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LATVIA


 

 

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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: 283- (26/07/04)

New Government formed
Latvia had a new government in March, approved by the Saeima (Parliament) led by Indulis Emsis. The coalition in government consists of the Green Party (Latvian abbreviation ZZS), People's Party (TP) and Latvia's First Party (LPP).
It is the first Latvian government since 1995 that does not have the ultra-nationalist "Russians Go Home" The Movement for Independence and For Motherland and Freedom (LNNK/TB), which has been responsible for stricter laws on citizenship and education, that became a cornerstone in the Russophone movement in recent months. In a nice twist, LNNK found themselves in the opposition along with the so-called Russian parties. 
Emsis' government is not necessarily going to last long. Much will depend on what the government will attempt to accomplish. 

Crisis of government 
The fragile ruling coalition was dealt a hefty blow in the June 12th European Parliament elections, with its three constituent parties mustering only 14 per cent of the vote, or one seat out of the country's nine in the European legislature.
The opposition right-wing, free-market oriented LNNK made a comeback and took four seats and 29.8 per cent of the vote in the election. It was followed with two seats and just under 20 per cent of the vote for the largest party in parliament, the conservative opposition party, New Era, led by Einars Repse who led another coalition government that fell in February. 
The pro-business People's Party was the only one of the three-party ruling coalition that scraped into parliament with a single seat. The leftist Human Rights in United Latvia, which defends Latvia's Russian speaking minority, and a rightist party also won one seat each. 
The coalition's opponents hoped to exploit the opportunity and to overturn the minority government. New Era and LNNK, whose strong showing of nearly half the vote gave them most of the country's six seats in the EP elections, asked the People's Party to leave the coalition and to join them in forming a new government.
Together these three right-wing parties hold 54 seats in Parliament. 
The other two coalition members, Latvia's First Party and Greens and Farmers Union, were dismissed as possible partners by former Prime Minister Repse, who called them "traitors." They had had a role in his fall from power in February. With a potential majority already their support seemed superfluous.
Nevertheless, Latvia's premier, Indulis Emsis, survived a parliamentary confidence vote on June 17th, days after his three-party coalition received the reverse in the European elections. 
More than half, or 56 of the parliamentarians, in the 100-seat assembly voted against a no-confidence motion submitted by New Era, which has been calling for early elections, with 31 voting for the motion. There were no abstentions.

Latvia leads the Baltics in economic growth
The first quarter of the year put Latvia in the spotlight amongst its other Baltic neighbours in terms of economicgrowth. The country posted the highest rate of economic growth for the above period, with gross domestic product (GDP) expanding an astonishing 8.8 per cent over the same period last year. 
Lithuania and Estonia followed with similarly strong figures, with their economies growing by 7.7 per cent and 6.8 per cent, respectively, over the first three months of the year.
Latvia's GDP grew to 1.5bn lats (€2.3bn) from January to March, led by trade, transport and communications, the processing industry and construction. Trade accounts for 18.7 per cent of GDP, while transport and communications 15.5 per cent.
Although the news was praised by politicians, central bankers cautioned against excessive growth and its repercussions on macroeconomic indicators. "Annual growth of over 8 per cent cannot be maintained from year to year and is dangerous to economic development in the future," Bank of Latvia President, Ilmars Rimsevics, said. In mid-June, Rimsevics announced the central bank had revised its estimate of annual GDP growth up to 7.5 per cent.
Together with the Finance and Capital Market Commission, the central bank said it was analysing ways to slow down lending, which is the leading factor behind the increasing consumption. "We think that the Latvian government should act to make sure the budget deficit is below one per cent next year and remains around 1.2-1.5 per cent this year, instead of the planned 2 per cent," Rimsevics said.
However, Rimsevics said that the central bank would not raise rates again and would instead look for other ways to prevent the economy from overheating.

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ENERGY

Latvijas Gaze to increase investment 60% in 2004 

Latvian gas concern Latvijas Gaze plans to invest 25.4 million lati in 2004, which is 58.8% more than in 2003, company CEO, Adrians Davis, said recently, Interfax News Agency reported. 
A priority area for investment this year will be the construction of a new compressor station and a reserve compressor unit at the Incukalns underground gas reservoir (24.4% of planned investment), the construction of gas distribution pipelines and also the gasification of towns and villages, he said, 
Company investment in 2003 amounted to 16 million lati. Davis said that Latvijas Gaze investment in the first half amounted to over 6 million lati. The company invested in modernizing the Incukalns reservoir and in developing the pipeline system. 
The company's audited net profit in 2003 increased 6.8% to 13.015 million lati, with turnover up 13.3% to 112.9 million lati. 
The company sold 1.63 billion cubic metres of natural gas in 2003, 3.8% more than in 2002. 
Itera Latvija and Gazprom each own 25% of Latvijas gaze, Ruhrgas owns 28.66% and E.ON Energie owns 18.06%. Charter capital is 39.9 million lati, split into 39.9 million shares, par value 1 lats each. 

Ventspils nafta terminal cargo turnover down 20% in H1 

Ventspils nafta terminals, a subsidiary of the holding company Ventspils nafta, handled 5.2 million tonnes of oil and oil products in the first half of 2004, 20% less year- on-year, Interfax News Agency reported. 
Ventspils nafta press secretary Gundega Varpa told the Baltic News Service that Ventspils nafta terminals handled 0.6 million tonnes of oil and oil products in June alone (0.2 million tonnes of diesel fuel, oil and gasoline each), 40% less year-on-year. 
Diesel fuel transshipment was down from 3.7 million tonnes to 2.2 million tonnes in the first half of this year, while that of oil increased from 1.5 million to 1.6 million tonnes and gasoline from 1.3 million to 1.4 million tonnes. 
Varpa said the reduction in handling was prompted by a reduction in shipments of diesel fuel by rail from Commonwealth of Independent States countries due to rising world oil prices, as well as the fact that rail cargo carriage through Russia to ports on the Baltic Sea is three to five times more costly than to Russian ports. 
Ventspils nafta terminals handled 10.7 million tonnes of product in 2203, 22.5% less than the year before. 
Ventspils nafta founded Ventspils nafta terminals in 2003. Ventspils nafta's main stockholders are the Latvian government (38.6%) and the company Latvijas naftas tranzits (42.8%). 

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TELECOMMUNICATIONS

More clients for Latvijas Mobilais

Latvian mobile communications operator Latvijas Mobilais telefons had 654,211 subscribers as of June 15th, 26% more than the year before, company press secretary Davids Dane, said, Baltic News Service reported recently. 
Currently, 28.27% of the country's residents use the company's mobile services compared to 22.35% in mid-June last year. Latvijas Mobilais telefons was set up in 1992. TeliaSonera owns 49% of company charter capital, the concern Lat-telekom 23%.

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