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DGIV/CULT/POL/book
(2000) 8
Policy
Review of the Report
prepared by Electronic Publishing, Books and Archives
Project Cultural Policy and
Action Department DG IV:
http://culture.coe.fr/epba
Giuseppe Vitiello Anne Geiller Ruth Goodwin
Policy Review of the Latvian
Book Sector RECOMMENDATIONS AND CONCLUSIONS BACKGROUND FRAMEWORK
THE BOOK SECTOR AND GOVERNMENT
PUBLISHING BOOK DISTRIBUTION
AUTHORSHIP AND
TRANSLATION LIBRARIES
LEGISLATION RELATED
TO BOOKS BANKING AND FINANCE
BOOK SECTOR ORGANIZATIONS
AND ASSOCIATIONS SOURCES OF INFORMATION
AND ADVICE
Latvia is a small country facing a lot of problems with the multi-language and multi-culture population. It is also an impressive country in terms of a high level of literacy and education. As a new associate member of the European Union, Latvia has already started the accession program. A National Book Policy could function as an important factor of the Latvian way toward EU membership with regard to the educational needs, restructuring and retraining programs as well as democratisation of the whole of society through broad and equal access to multi-language publications across the diversified Latvian society. If a clear and consequently well co-ordinated Book Policy program were to be adopted it would certainly strengthen the Latvian ambitious plan to become a member of the EU in year 2004.
BACKGROUND FRAMEWORK Population Latvia is situated at the coast of Baltic Sea
and is bordered by four countries: Estonia, the Russian Federation,
Belarus and Lithuania. The land area covers 64,589 sq. km. The population
of Latvia is decreasing (ca. 5% over the last five years). In January
1999 it was 2.44 million with 55.5% Latvians, 32.4% Russians, 3.9% Belo
Russians, 2.9% Ukrainians, 2.2% Lithuanians, 1.3% Poles and 1.8% others.
The official language is Latvian, which belongs
to the Indo-European language family. Like in Estonia, one of the social
and political issues is the status of the Russian minority,
The Latvian capital Riga is one of the most beautiful and romantic cities in Europe. Straddling the Daugava River, the city has been a major trading centre since the 13th century. Its current population of 900,000 is bigger than that of Stockholm and Helsinki and almost twice the size of the other Baltic capitals. The mass migration of Russian workers during Soviet times left Latvians in the minority in Riga.
Latvia is a parliamentary republic, with the 100-seat Saeima (parliament) elected by general elections with a 5% threshold for parties to enter the parliament. After the collapse of the Soviet Union, Latvia was—in principle—established as a restored state with legal continuity between the 1918—1940 republic and the present state. The government cabinet is nominated by the leading coalition and approved by the Saeima. The last government, headed by Mr. Andris Berzinsh, was sworn in during May 2000. It consists of two parties from the previous coalition, Latvia’s Way and For the Fatherland and Freedom-LNNK, and the prime minister’s People’s Party. The new government is going to be established with the support of the previous coalition and the so-called New Party which has eight seats at the Saeima.
The transition from a socialist economy to a free market economy began immediately after the renewal of the independent republic. In 1993, the Fifth Saeima was elected and rapid economic reforms were introduced soon after. Economic growth was relatively fast until 1998 (real GDP growth 3.6%); due to the Russian crisis in 1998 it has slowed down significantly and real GDP contracted by 0.6% in 1999. The forecast for restored industrial output growth over the next two years assumes a moderate real GDP growth of 1—3%. Inflation remains the lowest in Eastern Europe and in 1999 was at a record low of 2.3%. The external economic crisis also caused an increase of unemployment, which grew from 7.3% in July 1998 to 10.1% in May 1999. A substantial source of income for the Latvian economy is the transport of goods through the three important sea terminals located in Riga, Ventspils and Liepaja. Its advantageous geographic location can make Latvia an effective bridge between the Community of Independent States (CIS) and Europe. Most of the foreign companies interviewed by independent experts agreed that Latvia has the potential to become a gateway towards the Eastern market when the CIS countries recover, the border and political problems with Russia are settled, and the business environment in Latvia improves. In December 1999 the government agreed on an ambitious reform plan with the International Monetary Fund. The main issue is the central budget deficit, which the government wants to halve by the year 2000. Latvia is a member of the Council of Europe and an associate member of the EU. Although negotiations for the European Union accession started in 2000, membership is still some years away.
