Introduction

The rate of productivity in a country affects the level of living standards of its inhabitants. Likewise, the government plays a chief role in the well-being of citizens because it formulates the relevant rules that control output rates. Therefore, it should implement regulations that promote productivity and improve the economy. The president of Lisavia should guide the country to enforce some significant economic policies, namely introducing policies that increase productivity expansion, regulating savings, and reducing government regulation to raise the standards of living.

Introducing Policies That Increase Productivity Expansion

Productivity growth is an essential factor that affects the level of living standards in any economy. Similarly, a stable growth rate of productivity improves the consumption and output of employees. Consequently, the government can introduce policies that encourage productivity expansion in several ways, such as developing infrastructure, improving entrepreneurship, creating human capital, and promoting research and development.

Develop infrastructure. The quality of infrastructure in a country controls its productivity and growth significantly. For example, roads that connect different states reduce carriage costs and promote tourism. Likewise, decent infrastructure creates employment for people, such as the drivers on the highways and the workers in tourist hotels. Undeniably, it creates job opportunities and improves the living standards of the employees.

Improve Entrepreneurship. The government should eradicate all factors that prevent entrepreneurship development such as stringent tax regulations. Additionally, the president should ensure that the country implements a favorable environment to start a successful business. Firstly, the nation should have sufficient intellectual property rights that protect the ideas of innovators. Indeed, an innovator would be reluctant to introduce a business idea that he or she could not own eventually. Secondly, the government should reduce regulations that control business formation to encourage more people to invest. Thirdly, leadership should introduce policies that enable entrepreneurs to access loans to start businesses. Consequently, favorable policies for profitable startups promote the growth of an economy.

Create Human Capital. Most countries that have a strong economy also claim to have an active human capital. It is a unique style because it represents the skills that employees obtain from a series of training sessions. Likewise, experience and expertise enable them to improve productivity, develop efficiency, and create talents. Therefore, human capital allows an economy to increase the rate at which it produces commodities and services.

Promote Research and Development. The president should create policies that encourage scientific development to promote economic growth. Research and development lead to the formation of new products and services, which improves productivity considerably. Consequently, new product lines lead to more business and employment opportunities in the country.

Regulate Savings

The living standards of residents and the growth rate of a country depend majorly on the scale of saving. Most countries agree that a feasible saving plan should increase the consumption of each employee and promote economic growth. The state should use three techniques to improve saving namely, regulate business levies, reduce the tax on personal revenues, and government saving.

Regulate Business Levies. The country should have favorable tax guidelines that promote capital development. For instance, a policy that supports a fast cost recovery scheme is essential because it provides payments for depreciated equipment and plants in business — moderating business levies help to counterbalance the tax rate increments on all business profits that occur after inflation. Equally, it encourages commercial capital development because it increases the return on investment after all tax deductions.

Reduce Tax on Personal Revenues. Fewer tax burdens on personal earnings enable people to make more savings than before. Likewise, reduced tax rates encourage employees to work hard and invest in businesses as well. As a result, the living standards of citizens improve because they save more from income at work and investment opportunities.

Government Saving. The country should improve its saving rate strategy to enable it to reduce its budget deficit and develop infrastructure. Firstly, the government could moderate public spending to increase the rate of public saving on all its tax revenues. Similarly, an expenditure that exceeds income leads to a shortage in the budget of a country, which means it has an undesirable public saving. Secondly, the government could encourage the commercial sector to improve its saving techniques.  Indeed, government saving helps a country to build more infrastructure and improve the living standards of citizens.

Less Government Regulation

Unwarranted government regulation in customer product protection and employee safety could hinder economic development. Therefore, the president should ensure that the country introduces well-organized and flexible rules and abolishes the old ones. For example, the necessary regulatory changes could include moderating monopoly control, reducing control of the oil markets, implementing a cost-benefit breakdown of government spending, and minimizing license guidelines. The government should make the necessary changes to create a commercial environment that is conducive to attract both local and foreign investors. Indeed the business climate would create more job opportunities and raise living standards of citizens eventually.

Conclusion

Lisavia should have a steady production rate first to allow it to improve the living standard of its citizens. The president should implement promising policies that develop infrastructure, increase entrepreneurship, generate human capital, and promote research and development. Likewise, the country should adopt measures that regulate savings and reduce government regulations. Undeniably, Latvia should follow the policies to improve the economy and living standards eventually.