, when farmers are back home and we may easily show and tell them about our product. We have always thought that we have to start selling online as a great deal of

time and resources are invested in order to meet in person; for example fuel in order to visit the farmer; but currently the crisis situation has forced us to do so. Let’s say - this is some benefit from an otherwise complicated situation in general,” says Elizabete Andersone, eAgronom Latvia Country Manager. A big part of farmers are open to forced remote communication, besides the target audience of the solution comprises people who do not have any problems using a computer and other technologies. “In general agriculturists are advanced - it is very complicated to drive modern tractors,” she says. The biggest challenge in this process is to reach the moment when the sales specialist and the farmer are at the computer at the same time and may discuss the opportunities provided by the software. “When we persuade them that it will not last for longer than 20-30 minutes, it is not so problematic,” says E. Andersone. The company has also made changes to the product offer. In addition to the basic product, which is a farm management programme, eAgronom has already had the consultation service - Agribusiness Intelligence Advisory (AIA) consultations, for some time. Currently the company offers AIA Online, where consultations are performed remotely. A solution has been found for the remote inspection of fields, in order for farmers to continue to receive high-quality agronomic and business consultations. “We have already received the first positive feedback and to some extent this situation has helped us to change stereotypes about the fact that consultations in agribusiness cannot be performed when not being on site in the farm and not seeing the fields. Everything is possible, if the situation demands it,” says E. Andersone.

Previous experience is useful “Daily routines have changed completely as we communicate in a different way. It is not always

comfortable to discuss and share ideas online. We will probably use new forms of communication more often in the future instead of constant travelling. And we will surely consider expanding e-shopping,” says J. Zolubaitė. When talking about how the everyday business life of Food Union has changed, N. Staņēvičs says that the experience gathered in 2014, when an embargo on dairy products to Russia was introduced, is useful for the company, and the company refocused its business strategy, became digitalised and learnt to be cleverer in the circumstances of a variable environment. “Food Union is an international food production group of companies, present in 9 countries of the world. In relation to the spread of Covid-19, we already introduced preventive measures in all our companies on 28 February of the current year, in order to reduce the impact of the virus on our employees, cooperation partners and activities of the company in general. These are, for example - the number of visitors decreased to the minimum, temperature control at the entrance and increased disinfection measures at the work premises, and all business trips cancelled. But since 13 March, the administrative staff has moved to a remote working regime. Personnel recruitment is also performed remotely, and we only meet the applicants in person due to urgent need and work specifics. In turn, employees of the production unit continue to perform their work duties in person, following the range of additional safety rules,” says N. Staņēvičs.

Time to be flexible and adaptive

“The crisis will undoubtedly affect Lithuanian businesses; both on the domestic market and exporters. However, Lithuanian businesses, that have survived several difficult periods in the past and are currently facing quarantine restrictions, have the opportunity to apply the lessons

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provide the possibility for people to purchase dairy products while staying at home,” he says.

No quarantine on the internet

Our virtual supermarket currently has over 900 online stores, Daina Kleponė, the General Manager at Enterprise Lithuania

learnt during crises. Flexibility, the ability to quickly adapt to changed conditions, modify existing goods or start new production, discover new niches and customers, are more important than ever for businesses. We are glad to see such examples among the companies that have submitted offers. In this way, businesses not only show solidarity by contributing to the supply of necessary goods but also ensure the continuity of activities, guarantee jobs for its employees and support the sustainability of the economy. This is the biggest benefit companies currently receive,” believes Daina Kleponė, the General Manager of the Lithuanian Entrepreneurship and Export Development Agency “Enterprise Lithuania”. G. Breģe considers that in the long-term perspective both Rīgas dzirnavnieks as well as other companies will come to crisis conclusions and will assess their readiness for crises more, automate processes and ensure continuity of the production cycle, in particular, in the so important food industry. N. Staņēvičs is sure that every challenge means new opportunities. “The side effect of the coronavirus pandemic is a strong push to digitalise even more and more thoroughly. I can reveal that the whole Food Union Latvian team is currently working hard in order to

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When the quarantine was declared in Lithuania on the 16th of March, the activities of the Lithuanian Entrepreneurship and Export Development Agency Enterprise Lithuania were transformed immediately. In response to customer needs, it had to offer them what they needed the most. The usual requests for consultations about starting a business and development opportunities have been replaced by questions about what to do when the physical store is closed, how to create an online store, how to digitise a business, what to do to make an online store more visible and known. “It was clear that everything was moving to the internet and it is necessary to help Lithuanian small and medium-sized businesses to do this and be visible. We created simple methodological information on how to create an online store by yourself and invited Lithuanian companies to register their online stores that they have decided to open. During the first weekend of quarantine, the business support initiative No quarantine on the internet appeared in Lithuania. Later this initiative attracted business mentors who provide free business digitisation advice to those who need it the most. We have also received special business offers that allow us to take advantage of various discounts or receive services free of charge during the quarantine. When the registered online stores started to be publicised, well-known Lithuanian people contributed free of charge to increase the popularity of the stores. The initiative No quarantine on the internet provided assistance to Lithuanian businesses, which faced difficulties after the quarantine was announced in the country,” says D. Kleponė. As soon as the organisation invited Lithuanian small and medium-

sized entrepreneurs to register their online stores, it immediately received a lot of attention. In the first days, 150 online stores were registered per day. She thinks it confirms that this kind of business support was needed and the businesses seemed to be waiting for it. All sectors are active – clothing, food, furniture and various services. “None of them could be singled out. Everyone registered that they had online stores and created them during the quarantine. We estimate that during the quarantine in Lithuania about 10 percent of online stores were created. Considering the extent to which this business initiative is shared on social media networks by wellknown Lithuanians, it is likely that online stores will receive a lot of customers. Lithuanians like to shop online and the fact that supermarkets are closed during the quarantine, encourages them to discover this virtual supermarket that we have put together, which currently has over 900 online stores,” says D. Kleponė. She agrees that the crisis is a great opportunity, and companies are taking it. Lithuanian businesses have not only started to digitalise even more but have also reoriented their production – they started to produce the necessary protective equipment and supply it to the health sector. “We are also working hard on the second initiative Business vs. COVID-19: Supply Opportunities and Support. Currently, Enterprise Lithuania operates as an expert coordination group, collecting business offers and providing them to interested parties – state institutions, as well as publicly publishing information to other potential customers. We see that our coordinated single-window system Business vs. COVID-19: Supply Opportunities and Support has proven its worth – it is actively used both by companies that are submitting their offers and by public institutions that are planning public procurements, by the medical institutions, which need to purchase the necessary equipment here and now, as well as pharmacies and retail chains. We provide all parties with what is most needed in this situation – the opportunity to

promptly receive information, make decisions and act,” says D. Kleponė. Support your local restaurant While working at home, people still want to eat out and in this situation it means to eat in and order takeaway food. “Regarding the growth in demand, at a company-wide level, the situation varies. In some of the 21 countries we operate in, we’ve seen relative growth, and in some, the demand has remained at a normal level compared to the time before corona. We see that it depends on the situation and is different in every country. In Latvia, for example, our numbers are pretty standard at the moment. If we look at the past three and a half weeks in Estonia, the demand remained at a normal level during the first week, and grew some during the second and third week after the state of emergency was declared, and this week, we’ve seen a small upturn in demand again. It’s really hard to tell what the rest of the week is going to be like. As the situation is still relatively new and rapidly changing, determining Corona’s

overall impact is still difficult. We’ll know more over time,” says Liis Ristal, Wolt General Manager of Estonia, Latvia and Lithuania. The current situation’s impact on consumption habits of people hasn’t changed much – people who like salads still eat salads and meat lovers stick with meat. But there have been changes regarding when people eat – as breakfasts are eaten later, lunch and dinner also moves to later in the day. “It is interesting that tipping has doubled compared to the pre-corona era. It seems like people want to show their appreciation to the couriers for doing their work during these difficult times, which is extremely heartwarming to see,” emphasises L. Ristal. Asked about the long-term impact, she says it is too early to tell. It also depends on how long the restrictions last and if people really develop new habits during the stay at home period. Within the company, there has obviously been a lot to do. Wolt has moved its customer support to work from their homes in all of the

Comment:

NORIS KRŪZĪTIS, EXECUTIVE DIRECTOR OF THE LATVIAN FOOD TRADERS ASSOCIATION

Latvia is an exporter of food production. Our producers produce much more than we can consume ourselves. Basic products such as dairy products, cereals, meat products, fruits and vegetables typical of Latvia are fully sufficient for selfconsumption, and we can also supply other countries. During the crisis, only for a short time, when people were in a hurry to buy supplies in case they had to go to self-isolation, the shops had a busy time to physically fill the shelves. But now the residents have calmed down and the store shelves are full, as usual parallel with traditional trade, the demand for home food has grown several times during this time. This is a new challenge for traders, but traders have also significantly increased their capacity in this area. In times of crisis, the country’s food production and processing potential can be realistically assessed and felt. So far, only a short moment has passed in the new situation, and the current

21 countries, and put together remote introduction sessions for couriers and restaurants. Wolt also launched contactless delivery within days after the virus escalated. This is how the company minimises human contact throughout the delivery process with contactless deliveries, meaning deliveries are left at the customer’s doorstep/ entrance, and restaurants have set up separate no-contact counters from which couriers can pick up the orders without interacting with the restaurant staff. “Obviously we’re extremely concerned about how the outbreak is affecting the restaurant industry, and are doing everything we can to help out restaurant owners. We started the #supportyourlocalrestaurant campaign, and started highlighting local restaurants on the app and social media. We also lowered our maximum delivery fee, expanded delivery areas and increased the payout frequency to restaurants so they could access funds faster,” says L. Ristal. Wolt is also looking into delivering groceries. It has started to collaborate with grocery providers, like Spilva, Laima, No Bananas, Livin and others.

difficulties for the population are overcome. The difficulties that lie ahead will be related to the general downturn in the country’s economy, which will be felt by everyone. The people of Latvia do not have large financial reserves, and state support for those who will receive it in the long run will not compensate for all needs. We can only predict that the demand for cheaper food will change according to the financial situation of each individual. In previous years, the purchasing power of the Latvian population had significantly increased, and this could also be seen in the daily food purchasing habits. The situation is not the same for all traders. For small food traders who sell a variety of small items or fast food services in parallel, the drop in turnover may even be so great that it will be difficult to recover from the crisis. Also, all traders have risen in cost to meet hygiene requirements. At the moment, food retailers are focusing on keeping stores safe and food available on the shelves, but all spending will only be recognized when the crisis is over. Surprises can shopkeepers experience who rent and lease premises, as many shops are closed or have a small turnover. This means that traders will still need state support after the crisis to keep jobs and not push up prices.

