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latvia

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LATVIA


 

REPUBLICAN REFERENCE

Area (sq.km) 
64,589

Population
2,385,231

Principal 
ethnic groups 
Latvians 52.0%
Russians 34%
Belarusians 4.5%

Capital 
Riga

Currency 
Lats

President
Mrs Vaira 
Vike-Freiberga

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Background:
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: 267 - (27/03/03)

Events are developing very rapidly and unusual new departures are in the air. Latvia's President Vike-Freiberga gets on very well with Bush. On a recent visit to Washington various ideas were mooted in the media close to Pentagon sources of what was discussed. These were immediately denied as unfounded by Vike-Freiberga; but they are pre-eminently the sort of ideas that, if true, certainly would be denied at a time like this.

NATO shifts to the Baltic
The Bush Administration is set on "full spectrum dominance" across the world. We are assisting at a solemn and awesome function, the birth of the Mega-West. This will consist of an ever expanding array of states, committed to Western values, liberal democracy, market economy and a security regime involving no war with each to other, but mutual defence against outside aggression - the famous articles 4 and 5 of NATO, all under the US umbrella.
These articles were flouted recently by France, Germany and Belgium over Turkish demands for defence equipment to be sent to it. Russia then began to fish in dangerous waters by backing them over Iraq and, in particular, threatening to use its veto on another UN resolution. Moscow was giving every appearance of wanting to divide NATO. It may succeed, but with results it will not like. 
The honeymoon between Bush and Putin is quite over. That between him and either Schroeder or Chirac never existed.
Bush and his team believe in the New Testament precept: "if you are not for me, you are against me." But they also believe in the Old Testament principle of revenge, of smiting down the unbelievers. No turning the other cheek in this administration. If you fall out with them you can expect retaliation.
There is one quite drastic and effective way that they could get their own back - which would chime in with the new megaphone non-diplomacy of US defence secretary Donald Rumsfeld of late. They could spite Germany and Russia in one masterstroke, killing two birds with one stone. They could simply move the bulk of their forces in Germany to the totally loyal Baltic states.
The US has several air bases, 42,000 soldiers and 785 tanks currently stationed in Germany. If they were mostly moved to the Baltic states this would shake up German politics in no small manner. The US has already the use of superb air surveillance services at an airport outside Riga in Latvia, enabling them to monitor Northern Russia for commercial, no doubt, as much as military reasons. Their old bęte noir, Schröeder, whom they despise for his implicitly anti-American demagoguery to get re-elected last year, and their new fledgling bęte noir, Putin, or rather the Kremlin old guard behind him, would be immensely discomforted. The loss of jobs and money from such a move would hurt the Social Democrats in key states - given Germany's federal structure with state as well as federal elections it would be sweet revenge indeed.
The difficulty is that the move would effectively finish off the old NATO and would antagonise the Russians no end, presenting them with a final encirclement, US bases in Central Asia, the Caucasus and the Baltic. The first two zones have Islamic terrorists all right, but the Baltic has no sort of terrorists at all, except small-time gangsters. The move could not be justified by the war against terrorism - it would be flagrantly an anti-Russian development, affecting their commercial as well as security concerns. It could mean an end to US - Russian rapprochement.
That such a development has been considered in Washington is obvious, probably with Vike-Freiberga too. As Claud Cockburn said, one should never believe a rumour until it has been officially denied. Anyway, her remarks were especially unconvincing because immediately qualified by an admission that the Pentagon was considering troop transferences to make defence spending more efficient.
Latvian Defence Minister, Girt Valdis Kristovskis, said, "to transfer the military bases, the US has to make a decision on pulling them out of Germany, but there is no reason to do that now. It's not as easy as putting someone on a plane and taking him somewhere." They key word in this statement may be 'now,' the slip that gives away the game.
The Washington hawks must be itching to hit Schroeder and his lot in this way. When German Foreign Minister Fisher made a recent conference outburst that he could see no reason for the war in Iraq, Rumsfeld disdained to comment, but contempt was written all over his face. He would know all about Fischer's far leftist past and this particular brand of German pacifism would leave him cold.
The Americans know that a Christian Democrat successor government would immediately engage in reconciliation, and ask for the bases back. But of course these days the Germans do not need them for military, but only for economic, reasons. A new mark-two NATO could have come about, really a Northern Atlantic, Northern Baltic Treaty Organisation, with the sole function of providing overseas forward bases for American garrisons.
Even the hawks must be somewhat daunted at the rupture with Russia involved. But if the war with Iraq goes according to plan, the US will have far less need of Russia. And it will have shown decidedly who is boss. The next few months will show quite how radical as geopoliticians the Washington hawks are.

