Forecasts of Long Term Progress in The Socio
Forecasts of Long Term Progress in The Socio
Forecasts of Long Term Progress in The Socio
Introduction
Economic crime, which is a serious social problem, threatens sustainable
development and socio-economic well-being. Corruption and the shadow economy
are manifested in different countries, especially during periods of crisis and
transformation in society. In today’s environment, economic crimes have a real
negative impact on the production sector, the ability to attract investment and the
normal functioning of financial and business structures.
For a deeper understanding of organized crime, it is necessary to take into
account the multifactorial nature of its origin and impact on the socio-cultural
environment. It is important to bear in mind that ignoring these aspects may simplify
the analysis of the problem and lead to an underestimation of the scale of the
problem. The situation in Latvia serves as an example of the fact that traditional
economic standards are not effective, and a new economic culture has not yet been
formed. All this is accompanied by a lack of sufficient practical experience to
1 Faculty of Law, Riga Stradins University, LV-1007, 16 Dzirciema Str., Riga, Latvia.
2 Faculty of Law, Riga Stradins University, LV-1007, 16 Dzirciema Str., Riga, Latvia.
[email protected]
3 Department of Humanities and Social Sciences, Daugavpils University, LV-5401, 13 Vienibas Str.,
Daugavpils, Latvia.
50 Kipane et al.
implement new approaches and a lack of clarity about stereotypes of market
behaviour (Shipanga et al., 2022; Nurgaliyeva et al., 2017). Changes in thinking
related to the economy have two main forms: adaptation to new stereotypes of
economic behaviour and violation of laws and regulations (Barlybayev and
Sharipbay, 2015). The latter refers to the reaction to objective conditions arising
from policy. Conflicts between new standards and traditional models require
scientific study to better understand the nature of this phenomenon and its
determining factors. In this context, the use of an institutional approach to the
analysis of the phenomenon of economic crime and its impact on the socio-cultural
environment is necessary in view of its importance.
M. Kacare et al. (2022) consider the improvement of the environmental
situation as a factor contributing to the sustainable development of the economy and
the socio-cultural environment in general. In particular, they believe that factors
such as initial capital, transaction costs, economic conditions and availability of
financial resources can determine the pace of introduction of new technologies.
A. Kairiss et al. (2023) investigate the relationship between individual socio-
economic preferences and the benefits of developing cultural heritage sites in
localities and aspects of sustainability of cultural heritage development projects.
This demonstrates the relevance of this issue not only for Latvia but also for other
countries. The use of socio-economic indicators in practice is an important step
forward. However, it is important to emphasize that the effectiveness of the use of
these indicators can be increased through the implementation of a methodology for
managing immovable cultural heritage and socio-economic development. Socio-
economic indicators play an important role in this methodology at the national and
regional/local levels (Barlybayev et al., 2017).
In another study, I. Olevska-Kairisa and A. Kairiss (2023) draw attention to
the limited access of most stakeholders to justice and the right to an effective remedy
in the traditional criminal law system. It is emphasized that the low level of social
awareness of the socio-economic benefits and rights arising from the preservation,
development, and use of archaeological sites, together with the existing legal
restrictions, can lead to insufficient self-determination of individuals and groups
affected by heritage crimes.
О. Hynek (2020) notes that the crime rate in Russian-speaking regions does
not show higher trends than in non-Russian-speaking regions. At the same time,
unemployment and wages have improved, which indicates positive changes in this
direction.
Therefore, the purpose of the study is to investigate and establish the
prospects for the development of the socio-cultural environment in Latvia, taking
into account active measures to combat economic crime.
Pakistan Journal of Criminology 51
into account the ability of future generations to meet their needs. The impact of
globalization on sustainable development is evident and reflects general trends in
global development, such as economic, social, technological and political changes.
These processes lead to an increase in the volume of international flows of goods,
services, capital, and people between countries, which improves the quality of life
and contributes to the sustainable development of the socio-cultural environment
(Kotenko et al., 2020). Thus, sustainable development is aimed at improving the
welfare of society to meet the needs and ambitions of people and ensure an equitable
distribution of development between the present and the future (Rakauskienė et al.,
2022).