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For airlines, it’s apocalypse now Many airlines are fighting for survival due to the dramatic loss of air travel demand caused by the COVID-19 crisis. Among them is also the largest carrier in the Baltic region – airBaltic.

he message has been loud and clear. “For airlines, it’s apocalypse now”, said IATA Director General Alexandre de Juniac of the dramatic consequences of the coronavirus pandemic for the flight industry. “The impact of the COVID-19 crisis is continuously evolving and deepening as the fight against the virus continues. We have never seen a downturn this deep before. In our latest scenario, full year passenger revenues could plummet 55% below 2019’s figure, while traffic falls 48%. In other words, half our business disappears. That’s catastrophic.” Those remarks made by Alexandre de Juniac on 14 April are a good depiction of the huge problems that airlines are facing. The former head of Air France-KLM pointed out that some 2.7 million airline jobs were at risk, with many more times that number of jobs on the line further down the travel and tourism value chain. The estimates are based on three-month shutdowns across much of the world. The IATA figures suggest European airlines will bear a significant part of the global hit caused by the pandemic. Carriers across the continent could lose US$76 billion in revenues this year, leaving many of them desperately short of cash. On average, international carriers had less than two months of cash on hand to cover expenses before

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coronavirus hit, according to the IATA. Following the Latvian government’s decision to suspend international passenger traffic, airBaltic was among the first European airlines to suspend operations and instead concentrate on repatriation and cargo flights.

Long-term impact

“The aviation industry in Europe and in most countries around the world has been affected like never before”, noted Martin Gauss, CEO of Latvian national carrier airBaltic on 15 April, commenting on the impact of the COVID-19 pandemic. Passenger bookings for travel by air have fallen significantly globally, and by almost 100% in Latvia. As the coronavirus crisis continues, significantly affecting demand for air travel, airBaltic was forced to further decrease its overall capacity between 15 April and 31 October 2020, cancelling approximately 50% of its flights. “There are 25,000 flights still scheduled for the second half of the year and we have over 500,000 bookings for future flights that we will have to serve”, adds Gauss. In line with the 40% capacity reduction, airBaltic is looking at laying off 700 employees. The carrier hopes to rehire them as soon as it is back on its growth path, although no one can predict when that will happen. In addition, the company CEO has forfeited his salary for the duration of the crisis, while all other managers have taken a 20% pay cut. As far as recovery is concerned,

he believes it is too early to speak of recovery, and it is still hard to estimate how long the current travel restrictions will be in place in Latvia and abroad. It is now already certain that it will take at least a few years before the airline industry in Europe is able to reach the capacity levels it provided before the crisis. What is clear is that airBaltic will restart its operations gradually, by flying no more than 22 Airbus A220300 aircraft this summer. The company has decided to retire its Boeing 737 and Bombardier Q400 NextGen fleets. “When we are back, we expect to continue our sustainable growth path outlined by the Destination 2025 business plan, flying up to 80 Airbus A220-300 aircraft five years from now”, says Gauss, trying not to lose his optimism. airBaltic still has up to 80 A220-300 aircraft on order, and it will try to negotiate an optimum delivery schedule to support its future growth. “It may take some additional time, but we will be back on our growth path, ensuring the best connectivity to and from the Baltics.” Currently, however, airBaltic has been offering its clients charter passenger and cargo flights.

Each day brings costs

As far as the financial situation is concerned, the company currently has a solid availability of finances, claims the CEO. Each new day of the crisis, however, brings significant additional costs. “While our revenue is down by almost 99%, our costs are not reducing in line.” For now,

Photo: airBaltic

by EGONS MUDULIS and ALE X ANDER WEL SCHER

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Currently airBaltic has been offering cargo or repatriation flights.

shareholders of the company are discussing the amount of resources that might be invested in equity, but no final decision has been taken. In March, the Latvian government conceptually supported the idea of invest €150 million in airBaltic’s fixed capital. This is not the first time, however, that the national carrier is facing financial difficulties. Previously, the Latvian government invested some €200 million to save the company. Fortunately for airBaltic, one of its regional competitors flyLAL, the national airline of Lithuania, suspended its operations in January 2009 due to financial difficulties. Nordica, Estonia’s national airline, however, which is another regional competitor, is still in business. For now, there are a couple of connections that still function at Tallinn Airport. Lufthansa flies three times a week to Frankfurt, Belavia three times a week to Minsk, and Finnair once a week to Helsinki. In Lithuania, however, all the regular flights are cancelled for now.

Freeze the plans

The aviation industry has never experienced such a crisis – neither after 9/11 nor in 2008, as air traffic has either been halted or considerably reduced globally, says Artūrs Kokars, CEO of the Latvian Aviation Association. In March, the decrease in flights reached more than 50% globally, and in April it could top 70%. Kokars recalls what aviation expert John Grant, a partner at MIDAS Aviation, said at last year’s

Riga Aviation Forum – out of more than 200 carriers in Europe only 10% have been making a profit for the decade. It means that before the crisis, some 190 carriers had longterm problems either with efficiency or gaining enough market share. Therefore, the companies which have the state as a shareholder or have enough financial reserves will most likely be able to survive the crisis. These companies able to reopen routes will have to understand, however, that the passenger load factor will be lower. That means additional investment in route reopening as carriers will have to work with losses. To reiterate the challenges − first, carriers have to survive the crisis, pay the bills, and restructure their business. Second, as many carriers will go down or merge, there will be a market redistribution in Europe. On the positive side, weak ones will leave the market, and that will allow work to resume for those that are efficient and restructured. Carriers that have a newer and more efficient fleet will have certain advantages. As far as airports are concerned, it is clear that competitors will try to increase their market shares with different support instruments – discounts, subsidies, and so on. For Riga, which he believes has suffered more than others as it is the biggest airport in the Baltics, it is important that the national carrier of Latvia – airBaltic − successfully reopens its routes both from Riga and wherever else it has bases. However, the top priority for Riga Airport is to reach an agreement with the government regarding the plan to overcome the crisis. For now, Riga Airport is going to drastically reduce its expenditure, stop or postpone its investments and review personnel costs. However, if there were concerns that an overheating of the economy may occur partly due to different transport infrastructure projects even before the pandemic, the

European Rail Baltica project – which will have a terminal at Riga Airport − may now become a solution to significantly support the economy in the whole Baltics, notes Kokars. He estimates that it may take 12 to 18 months to reach an 80% level of February. However, we don’t know when the vaccine will be available or how travel habits will change. And we also don’t know what will happen to ticket prices for companies unable to swallow losses for long if the passenger load factor is low. For the coming years, it is important for the European Union to revise state aid guidelines for aviation, or we will lose the advantages of aviation mobility in Europe for a long period of time. It is notable that almost all countries worldwide already have structured and confirmed significant state aid for their aviation sectors.

Some positive aspects

The executive director and founder of the Hamburg-based aviation consultancy Prologis, Gerd Pontius, expects the current crisis to further advance the consolidation of the airline industry. “Not all airlines in Europe will survive the massive downturn. Some smaller, independent carriers without state backing could disappear.” Despite all the negative consequences of the coronavirus outbreak for the airline industry, he also sees some positive aspects in the long run. “Existing over-capacities will be reduced, airline load factors will increase and the cut-throat competition to offer the lowest prices might finally come to an end”, says Pontius. “airBaltic is in a good position to weather the crisis and could emerge as a winner out of it. The management is pursuing a clear strategy, the airline has government support and is well positioned in terms of its cost structure. However, not only for airBaltic but for all airlines, the most critical question is: Are there enough financial resources and liquidity to survive a longer shutdown?”, adds Pontius.

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Transport and logistics to be restructured While the world is facing the COVID-19 pandemic, the sector that takes care of the movement and distribution of goods is already experiencing changes and optimising its operations.

by EGONS MUDULIS

epresentatives of the companies working in the sector in the Baltic states acknowledge that there will be no more business as usual. Due to the fast developing situation and lack or time some businesses did not want to comment on their activities and plans.

Still in good shape

How is the order (from clients) situation changing? “Overall in the world, economic development is slowing down, especially in countries with a high number of COVID-19 pandemic cases, like Italy, Germany, the USA, the UK, etc. Many industries closed their production, such as the automotive, machine industries. This is inevitably negatively impacting our business, so here in Latvia we receive fewer shipments to deliver,” says Mrs Snezhina Kazakova, a member of the board at DHL Latvia, a provider of express delivery services. The majority of local companies, however, have found a way to keep their business running and therefore DHL Latvia shipments from Latvia to the rest of the world are maintaining their recent levels before the crisis. As a result, the company does not need to carry out layoffs and continues operating at full speed. During the days with lower shipment volumes, some of the people take holidays. Every employee outside the operational department is working from home. The company has not asked for any governmental support as it is in good shape, and

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Mrs Kazakova hopes that it will not be forced to ask for it. “But if the need arises, we will.” As a daughter company of DPDHL, which is in very good shape and even paying dividends this year, DHL Latvia does not see any risk to its existence on the Latvian market. As far as border crossings are concerned, the company experienced fairly considerable issues with road transport in the first couple of weeks, after most of the countries took protective measures, but now everything is back to normal. “Everybody understands the necessity of commercial transportation, especially in hard moments like this. We have never experienced a problem with air transport since we have our planes and currently DHL is the biggest airline company in the world, which is still operational with its more than 250 planes.” Although nobody knows how long this crisis will continue, Mrs Kazakova hopes it will not last long, since all countries are already thinking about how to enable their economies to recover from it. Currently, China is slowly increasing its trade volumes, so there is hope that other countries will be able to do this soon as well. As to what extent – it depends on the industries. Passenger airlines and tourism business are the most impacted with almost 100% losses at the moment; the automotive and machine industries are the next ones, which took a big hit, but pharmaceutical and food industries are not experiencing difficulties. “So overall, the world’s business analysts

predict that it will be a hard crisis (similar to 1929), but let’s see. Maybe we can recover quicker in the 21st century.”

