The development of a country is not a destination, but a continuous process. Countries finding themselves at different stages of economic development have to set the right political priorities, which are exactly appropriate for a certain development stage. The present paper presents an attempt to elaborate a model for a sustainable growth of an economy, which ranges political initiatives according to their added value to the general competitiveness of a country or a region. The analytical part of the paper analyzes the economic situation in Latvia, defined the stage of economic development of the country, as well as proposes a strategy for further effective development of Latvia in the internal market of the European Union.