On health, wealth and education

A country's health, wealth and education levels are three of the most important socioeconomic indicators. Latvia has done much to improve these factors over the last two decades. In this episode, I will give my observations on the present state of these indicators in Latvia, with some stories to illustrate my views and the occasional comparison with my home country of Britain. I interviewed a Latvian doctor to discuss health, looked at some banking scandals and interviewed my eight-year-old son about his education.

Thanks for listening!

Transcript

A country's health, wealth and education levels are three of the most important socioeconomic indicators. Latvia, a small country of 1.9 million people with a troubled history of various invaders and occupiers, has done much to improve these factors over the last two decades. Being a member of the European Union has considerably helped. In this episode, I will give my observations on the present state of these indicators in Latvia, with some stories to illustrate my views and the occasional comparison with my home country of Britain.

Health

Latvia's healthcare system is similar to the UK’s National Health Service (NHS), with universal population coverage from tax-financed healthcare provision. The Ministry of Health is responsible for defining national health policies and regulations. Primary care providers - general practitioners - are privately run and publicly funded. Secondary care, like hospitals, is a mixture of a private and public-run system but financed by general taxation. Although health expenditure per capita has increased by 75% since 2010, it remains the fourth lowest in the EU. Almost all residents in Latvia are registered with a general practitioner, who acts as a gatekeeper to secondary care, like in the UK. Also, like in the UK, medicines prescribed by doctors are subsidised but not free. In Latvia, this has resulted in the EU’s second-highest out-of-pocket 'personal' expenditure and disproportionately impacts the poorest.

According to the OECD, the life expectancy of the Latvian population has increased by more than five years over the past two decades and reached nearly 76 years in 2020. Despite a growth rate above the average for the EU, life expectancy in Latvia remains the fourth lowest in the EU at almost five years below the EU average of nearly 81 years. The gender gap in life expectancy is more than nine years – the second highest in the EU. On average, men lived only 71 years in 2020 compared to 80 years for women. This fact is mainly due to greater exposure among men to some risk factors for health – alcohol consumption and smoking. Inequalities in life expectancy in Latvia exist not only by sex but also by the level of education. The life expectancy of men with the lowest level of educational attainment is, on average, 11 years lower than for men with higher education. This statistic highlights the higher smoking rates and poorer nutritional habits among the least educated.

Less than half the Latvian population reports being in good health. Wealth does make a difference. 69% of people within the highest income bracket reported being in good health, compared to only 25% of those within the lowest income bracket - one of the most significant gaps in the EU. 43% of all deaths in Latvia can be attributed to a combination of poor diet, tobacco smoking, alcohol consumption and low physical activity.

Latvia has the highest alcohol consumption per person in the EU, and one in four men binge drinks monthly. The proportions of obese adults and smokers are well above the EU average - 35% of Latvian men smoke daily, the second highest in the EU. Heart disease and stroke are the leading causes of death in Latvia. Lung cancer remains the most frequent cause of death by cancer. The burden of mental ill health is also significant in Latvia: suicide is a major cause of death, particularly among men. Despite some progress in suicide prevention, Latvia recorded the fifth-highest suicide rate in the EU.

Socioeconomic inequality - low income and low education - contribute to health risks.

I spoke to a Latvian doctor, a radiologist at a hospital in Riga. 