Changes are coming

Commenting on the impact of COVID-19 on its business, Mr Jānis Meikulāns, member of the board at Latvian branch of global transport and logistics company DSV Latvia, says it is hard to predict precise numbers, but in April orders from clients may decrease by approximately 20%. As far as employee layoffs are concerned, such a possibility cannot be excluded in the case of orders falling considerably. The pandemic also forces us to think about the optimisation of all the company’s operations. He is following the government’s decisions during the emergency to support both employers and employees. For now, however, the company does not meet the requirements for support mechanisms. Nevertheless, the situation can change rapidly and the company will apply for support if necessary. Asked how big a concern the inescapable decrease in turnover is for the company as a part of a global group, he explains that it is a misconception that the parent company takes care of everything. In reality, every branch has to reach goals set by itself and accepted by a parent company on its own. Although there were problems for lorries crossing Poland for a couple of days, now cargo flows through the country are not being slowed down. According to the site covid-19.sixfold. com, the maximum time for a truck to cross any border with Poland was one hour or less on the morning of 16 April, to cross the Lithuanian−Latvian border might take up to half an hour, and there was no significant slowdown detected on the Latvian−Estonian border. However, as the European gauge Rail Baltica infrastructure connecting the Baltics and the rest of Europe is expected in 2026 at the earliest, railway transport is currently not used to carry cargo in this direction. Mr Meikulāns also acknowledges that the stopping of air traffic to Latvia causes some problems.

Asked what clients’ expectations are about the development of the crisis, he says that they also have no idea what will happen and when different restrictions will be lifted. It is clear, however, that the purchasing habits of people are being changed during the pandemic. For now, it seems to be impossible to say what scenario will take place – either people will want to make up for lost time and increase spending (this would mean a lot of orders for logistics companies), or the situation will never be the same again. It may well be the case that certain goods (of non-primary importance) will not be purchased for a while due to a lack of income. Mr Meikulāns is convinced that until production prices here are lower, China will remain the manufacturing superpower.

Numbers down

“As retail has dropped by around 20−40% because of special restrictions in all the world and as well in the Baltics, the decrease in volume is also remarkable in the 3PL business segment depending on the customer base the company has,” says Rainer Rohtla, CEO of Via 3L Group, a logistics company operating in all the Baltic states. In international forwarding, the drop is not as extensive as the fulfilment of orders takes time for production companies and orders made before the crisis must be delivered. One can already see a decrease in volumes from last week (15), because a new flow of orders has stopped for production companies, which also leads to lower volumes in international transportation. There is some growth in the fast-moving consumer goods segment as wholesale companies would like to ensure their warehouse levels in the case if restrictions more heavily influence the flow of receiving them. Due to the dropping of volumes, Via 3L had to carry out some layoffs, as well as redirect people as much as possible to part-time jobs in order to retain them until the end of the crisis. According to him, everybody is waiting for when governments will loosen restrictions a slightly to bring some optimism

to people and give some basis to companies to plan future steps. While there is no such information available and restrictions are in force, there is no way to make longer plans. As far as state support is concerned, the company is keeping its eyes on all the support measures the governments are offering to companies to live through the crisis. “We did not use any measures in March, but might be considering using some measures suitable for us in the future.” As Via 3L is a strong logistics group in the Baltics at the moment, it has enough liquidity and capital buffers, but the future depends on the overall economic development of its customers. If the issues with customers’ financial behaviour change and unpaid invoices increase heavily, then it might lead to some challenges financially in the longterm perspective for Via 3L and for other companies on the market. As far as international transport flows are concerned, for Via 3L they were already built up before the crisis through a more land plus sea model. As a result, its processes were not influenced by Poland’s activities on the borders. Besides, the Estonian Government quickly initiated a special ferry line between Germany and Estonia to give transportation companies a window to pass Poland via the sea.

Working from home

Although it is clear that the COVID19 pandemic will affect economies not only in the Baltic countries, but also in the world at large, it is hard to predict what kinds of consequences it will cause and to what extent they will develop, says Julija Erasmus, Marketing Manager of Jungheinrich Baltic, a branch of a Hamburg-based company working in the material handling equipment, warehousing and material flow engineering sectors. “Thanks to the measures taken by the crisis team in our HQ the supply chain at Jungheinrich is not affected by the Corona crisis that much.”

Nevertheless, due to the current global situation, there are some supplier bottlenecks that Jungheinrich cannot affect. Those delays have a slight impact on daily work. One of the company’s plants reopened on 5 April after forced closure for a few weeks. No further serious delays in the delivery of assembling parts are expected, and the company is able to deliver its products and services to customers. “We rearranged our working processes and adapted them to the current emergency in the Baltic states: our office employees are mostly working from their home offices, sales representatives are communicating with customers by means of telephone, e-mails and skype meetings, and after sales services are still available 24/7, although technicians are more secured from external factors.” Thus Jungheinrich continues to provide customers with the best possible support, particularly in food production and processing, food wholesale and retailing, medical supply, as well as in transport and warehousing logistics.

Everything will change

Structural changes in many industries are unavoidable, says Normunds Krūmiņš, CEO of the Latvian Logistics Association, commenting on the consequences of the pandemic. Most of the people – even those who were not friends with technologies – are forced to use the internet and work remotely and see that they can save a lot of money by not travelling. Businesses will reassess the need for meetings in person which means that the real estate market, airlines, etc. will suffer as demand for their services will decrease. The same fate may strike cinemas – as more people discover Netflix – and the cruise industry. Online trade, however, will prosper as one can already see. Even governments – hardcore bureaucrats – are talking about the need to restructure their work. As far as global manufacturing is concerned, companies will either look for the second option to China, e.g., India, Turkey, Pakistan, or will get out of there. As all the latest global health pandemics have come from China.

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Coronavirus: Baltic Business Support Mechanisms

by ROL ANDS VALDEMĀR S AT TORNE Y AT L AW L AW FIRM BDO L AW

Latvian legislation concerning support to enterprises affected by the Covid-19 crisis and amendments to laws The same as the majority of the European countries, Latvia also, first of all, thinks about solidarity between the state and entrepreneurs on the prevention of the immediate unemployment situation. In order to motivate entrepreneurs affected by the crisis not to discharge employees, having idle-time, and to try to wait for the transfer from the crisis and restrictive measures, the state offers to pay out idletime benefit for employees of the companies, temporarily not being able to employ and pay out a salary to them as a result of the crisis. It should be noted that the case of each company requires an individual approach, examining whether the company fully qualifies for the receipt of idle-time benefit, as quite a large number of criteria should be complied with.

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IDLE-TIME BENEFIT. WHO CAN APPLY FOR IT? • companies, the revenues of which in April 2020 have decreased by at least 30%, in comparison with the relevant month of 2019; • companies, the revenues of which in April 2020 have decreased by at least 20%, if the export volume in 2019 constitutes 10% of the total turnover or constitutes at least EUR 500,000, or the paid out monthly average gross salary in 2019 is at least EUR 800, or long-term investments in fixed assets on 31 December 2019 constitute at least EUR 500,000; • newly established companies shall calculate the decrease in revenues from the average monthly turnover in 2019; • an employer, employing an employee in Latvia, for which taxes are paid in Latvia (SIA, AS, branch, union, etc.), may apply for it; • it is only possible to apply for idle-time for a part of employees, while continuing to employ the remaining part of employees; • employees, who are employed by several employers, may also receive the benefits. THOSE WHO CANNOT RECEIVE IDLE-TIME BENEFIT: • Companies, which do have tax debts exceeding EUR 1000 and have not requested to prolong the payment thereof or distribute it in timeframes, which have not submitted declarations and annual reports, have been deleted from the VAT Register or the operation of which has been suspended, which

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have an insolvency proceeding, and the declared monthly taxes of which during the period of the last 6 months have been below EUR 200 per month, cannot apply for idle-time benefit; Members of the board of the companies may only receive idle-time benefit in the case if all employees of the company have idle-time; Members of the council may not receive idle-time benefit; If the employee is incapable of work (sickness), then it is not possible to receive idle-time benefit; Employees, who have commenced employment relations after 1 March 2020; Employees, who are at the same time employed by the state or a municipal authority or capital company, or perform commercial activity; Companies, the employees of which are leased as a labour force; Companies, for which additionally payable taxes have been determined as a result of a tax audit; Companies, which (or members of board of which) are punished for violations of tax, customs, employment regulation.

REGULATIONS ON THE RECEIPT AND USE OF THE BENEFIT • If the company has any tax debts, it should first request to postpone tax payments and afterwards request granting of the idle-time benefit; • The company should substantiate this and how the Covid-19 crisis has caused the idle-time of employees; • Application of the benefit may be submitted once per month for a period of one month; • The employer shall not employ the employee, while the benefit is paid; • The employer is restricted to give a notice of termination of the employment contract for one month after submission of the application; • The employee shall not hire new employees for work while employees receive the benefit;

• Idle-time benefit shall not be subject to taxes; • Decision regarding granting of the benefit shall be adopted within a time period of 5 days. The amount of the idle-time benefit in Latvia is determined in the amount of 75% of the monthly average gross labour payment for the previous six month period before the announcement of the emergency situation, or according to the actually declared data regarding the employee during the previous six months, however, not exceeding EUR 700. Employees, having children in their supportive custody, may receive an additional payment of EUR 50 for every child. ! It is important to indicate that the employer may decide, whether it is possible for it to provide a pay-out of the salary of the employee in the actual amount during the period of idletime; however, it is not an obligation, and it shall be at the discretion of every employer to decide whether the compensation of the employee during the idle-time will be the same as it is determined in the employment contract. This condition shall only refer to those employees, for which the idle-time benefit is applied for and is paid out. PAYMENT OF THE SICKLEAVE CERTIFICATE FROM THE STATE BUDGET The state has introduced another change in the area of employment, trying to motivate employees and employers to comply with the selfisolation measures. In a general case, when an employee gets sick, an employer has to pay the sick-leave certificate for the employee for up to 10 calendar days. Taking into account the course of the Covid-19 disease, it is currently determined that the state shall pay for sick-leave instead of employers, already starting from the second day, for the following employees: • Employees, who suffer from Covid-19;

• Employees, who have been in contact with a Covid-19 patient and where the epidemiologist has determined quarantine.

periods of postponement, inclusion on the list of debtors and the fact that a late payment fee in the amount of ¼ will be applied to the company anyway.

