Fighting the cause for business

Fighting the cause for business

As the voice for business on Latvia’s top table of decision-making, Liga Mengelsone sees a bright future for the national economy. Colin Donald talked trade unions and the future over lunch with the the Latvian Employers Federation chief.

Liga Mengelsone is talking about “apple juice with cinnamon”, but it’s not on the menu she holds in her hand.

For the general director of the Latvian Employers Federation (LDDK) the recipe is a metaphor for Latvia’s special formula: “We are a very good mix. We have western thinking, but the eastern part gives it the spiciness”.

“As a nation our approach is quite ordnung [disciplined] as the Germans say, and we can work long hours. But we also have specific knowledge about our eastern partners. We are the bridge. Rather than going straight to Russia, which can be very challenging, let us be your translators, literally and culturally, your guardians.”

Most business visitors to Riga will have heard this already: Latvia as portal between the European and Russian spheres, lucky inheritor of a prime patch of global real estate. They won’t, I bet, have heard it put as persuasively as by Liga Mengelsone over lunch at the Biblioteka, one of the capital’s finest restaurants. The former newspaper publisher, who joined the LDDK in 2011, is a key player in the high-growth nation’s business scene, and a persuasive cheerleader for Latvia’s economic destiny.

Her table talk wanders over a vast canvas, switching effortlessly from the pre-Christian Baltic spice trade to the current National Development Plan.

Before we tuck into those meaty subjects, a minute to appreciate our surroundings: We are in the multi-award-winning Biblioteka No 1 Restorans, opened in 2011 and presided over by star chef Maris Jansons.

I had arrived early for our lunch date, but Ms Mengelsone was even earlier, pecking away at her smartphone in a quiet part of the 70-cover restaurant. It is the part that resembles the “library” the name suggests, albeit a library furnished by Ikea, the trendy Swedish furniture store.

It’s obviously a spot she knows well. Later, when she requests that “Maris” comes out to take a bow for his spectacular cooking, she greets him like an old friend.

This is not surprising, as the Biblioteka No 1, like Liga herself, is at the epicentre of Riga business life. Located in the Vermanes Darzs (Verman Garden), one of 19th century Riga’s first public parks, the building that the Biblioteka’s terrace extends from has been a spa, a movie theatre and a pharmacy.

Now the restaurant shares this prime position with a casino and a nightclub, though its placid atmosphere and subtle service have nothing in common with such places.

For starters Liga and I talk about what it means to be Latvian to the accompaniment of dishes (lampreys in a soy marinade and red deer tartar) that are seasonal, fresh and locally-sourced. An American survey designated Latvia as the second greenest country in the world, an implied stamp of authenticity on its natural larder. Enhanced by the magic of Janson’s cooking, these are flavours that advertise Latvia’s increasingly-celebrated food culture, presented with ingenuity and flair.

Liga tells me more about the LDDK’s work: essentially to represent business at the top table of national decision-making, particularly in a forum called the National Tripartite Council, where government intersects with business and trade unions.

The forum came into its own during Latvia’s crisis period, now thankfully fading into history, when the severity of the country’s problems and the radical “internal devaluation” [including wage-cuts of up to 40%] needed to counter them, could easily have led to Greek-style social unrest.

“It was a nerve-wracking period” Liga remembers. “The economy shrank by 18%. Only good co-operation and mutual understanding and attitude prevented Latvians from taking to the streets. It could have been very different. Of course it was dramatic, and there was lots of unemployment. But when I’ve asked my counterparts from other countries – especially the countries of “old Europe” – about whether they could have accepted this, they say ‘no way!’”

“I think the Latvian nation in general showed great heroism. Our organisation and of course our trade unions, allowed us to get through it patiently, step by step.”

I sense that Liga Mengelsone’s belief in social solidarity comes with a strong sense of the firm leadership, which she believes business must provide. Charming, frank, and often very funny as she is, I sense that if it were a boardroom table not a lunch table, it would be a different story. “I am quite a straight person” she says “maybe sometimes too straight. This position sometimes asks from me more diplomacy, more democracy so my style doesn’t work too well. I need to work on myself.”