In our interview, I said Latvia has a low life expectancy compared to other EU countries, with significant health risks from high alcohol consumption, poor nutrition and smoking and an underfunded health system. I asked the doctor what had been done to improve these negative characteristics. The doctor said that she agrees that the health system has been underfunded for years, and it does not look much better even though this foundation is rising yearly. But still, it's not enough, and it's not comparable with other European Union countries. On what is being done to improve these negative characteristics, the doctor said that the lack of money impacts life expectancy, the health system, education, and lifelong learning.  This is where the doctor saw that there was very little improvement because people didn't want to change so easily. On the other hand, after Covid, there was quite a lot of investment in major hospitals. As a professional, she noticed that new equipment was changed from older to newer. Also, newer methods have been invented, particularly in her field of radiology, like nuclear medicine options. She said she could not answer for the whole medical system, only for her field. I asked from her perspective what she liked about the Latvian healthcare system. She said that as a professional, she likes that Latvia is a small country. Every specialist is more or less accessible. She can pick up the phone and call and find somebody to answer questions and not have to write long letters. Most likely, in every field of medicine, she would know somebody who could answer her questions quite quickly. That is a real advantage. From being a patient as well, she has noticed that in the last few years, her family physician has become more accessible and able to deal with different things. I said that I thought her views would be very interesting to people in England at the present time with long waiting lists for appointments or operations, a very bureaucratic system that relies on people sending letters from one person, one medical practitioner to another, to book medical services. I asked what the doctor disliked, and what she would change in the Latvian healthcare system. She replied that one major thing that impacts a patient and a doctor, especially family physicians, is the lack of a unified medical data system. There are several data systems. Everyone works with different hospitals or different polyclinics. They are not unified; sometimes, you must look at three or four data sources. It's not easy to use, especially for doctors. For patients, it's easier because they can find the result, but for doctors, it's not unified. The doctor said that she is always looking for the previous examination and checking several systems to find out whether she has something to compare with or not. It makes work complicated, takes longer and means she can see fewer patients. I asked if the solution was an investment in IT. Yes, she replied, but it needs a state-provided solution. At the moment, the data systems are privately based except for one, but that does not contain patient results until now.

Not all is bad. Latvia has focussed over the last decade on improving primary healthcare. I have had a good experience with this. When my son developed spots, my wife texted our family doctor with a photo of the spotty boy. The doctor replied quickly, an examination was arranged and medicine prescribed. Son recovered quickly. Compare that example with my experience in the UK. I felt ill. I called the local medical practice. I was asked to attend an appointment in three weeks. I told the receptionist that I felt very sick. If the doctor didn’t see me, I would drive to the accident and emergency unit at my nearest hospital. I was allowed to come to the medical practice and was eventually seen by a doctor, given an ECG and immediately sent to the hospital. My heart had been racing at 175 beats per minute, and the hospital staff nicknamed me “the revver”.

Also, later in Latvia, I paid my euro 30 consultation fee to see a cardiologist, who explained what was going on with my heart. It took over two years in the UK before I got a similar explanation from a cardiologist. In the UK, my original cardiologist gave 5-minute appointments purely to check medication. When I asked questions about what was wrong with my health, the cardiologist told me that I should stop worrying and go away—medical paternalism. When this same cardiologist was reading from another patient's medical record at a later medicine consultation, I complained and changed my heart care to a better hospital. I had an operation at this world-class heart hospital. Job done. I never had any aftercare. 

I have had an annual complete blood test checkup with the private clinic E. Gulbja Laboratories for a few years. Our family doctor then examines the results of the test. Yes, I have to pay for the test, but such a concept of an annual health check is only available at many times higher cost privately in the UK. The NHS in the UK focuses on the healthcare of the sick, not health risk prevention.

Wealth

Depending on where in Latvia you live and what you observe, you may have a different view of residents' wealth. In the capital Rīga, one notices many expensive cars being driven, Porsche Taycans, big Mercedes and BMWs, and nice-looking houses or apartments around the city. But stare harder, and you see many old secondhand cars on the road and prefabricated tower blocks throughout the suburbs. I live near such a suburb in Imanta. Nothing wrong with it - it is certainly not a ghetto or a no-go area. Just tower blocks that were never designed to last 70 years. There is similar housing across the former socialist states. I remember taking Prince Charles, now King Charles, around Petražalka on the opposite side of the River Danube to Bratislava, the capital of Slovakia, while I was a diplomat there. He stopped and asked two ladies if they lived in that part of the city. They said yes, and pointed to the prefabricated block where they lived. What was it like to live there? Charles asked. They explained that although the outside looked tacky, they had decorated the inside of the apartment in a lovely way. The ladies asked Charles for a selfie picture. He obliged! Bet they had an interesting discussion with friends afterwards: what did you do today? We had a chat with Prince Charles. No, I don’t believe you! Here’s the evidence in the photo!

The economic downturn caused by the Covid pandemic and the Russian invasion of Ukraine has hit Latvia hard. The gross domestic product in 2023 is projected to rise by 0.8% across the European Union but only by 0.1% in Latvia. However, projections are for a much higher than EU average growth in Latvia in 2024. Unfortunately, inflation is among the highest in the EU at 22%, but this is expected to drop to 7.9% in 2023 and a slight 1.5% in 2024. Better times may be coming!