TAX HOLIDAYS One more mechanism for the support of entrepreneurs during the circumstances of crisis, introduced by Latvia and almost all European countries, is tax holidays. Companies that qualify for certain criteria are entitled to request the State to postpone an income tax payment or to distribute it in timeframes for a time period of up to 3 years, and in such a case the late payment fee shall not be applied for companies and they will not be included in a list of tax debtors (which, for example, prohibits them from participating in procurements).

REGULATION OF THE COMMERCIAL ACTIVITY CRISIS The Latvian government has not only determined support mechanisms for entrepreneurs in relations with the state and entrepreneurs, but has also determined temporary regulation on the issues affecting private relations between entrepreneurs and their cooperation partners. The most important news, introducing changes in the current procedure and targeted towards the temporary protection of companies affected by the crisis, is as follows: • Until 1 September 2020, creditors and employees shall be prohibited from bringing an application regarding insolvency to the court; • When commencing the recovery of debts, a debtor shall be warned and a time period of 60 days should be provided for expressing of objections; • A prolonged period of 60 days for different enforced legal activities (execution of judgment, implementation of the commercial pledge, execution of the mortgage rights etc.) is determined. • Limitation period of the rights of claim is suspended in emergency circumstances, providing a possibility for creditors to wait for the performance of recovery and not to lose the right of claim; • From 1 April to 1 September, creditors may only apply the lawful late payment interest (6% or 8% and additional 8% + the half-a-year refunding rate determined by the European Central Bank) to debtors; • During the crisis the legal protection proceeding is determined by a court for a time period of up to 4 years (previously: 2 years with a possibility to prolong, receiving the approval of creditors and a court).

Companies, which qualify for the application of tax holidays • companies, the revenues of which in April 2020 have decreased by at least 30%, in comparison with the relevant month of 2019; • companies, the revenues of which in April 2020 have decreased by at least 20%, if the export volume in 2019 constitutes 10% of the total turnover or constitutes at least EUR 500,000, or the paid out monthly average gross salary in 2019 is at least EUR 800, or long-term investments in fixed assets on 31 December 2019 constitute at least EUR 500,000; • Newly established companies shall calculate the decrease in revenues from the average monthly turnover in 2019. It is important to indicate that companies have to carefully and accurately prepare the application for tax holidays, because we have noticed in practice that companies make mistakes and apply for the postponement of the tax payment term according to the general procedure, rather than in accordance with the procedure of the emergency regulation, which means shorter

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It should be concluded that the Latvian government works at a very dynamic pace on the regulation in order to minimise the adverse economic consequences of the crisis in the short-term and long-term perspective. Undoubtedly certain inaccuracies and errors arise in a hurry, but it is to be approved that a number of errors are rectified by further amendments to the regulation and the government tries to listen to the opinion of representatives of the industries. We have to say that the dynamics of changes in the regulation are challenging for representatives and the management of companies, trying to follow up on the procedure and pre-conditions, to understand whether the company may apply for state support measures, which is even more challenging for companies with foreign management.

JĀNIS ZELMENIS MANAGING PARTNER BDO L AT VIA

Estonian legislation concerning support to enterprises affected by the Covid-19 crisis and amendments to laws IDLE-TIME BENEFIT The government of Estonia has approved benefits to be paid to employees. Enterprises meeting two of the following three criteria qualify for the exemption measure: 1. sales or, alternatively, employer’s revenue for a calendar month

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for which the compensation is sought has dropped at least 30% compared to the relevant figures for the previous calendar month; 2. the employer is not able to provide at least 30% of employees with work to the agreed extent and reduces salaries unilaterally; 3. the employer has reduced salaries of at least 30% of employees by 30% or down to the level of minimum wage. Salaries will be compensated directly to affected employees for whom the employer cannot ensure the agreed amount of work. The Unemployment Insurance Fund will pay employees compensation amounting to 70% of average salary but not more than EUR 1,000 (gross) per calendar month. The compensation will be regarded as a salary payment by the employer, which is paid by the fund to the employee on behalf of the employer from the fund’s own account. Employers must pay gross salaries of at least EUR 150 to their employees receiving compensation payments. The compensation paid by the fund must be equal to at least minimum wage defined by the government on the basis of working hours specified in the employment contract plus the salary paid by the employer. An employee may receive compensation payments for up to two calendar months as long as the employer meets the conditions specified above. Accordingly, the measure can be applied for two months between 1 March 2020 and 31 May 2020. TAXATION Owing to default interest suspension for two months, tax arrears can be rescheduled at lower interest rates. Undertakings may apply for rescheduling of their tax arrears if there is a need for continued interest relief after May 1 2020 or difficulties in making tax payments after May 1 2020.

All self-employed persons are also subject to the above social tax support measure. Salary-related services to compensate for salary reductions are provided by the Estonian Unemployment Insurance Fund. KredEx has introduced the following measures: loan surety for easing repayment schedules of existing bank loans, business and investment loans. COMMERCE AND STATE AID Estonia adopts loan guarantee and subsidised loan scheme managed by foundation KredEx and the loan guarantee and subsidised loan scheme managed by the Rural Development Foundation. Measures provide aid in the form of guarantees on loans and subsidised interest rates for loans and relate to investment and working capital needs. undertakings registered with the commercial register in Estonia, irrespective of their size. State aid is granted only to undertakings that were not in difficulty on 31 December 2019, but that entered into difficulty as a result of the COVID-19. The aid is granted either directly or through credit institutions and other financial institutions.

Lithuanian legislation concerning support to enterprises affected by the Covid-19 crisis and amendments to tax laws IDLE-TIME BENEFIT On 7 April 2020, the Parliament adopted amendments to the Labour Code, which set out requirements concerning state subsidies to be granted in situations when idle time is announced to employees and specify payments to be made to self-employed persons. According to these amendments, an employer may declare idle-time caused by an emergency situation and quarantine, provided both of the following criteria are met: the employer is not

able to ensure work for an employee under the employment contract and the relevant employee is unable to work remotely for reasons of an organisational nature or does not accept another job suggested by the employer. Employers who have submitted applications for idletime benefit may not dismiss their employees according to Articles 57 and 59 of the Labour Code. A subsidy is calculated as a percentage of an employee’s salary, which may not be higher than the salary paid before the declaration of the emergency situation and quarantine and lower than the minimum monthly wage set in Lithuania. Based on an employer’s declaration, salary subsidies are as follows: 70 per cent of an employee’s salary but not more than 1.5 of minimum wage (EUR 910.5 gross), the employer may not dismiss the employee concerned during at least six months after the termination of subsidy payments; 90 per cent of an employee’s salary but not more than EUR 607 (gross). It is set forth in Article 47(1)(2) of the Labour Code that, if idle time of less than one full working month is announced to an employee, the subsidy amount is calculated on a proportionate basis and paid as long as the emergency situation and quarantine persist. According to legislation, all selfemployed persons are paid a fixed amount of EUR 257 per month if the following criteria are met: • self-employment status has been registered for a period of at least three months during the last year and has not been de-registered until the declaration of the emergency situation and quarantine; • the person has no employment relationship or another relationship that would be regarded as employment; • there are no outstanding liabilities to the state budget or the Social Security Service (deferred

debts are not of relevance); • the entity is not undergoing liquidation or bankruptcy proceedings. TAXATION There is a list of enterprises that are automatically exempted from taxation and will not be required to pay late payment charges. All taxes due must be paid within two months following the end of the quarantine or a tax credit must be approved by the tax administration. This list mostly includes enterprises that are directly affected by bans on their operations: sports and holiday resorts, hotels, stores (except for food stores) and other kinds of activities that are regarded as vital. Other undertakings may apply for inclusion in this list through the tax administration. Corporate income tax may be reported on the basis of annual revenue forecasts and not prior year’s results. As a result, all companies making cooperative income tax prepayments are able

to reduce their tax expenses. Deadlines set for the submission of personal income tax returns and tax payments are postponed to 1 July. The tax administration can be requested to extend the payment term for corporate income tax, VAT, personal income tax and other taxes. Moreover, Lithuania is considering whether the VAT rate may be revised downwards from 21% to 9% for catering services, food and soft drinks. COMMERCE AND STATE AID Lithuania adopts subsidised interest rates loans scheme to loans to undertakings most affected by COVID19 and a subsidised interest rates loans scheme loans for outstanding invoices from 9 April 2020 to 31 December 2020. Aid can be granted to undertakings that were not already in difficulty on 31 December 2019, and is granted through credit institutions and other financial institutions. The amount of the loan can not exceed EUR 100.000, and it is granted for a period of 24 months.

C O N C L U S I O N S All three Baltic states have specific regulation regarding the lessening of negative impact of the spread of the virus in the fields of tax, employment in the form of idle-time benefit, as well as state aid and various Private Right and Commercial right fields, although the criteria for these relief measures is different in each state, as well as the sums and time periods are various. Late payment charges are suspended, and employers can apply to receive idle-time benefit for undertakings affected by the virus, with employees in down-time. In Latvia very strict criteria must be met to receive the benefit, and amount of 75 % of the average monthly gross work remuneration, considering the information at the disposal of the State Revenue Service, or in accordance with the actual data declared by employees within the previous six months, but not exceeding EUR 700 per calendar month, can be received. In Lithuania the benefit is up to 70 per cent of an employee’s salary but not more than 1.5 of minimum wage (EUR 910.5 gross) or 90 per cent of an employee’s salary but not more than EUR 607 (gross), while in Estonia the benefit is 70% of average salary but not more than EUR 1,000 (gross). All three states have adopted various state aid measures in conformation with the legislation of the European Union, granted either directly or through credit institutions and other financial institutions, as well as stopped the interest on tax debt, provide the possibility of division of the payment of late tax payments in instalments or deferral.