Sustainability includes three main components: economic, social and
environmental, in Figure 1. These three pillars do not exist independently of each
other; they interact and reinforce each other. The level of economic growth, life
expectancy, education level and poverty rate are key factors in this process (Latvia
crime rate & statistics 1992-2023, 2023).
Economical
Social
Cultural
cultural dynamics of a society. The solution to the crime problem cannot be limited
to isolating offenders and physically punishing them, as this approach has limited
possibilities and can lead to overcrowding in correctional facilities. Overcoming the
phenomenon of crime requires a comprehensive approach and consideration of
numerous factors that influence this phenomenon. Society should focus its efforts
on analysing time perspectives, including the short-, medium- and long-term future,
as well as the various aspects of life that can become a breeding ground for crime.
Factors such as the political and economic situation, the psychological and
sociological state of society, and the depth of the human personality are important
for understanding and combating crime. The positive dynamics of these factors
contribute to the creation of a favourable environment for crime prevention and the
maintenance of social harmony. In the context of the development of a socio-
cultural sustainable society and the fight against economic crime at the international
level, the Foreign Investors Council in Latvia (FICIL) has been actively
emphasizing the need for more active measures to combat economic and financial
crime for a number of years. In order to improve the situation, FICIL recommends
developing a clear strategy for combating economic and financial crime, focusing
on three key aspects:
cooperation between institutions at the local and international community
level, as well as between the public and private sectors;
ensuring an effective and up-to-date legal framework that is understandable
and accessible to all citizens;
providing the necessary funding for the implementation of measures to
combat economic and financial crime.
Crimes in the field of finance and economy have a significant impact on
economic development, competitiveness, and welfare of the population, as well as
a direct impact on the circulation of illegally acquired funds in the national economy
(Dovgal et al., 2017). According to the 2021 annual report of the Financial Market
and Capital Commission, the overall level of money laundering and terrorist
financing and proliferation of weapons of mass destruction (ML/FT) risk in the
Latvian financial sector has significantly decreased in the most important segments
– credit institutions and payment institutions (Strengthening Latvia’s capacity to
combat financial crime, 2022).
An effective system of monitoring and combating economic crimes, as well
as the development of relevant legislation and changes in organizational structures,
along with the coordination of their activities, must be based on research and a deep
understanding of the causes of these crimes and the mechanisms of their formation.
It is extremely important to influence the factors that determine the level of crime
in general. The authors note that legislation, legal regulation and their use have a
58 Kipane et al.
significant impact on the situation with criminal activity in the country. Legitimate,
efficient, high-quality and socially oriented judicial proceedings are a fundamental
pillar, contributing to the implementation of the key principles of a fair trial as
defined in the concept of justice. The state is responsible for ensuring the
effectiveness of justice. The criminal investigation process, as defined by the
Criminal Procedure Law, should be aimed at achieving a fair result on the merits of
the case, while avoiding overly restrictive procedural barriers.
The activities of law enforcement agencies are aimed at preventing crimes,
detecting them and identifying the perpetrators, as well as ensuring compliance with
the law. In Latvia, criminal investigation is divided into pre-trial and trial stages.
During a criminal investigation, circumstances should be taken into account in
which the rights of individuals cannot be restricted too severely or indefinitely.
Thus, the state is obliged to guarantee the realization of the interests of each person
within the framework of fair and objective legal proceedings. Lengthy court
proceedings not only slow down investment and negatively affect Latvia’s
reputation as a state governed by the rule of law, but also have a serious impact on
economic activity and increase the feeling of impunity among citizens.
Latvia has an interesting experience in improving the institutional system of
law enforcement agencies in the fight against economic crimes. Since 31 March
2020, the Economic Court, a specialized district court, has been operating
(Evaluation of the judicial systems (2020-2022) Latvia, 2022). The competence of
the Economic Court is determined on the basis of an analysis of areas that require
immediate resolution in order to ensure a thorough, cautious and progressive
approach to determining jurisdiction, avoiding overloading with cases during the
first years of operation. The establishment of the Economic Court provides
significant benefits for the sustainable development of the legal system: increased
reserves and their efficient and rational use; improved judicial qualifications and
quality of judgments; increased credibility of the judiciary and reduced burden on
other judicial bodies. As a result, it is expected that the speed of court proceedings
will increase and the court practice will be enriched, which will contribute to the
development of a unified policy of collecting fines. The establishment of the
Economic Court is an important step for:
1. Ensuring stable economic development of Latvia and attracting
investments.