Responsibilities for books within the Ministry of Culture is shared among several departments with no special department dealing with books. One person is employed in the Ministry to deal with tasks related to publishing and almost half of her time is related to issues of the book sector. All responsibility for financial support has been delegated to the Cultural Capital Foundation of Latvia (see the Section on Culture Capital Foundation of Latvia below).
The restoration of Latvia’s independence and the development of a democratic society with a free market economy demanded a dramatic shift in educational focus. Therefore, in 1998 the Ministry of Education and Science adopted the National Compulsory Education Standard, which outlines the contents for educational reform by the year 2005. The first new textbooks were already published in 1999. The total duration of general school education in Latvia is 12 years. It consists of 9 years of compulsory basic and 3 years general secondary education. The number of pupils at the basic school level in the last school year (1998/1999) was 293,385; 46,457 students were enrolled in general secondary education and 46,237 in vocational secondary education. The Ministry does not want to interfere with the free market mechanism of educational publishing. The role of the Ministry is reduced to general recommendations for textbook development, the approval of manuscripts as textbooks, and the supervision of the process of dissemination among pupils and students. This process is supervised by the Centre for Curriculum Development and Examinations, a public body associated with the Ministry, which consists of a group of pedagogical experts from different fields. On the other hand, the Ministry provides certain funds from the state budget to the school system for the supply of textbooks (see the Section on School Textbooks below). Computerisation in schools has already been initiated, and the Ministry’s ambitious plan is to complete the establishment of computer labs in each secondary school by the year 2001. Regarding higher education, the system is rather decentralised with five universities and a number of academies, both state and private and all of them fully autonomous. The State budget allocated for education in recent years amounted to 6.5 per cent of the GDP, which, for instance in 1998, represented 246.5 million LVL. In the near future the system of funding in higher education will be rearranged in such a way that all students will pay a tuition fee. The government is working out a system of study loans, which will be introduced at the same time.
The Ministry officials present the very pragmatic view that the book sector does not differ from any other business sector in Latvia. Therefore, they do not support any tax exemptions. It is strongly recommended by the Ministry officials to impose the standard VAT rate, 18 %, for books, since the Latvian legislation has to be harmonised with the EU rules over the next three years (see Section on Taxation and VAT below). The governmental plan of the harmonisation with the EU legislation assumes that all goods and services will be subject to 18 % VAT, i.e. that there will be no reduced rate or VAT-exemption whatsoever.
The most active and most relevant one for the book sector is the Commission for Education, Science and Culture. This commission consists of ten members of the Saeima. The commission deals with a number of issues concerning culture, science and education, especially with regard to all legislation to do with the book sector. Some members of the commission are well-known and respected writers and artists in Latvia. They organise frequent meetings with experts and representatives of trade associations such as the Publishers’ or the Booksellers’ Association.
The level of literacy in Latvia remains very high, but reading activities have decreased significantly over the last decade. This is also reflected in a decreasing number of publications per capita. Usually Latvia is compared statistically with the other Baltic States, and according to the data of 1995 Latvia is in third place with 2.9 books per capita. Estonia takes the first place with 5.3 books and Lithuania the second with 4.9 books per capita. Readership surveys show that approximately 20 % of the Latvian population does not read books at all (not a single book during the past five years), which places Latvia at a similar level to other countries of the Baltic region.