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informed about the choices that are available, and to act swiftly on opportunities. Otherwise they risk personal liability, in particular where business owners claim compensation for losses caused during the crisis. The biggest problem in this crisis may be inertia To get through the crisis, the immediate reaction of most companies is to preserve their liquidity. State subsidy schemes, employment arrangements and deferred payment offers are some of the possible opportunities any company must

Keep calm and carry on? Passive management may cause liability

In addition to tracing public grants and assistance schemes, companies should now also look to improve their liquidity by enforcing commercial claims if these offer a realistic chance of success. A straightforward claim for payment against a solvent debtor should be realized through legal action unless the management is able to show why it does not follow through. Examples are claims in connection with the widespread damages cases against truck cartels, and fraud compensation claims against the makers of diesel cars Volkswagen, Audi, Škoda, Porsche, and Daimler Benz: where companies in the Baltics own a fleet of diesel cars but do not claim compensation that they most probably are entitled to according to court practice in thousands of similar cases, management will need to explain why. Management decisions entail an evaluation of risks and rewards, and legal actions are no exception.

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Objectively good management be aware of in order to protect cash reserves. The specific dynamic of the pandemic crisis is its immediate effect on businesses, as well as swift reactions by law makers. Whereas governments in the Baltic States have put in place grant programmes almost overnight, it remains to be seen how quickly companies are able to use these to their advantage. Passive management in a severe crisis does not just mean a missed opportunity (to hoard cash), but may actually be the cause of direct losses, which the company may reclaim. Where companies are publicly traded, they are even under the obligation to sue management for losses on behalf of the shareholders. In private limited liability companies, such as SIA, OÜ or UAB, owners should to point out to management that all opportunities must be actively explored.

IMPRINT

Not just subsidies – but private commercial claims can also be pursued

by THEIS KL AUBERG PA RTNER, KL AUBERG BA LTIC S

anagement did not actively cause losses, nor did it know about their underlying risks, but is now fighting to stay out of jail. The current case against the former head of the board of carmaker Audi is yet another example of inactivity leading to liability. Not being properly informed may very well constitute a breach of director’s duties, in particular if it leads to gross inefficiency by company management. Where management lacks direct or indirect control of all processes, it often does not matter whether subsequent problems are caused by bad choices or simply by not acting at all. In the context of the pandemic crisis, causing lockdowns, production stops and workplace closures, there are often but few choices left for management. But directors are well advised to keep

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Different opportunities arise for different companies, and the demands on management change with each situation. Directors are not required to be exceptionally responsive and knowledgeable, but it will also not be a justification to claim lack of knowledge. In today’s fast moving commercial environment, it is essential that management is able to show that their activities are based on sufficient and accurate information as well as on rational decision making. However, this also means that directors are well advised to document their decision making, introduce appropriate procedures and quality management systems, ideally audited by an independent institution. To define the duties of company directors, Latvian law refers to an orderly housekeeper as the standard to be followed in every company. The house must be kept in order so that the business may prosper, and this includes making use of all the resources available.

SERVICE

Bolderaja Serviss SIA Location: Rīga, Latvia Employees: 124

Irina Kroitore

Tel.: +37128664649 irina@bdesk.lv Bolderaja Serviss is for quality and we have been successfully delivering the highest standard of work for the past 27 years. During that time, we have built longterm relationships with our clients in Sweden, Finland, Denmark, Norway, the United Kingdom, the Netherlands, Estonia, Latvia and Lithuania. Our wide range of professionally designed furniture for offices, schools, kindergartens, pharmacies, hotels and custom orders is created by focusing on details and consistently exceptional quality, provided by 120 professional employees in accordance with the ISO 9001:2015 quality management system standard. Whether you need furniture for immediate delivery or created according to your design and preferences, we have a solution that suits your needs.

SERVICE

Datakom SIA Location: Rīga, Latvia Employees: 80

Edijs Tanons

Tel.: +37129197313 edijs.tanons@datakom.lv Datakom is a full IT service provider in Baltics for 25 years. We offer trustable on our experience based qualitative IT services for high performance business development and risk mitigation. We develop cash registers Tiki-Taka PAY and TikiTaka POS. We are gold and premium partners to biggest IT brands, like HP, IBM, Microsoft, CITRIX, Lenovo, Nutanix etc., we are trustable partner for our clients, we have proved it in our past cooperation and starting new relationship.

Magazine “Baltic Business Quarterly” Founder: German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania (AHK), Breite Straße 29, D-10178 Berlin, Germany Executive Board Member: Florian Schröder Editorial office: Strēlnieku iela 1-4, LV1010, Riga, Latvia, +371-67320718, www.ahk-balt.org Publisher: SIA ”Žurnālu izdevniecība Lilita”, 21 Merķeļa str., Riga, Latvia, LV1050. 20004547, lilita@lilita.lv, www.lilita.lv Reprint allowed only with a written agreement with the Founder. ©2018.AHK Printed in printing house “Lietuvos Rytas Print”, Lithuania Cover photo: BMWi/Susanne Eriksson Editor in chief: Līva Melbārzde, +371 6 732 0724 Reporters: Anda Asere, Audronė Gurinskienė, Matthias Horx, Rūta Kesnere, Theis Klauberg, Egons Mudulis, Juris Pētersons, Karoline Schlegel, Vineta Šķērīte, Jānis Šķupelis, Rolands Valdemārs, Santa Dunaiska Alexander Welscher, Magdalena Worst, Jānis Zelmenis Photographers: Arina Solntzeff, Ritvars Skuja, Augis Narmontas, Matīss Markovskis, Kaspars Garda, Mindaugas Mikulėnas, Marko Mumm, BMWi/Susanne Eriksson Art Director: Vitalijs Suseklis Advertising Director: Līva Melbārzde Tech Director: Gints Mucenieks Advertising Editor: Jānis Rožkalns, reklama@lilita.lv Digital editions: App Store and Google Play ISSN 2592-2570 Publisher is a member of Association of Press Publishers of Latvia. lpia.lv

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Digital platform as a replacement for a trade fair

Audronė Gurinskienė Head of AHK office in Lithuania Division manager for trade fairs

How to wisely prepare for trade fairs in times of quarantine

For many of us, attending or participating in fairs abroad had become an integral part of our daily business. It’s the quickest and most effective way to build new business collaborations. While we are surrounded by a virus that dictates the rhythm and shape of life and business, we can use the time for activities that usually lack attention but are needed to achieve good results. Improve your first impression. Create, improve your website in German. If you want to establish contacts in the German market, we highly recommend that you prepare your website or promotional materials in German. Preparing “your first impression” promotional material or speaking German yourself, not only shows respect for the client or partner, but also increases chances for longterm cooperation. Entrust good language corrections to a native speaker. Update your databases for existing and potential international clients. Maintaining and updating contacts requires knowledge, time and human resources, which are probably more available now than at any other time. The AUMA website and exhibitor lists of international trade fairs offer good contacts. If you need advice or more support in setting up German customer databases, contact German chambers of commerce and industry, professional business institutions or consultants with a focus on the German market from the Baltic states.

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Expand your knowledge in trade fair marketing. While there is a break in the exhibition business, it is the right time to test your knowledge and find a solution to improve it. Keep in mind that classical marketing tools are not necessarily suitable, as trade fairs are a rather expensive sales promotion. For this reason, in addition to a well-located and organised stand that fits the brand and message, a lot more should be considered in order to achieve a real “return on marketing investment”. You can also seek the advice of representatives of German trade fair companies in the local market.

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Do your homework to get more out of your next trade fair. Industry events are excellent for meeting

established and potential partners, suppliers and customers. Who would you like to meet during the event? Contact the companies and set meetings. Gather information about the companies whose representatives you’re about to meet – new services, upcoming products, support etc… anything of professional interest to you. With all this in mind, choose which topics would be best to discuss during each meeting. If the trade fair provides a business matchmaking service, take advantage - it will help you connect to your target group without losing time and focus in the process.

view of the extensive restrictions on public and economic life due to Covid-19, many national and international trade fairs cannot take place this year. It is the first time in the last 73 years that spring has passed without HANNOVER MESSE, for example. However, organisers are looking for new methods of communication between companies. In developing new digital tools, the trade fair organisers are using their extensive knowledge of the trade fair sector gained over many years, focusing on the needs of companies. Using various web-based formats, exhibitors and visitors will be able to exchange information about challenges and solutions that are now on the agenda. Diverse functions make it possible to replace a large part of the face-toface communication of trade fairs and conferences, e.g. business matching, product presentation and the generation of specialist knowledge. Live streams disseminate expert interviews, panel discussions and best-case presentations all over the world. Also, the digital exhibitor and product search will be given new functions. Among other things, visitors and exhibitors can make direct contact. For example, ITB launched the ITB Virtual Convention, which spans a bridge between real-life meetings and digital networking and features other innovative tools for business and exclusive content. The cancelled HANNOVER MESSE should have been a forum for digitisation in industry. Now the world’s most important industrial show will take place in April 2021. Therefore, the newly created digital information and networking platform on hannovermesse.de will be available until next year. It is an effective supplement to industry events and enables comprehensive networking: digital encounters and contact initiation as well as product presentation and thematic exchange. The platform is maintained throughout the year and tools such as appointment scheduling and video conferences will enable KEY POINTS FOR TRADE FAIR industrial companies to PARTICIPATION: partially compensate for the drop in sales – REGULAR CUSTOMER CARE caused by cancellations – NEW CUSTOMER ACQUISITION and postponements. Deutsche Messe is – INCREASING AWARENESS OF THE expecting another COMPANY, PRODUCTS AND BRANDS “corona-creative-baby” in June 2020 - a two to THE ESSENTIAL TRADE FAIR PLUS three-day online event FOR OF ALL EXHIBITORS: on a separate website that extends the online platform. Like a trade PERSONAL CONTACT + NETWORKING fair, it will take place at TRADE FAIR ADVANTAGE FOR a specific time and, due OF ALL EXHIBITORS to its live character, is suitable for key notes, awards ceremonies, THE COMPANY AT TRADE FAIRS CAN live presentations, ADVISE AND CONVINCE – POTENTIAL discussions, workshops or – CUSTOMERS DIRECTLY THROUGH hackathons. There will be COMPETENT EMPLOYEES no virtual halls, avatars, etc. but “only” content.