2. Improvement of the legal system – creation of a system in which economic
cases will be considered in a reasonable time.
At the same time, the use of advanced law enforcement technologies and the
latest tools, including artificial intelligence, can play a key role in combating
economic crime and contribute to the sustainable development of society, as well
Pakistan Journal of Criminology 59
Discussion
Scientific research aimed at analysing the prospects for sustainable
development of the socio-cultural environment in the context of combating
economic crime in Latvia plays an important role in addressing the problem of
economic crime in this country. These studies help to examine the impact of socio-
cultural factors on the level of shadow economy and corruption.
One such study conducted by G. Stack (2021) found an inverse relationship
between the level of development of the tax culture of the population and the size
of the shadow economy. In a comparative analysis between the United States of
America and Spain, statistically significant evidence was found that a higher level
of tax culture leads to a reduction in the size of the shadow economy. Similar results
were confirmed by other empirical analyses conducted by
A. Lytvynenko et al. (2022). Similarly, other researchers have widely considered
the socio-cultural context of the relationship between the development of the
60 Kipane et al.
shadow economy and corruption in a number of empirical studies
(Sredņakova & Sumbarova, 2022; Ginting, 2019; Aldhila et al., 2021). For practical
application in the development of anti-corruption policy, studies recommend taking
into account the conceptual aspects of systemic innovation and security approaches,
which confirms the security approach proposed in the study results
(Mileiko & Hamilton, 2022).
At the same time, P. Seshaiyer and C. McNeely (2020) found that the
characteristic features of transformational economic systems are their
deinstitutionalized nature and the transition from formal institutions to informal
interactions. According to their conclusions, informal institutions include not only
informal economic practices that arise in the context of formal institutions, but also
a set of social norms that are shaped by cultural factors. However, it should be
understood that the nature of transformational economic systems is not necessarily
deinstitutionalized or that it is necessary to move from formal institutions to
informal interactions (Makalyuk, 2014). There are other theories and studies that
may indicate a different type of interactions in the process of transforming economic
systems. Thus, it is possible to question the generally accepted nature of these
conclusions and point to the need for additional research and discussion of different
approaches to this issue.
It is also worth noting the opinion of T. See (2020), who emphasizes that the
shadow economy has an impact not only on the economy, but also on social
processes taking place in a transitional society. In the context of market
transformations, shadow economic activity is becoming typical for many business
entities (Pylypchynets, 2022). This is due to the conflict between modern and
outdated norms, rules and standards, as well as the willingness of business entities
to act in conditions of legal ambiguity to meet their needs. In this context, informal
rules, infrastructure, and prices for bureaucratic services are formed. It seems that
Latvia, like other transition countries, differs from developed countries not only in
terms of the size of the shadow economy, but also in terms of its qualitative
characteristics (Shapoval et al., 2018). In developed countries, the shadow economy
is usually assessed as a violation of existing legislation, while in transition countries
it is seen not only as deviant behaviour of economic agents, but also as the
institutional structure of society, which is manifested in the legislative, executive
and judicial branches in the form of shadow institutions. It is clear that the
deinstitutionalization of society affects the legal infrastructure of the economy,
which leads to the institutionalization of shadow and criminal economic activity
(Haraschuk et al., 2020).
The economic order is an indispensable tool for the organization of society
and the modern open economy, as pointed out, for example, by A. Uslu et al. (2020).