Latvia’s economy is heavily based on services at 74% of GDP, manufacturing at 22% and agriculture at 4%. The primary manufacturing industries are processed foods, processed wood and metal products, textiles and synthetic fibres, pharmaceuticals and electronics. Exports and a highly developed transit service between countries are important parts of the Latvian economy. Undoubtedly the war in Ukraine will hit transit services hard as the EU imposes sanctions on exports to Russia and Belarus and imports from those countries via Latvia.

Latvia has an average gross monthly salary (before income tax and social contributions) of about Euro 1,300. This statistic hides the fact that average wages are higher in Riga and its environs and in Ventspils than in other parts of the country. The region of Latgale has the lowest average salary. The statistics also show that 23% of the population lives below the poverty line. In the UK, 20% of the population is regarded as being in poverty. The unemployment rate in Latvia has remained static over the last few years at 7%. That’s from official statistics. There are also what I call the brown envelopes. Employees are paid the minimum wage (Euro 620 per month from January 2023) to keep tax and employers' social contributions down, and this wage slip salary is topped up by cash in a brown envelope. I know of someone whom a company in Riga paid that way. But try to get a bank loan or mortgage when you can only prove you are on the minimum wage! There is, of course, a massive loss to the government from this tax evasion and, therefore, to all the social services that the government provides - because of brown envelope salaries.

Corruption and money laundering have been problems in Latvia. Latvia’s banking sector was once viewed as a hub for illicit money from Russia. After the breakup of the Soviet Union, Latvia positioned itself as a financial hub for the eastern region. Wealthy Russians saw Latvia as a transit point to Europe. Many businesses in Latvia had long-standing ties with companies in Russia. There have been a series of banking scandals. In 2018 a Latvian private bank called ABLV was regarded by the US Treasury as an institutionalised money launder, allegedly even funding North Korea’s nuclear missile programme. At the same time, Danske Bank, a major Danish bank in the Baltic States, was investigated for serious money laundering offences of 200 billion Euros in illicit payments from suspicious Russian and Latvian customers - including, allegedly, Russian President Putin’s family - through its Estonian branch over eight years. The funds then flowed to major European and American banks. The fraud was exposed by a British whistleblowing employee who ‘spilled the beans’ on the “ask no questions about the source of the money or where it is going” approach Danske took to banking. The largest money laundering scandal in Europe, possibly the world. At the end of 2022, Danske Bank pleaded guilty to a multi-billion dollar fraud scheme on US banks and paid a US$ 2 million fine. The bank is also being tried in Estonia and the UK for money laundering. The Danish regulator was reluctantly forced to investigate the largest bank in Denmark. Charges against the former directors of the bank were dropped in 2021. Danske has closed its business in Latvia.

Latvia has made great efforts to clean up its banking sector with tougher anti-money laundering controls. Since Russia invaded Ukraine, banks have had to review transactions by their customers to ensure they do not violate the EU’s sanctions on Russia and Belarus. Latvian banks' compliance departments are now critical. Some banks, like the largest bank in Latvia - Swedbank, have stopped all transactions with Russia and Belarus. The Wall Street Journal recently said Russians now use Hungarian banks for transactions because of lax banking oversight in that country. 

“Money makes the world go round”, sang Liza Minnelli in the 1972 musical drama film Cabaret. ‘“Money is the root of all evil” is a proverb originating from the Bible. Which do you believe in? I joke with my friends that I’m becoming an anarchist as I grow older, so the anti-capitalist, money is the root of all evil, is for me!

Education

Latvia's education system differs from the UK's but is not dissimilar to other EU countries. Non-compulsory preschool education is for up to 5-year-olds, compulsory preschool education from 5 to 7, then compulsory basic education from 7 to 16. Then there is a non-compulsory choice between secondary education or vocational education and training from 16 to 19 or leaving education for the employment market. Higher education is usually from 19 to 23 years or longer with 3 - 4 year university degrees and 2 -3 year college education.

There are 29 universities in Latvia and 24 colleges. 13% of students in Latvia are international students, with Rīga Stradiņš University a popular choice for its medical and health programmes. Riga Technical University is the highest-placed Latvian university in the QS World Rankings, with its architecture programmes highest ranked by subject, then engineering and technology, then business and management studies. 