Deutsche Messe

FAIR TO SHARE

Trade fair halls reused for corona patients

hile the trade fair industry is severely affected by the cancellation of trade fairs, it is proving its strength by supporting its region and cities in the fight against the coronavirus. The trade fair organisers in Germany are making their unused trade fair halls available for tests or for the medical treatment of corona patients. For example, an additional corona treatment centre is being set up on the Messe Berlin grounds in cooperation with the German Armed

Forces and other partners. In order to treat more Covid-19 patients Berlin has begun rebuilding Hall 26 on the exhibition grounds. As a first step 500 beds will be created in the exhibition hall. Each bed will therefore have an oxygen supply. Respirators are also planned for 100 beds, and there will be a CT machine including radiation protection. An intermediate model between the hospital and field hospital is to be created. It is intended to be a reserve hospital when other clinics are unable to accept any more

Trade fair industry expects a decline of billions in sales

ccording to UFI, the International Federation of Exhibition Centres, there are 1,200 venues hosting trade fairs worldwide and 31,000 trade fairs per year. The exhibition space in the halls adds up to 35 million square metres or a good 460 football pitches. Germany’s share of the global trade fair market is around ten percent.

patients. In the pandemic, this would be a further component for the capital. In view of the increasing numbers of coronavirus tests, a so-called drive-in test centre has been moved from the city centre in Hanover to the exhibition grounds. There, people are tested after being referred by their family doctor. Patients can drive up in a private car, roll down the window for a smear test and then drive home again. They are later informed of the results by telephone. Up to now, about 100 tests were carried out daily, but now up to 1000 tests would have to be done. A Corona emergency hospital with more than 500 beds will also be set up at the Hanover Exhibition Center in Halls 19 and 20. The auxiliary hospital is intended for people who can no longer be cared for at home, but who do not need to go to intensive care. It will only be used when all other options have been exhausted. Additional facilities are also being built at other exhibition centres to relieve local health facilities.

Due to cancellations and postponements worldwide, the industry is expecting a drop in sales of more than 14 billion euros. The trade fair industry has never experienced such a situation internationally. In Germany, around 28 billion euros in overall economic production effects are generated each year by the organisation of trade fairs. The Institute of the German Trade Fair Industry AUMA has extrapolated the effects for Germany. According to this, the cancellations or postponements announced to date alone are expected to result in losses for the German economy as a whole of EUR 5.6 billion.

For the year 2020, 190 international and national trade fairs were planned in Germany with 180,000 exhibitors and around ten million visitors. Due to current developments In addition to trade fair organisers and stand construction regarding the spread of the coronavirus, more than 1414 companies, many other sectors of the economy such as trade fair events worldwide have already been cancelled or the hotel and catering industry, the transport industry and at least postponed, including 129 trade fairs in Germany and numerous local suppliers and craftsmen will be affected. 67 international trade fairs, including 12 leading trade fairs with three- and four-year cycles. NUMBER OF POSTPONED OR CANCELED TR ADE FAIRS However, several international trade fairs in Germany have also been postponed to the second WORLDWIDE IN GERMANY half of 2020 or into 2021. Some trade fairs with an annual cycle will not take place this year, but will OR OR be postponed until the next regular date in 2021.

1.414

- 4,6%

129

- 68%

AUMA.DE, 03.2020

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Diary of a lockdown What does it feel and look like in Baltic cities during the pandemic? Photographers capture COVID-19’s urban impact in Tallinn, Riga, Vilnius and Kėdainiai.

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Photo: Arina Solntzeff, Ken Mürk

Shop assistant Jekaterina Mironova stands behind the cash desk in a small grocery store in Miera street in Riga

by ALE X ANDER WEL SCHER and LĪVA MELBĀR ZDE

Working from home? No chance! In times of the coronavirus pandemic, most of us stay at home – also working people. Despite the stress of keeping up with the workload while parenting kids and going through occasional outbreaks of cabin fever, working from home is still a privilege these days. But how about the others? Here are some impressions of people who keep things going at their places of work.

Jekaterina Mironova stands calmly behind the display counter in a small independent grocery store in the centre of Riga. “No, we will only have it again tomorrow”, she says to an elderly customer who wanted to buy a special curd cheese product. Otherwise the fridges and shelves are properly stacked with cans, bottles and all other kinds of products that mostly have individually attached price stickers. Everything seems to be normal, if

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it were not for the black face mask that Mironova is wearing and the yellow sign at the cash desk calling on customers to act responsibly and observe safe physical distances. While social distancing and stay-athome orders have been implemented across the Baltics, for some people like Mironova this is going to be physically and economically impossible. Cashiers, couriers, train and bus drivers, and police officers – they are the ones for

whom working from home is out of question. How do these people feel about working on the front line? “Normal”, answers Mironova in the little shop at the beginning of Miera street. “I am not afraid. You always have to be careful.” In some international media, the street has been named the most hipster neighbourhood in the Latvian capital and sometimes even in Europe. While this claim is doubtful even in normal times, it is certainly not the case during the pandemic. On a day in mid-April, the street is empty, and foot traffic is almost zero at this point in time. But business is still going on as before in the grocery shop where Mironova works. Originally from the Latgale region in Eastern Latvia, the shop assistant has not met her parents and relatives for weeks, but many others continue to come to shop every day. “People from the

neighbourhood still regularly buy the things they need here”, she says. “There are fewer customers but not much has changed really. Everything is fine. Most customers are polite and observe the two-metre distance rules”. In the small shop, however, social distancing regulations can hardly be implemented – the narrow and tight rows of shelves leave little to no space. Unlike with big supermarkets and other retailers, there are also no protective plastic shields installed at the cash desk. Instead, Mironova was provided with the face mask, in addition to the obligatory disinfection liquids for customers before and after shopping in the entrance area.

Barkeeper Lida Mai taps a beer in the St. Vitus bar in Tallinn’s popular Telliskivi area

Additional hygiene measures are also in place in the St. Vitus bar in Tallinn’s popular Telliskivi area. The “beer lover’s heaven”, as the bar promotes itself on its website, is the only place in the trendy neighbourhood whose taps are still running. “It was a collective decision to offer food and a change for those who are tired of the situation. We are going to keep open as long as there are clients,” is how barkeeper Lida Mai explains the motive for the rather unusual move. Most of the other bars and restaurants in the Estonian capital have temporarily suspended their operations or currently only offer a takeaway or delivery service. Mobility analysis shows that – in accordance with the goal of the emergency situation declared by the government – half of the people in Estonia are now either staying at home or have significantly reduced their movement, especially to venues such as restaurants, cafés and other frequently visited places. “Most customers these days are regulars or my friends. Since I cannot choose whether to stay at home or come to work, it is actually quite nice to be here”, says Mai without being worried about any careless

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customers. “The few clients who still come here are responsible people who keep to themselves, and there are no large groups.” This cannot be said about the Riga Central Market where the situation and routines are similar to normal days. Even though the huge market pavilions and outside stalls are less crowded than usual at this time of year, people are still coming to buy meat, fruit and vegetables. While some merchants still encourage market-goers to taste their products and offer samples, others ask people not to touch anything at their market stall and to keep social distance while shopping for food. But a lot of people seem to forgot about this, with many sellers reporting of thoughtless customers. “People are not listening. They are not really understanding what has happened”, a market woman told Latvian television. While she and other colleagues have disinfectants at their market stalls and keep at least two metres distance from each other, many market-goers are

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ignoring the restrictions on physical proximity. For young and especially elderly people, it seems hard to change their habits. “They are not following the instructions we are giving them that they should keep their distance. But what can you do?” Parcel courier Toms Dāle is in a slightly better situation when providing last-mile logistics services. “I am doing everything in order to prevent customers from coming close”, Dāle says upon delivering a parcel from abroad. “I use gloves, I use disinfection, and I keep a safe distance – to protect you and myself.” In response to the corona crisis, parcel delivery service providers have taken additional precautionary measures to protect the health of their couriers and the parcel recipients. Most of them do not require a receipt anymore to avoid the risk of spreading the virus via the pen or scanner, and call on customers to give them permission to drop off parcels at their desired location. The personal contact between the courier and the recipients is thus reduced

to a minimum, but cannot always can be avoided when moving goods from a transportation hub to the final delivery destination. “I talk to 100 or more people every day – and the virus can be anywhere. But I am not afraid. I live like I did before”, Dāle says. While the amount of parcels from online shops that he delivers on a daily basis has not changed very much, he has noted one big difference: “The good thing is that 90% of people are now at home. Before it was only like 50% or 60%.”

Police officers across the Baltics are grappling with the impact of coronavirus on public safety – and their own. Their duties increasingly include imposing social distancing and shelter-in-place measures in circumstances in which it is sometimes hard to practice them. In the challenge of keeping public order and enforcing the law, policemen often have to strike a balancing act between public safety and personal health. “I think we have always been more at risk because of our profession. In that sense, not so much has changed”, says a police officer at a Covid-19 drive-through inspection point set up at the Bikernieki Track in Riga. “I do not have any uncomfortable feelings or fear of performing my duties here or anywhere else. It is our job and we do it as thoroughly as ever.” The testing station is designed to make it easy for people who suspect they have been infected to have the test simply and quickly. It also mitigates the risk of people who may be infected with the virus from attending a hospital or health centre for the test, and then potentially passing it on to others. Stringent infection control measures are in place at the testing unit, including medical staff in specialist protective clothing. People who need to be tested will be able to access the testing station once they have been

Keeping emotionally strong and physically safe is an ever-present worry for medical workers.

Photo: Arina Solntzeff, Ken Mürk

Parcel courier Toms Dāle stands the staircase of a residential building in Riga

home”, Põllu said, admitting that being separated from her daughter and son is not easy. “They are already used to the fact that their mother often has night shifts and goes to work a lot. It is still a little bit hard, though. It makes me tear up.”

directed by prior arrangement and appointment only. The police are making sure that people arriving at the inspection points have the necessary registration. Otherwise they will not be tested. “We always stay at a distance of a couple of metres to whoever comes here and are very mindful about our hygiene”, says the police officer without showing any sign of being worried, strictly keeping behind the barrier built around the mobile inspection point. “There is no difference to other places. We are always trying to stay safe to be able to help and also keep others and the public safe.”