Pakistan Journal of Criminology 61
Its main goal is to achieve maximum productivity through the rational use of
resources, harmonization of social interests and creation of conditions for making
informed economic decisions. In a society in transition, economic order involves
strengthening the legislative and regulatory framework for reforms, consolidating
state power, restructuring enterprises, creating effective ownership structures,
developing the financial and credit system and channels for investment, expanding
market infrastructure, improving the culture of business relations, building trust
between business entities and reforming labour relations, social protection of
employees and the population, and improving relations between the centre and the
regions (Kondratenko et al., 2018). Therefore, it is important to understand that the
socio-cultural context that determines the way people interact, regardless of the
strict grammatical norms of the language, is a significant component of human
communication (Kopnova et al., 2022). Individuals choose the way they
communicate based on their socio-cultural background and are not limited to
grammatical requirements. All aspects of their communication have a certain
structure that influences the choice of interaction. Therefore, it is worth agreeing
with T. See (2020) and M. Mintaurs (2021), who note that the rituals of daily
communication play an important role, determining certain connections and
relationships.
The results of the study showed a strong positive linear correlation between
the socio-cultural conservation strategy and the sustainability of community-based
tourism projects. In the opinion of W.C. Tubey et al. (2019), this indicates that
effective factors of the socio-cultural conservation strategy, such as the preservation
and promotion of cultural heritage, quality, and diversification of products offered,
entrepreneurial opportunities for local residents and social integration of minority
groups, contribute to the sustainability of community-based tourism. Thus, most
scientific research is aimed at analysing the phenomenon of economic crime in
Latvia. The research includes the study of types of economic crimes, their causes,
mechanisms of occurrence and spread. Researchers pay attention to the analysis of
factors that contribute to economic crime, such as corruption, economic inequality,
insufficient regulation of markets and human trafficking. An important aspect of the
research is to consider Latvia’s cooperation with international organizations and
other countries in the fight against economic crime. This may include an analysis of
joint programmes, exchange of information and practices. Some studies focus on
the impact of the socio-cultural environment on economic crime. This includes
analysing cultural aspects, societal upbringing and attitudes towards offences. Some
studies aim to develop recommendations for the Latvian government on policies
and strategies to reduce economic crime and support sustainable development.
Thus, the state of research on this issue is constantly changing and evolving. Both
62 Kipane et al.
national and international researchers are increasingly interested in the problem of
economic crime and its impact on the socio-cultural environment in Latvia. This
research is important for the development of strategies and policies aimed at
strengthening the rule of law and sustainable development of the country.
Conclusions
The development of cultural space is a key aspect of the strategy for
sustainable development of the socio-cultural environment in Latvia. The
uniqueness and multifaceted identity of nations is determined by their material and
spiritual values, both inherited and newly created. This development contributes to
the consolidation of society and the development of new social, economic and
cultural values. Cultural capital is especially important in the era of changes in the
global economy, when the creative industry is becoming the main source of
competitiveness, determining its presence in human creativity, imagination, and
intuition. The socio-cultural environment is a key factor that determines these
qualities. The main idea behind Latvia’s sustainable development is to achieve a
balance between the needs of the current generation and the interests of social
welfare, environmental protection and economic development. It requires taking
into account environmental aspects and avoiding compromising the ability to meet
the needs of future generations. Crime, which is rooted in the structure of society,
has a strong impact on the cultural and ideological component of the latter. In
Latvia, crime depends on the national factor and other factors, such as the type of
country, political system, geographical location and the role of migration. Countries
with different cultures and mentalities may experience different levels of crime. In
Latvia, as a multinational country, this diversity is reflected in the coexistence of
different ethnic groups. This can lead to cultural exchange, but it can also give rise
to conflict. However, the Latvian authorities recognize the rights of minorities and
take care of their cultural identities and language rights.
Artificial intelligence and new technologies play an important role in the fight
against economic crime and in the development of the socio-cultural environment.
They help identify risky industries, improve criminal investigations and contribute
to the fight against crime. The application of these innovations helps to improve
investigative techniques and the ability of law enforcement agencies to respond to
modern challenges. The development of the cultural space and the fight against
economic crime in Latvia require an integrated approach that includes the
preservation and development of cultural values, sustainable attention to
environmental aspects and the use of modern technologies to improve law
enforcement. This will help achieve sustainable development and maintain the rule
of law in society. Ensuring the sustainable development of the socio-cultural
Pakistan Journal of Criminology 63
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