Unlike the Latvian Culture Foundation, which is focused mainly on the support for regional culture and the overall promotion of Latvian culture abroad, the Culture Capital Foundation of Latvia concentrates on direct sponsorship of both individuals and institutions involved in cultural issues. The Culture Capital Foundation of Latvia was established in 1998 as a non-profit joint stock company owned by the state. A scope of its activities and sources of income have been defined in the special parliamentary act called the Law on Culture Capital Foundation, which was adopted in December 1997. The main objectives of the Foundation are “to support and enhance culture in its totality, as well as individual artistic projects, to promote research related to culture and cultural heritage, to support outstanding individuals engaged in art and culture by way of awarding grants.” Until the end of last year, the Foundation’s financial resources came from a fraction of the state budget revenue and directly from lotteries, gambling duties and tax. In the year 2000 the system was changed, and resources now come from the alcohol and tobacco excise tax income in the amount of 3 %. It appears to be a controversial decision to link the consumption of alcohol and tobacco with the promotion of Latvian culture. However, the Cultural Capital Foundation of Latvia is highly regarded in Latvian society. All activities of the Foundation are governed by an 11-seat Council, which is appointed by the Cabinet of Ministers. As a rule, the Minister of Culture is the chairman of the Council. On a competitive basis, the Council appoints members of seven branch councils and the administration board. There are eight branch councils: Literature, Music and Dance, Theatre, Cinematography, Visual Arts and Photography, Cultural Heritage, Traditional Culture and the General Council, which deals with overlapping areas of culture activities and multidisciplinary projects. Publishers and authors can submit their proposals to the Council of Literature in the first place, but other councils do consider subsidising related publishing projects as well. There are four competitions a year in order to select the best projects. Basically, funds are evenly spread among branch councils and the Literature Branch can distribute ca. one eighth of available financial resources. The proportion of projects accepted and rejected by the Foundation is one to six (seven). According to the management of the Foundation, the ideal proportion would be one accepted to three rejected proposals. In 1999 the Foundation spent ca. 240,000 LVL (400,000 USD) on publishing projects within the Literature Council.
Books have played a significant role in the history of Latvia and the Latvian language. The first book in Latvian was published in 1525, soon after Riga became the printing centre of the Baltic region. In the 20th century, during the first twenty years of Latvia’s independence, the book industry was very dynamic, and Latvia held the second place in Europe in the number of books printed per million inhabitants. With the restoration of independence in 1990 came the enormous boom of the publishing industry. To date, the ISBN Agency has 737 registered publishers, which is a much higher number than the one for publishing houses active in 1940 (479), prior to the Soviet occupation. However, based on data collected by the Department of Press Statistics, only 402 out of 737 registered publishers released new publications in 1999.
The output of titles between 1991 and 1999 shows a continuous increase from 1387 titles in 1991 to a peak of 2652 in 1999. The forecast for 2000 shows a possible slight fall in the number of titles published. Consequently, the total annual print runs decrease, from a very high number in 1991 (28.5 million copies) with a dramatic fall over five years to 9.5 million copies and reaching a relatively stable level in the period of 1996—1999: between 7.7 million and 7.2 million copies. This means that average print runs are currently between 2,600 and 3,000 copies. Among 2652 book titles published in 1999 there
are 2191 in Latvian, 1610 of these are new original Latvian literature.
Translations of foreign works into Latvian represent
The trend for publications according to market demand, surprisingly, is not typical compared to the experience of other post-communist countries. There are a relatively stable number of best-selling fiction titles and a falling number of children’s books. This is an interesting tendency, showing a growing predominance of science, reference and educational titles, which, for instance, in 1997 represented 45 per cent of all book titles published in Latvia.
The book sector in Latvia does not support the fixed-price system, but publishers are strong enough to control book prices. The major part of any production is distributed on a consignment basis from publishers to wholesalers and/or booksellers with the full right to return unsold stock. If a wholesaler is involved in the process, he or she gets from 7 to 10 % discount on the publisher’s price. Booksellers usually mark up the price of a book by 25 %, and they are left with a tiny margin from which it is hard to make any reinvestment in infrastructure development. Gradually, more publishers are establishing their own shops and effectively compete with the booksellers in pricing. In a small country such as Latvia, it is virtually impossible to diversify prices in different shops. The maximum discount (10 %), which publishers pass on to distributors, is far too small for them to survive easily. Profitability of a wholesaling business in Latvia, measured as the ratio of the gross profit to the net turnover, is extremely low and does not exceed 0.02 %. As a result, all areas of the book sector try to survive by delaying payments to creditors in order to accumulate the capital needed to maintain and develop infrastructure. To summarise, if a publisher’s price is 100 units
(VAT not included) the typical breakdown is as follows:
Formally, school textbooks were supplied free to all children in Grades I to XII from the state budget. However, the state can guarantee a maximum of only 1,6 LVL (2,8 USD) per student per year. Local governments also contribute to the purchase of school textbooks. Depending on the region, this varies from 2 to 12 USD per student per year. Bearing in mind that an average set of textbooks costs approximately 40—60 USD per student per year, there is a deficit of at least 25 USD per student per year, which only parents can pay for. A free supply of textbooks seems to be illusory at this stage. Naturally, poorer pupils or students can borrow second-hand textbooks from a school library. The Ministry of Education and Science assumes a period of five years as an average lifetime of a textbook, which appears to be a far too optimistic figure. Textbooks for schools are usually selected by individual teachers or by the so-called methodology board in a school and delivered directly to school libraries and the students. The total market for school textbooks is approximately 3.5 million LVL (6.0 million USD), with a dominant position of Zvaigzne ABC (60 % of the market share) and the two leading educational publishers Lielvards and Raka (at least 10 % each). The best-selling textbooks for primary education may reach a print-run of 15,000 to 20,000 copies.