Doctors and healthcare workers in hospitals and clinics

across the Baltics not only have to take care of their patients, but also need to prepare themselves for the fact that the coronavirus outbreak might not yet have reached its peak. “If you stay at home, we will all be saving lives together”, argues the medical worker of the Pauls Stradiņš Clinical University Hospital in Riga, one of Latvia’s main

hospitals, emotionally in a video, urging the public to adopt a socially responsible attitude. “Please do your bit, so we can do our work”. Similarly, the medical professionals at the North Estonia Medical Centre (PERH) have called on all Estonians to take the threat of the virus seriously and to self-isolate as much as possible. Amid fears of bringing coronavirus home, many healthcare workers also do it themselves. “My life at the moment is that I go to work and then sleep at home in the evenings. My son is staying with his father, where he at least has parental care, and my daughter went to my sister-in-law’s. My brother’s child is also on home-schooling, so he can support her”, Kristiina Põllu, Head of the PERH Department of Emergency Medicine, told the news program “Ringvaade” on Estonian television. She only gets to meet her children in the garden, without hugging or getting close to them. “We bring them food bags, placed behind their doors, wave to them from two metres, because it is a big enough danger that I will bring some kind of infection

Keeping emotionally strong and physically safe is a contagious environment an ever-present worry for hospital workers. “You should see the faces of medics who leave the room where an intubated patient is being reanimated – you cannot recognise them,” Rimvydas Tumas, head of Covid-19 department at the Republican Hospital in Lithuania’s fifth biggest city Panevėžys, said in an interview with the national broadcaster LRT. People treated by Tumas and his colleagues are already ill with chronic conditions and exhibit severe symptoms of the coronavirus – fever, cough, shortness of breath, muscle pain and tiredness. Setting up the department in MidMarch has brought back memories to Tumas. “The only similar feeling was only once, on January 13,” he said, referring to the bloody events in Vilnius in 1991 when an assault by Soviet security forces left 14 civilians dead and hundreds injured, throwing medics into the deep. Even though the situation has been different now, Tumas calls on people not to relax and take the threat seriously. The risk for contracting the virus is still present, he warns. This is especially true for medical workers dealing directly with COVID-19 patients. “I am very proud of my staff. No one said I do not want to go, I will not do it, it is too difficult, or I am afraid,” Tumas said. “But we all understand that the test result today is negative, but we can get infected tomorrow.”

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The post corona world A Backwards Corona Forecast: Or how we will be surprised when the crisis is “over” The corona crisis has currently taken a tight hold of our lives. But what comes after that? Futurologist and trend analysts have already voiced first ideas and notions. In a guest article for Baltic Business Quarterly, Germany’s most renowned trend researcher Matthias Horx shares his vision of the world post corona that has already found its echo in the public space in Germany and elsewhere.

the moment I am often asked when Corona “will be over” and when everything will return to normal. My answer is: never. There are historical moments when the future changes direction. We call them bifurcations. Or deep crises. These times are now. The world as we know it is dissolving. But behind it comes a new world, the formation of which we can at least imagine. For this I would like to offer you an exercise with which we have had good experiences in vision processes at companies. We call it the RE-gnosis. In contrast to the PRO-gnosis, we do not look “into the future” with this technique. But from the future BACK to today. Sounds crazy? Let’s try it:

The RE-gnosis: Our world in autumn 2020

Let’s imagine a situation in autumn, let’s say in September 2020. We are sitting in a street cafe in a big city. It is warm and people are walking down the pavements again. Do they move differently? Is everything the same as before? Does the wine, the cocktail, the coffee taste like it used to? Like it did before Corona?

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Or even better? Looking back, what will we be surprised about? We will be surprised that our social distancing rarely led to a feeling of isolation. On the contrary, after an initial paralysing shock, many of us were relieved that the constant racing, talking, communicating on a multitude of channels suddenly came to a halt. Distancing does not necessarily mean loss, but can open up new possibilities. Paradoxically, the physical distance that the virus forced upon us also created new closeness. We met people who we would never have met otherwise. We contacted old friends more often, strengthened ties that had become loose. Families, neighbours, friends, have become closer and sometimes even solved hidden conflicts. The social courtesy that we previously increasingly missed, increased. Now in autumn 2020 there is a completely different mood at football games than in spring when there was a lot of mass rage. We wonder why that is. We will be amazed at how quickly digital cultural techniques have suddenly proven themselves in practice. Teleconferencing and video conferencing, which most

ABOUT THE AUTHOR For Matthias Horx, staying ahead of the times is what it is all about. The 65-yearold publicist is considered to be Germany’s most influential futurist and founder of a renowned think tank for future research – the Zukunftsinstitut. Always aiming at the big picture, he examines global trends that can change society and the economy. Horx has published some 20 books, many of which have become bestsellers, and has given many keynote lecture in management or political circles and at large conferences. In his column “Future Mind” he regularly explains and addresses current topics, and on a new website now takes on the post-corona future. www.horx.com, www.zukunftsinstitut. de and www.diezukunftnachcorona.com

colleagues had always resisted (the business class flight was better), turned out to be quite practical and productive. Teachers learned a lot about internet teaching. The home office became a matter of course for many — including the improvisation and time juggling that goes with it. At the same time, apparently outdated cultural techniques experienced a renaissance. Suddenly you got not only the answering machine when you called, but real people. The “messages” themselves suddenly took on a new meaning. You really communicated again. Nobody was kept waiting anymore. Nobody was stalled. This created a new culture of accessibility, of commitment. People who never came to rest due to the hectic rush, including YOUNG people, suddenly went for long walks (an activity formerly unknown to them). Reading books suddenly became a cult. Reality shows suddenly seemed awkward and the whole trivia trash, the garbage for the soul that flowed through all channels seemed ridiculous. No, it didn’t completely disappear. But it was rapidly losing value. Crises work primarily by dissolving old phenomena, making them superfluous … We will be surprised that drugs were developed in the summer that increased

Photo: Klaus Vyhnalek (www.vyhnalek.com)

by MAT THIA S HOR X

the survival rate. This lowered the death rate and made Corona a virus that we have to deal with — much like the flu and many other diseases. Medical progress helped. But we also learned that it was not so much technology, but a crucial change in social behaviour. The decisive factor was that people could have solidarity and be constructive despite radical restrictions. Human-social intelligence has helped. The much-vaunted artificial intelligence, which promised to solve everything, has only had a limited effect on Corona. This has shifted the relationship between technology and culture. Before the crisis, technology seemed to be the panacea, the bearer of all utopias. No one — or only a few hard-boiled people — still believe in the great digital redemption today. The big technology hype is over. We are again turning our attention to the humane questions: What is mankind? What do we mean to each other? We are astonished to see how much humour and humanity actually emerged in the days of the virus. We will be amazed at how far the economy could shrink collapsing, something which was predicted during every pre-corona tax increase and every government intervention. Although there was a “black April”, a deep economic downturn and a 50 percent drop in the stock market, although many companies went bankrupt, shrank or mutated into something completely different, it never came to zero. As if the economy was a breathing being that can also nap or sleep and even dream. Today in the Autumn, there is a global economy again. But global just-in-time production, with huge branched value chains, in which millions of individual parts are carted across the planet, has survived. It is currently being dismantled and reconfigured. Interim storage facilities, depots and reserves are growing again everywhere in production and service facilities. Local production is booming, networks are being localised, and crafts are experiencing a renaissance. The global system is drifting towards GLOCALisation: the localisation of the global. We will be surprised that even the loss of assets due to the stock market crash does not hurt as much as it felt in the beginning. In the new world, wealth suddenly no longer plays the decisive role. Good neighbours and

a blossoming vegetable garden are more important. Could it be that the virus has changed our lives in a direction that we wanted to change anyway?

of bewilderment and fear, an inner strength arises. In the middle of civilisation’s shutdown, we run through forests or parks, or across almost empty spaces. This is not an apocalypse, but a new beginning.

Why does this kind of “from the future scenario” seem so irritatingly different from a classic forecast? This is related to the specific properties of our sense of the future. When we look “into the future”, we typically only see the dangers and problems coming towards us that pile up onto insurmountable barriers. Like a locomotive coming out of the tunnel that runs over us. This fear barrier separates us from the future. That’s why horror futures are always the easiest to depict. RE-gnosis, on the other hand, form a loop of knowledge in which we include ourselves and our inner change in the future. We connect internally with the future, and this creates a bridge between today and tomorrow. A form of “Future Mind” is created. If you do it right, something like future intelligence is created.

Science also experienced an astonishing renaissance in the crisis. Virologists and epidemologists became media stars, but also “futuristic” philosophers, sociologists, psychologists, anthropologists, who were previously left on the sidelines of polarised debates, regained their voice and value.

We all know the feeling of successfully overcoming fear. When we go to the dentist for treatment, we are worried a long time in advance. We lose control on the dentist’s chair and it hurts before it hurts. In anticipating this feeling, we bathe ourselves in fears that can completely overwhelm us. Once we have survived the treatment, there is a feeling of coping: the world looks young and fresh again, and we are suddenly full of drive. Neuro-biologically, fear adrenaline is replaced by dopamine, a type of endogenous drug of the future. While adrenaline leads us to flee or fight (which is not really productive in the dentist’s chair, and just as useless in the fight against corona), dopamine opens our brain synapses: we are excited about what is to come, curious, foresighted. When we have a healthy dopamine level, we make plans, we have visions that lead us to the forward-looking action. Surprisingly, many experience exactly this in the Corona crisis. A massive loss of control suddenly turns into a veritable intoxication of the positive. After a period

A virus as an accelerator of evolution

The new world after Corona — or better with Corona — arises from the disruption of the megatrend CONNECTIVITY. The interruption of connectivity — through border closings, separations, seclusions, quarantines — does not lead to the abolition of the connections. But it enables the reorganisation of the things that hold our world together and carry it into the future. The world to come will appreciate distance again — and this will make connectedness more qualitative. Autonomy and dependency, opening and closing are rebalanced. This can make the world more complex, but also more stable. This makes you dizzy at first, but then it shows its inner meaning: and what connects the paradoxes on a new level is sustainable. Every deep crisis leaves a story, a narrative that points far into the future. One of the strongest images left by the corona virus are of the Italians making music on the balconies. The second image was sent to us by satellite images that suddenly showed the industrial areas of China and Italy free of smog. In 2020, human CO2 emissions will drop for the first time. That very fact will do something to us. If the virus can do that, then can we possibly do it? Maybe the virus was just a messenger from the future. The drastic message is: Human civilisation has become too dense, too fast, and overheated. It is racing too fast in a direction in which there is no future. But it can reinvent itself. System reset. Cool down! Music on the balconies! This is how the future works.