In Latvia, 46% of 25 - 34-year-olds hold a university or college qualification. But are these high figures changing? Just over 26,000 fee-paying students enrolled at university or college for the 2022-23 academic year, the lowest in a decade and nearly 9% less than the previous academic year. About half of the students study Bachelor level programmes, a quarter study Master level programmes, less than a quarter go to college, and nearly 3% do Doctoral level programmes. Despite the expansion of a scholarship programme introduced in 2021, there appears to be a steady drop in interest in higher education. In a February article, Times Higher Education, a well-regarded education publication in the UK, reported this decline in Latvia’s student numbers. It said that the monthly scholarship payment of Euro 160 was insufficient to counter the massive rise in the cost of living, with inflation at 22%. The majority of students in Latvia pay for their studies themselves. Many decide to go into employment rather than university or college studies or otherwise study in another country.

Again we see a strong link between health, wealth and education. 

The European Commission has named 2023 as the Year of Skills. They argue that having a workforce with the skills in demand contributes to sustainable growth, leads to more innovation and improves companies' competitiveness.

In 2021 across all EU countries, 11% of adults participated in lifelong learning - learning new skills or improving existing skills. Some countries like Sweden saw 35% of adults doing lifelong learning. It was also high in Estonia at 18%. Latvia wasn’t bad at nearly 9%. Certainly much better than Bulgaria, Greece, Slovakia or Poland. 

However, I also recently read a rant by the Latvian Prosecutor General, Juris Stukāns, in which he said that the prosecutor's office had been unable to fill vacancies for a long time. Mr Stukāns said, “We cannot select the required number of employees. For example, there were 70 candidates with higher legal education and a master's degree. I'm sorry, but they should not even have a bachelor's degree because, in the test, they cannot answer basic questions of law”. He went on to criticise the education system and quoted the results of the last lawyer qualification exam in which only 26% of students passed. “For a third year, the results of this examination, which the public prosecutor candidates should also pass, have been disastrous,” the Prosecutor General said.

I am an advocate of the apprentice scheme in the UK. Employers with over 50 staff have to pay an apprenticeship levy to the government. They can reclaim much of this levy if they employ apprentices. Some organisations regard it as a tax and don't employ apprentices, but this payment supports smaller companies to take on an apprentice. Apprentices typically spend a day studying and four days working on the job for a year and a half. It gives the apprentice good insight into a particular sector and good vocational training and allows the employer to see whether the person fits in. I tutor about 50 public relations apprentices at the moment. Most are offered full-time employment after completing their apprenticeship qualification. My apprentices come from many different backgrounds, very different to the traditional public relations sector of predominantly employing white middle-class people. That can only be good for the profession. I spoke to a university professor in Australia the other day who was keen to know more about the apprenticeship scheme in the UK. She identified that many students in Australia started a university course because they felt they had to, for future employment prospects, yet gave little thought about the subject of their degree and what this would lead to after graduating. For many, a more vocational qualification would be better, she thought.

My son started first grade at Rigas Imantas Vidusskola in September 2022, after three years as a pupil at a primary school in Long Melford, England. I asked him, an eight-year-old, for his perspective on the different education systems.

I asked Oliver what he liked about Rigas Imantas Vidusskola. He said he liked music lessons because he learnt the do-re-mi scale. He liked his teachers because they gave him easy and hard homework. He said he had friends at school, the whole class were his friends. I asked him what things he disliked about Rīgas Imantas Vidusskola. He said the school lunch. Because they served him nuts that he didn’t like (that was his word for griki). He didn’t like homework, because yesterday they gave him three pages of homework for the last lesson. I asked him what he missed from Long Melford primary school. His friends, he replied, because they were nice to him, played with him, and helped him out. I asked him what was different at his school in Riga compared to Long Melford in England. He said his Riga school was way bigger, there were more floors. He is in the first grade, and in his English school, he would be in the third grade. I asked him if he understood everything the teacher said in Latvian, and he said yes. I asked about the other pupils, do they all speak Latvian in class? Yes, he replied, but they also speak Russian and English.

Conclusion

I hope I have made the case that there is a strong link between health, wealth and education. That some people will be disadvantaged by all three socioeconomic factors. The state of a nation needs to be viewed holistically, especially by policy decision-makers in government. But also by the practitioners working in healthcare, employment and business, and education provision. Simply, all three factors are important and interlinked. I hope, too, that I have painted a picture of a nation getting to grips with society's ills. That good times are probably on the way in the not-too-distant future.