She talks about her ongoing discussion with Latvia’s trade unions about the overtime pay provision, “the most difficult thing” in the new labour law currently going through the Saeima, Latvia’s parliament. The trade unions are holding out for 100% of normal hours pay, the LDDK says 50%. “That is our position and they haven’t agreed to that. It’s a very tough issue and we have already had a strike about it, but I hope we will find a compromise.”

Don’t get her wrong, Ms Mengelsone likes strong and professional trade unions, believing they should be integrated into companies enough to know balance sheet figures, productivity levels etc, but “they can’t just be in the position of demanding things.”

She believes they must face the realities of making recovering Latvia more competitive. “It’s a big issue that employers can’t get rid of people, even if they are lazy or unprofessional. The good thing is that the trade unions understand that these are not normal times and we are talking about it around the table, not in the streets.”

While waiters hover tactfully, we talk about former Prime Minister Valdis Dombrovskis, who left office in January, taking responsibility for the November 2013 Maxima supermarket disaster.

She admired him, not least because of his readiness to take advice from the LDDK. She bridles when I repeat the accusation levelled by some intellectuals that the National Development Plan he led, informed by LDDK input, was an 87-page technocratic EU funding application, not an inspirational manifesto for the nation’s future growth.

“What! We spent hours, weeks and months last year working on this process over Easter while everyone else was away in the countryside. We insisted that the document should read like a business plan, not some fairy tale or wish list for Santa Claus. There was very wide involvement in this, and everyone had a chance to say what they wanted. Latvia needed a business plan, where it is clearly stated who is responsible for what, how much money we have in the state budget and from European funds, and also development money. I would be suspicious of anything you could put on three pages, you need tables, you need figures.

“Money for innovation, education, the roads, we know who the responsible ministries are and how many million Euros we have to spend. We [the LDDK] will be the watchdogs of this, we will ask if it has been done or not, we have decided that this is our role.
“The next plan will be better than the last plan, but this is better than the previous one, which really was a book of fairy tales. We can make this work, with a bit of adjustment to the left or the right where need be, but it hurts to hear criticisms of it.”

While we wait for our main courses – veal cheeks with butternut squash, pot barley and cod with cauliflower puree and split peas – we talk about Latvia’s impressive workplace gender balance. She is not the first female director general of the LDDK and it was no big deal when the country’s first female prime minister Laimdota Straujuma, “Latvia’s Angela Merkel” as the press called her, took over in January. She is scathing about European equalities commissioner Vivian Reding, who wants to impose quotas on the continent’s boardrooms. “I’m opposed” she says. “The joke in Latvia is that they need quotas for men. It should all be down to professional quality, not gender.”

Liga’s own high standards and the “values” she insists on, derive from her background. Her mother was a lawyer, her father an engineer – “a brilliant brain” who imparted to her his ideas about business’s proper role in society and treated the sexes equally. “I also have some very interesting aunts who were professors.”

Her upbringing, she suggests, made her a “person of action”, one who prefers trying to change things to criticising from the sidelines. “Everything starts from analysing something and then fighting for it. If you don’t take these steps yourself, nothing will happen.”

Under protest, Liga allows the waiter to pour her glass of Roseto del Volturno, a light rose from the Campania from Biblioteka’s heavily Italy-dominated wine list. Food as good as this demands an accompaniment. As we savour it, Liga talks a bit about the challenges of raising two boys (Karl, 6 and Gustav, 5) while maintaining a high-flying career, about the greatness of Latvia’s operatic singers, about the glories of Latvian black bread, and about her past career.

An MBA from the University of Latvia, she worked for the Swedish newspaper publishing group Bonnier, where she learned about social and economic issues and the value of “high-speediness”. She helped a new science magazine that has help brightened up classroom life.

A genius for trading, she suggests, is engrained in the people of Riga. “It feels like the centre of the Baltic, because we are. It’s a multi-cultural city with good traditions, dating from the pre-Christian Balts who lived here before Bishop Albert founded the city.

“They had a very organised state, with a sophisticated trading system designed to promote the well being of every person in society, with strict rules about who could sell amber and spices to whom. Everyone had their job, and their income, that was the system until the Christians came along in 1201 and collapsed it! Everyone wanted to occupy Riga, its the place where trade naturally flows – it’s been our advantage and our problem throughout history, when we’ve been invaded by the Germans, the Poles, the Swedes and the Russians. Location is everything.