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“You cannot put culture in quarantine!”

masks to protect themselves and others, the white angel on a building belonging to the Lithuanian Ministry of Foreign Affairs is also covered with a protective mask. “Even the sculptures in #Lithuania have joined the lockdown and remind us to undertake the necessary measures against the spread of #Covid-19”, Foreign Minister Linas Linkevicius wrote on Twitter. A number of statues in Vilnius were also masked by artists –as a sad reminder of the stillness of the cultural life.

Everyone is adapting to the new normal as social life has come to a standstill. This is also true for the culture and art scene in the Baltics which, in times of coronavirus crisis, shows once more how creative, versatile and valuable it is. Family portrait ‘In Nature’: Lithuanian photographer Adas Vasiliauskas has been using his drone to capture portraits of people quarantined at home

by ALEXANDER WELSCHER

reativity is essential to sustain and unite people during the global coronavirus pandemic. In times of social distancing and bans on mass gatherings, culture and art play a crucial role to step in and fill the void in the lives of people staying at home. In the Baltics, artists and cultural mediators alike have found inspiring ways to cope with the lockdown.

in quarantine and lockdown. There are countless cultural experiences at your fingertips to make time indoors more artful and imaginative.

Estonia: Add your coronavirus story to the cultural heritage

Similarly, the Estonian Cultural History Archive of the Estonian Literary Museum and the Estonian Biographies Association are calling on people to write down their thoughts and actions in emergency diaries. To be included are thoughts and reflections on whether and how everyday life and personal relationships have changed, what priorities and basics have been shifted or redefined in them, and the personal fears and hopes of the

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diarist. Changes within Estonia or in the world and their effects on people’s lives can also be described. The Estonian Folklore Archive has also dedicated its attention to coronavirus, which has become the main topic of public and private conversations, filling both mainstream and social media in Estonia. Alongside serious discussions and recommendations, various fake stories, popular wisdoms and beliefs, and a myriad of jokes are spreading almost as fast as the virus itself – about the origin and cause of the virus, the various panaceas against it, home quarantine and stockpiling toilet paper and other items. What is your personal story or what other stories have you heard

about coronavirus? Send them to the museums – in Estonian, Russian or English. And make them part of the history and collective memory of Estonia.

Latvia: Art and culture go digital Staying in instead of going out: artists, musicians, museums, galleries, music venues and opera houses are as creative as ever as the public and cultural life faces restrictions due to the coronavirus pandemic. With many events, performances and exhibitions cancelled, museums and cultural institutions have launched projects on social and digital platforms or set up online versions of their artistic offerings – to lift the spirits of art lovers

Photo: Adas Vasiliauskas

What is life like during a state of emergency? Several cultural memory institutions in Estonia have started collecting stories related to the coronavirus outbreak. The Estonian National Museum invites residents of the Baltic country to share their story or photographs about how their everyday life and environment has changed during the crisis, how they have adapted to it inside or outside their home and what they are doing during the emergency situation.

Leading the way in Latvia for art and culture to cross the physical boundaries of their regular performance venues into people’s living rooms is the Ministry of Culture. Soon after the restrictions on public events and gatherings, it launched the campaign #Ēkultūra and put together an overview on its website with links to digital cultural offerings in Latvia that can also be enjoyed from the comfort of your couch. The list includes virtual museum tours and exhibitions, film streams, concerts and performances by the Latvian National Opera and Ballet, audio-visual stories about various monuments as well as digital collections from the Latvian National Library and the Latvian State Archive. “At a time when the daily rhythm of the population has changed rapidly, the availability of culture in everyone’s own home can become important in our daily lives”, stated Latvian Minister of Culture Nauris Puntulis. He has called on the creative people to actively participate in the campaign by using the hashtag #Ēkultūra when informing about cultural offerings on their social media profiles. Some Latvian artists had previously already taken their own initiatives – offering various films, concerts and book readings online.

The Dirty Deal Teatro in Riga even went so far to create a cycle of performances where everyone can get involved and become actors themselves. On its website stating “You cannot put culture in quarantine!”, the independent professional theatre provides step-by-step instructions in both English and Latvian on what to say and act out. The DIY performances arranged by playwrights vary in length and can be staged with someone in person, or through video chat – with or without an audience.

Lithuania: Face masked sculptures and portraits of the quarantine In Lithuania, artists have also approached the fight against the spread of coronavirus in a creative manner. In Siauliai, several sculptures on the main pedestrian street were decorated with a face mask – to remind the citizens about personal responsibility, empathy and the need to care for each other. The campaign by the local cultural centre was aimed primarily at younger people. Lithuania’s first coronavirus case was registered in February in the northern city of Siauliai – and the patient has since recovered and been released from hospital. Similarly, in the capital Vilnius some statues were covered with face masks too. Encouraging everyone to be vigilant and wear protective

The Vilnius-based photographer Adas Vasiliauskas focuses on people stuck at home – and captures their lives with so-called “portraits of the quarantine”. Maintaining social distance by using a drone, he portrays peoples on their balconies, patios, and through their windows across Vilnius – to show how they are spending their time during the lockdown declared by the city government. The result is an entertaining collection of longdistance snaps depicting families engaged in everything from having picnics, exercising or sunbathing on terraces to doing coronavirus-inspired cosplay while dressed in costumes along with wigs and painted faces. “I started this project to give people a chance to brighten their day in this negative coronavirus information overload environment”, is how Vasiliauskas explains his motivation for the project in a post on PetaPixel. At first, he took a few drone pictures of his friends that became very popular around the city and resulted in many requests from other families. All of the portraits can be seen on his website tasfotografas.lt and on social media. His work has proved to be a great success. Almost all Lithuanian media and several international outlets have already reported on them. “I hope these funny photos remind everyone that sitting quarantined at home can be fun too. And, of course, I hope they also remind people to keep their social distance during these scary times.”

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by ALEXANDER WELSCHER

One of the leading figures in Latvia's fight against COVID-19: Jurijs Perevoščikovs

An engine to power your business. Made in Germany.

The national epidemiologist There is hardly anyone nowadays in Latvia who has not heard his name yet: Jurijs Perevoščikovs has been omnipresent for weeks. No one can get around him in the coronavirus crisis – neither the government nor the public.

hese are busy days for Jurijs Perevoščikovs. The expertise of the bespectacled, whitehaired epidemiologist is in demand as never during the coronavirus pandemic in Latvia. The Director of the Infectious Diseases Risk Analysis and Prevention Department at the Centre for Disease Prevention and Control (SPKC) is currently one of the most visible people around in the restricted public life of the Baltic country. Perevoščikovs has become the face of the Latvian coronavirus response and is seen as the driving force behind the clear line by the government in Riga in preventing the spread of the virus. The public health official tirelessly appears almost every day on television and radio to give interviews and briefings, and is a key advisor on the coronavirus outbreak in Latvia. He also used to be present at press conferences with Health Minister Ilze Viņķele and Prime Minister

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Krišjānis Kariņš before the government temporarily went into self-isolation and since then has continued to work mainly remotely. Latvia’s top infectious disease expert has more than 30 years of experience at the frontline in the fight against contagious diseases. Educated at the Leningrad Medical Institute of Hygiene and Sanitation, he has held leading positions in public health institutions ever since Latvia regained its independence in the early 1990s. Among his key tasks have been the organization of epidemiological surveillance and immunization at national level, and the development of proposals to legislative acts and guidelines for the implementation of international health regulations. What used to happen mainly in the background has now brought him into the spotlight. However, Perevoščikovs is anything

but a shrill populist. With his sonorous voice, he rattles off statistics on the latest coronavirus cases and explains whether the contact persons of the infected people could have been identified or not. The man with a name that even Latvians find hard to pronounce does not try to sugarcoat anything, and many seem grateful to him for this. Perevoščikovs is the most trusted of all officials involved in combating Covid-19 amongst the general population, according to survey conducted by the research center SKDS. From his knowledge and position, Perevoščikovs seems to have an inner responsibility in this serious situation to not leave the field to self-appointed experts that downplay the severity of the crisis. Even if that means being in the headlines and exposed to the attention of the public – something that the expert has apparently not opted to do for himself, but rather considers to be one of his duties in the current situation. Perevoščikovs explains what is happening in an understandable

and calm manner, and regularly appeals to the responsibility and common sense of the population in Latvia. Over and over, he urges the nation to adhere to social distancing guidelines and follow hygienic practices. “The virus is not selective”, is how the epidemiologist reminds everyone to protect themselves and others. “Only our actions can change the impact of the pandemic.” His remarks are echoed by other state officials and medics around the country who are urging people to stay home to slow the spread of the virus, thereby reducing the load on the medical system. This approach has proven successful: Latvia reacted quickly and reduced public life to a minimum after the first coronavirus cases in the country. So far, it has registered fewer cases of infections than its Baltic neighbours and many other European countries. However, Perevoščikovs is far from taking credit for this but rather warns that the pandemic is not over yet – not least because he is well aware that Latvia’s health system is underfunded and in a poor overall state.

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2nd German-Baltic Digital Summit 7 October 2020, Munich Germany is not only the biggest single European IT market. It also invest massively in its own digital infrastructure and services portfolio. Germany is therefore a main target market for Baltic services suppliers and benefits at the same time significantly from cooperation with the innovative Baltic technology scene. Estonia, Latvia and Lithuania are European figureheads and global forerunners when it comes to digitization. Digital Energy solutions, Sustainable Mobility in a Smart City, Cyber Security and Digital Administration & E-Government are the main topics of the 2nd GermanBaltic Digital Summit. Please visit www.digital-baltics.de to apply and to check the program and speakers

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