RIGA, Latvia -- The Baltic state of Latvia, fighting with its neighbors to attract foreign investment, is making life far too tough for companies that want to set up here, the World Bank said Tuesday in a wide-ranging report.


The report, containing some 100 recommendations on how to improve investment, was drawn up by a team from the World Bank's Foreign Investment Advisory Service and released Tuesday.


"The point is the way the government operates, its regulations are unproductive and cumbersome for all investors, international and local," Lars Jeurling, chief of the World Bank's mission to the Baltic states, told journalists.


Latvia is desperate for more investment, both foreign and local, as it tries to revitalize its economy after 50 years of central planning when it was part of the former Soviet Union.


Of the three Baltic states, northernmost Estonia is by far the most successful in attracting investment.


The European Bank for Reconstruction and Development said in its recent Transition Report that Estonia got $253 million of foreign direct investment in 1994, Latvia an estimated $155 million and Lithuania just $60 million.


"This is not just a government problem, it is no secret that a lot of business practice here is simply unacceptable," Jeurling added, citing the recent banking crisis as an example.


The banking crisis in Latvia was sparked by the crash of what was the largest bank, Banka Baltija.


Many banks were set up in Latvia with lax regulation and some were used to lend money to their own shareholders. "No economy can function and develop with those practices," Jeurling added.


"You have great potential in this country both for foreign investment and national investment but today the country is not yet achieving its full potential," FIAS's Wayne Edisi said.


The FIAS team met local and foreign businessmen in February to discover which problems most concerned them and put them off investing in Latvia.


The report mentions bureaucracy, high costs and problems with customs and tax rules, corruption and crime.