As in other post-communist countries, the number of university students in Latvia has risen significantly. On the other hand, the market for academic textbooks in Latvian is rather limited. Roughly, university textbooks in Latvian represent 10—15 % of all academic publications, and imported textbooks in English and in Russian dominate the market. The Ministry of Education and Science does not promote any subsidy program for university publications, neither directly to publishing nor indirectly to the library system, which limits the ability of academic publishers to invest in the development of higher education textbooks. As the Ministry officials point out, Latvian universities are autonomous state-owned or private institutions; therefore the Ministry should fund all publishing activities from a university budget, not directly. Since the budget is very tight, there is relatively little money to be spent on textbooks.
Publications for children seem to be a big concern for Latvian officials. There was a significant decrease in the number of books for children in 1999 (208 titles) as compared to 1998 statistics (331). In addition, there were only 25 first editions of books in Latvian published last year. Due to limited financial resources, specialised children’s libraries (74 libraries of this kind in Latvia) are poorly supplied with new publications. The situation in school libraries is even worse, with the exception of textbooks and some reference publications there is no supply of any children’s titles at all.
Electronic publishing in Latvia is in its developing phase and rather limited. It is a small market affected by piracy (see section Piracy on p. 25). Moreover there is no Windows or other international operating system available in the Latvian language. Therefore, to date, only a few CD-ROMs have been released in Latvia. The retail price of the official version of a CD.-ROM title is ca. 45 – 48 LVL (18 per cent VAT included) compared to 3 – 5 LVL for an illegal copy. The most prestigious title ‘The Encyclopaedia History of Latvia’ published in Latvian and English was subsidised by the Soros Foundation of Latvia and sold just several hundred copies and even with a huge discount only a few thousand additional copies were sold to schools. In addition to 700 articles it contains nearly 1,000 pictures, 60 video and audio clips. Among other CD-ROM titles English language teaching materials dominate with the retail price between 24 to 32 LVL including VAT. The number of computers equipped with the CD-players is ca. 50,000 and 40 per cent of them are located in households. In schools there is much lower number of computers with the higher specification required to operate with the more advanced software. CD-ROM titles are subject to the normal rate of VAT contrary to a relatively large number of book titles (works for children, school text-books and scientific, technical and medical books, and first editions of original works printed in Latvia), which are tax exempt. They definitely should be regarded as a part of the book sector with the same tax rates as other publications. There is a rapid development of on-line publishing in Latvia, although currently publishers can hardly find a way to make money on electronic activities.
There is no system of subsidies to the book sector directly from the government. Publishers and authors can submit projects for grants to the Culture Capital Foundation of Latvia (see the Section on the Foundation above). As in other countries of the region, the Soros Foundation Latvia is the most significant private sponsor of publishing, bookselling and libraries in Latvia. Over the last seven years the Soros Foundation Latvia has provided sponsorship in the development of textbooks, legal literature, humanities and social sciences translations, etc. In addition, the foundation supported a number of training programs for publishers and their participation in international events such as seminars and book fairs. Total support received by publishers amounts to 2.1 million USD in the period 1993—1999. Since the year 2000 the Soros Foundation has withdrawn from direct subsidies to publishers in Latvia.
The printing industry is a traditionally strong sector in Latvia, with the ability to export its services to the neighbouring countries, e.g. Estonia, Lithuania and Russia. The great majority of printing companies are completely private and very well equipped with modern sheet and web offset machines. Printers are active not only in Rigabut throughout the region. There are important printing houses in Cesis, Madona, Rezekne, Talsi and Valmiera. The number of active Latvian printers able to produce books is over 60. Contrary to the neighbouring countries, Latvia has not ratified the Florence Agreement yet (see the section Legislation Related to Books). This makes the printing service offered by Latvian printers less competitive than that offered by Estonian or Lithuanian printers. Paper as well as inks, films and plates have to be imported, mainly from Finland and Sweden.