“Latvians are proud of their culture, and nowadays its best to think locally and act globally, which is why it’s encouraging that lots of young people who have experience of the world and have good management skills are marketing splendid new products based on Latvia’s natural provenance.”

As an example, she cites a company called Madara cosmetics, which she has been mentoring, that produces organic cosmetics and is also exploiting the commercial potential of the “juice” of Latvian birch. The company now exports to 100 countries.

It is Liga Mengelsone’s job to talk up Latvian business but she comes across as a pragmatist and a realist. The crisis has had its positive side, she suggests, as the country now knows the difference between wealth based on consumption, banking and real estate (although she sees enduring value in building Russian-friendly “non-resident banking”), and what she calls “producing real stuff that is made here, by our resources, by our employers and our workers. That makes added value by getting euros, dollars or roubles.”

Latvia, she proposes, is better-placed than much of “old Europe”, as it has fiscal discipline, both from its crisis retrenchment and the preparations that ensured the smooth joining of the Euro in January 2014. “Given Latvia’s history I would say we are quite German.. but in a good way”. She smiles.

Most memorable is her pride in Latvia’s achievements and anticipation about the future of a country that has accomplished so much since independence in good times and bad, and whose business ethos and work ethic can match the best in Europe. Right now the growth rates are better than the rest of the EU’s and continuing this will be the spur to the repatriation of Latvian talent.

“The majority would like to come back – not all, but the majority. They are economic refugees, and as soon as our business and entrepreneurs can afford higher salaries, they will be back. They need their own society, their family and their friends”.

As we say our hurried goodbyes (the lunch has overrun), and leave the restaurant it occurs to me that the Latvian Government should send Liga Mengelsone abroad to chivvy the diaspora back to the motherland. If they do come back, and flourish in the new Latvia of Ms Mengelsone’s dreams, they can aspire to eat as well here as in any European capital.

Cooking the books:
How Maris made Biblioteka No1

Like all the best chefs, Biblioteka No 1 Restorans’s globe-trotting Maris Jansons (33) prefers to let the food do the talking. Professional since 17, he has worked in Riga’s best restaurants, Vincents and La Boheme, before helping to launch Biblioteka in 2011.

A board member of Latvia’s Chefs Club, he spends any spare time supervising the training of young professionals. BQ Baltic coaxed him from his kitchen to get his perspective on the state of Latvian fine dining.

Your menu suggests a desire to show off Latvia’s natural larder, am I right?
High quality products are the basis of good food. Farmers who grow these wonderful products and fishermen are the real heroes. Basically I try to create dishes where these tastes are recognisable, but presented in a contemporary manner.

Is Baltic cuisine aligned with the Nordic trend for foraging and wild ingredients?
There is definitely some influence from Scandinavia. We are a Northern nation and our climate is also rather rough so I think our eating habits are quite similar. However, income levels are different and Latvia is somewhat behind. But the philosophy about a self-contained environment, choice of local products and most importantly about the [national] identity will be developed further here.

Do you see Riga as a centre of fine dining?
Culinary art in Riga has been developing very fast in the last five years thanks to my generation which, after training and working in this environment, is setting the pace. There are more and more new restaurants where chefs are the owners which makes a difference.

We still lack the general level of national wealth to reach the level of the best Scandinavian cooking but we can feel that changing. After more than 20 years of independence during which we have tasted and tried different kinds of European and other cuisines, we are now developing the unique products and producers that will allow us to develop contemporary Latvian cuisine.

Are you aiming for Michelin stars for Biblioteka?
Our goal is to grow into the market-leading restaurant, and to retain that status. I don’t think that Michelin stars will happen so soon.

It’s hard to gather five suitable restaurants in all three Baltic States, which makes it still too small to be interesting to [gastronomic] critics. What matters it that people come to our restaurant and they really like it. Just keeping it up at that level generates enough stress!

Two courses (appetizer and main course) for two people at Biblioteka No 1 Restorans costs around €68, with mid-priced wines at around €25.