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LATVIA


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 8,406 7,500 7,200 93
         
GNI per capita
 US $ 3,480 3,230 2,920 86
Ranking is given out of 208 nations - (data from the World Bank)

Books on Latvia

REPUBLICAN REFERENCE

Area (sq.km) 
64,589

Population
2,348,784

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

Capital 
Riga

Currency 
Lats

President
Mrs Vaira 
Vike-Freiberga

  

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: 279- (23/03/04)

The Latvians are doing very well, all things considered. They started out from a very low base at independence in 1991. They were about the tenth poorest country in Europe at the time, a sad proof of the effects of Soviet communism because before the war they were among the more prosperous countries of the continent. 
The key figure in directing the economy during the 1990s was not any minister, but the central bank chairman, Einars Repse. At the beginning of the new millennium he resigned and entered politics. After founding his own party he led it to victory at the next elections, becoming prime minister in a coalition with two others. The coalition assumed office on October 5th 2002. 
The Latvia First Party defected from the government. The party made the move in February after Premier Repse sacked the deputy premier, the leader of Latvia First, Ainars Slesers, in January after months of dissension. He then found himself obliged to resign himself.
He has something of the supreme technician's contempt for politicians as amateurs, good only for a talk-shop, without ever having done a real job of work in their lives. He soon came to be regarded as supreme in his arrogance by his own colleagues, let alone the opposition. But the rumpus led his coalition partner to leave the government and he had to resign in February. A new coalition is in office.
His record in handling the economy, nevertheless speaks for itself. GDP growth was 7.2% last year, continuing the success of 2002, and is due to be 7% this year. His successor as central bank chief, who is in the same mould, Ilmars Rimsevics, can be guaranteed to pursue the same successful policies. He is more important than the premier, Indulis Emsis, the leader of the conservative-green Farmers' Party. A new twist in coalition politics could bring back Repse, who is respected, even if not liked.

Stock market boom
The economic success has led to a stock market boom. Latvia's stock market index RICI is all the rage among investors. Since the start of last year, the value of the index - which contains the 13 leading Latvian companies that are listed in the stock market - has more than doubled.
"This is also an indicator of the very good economic development in Latvia," said Juergen Machalett, president of the bank Norddeutsche Landesbank Latvia.
Latvians are trusting their own economy as the country prepares for European Union entry, and they have gathered the needed capital both from abroad and domestically. Everything is open for investment: glittering shopping centres and new office buildings, expensive home appliances and western cars.

May Day is D Day
Latvia is to join the EU on May 1st. Europe beckons. Air Baltic is starting up flights from Riga to Milan on May Day, as tourism mounts. Many Latvians are leaving to work in the EU already. There are fears that an exodus could commence on May Day.
Latvia is regaining its European identity, lost in 1940 by being engulfed in the Soviet Union. But the fact that one third of the population are Russian is a constant reminder of the Soviet heritage.
President Vaira Vike-Freiberga met with President Roman Prodi of the European Commission (EC) in Brussels on October 10th. Previously the EU had objected to Latvia's policy on citizenship, denying it in effect to the large Russian minority, which predominates in the six largest conurbations, including the capital. Riga. The requirement of fluency in Latvian has been too daunting for Russian Latvians of a certain age. The EC, however, supports Latvia's society integration policy, says the commission president, which is on the right track, he avers. 
Such is not the view of the Council of Europe; whose head on human rights, Alvaro Gil-Robles, told a Latvian parliamentary delegation recently that the naturalisation process in the country is too complicated. The language politics in the republic is aimed more at assimilation than integration, he said. "Even if someone were just thinking about assimilation, it would be a big mistake; it is more important to convince the society than it is to coerce them. Otherwise you could have problems in the future."

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AVIATION

AirBaltic to launch flights to Milan in May


National airline airBaltic plans to launch direct flights to one of the most popular Italian cities amongst tourists - Milan - as of May 1st this year, LETA reported recently.
Taking into account the present tourist market situation, it is planned to establish maximum convenient travel routes southwards, as there have been no such routes before, airBaltic President, Bertolt Flick, explained, adding that direct flights to Milan would be launched because of considerably high flow of tourists between Latvia and Italy, according to a study.
Initially, airBaltic plans on three direct flights to Milan a week - on Tuesdays, Thursdays and Saturdays. The flight will take about two hours and 40 minutes. One way ticket including airport taxes, will be 49 lats. AirBaltic will conduct flights to Milan with the 120-seat Boeing 737 aircraft. This will be already the 19th direct flight offered by the airBaltic.
As reported, airBaltic plans to launch five new routes this year, therefore offering flights to 20 European cities. In 2003 airBaltic carried as many as 336,367 passengers which is 28% up from 2002 with 262,212 passengers. The airline operated 10,316 flights in 2003 while in 2002 as many as 9,074 flights were conducted. This year airBaltic plans to increase the fleet up to 14 planes.

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SHIPPING

Hyundai to build 4 tankers for Latvian shipping company

Latvian shipping company AO Latvijas Kugnieciba has signed an agreement with South Korea's Hyundai Mipo Dockyard Co Ltd to build four mid-sized tankers, a source in the Latvian shipping company said, Interfax News Agency reported recently. 
The source said that Latvijas Kugnieciba subsidiary Crown Navigation Inc signed an agreement recently with Hyundai Mipo Dockyard Co. The South Korean company will build four tankers with a freight capacity of 37,000 tonnes each, to be delivered to the client in 2007. In line with the conditions of the deal, its value has not been revealed. However, the Latvian newspaper Kommersant Baltic Daily reported earlier that one tanker might cost about US$30.5m. The Latvian shipping company also plans to acquire three Arctic-class tankers. Crown Navigation Inc and International Andromeda Shipping plan to sign an agreement over the next few days for the acquisition of the three tankers Pink Star, Coral Star and Purple Star, built in 2003. The company may receive these ships in May-June.

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TRANSPORT

Latvia oil terminal ups cargo turnover 10%

Ventspils naftas terminals, a subsidiary of the Latvian oil transit company Ventspils naftas, shipped 1.1m tonnes of oil and oil products in January 2004, up 10% from under 1m tonnes in January 2003, the company told the Riga Stock Exchange. The terminal shipped 500,000 tonnes of diesel fuel, 400,000 tonnes of crude, and 200,000 tones of gasoline. All shipments arrived at the terminal via rail. Ventspils naftas terminals reduced its cargo turnover by 22.5% in 2003 to 10.7m tonnes, while the volume of cargo received via rail increased 68% to 4.3m tonnes. Ventspils nafta founded Ventspils naftas terminals in 2003. Ventspils nafta's biggest shareholders are the Latvian government with 38.6% and Latvijas naftas tranzits with 42.8%, New Europe reported recently.

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