Print-on-Demand and digital printing is relatively new and therefore at an experimental phase in Latvia. Neither publishers nor printers know this new technology. It is the view of printers that, at the current stage, Print-on-Demand cannot be more cost-effective than classic printing technology, as long as printers use the old small size offset machines. This is also due to the excessive number of the active printers and tough competition among them for the orders from Latvian publishers, therefore the printers, in order to survive, offer a relatively inexpensive service Print-on-Demand has been suggested by librarians as a promising tool in their work, gradually replacing the classic photocopying technology. It would also allow to control copy rights and effectively arrange for the payment, while any copy right protected text is being reproduced at a library.
There is one national event in April, the Riga Book Fair. The first book fair took place in 1998 as an initiative of the associations of Latvian Publishers and Booksellers. It is run by a private company and both associations play a role of an “umbrella”. The Riga Book Fair attracts both private and public media as well as the government, therefore publishers can use it as a lobbying and awareness-raising instrument. There was international co-operation in the Baltic region among local booksellers associations, which resulted in organising the Baltic Book Fair, the first in 1995 in Tallinn, the second in 1997 in Riga and the last one took place in 1999 in Vilnius.
There is a monthly trade journal “Book Review” published by the Latvian Publishers’ Association for its members but this periodical is struggling for survival and quite likely will be closed down soon. Quite impressive detailed statistics are available at the National Library of Latvia, these are prepared regularly by the Department of Press Statistics. In 1999 the Latvian Publishers’ Association released a brochure with a short survey of book publishing in Latvia, the Latvian Booksellers’ Association is also involved in the Books-in-Print Agency. Books-in-Print is available in a hard copy form and every week the publishers’ forecast is disseminated among wholesalers and booksellers.
There is no permanent training programme in publishing at any Latvian university. In the mid 90’s there was a series seminars and workshops organised by the Publishers’ Associations of all Baltic States in conjunction with the British Know How Fund. The Soros Foundation of Latvia has also financially supported a number of seminars and conferences for Latvian publishers. Unfortunately, this programme has been discontinued. The Latvian Publishers’ Association would readily develop a training scheme but there are no funds available to set up a permanent training centre, an idea, which most publishers would welcome.
Book distribution in Latvia faces same problems as in other countries of the former Soviet bloc. In addition, due to a concentration of wholesalers and booksellers in Riga, the delivery system in provincial cities and in remote regions is relatively weak. There is no data available to showhow many real bookshops currently exist in Latvia. The largest distributor in Riga deals with ca. 1,200 retailers (bookshops and outlets with books). The number of real bookshops is gradually declining. In 1999 alone four bookshops were closed down in Riga. To date the Latvian government has not developed any policy to support booksellers and to stop this negative tendency.
According to an estimation made by the Latvian Booksellers’ Association the number of shops dealing with book only does not exceed 100, which compared with the number of active publishers (ca. 400), is far too few to maintain a proper customer service. An average bookshop is rather small, with retail space up to 80-100 square meters, holding a stock of 2,000-3,000 Latvian book titles. Quite exceptional is the Janis Roze bookshop chain with 9 shops in Riga and 2 elsewhere, all of them with an attractive modernised interior. Focused on books in the Latvian language (Russian titles represent no more than 12 per cent) the Janis Roze company has demonstrated a steady growth over the last five years. However, this growth has to be supported by sales of non-book products such as other audio-visual cultural products, stationary and school supplementary materials. These comprise at least 40 per cent of the turnover. One of the most significant problems is pricing (see section on Pricing above), since the mark up rate on the publisher’s price is no more than 25 per cent and even lower in remote regions due to the lower purchasing power. Another painful factor is the rental rate. In the most attractive locations in the centre of Riga it is 20 – 22 US dollars per square meter, the same rate as in any type of a retail outlet, and in some bookshops the monthly rate exceeds 8-10 per cent of their monthly turnover, which virtually makes their business unprofitable.
Street vendors are less active as now than in the early 90’s. The main location for a street trading is the railway station in Riga. Publications available on the streets of Riga are mainly the latest best-selling titles with relatively modest prices. Street vendors do not present serious competition for bigger and well-established booksellers but, due to high rental cost, it appears to be an alternative for smaller bookselling businesses.
