Mrs Vaira Vike-Freiberga
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After a brief period of independence between the two World Wars, Latvia was annexed by the USSR in 1940. It reestablished its independence in 1991 following
the breakup of the Soviet Union. Although the last Russian troops left in 1994, the status of the Russian minority (some 30% of the population) remains of
concern to Moscow. Latvia continues to revamp its economy for eventual integration into various Western European political and economic institutions.
Update No: 256 - (23/04/02)
The Latvians are none too convinced that their country is doing well. When asked which of the three Baltic states is the most successful more than 50% said
Estonia and only 12% Latvia.
Lure of the West
Yet the statistics report a strong growth of GDP by 7.6% for 2001 over 2000, after good figures during the 1990s. The matter is perhaps explained by high
unemployment of 8.2% of the work force, that is over 20% in places. Everybody knows of somebody not doing well, because even those in work earn much less
than in Western countries, about which Latvians are increasingly well-informed.
A Latvian version of Cosmopolitan, for instance, began this spring, with Britney Spears on the cover. The spread of Western magazines is making people aware
that they have a long way to go to reach Western standards of prosperity. Only the young are confident that they might make it.
New portfolio deal imminent
Change is under way all right and Western influence on the up. Foreign investment has reached US$4.2bn mostly direct. But a surge in portfolio investment
can be expected if a current deal goes through. This is no less than that the Helsinki Stock Exchange (HSE) obtains majority control of the Riga Stock
Exchange (RSE). The Helsinki bourse is aiming for a more than 75% stake in RSE. That would enable it to raise standards to Western levels.
A flurry of new interest would result. Latvia's location as the Baltic gateway to and from Russia would be enhanced. Indeed, a more positive development could
scarcely unfold, should HSE succeed in their bid
New political forces
It looks as if a political revolution may be in the offing in Latvia. A new centre-right pro-business political party was officially registered on February
20th, with a head start in opinion polls ahead of parliamentary elections due in October. Simeon II, the former king of Bulgaria, has shown what can be done
in a few months in a transition economy if a new party has a charismatic leader; he swept to power in Sofia last year only months after forming his National
In Latvia's case the key figure is Einars Repse, who was the central bank chief from independence in 1991 until December when he resigned to form his party,
New Time. He has been effectively the most important figure in Latvian politics for a decade, the unchanging fulcrum of the whole reform programme, while
governments have been and gone. He can, therefore claim much of the credit for the achievements of the last ten years, which have been remarkable. This puts
him in a different position from any other opposition politician or, indeed, any politician in Latvia. He clearly feels the time is coming when he should
enter centre stage, having left behind a chief to succeed him at the central bank and a team under him totally loyal to his ideas, which are orthodox
The IMF regards Latvia as a model performer among transition economies and it is now in a leading position among the EU candidate countries. Inflation is
estimated at 2.5% for 2001 and 3% for 2002, well within acceptable limits. The prospects look excellent for this small, but strategically-placed Baltic
Latvia grants oil exploration licence to US-Norwegian venture
The Latvian economics minister and a representative of TGS-NOPEC, a US-Norwegian joint venture, signed on 3rd April a licence granted to TGS-NOPEC for oil
exploration in Latvia's territorial waters of the Baltic Sea, BNS News Agency has reported.
Latvian Economics Minister, Aigars Kalvitis, and the TGS-NOPEC vice-president and general manager, Europe, Kjell E. Trommestad, signed the document.
Now that the licence has been signed, the US-Norwegian company will be able to take preliminary steps for exploring Latvian territorial waters in the Baltic
Sea for oil fields. Actual oil deposit exploration in the Baltic Sea shelf could take place only several months after the initial preparation work.
Late in February, a tender commission decided that the oil exploration licence should be granted to TGS-NOPEC, although with some minor adjustments to
initial licensing terms. TGS-NOPEC is the only company that applied to the Economics Ministry by the deadline of 31st October 2001 for a non-exclusive oil
exploration licence in Latvia's territorial waters in the Baltic Sea. Acquiring this licence will allow for oil exploration work in Latvia's territorial
waters in the Baltic Sea but will be a non-exclusive licence, not allowing for oil extraction or drilling. The oil exploration licence will be issued for a
two-year term and will cost 2,000 lats (3,600 euros). TGS-NOPEC is one of the largest companies dealing with exploration of fossil fuel deposits...
The Latvian Economics Ministry received no applications for an oil exploration and extraction licence tender and the ministry has begun considering possible
further steps concerning the matter.
FOREIGN ECONOMIC RELATIONS
Vike-Freiberga satisfied with her visit to Greece
Latvian President, Vaira Vike-Freiberga, said that her recent visit to Greece was successful. Concluding her visit in Greece, LETA News Agency quoted
Vike-Freiberga as telling journalists that the best result of the visit is the full support of Greece to the expansion of the European Union (EU) and NATO.
The president is also pleased that many residents of Greece know about Latvia and its strivings to join the EU and NATO.
Vike-Freiberga expressed a hope that the visit of Latvia's business delegation to Greece has also been successful, and that economic cooperation between the
two states will commence. Each visit of the president is like an advertising event, the news agency quoted Vike-Freiberga as saying.
During the visit, Vike-Freiberga met with the President of Greece, Constantinos Stephanopoulos, and Prime Minister Kostas Simitis. Defence Minister, Girts
Valdis Kristovskis and Economy Minister, Aigars Kalvitis, accompanied the president during the visit.
New ferry line to Stockholm
The joint-stock company Rigas juras linijas (RJL), plans to make its maiden voyage on the Riga-Stockholm route in the near future; the first commercial trip
is scheduled for two days later, LETA quoted the company's Board Chairman, Miks Ekbaums, as saying. The Riga-Stockholm ferry will make one trip every two
days. Overall, the company will provide employment for about 100 people, of which about 50 will work on the ferry in two shifts.
The company plans to charter the Max Mols ferry for six months; after that, it will buy its own ferry and prepare a three-year business plan. Riga Passenger
Port's building needs to be renovated to meet the requirements of the ferry's services.
Box offices will operate both at the Riga Passenger Port and Stockholm Port's passenger terminal. It is planned that the catamaran ferry, which was made in
1998 and previously operated in the Atlantic, will perform 20 trips a month between Riga and Stockholm. The ferry can carry 800 passengers, four buses, 40
mini-vans and 120 automobiles.
NERA to hold UMTS telecommunications auction
Latvian Minister of Transport, Anatolijs Gorbunovs, on April 2nd signed a contract on organising an auction of UMTS mobile telecommunications licences with an
international consortium, whose chief participant is the British international economic consulting company National Economic Research Associates (NERA), New
Europe reported recently.
The consortium also includes the joint-stock Hansabanka and the law offices Grunte un Cers. The consulting company will work out regulations for three
auctions of new-standard mobile telecommunications as well as hold the auctions. It is expected that the results of the auction could be approved in October
this year according to the schedule. The auctions are aimed at attracting the third mobile telecommunications operator. One licence will be meant for
operations in both GSM and UMTS standards.
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