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ENERGY

Transneft refuses to buy Ventspils Nafta shares

Transneft has rejected a proposal from shareholders in Latvia's Venspils Nafta to acquire a packet of shares in the company. Interfax News Agency quoted Transneft Vice President, Sergei Grigoriev, as saying the company was not happy with the proposal from the Latvian side, regarding the conditions under which the shares would be acquired, despite the low price for the share packet. "They took too long to think and our interests have changed. Moreover, their approach to this issue does not suit us," he added.
He also noted that Transneft does not plan to transport oil to Ventspils by the end of the year, due to the lack of technical facilities. "These facilities are not going to suddenly appear from nowhere, they may appear only to the loss of the Baltic Pipeline System, but for this a political decision is required," Grigoriev said.

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INFORMATION TECHNOLOGY

Latvian IT companies boost exports in 2002

Latvia's largest IT and telecommunications companies that have formed an information society cluster last year achieved considerable growth of exports according to the survey by the Latvian IT and Telecommunications Association (LITTA), reports New Europe.
The Survey covered nine companies - DataPro, Dati group, Exigen Latvija, IT Alise, MicroLink Latvija, Rix Technologies, TietoEnator Financial Solutions, Tilde and Verdi Informacijas Sistemas un Konsultacijas (Verdi).
Total exports by these companies reached 17m lats (€27.05m) last year with a 35% growth from 2001 when this figure was 12.6m lats (€20.3m). Most of 2002 exports went to Europe - 44% of the total with a growth of 86%. Major exporters to Europe were DataPro, Dati, MicroLink Latvija and TietoEnator Financial Solutions. Exports to the US accounted for 31% of total exports, increasing 14% from 2001. The leading exporter in this category was Exigen Latvija. Exports to the Commonwealth of Independent States increased by 22% last year due to activities by MicroLink Latvija, TietoEnator Financial Solutions and Verdi. Exports to Baltic neighbours Lithuania and Estonia grew by 9% in 2002. The Latvian cluster companies' revenues from business in the Baltics rose 10% from 2001

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TELECOMMUNICATIONS

LMT to start selling subsidised phones

The Latvian Public Utilities Commission has made a decision to amend the licence issued to LMT mobile telephone operator, allowing the company to sell subsidised phones, the practice already used by its competitor, Tele2, Dienas Bizness reported.
The commission's decision annuls an earlier decision by the Latvian Transport Ministry, responsible also for telecommunications, barring LMT from offering subsidised mobile telephones. All experts saw this restriction as putting LMT at an objective disadvantage in competition with Tele2. LMT tried to compete by offering mobile telephones in a pay-by-instalment scheme, with a small initial down payment. However, this could not equal Tele2's offer of cell phones at a low one-time cost, conditional on use of a certain tariff plan of this operator.
According to unofficial estimates published in the press last October, aggressive marketing and pricing policies by Tele2 may have boosted the company's clients to 455,000, leaving behind LMT, which had 440,000 clients in mid-October.
LMT would not comment on the estimate but the business newspaper quoted Public Relations Manager, Valdis Jalinskis, as saying the company would take the opportunity given by the amended licence terms "to offer its customers ever better terms for use of mobile telecommunications."
Tele2 Director, Bill Butler, said, "Tele2 welcomes healthy competition in this market sector because we support market liberalisation for all."

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