Bookselling is entirely free of any governmental subsidies. There are neither financial programmes to subsidise bookselling activity nor support toward the rental fees of a shop space in state owned real estate.
Book distribution and wholesale activity is fully controlled by the private entrepreneurs. As in other countries of the region, book distribution faces big structural and working capital problems. There are too many small local distributors placed in Riga, who serve mainly Riga booksellers, therefore the whole range of Latvian publications is hardly available in other cities and rural areas. Distributors operate on extremely narrow margins (see Section on Pricing above) and publishers are concerned about the, quite likely, scenario of a distributor collapse. On the other hand, in order to reach a higher profit, many booksellers from Riga prefer to deal with publishers directly, since at least 80 per cent of publishers are located in the capital.
Unlike other post-communist countries, in Latvia mail-order selling has not developed yet. The largest publishers sell ca. 90 to 95 per cent of publications through the bookshop system. The main reason for the lack of mail order selling in Latvia is the high cost of mailing as compared to the average price of a mailed book (or books) and the key system of payment is COD (cash on delivery). Reduced postal rates for printed matter would definitely enhance sales of books by mail, especially in the remote regions.
Books in Print catalogues are regarded as a basic tool for the day-to-day activity of booksellers, distributors and librarians. Publishers can also make more accurate marketing decisions when they have an access to up-to-date information on books which are available on the market. In 1996 the Council of Europe commissioned a survey describing the objectives of Books-in-Print centres followed by a feasibility study in each of the three Baltic states. As a result of this and thanks to the financial support from the Soros Foundation – Latvia (small grant in amount of 11,714 US dollars), a first pilot hard copy edition of the Books in Print catalogue was published in 1998 by the Latvian Booksellers’ Association. It covered approximately 4,000 titles available on the Latvian market. The most recent catalogue was published in 2000, this contains 5,500 titles. There is no CD-ROM edition, however an on-line service is offered with weekly up-dates at www.gramatuinfo.lv. This is a commercial product since publishers have to pay 0.45 LVL per each new record in the first year of a publication and 0.20 LVL in years after. The hard copy edition is distributed free to members of both the Booksellers’ Association and the Publishers’ Association. Members of these associations also receive a weekly newsletter “Gramatu Jaunumi” with a list of newly published titles, approximately 50 new titles every week. The BiP centre is run by just one person and yet it did not break even in 1999. The Centre has developed its own software, although there is a great need to standardise systems at least across the region. Unfortunately there is very poor knowledge among publishers on ISBN numbering. One can find in the BiP catalogue a quite large number of titles with the old Soviet prefix – 5, nowadays formally belonging to Russian publishers only. Therefore ISBN cannot be used as univocal identifier of the Latvian publications.
Similar to the publishing business there is no formal training programme in book distribution. The number of specialist booksellers has dramatically decreased over the last decade and they are being replaced by coincidental merchants with no formal education or professional skills, who leave a job very often of their own volition, therefore short-term employment is one of the key problems faced by the industry. In the mid 90’ there was a series of seminars and workshops for booksellers organised mainly by the Soros Foundation – Latvia, the US Information Service and the British Council.
Bearing in mind that almost 50 % of the population are the Russian speaking minorities (Russians, Belo Russians, Ukrainians and others), there is a relatively strong demand for Russian books in Latvia. In order to meet their needs books are imported from Russia mainly but there are also a few local publishers who publish in Russian. This represents approximately 8 per cent of the total book output in Latvia. Readership in Russian has been systematically increasing due to the relatively low prices of Russian publications and their attractive wide range of subjects. Total sales of Russian imported books can hardly be estimated due to the predominance of illegal shipments from Russia. However, the largest Latvian bookseller, Janis Rozne, reported that sales of Russian books represent at least 12 per cent of the entire sales in their chain. The majority of legally imported books to Latvia are publications originating from the West with a striking predominance of the British and American textbooks, e.g. English language teaching materials and university textbooks, in basically all fields. As a rough estimate just under 2,0 million US dollars of imported books were sold in 1998. It is not an impressive figure. Sales of imported books are being negatively influenced by the fact that 18 per cent VAT is applied whilst domestic production of the educational material is VAT exempt.
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