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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: 277- (01/02/04)

Latvia in Iraq
The Latvians have been doing some 'missionary work' recently, namely in Iraq. The Latvians were among those who generally supported the war in March. Their foreign minister, Sandra Kalniete, explained why in a recent article in the Wall Street Journal Europe, called 'Freedom cannot be taken for granted.'
"Latvia recently celebrated her 85th anniversary. Fifty of those years were spent living under Soviet and Nazi totalitarian regimes. Latvia lost its independence in 1940 because its proclaimed neutrality was not effective and Western countries were not able to take a common line against two evil empires. Our people suffered under the rule of totalitarianism. This is why Latvia decided to support coalition forces in Iraq."
She added: "This is why Latvia has sent more peacekeeping forces than anywhere ever before to Iraq. Latvia has committed itself to this process by sending its soldiers as part of the stabilization forces in Iraq and offering technical assistance, as well as sharing our transformation experience."

Latvia in the EU
Another woman at the top in Latvian politics is the president, Vaira Vike-Freiberga. She is keen to steer Latvia into the EU as soon and as smoothly as possible, not least to exclude for ever the possibility of a return to totalitarianism. It is not that even the newly authoritarian Russia of Putin makes Latvians afraid of a new Russian invasion, but that one cannot be sure what Russia might be like in 30 or 50 years' time.
Latvia is in fact due to join in May next year.Vike-Freiberga met with President Roman Prodi of the European Commission (EC) in Brussels on October 10th. These types of meetings are usually the occasion for a bland exchange of platitudes. The leaders merely ratify decisions taken by hard-nosed officials out of the public eye. This was no exception.
But this itself was significant. Previously the EU has 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 social 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."
The problems are already present in Russia's view, which cancelled a planned meeting of the Latvian-Russian Intergovernmental Commission for October 27th. The commission has never met at the highest level since its formation in 1997. The Russians are taking revenge on Latvia by cutting their supplies to Ventspils, the oil terminal and port on the Baltic. Oil transhipment by pipeline has been halted and is only by rail from Russia. This has risen by 143% year-on-year, but not enough to offset a 22.9% drop in total from 11.8 million tonnes in the first nine months of 2002 to 9.1 million tonnes in the same period of 2003.
Actually the problem of integrating the Russia minority is likely to disappear in the future, as young Russians take to learning Latvian at school as well as even marrying into the Latvian population. The future lies with harmony. 
This is for largely economic reasons. Latvia is doing well economically in a way that is not captured by statistics. Some 40% of economic activity is in the black economy, unreported by official statistics. Even on these the economy is vibrant, GDP growing by over 5% annually in this decade. Russian Latvians want to be part of the success story and members of the EU to boot.

Sweden to the rescue
The Swedes and Latvians are akin in spirit and share the Protestant faith, not just the Baltic Sea. The parenting pattern is repeated throughout the region, Lithuania having ties with Norway and Estonia with Finland.
The Swedes have set up a business school in Riga, which is training up a new generation of managers in Western business practices. The Stockholm School of Economics is having a big impact. MBAs are flourishing and student numbers are rising. Never has it been a better time to be a young businessperson in Latvia, and many of the best students are women.
The phenomenon resembles the Marshall Plan after the Second World war in Germany and elsewhere, whose managers were trained in the US in their tens of thousands. This time it is on the spot, with Latvians from the Diaspora playing an important role, some from Sweden, others from the US and Canada.
The graduates are the new business elite. Notes Torger Reve, President of the Norwegian School of Management in neighbouring Lithuania: "Integration of management education is the most important force in bringing the Baltics up to speed with their European Union neighbours."
The process is still in its early stages. There is great scope for catching up. But there is every reason to suppose that in a generation or two Latvia will become a prosperous Western nation.
The existence of highly educated personnel lower down the hierarchy also greatly helps. The combination of a still very cheap work force of a high quality and well-trained managers is attracting abundant foreign investment to Latvia. The auspices are excellent.

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ENERGY

Big Latvijas Gaze shareholders buy only 0.4% from minority 

Strategic investors in Latvian gas company, Latvijas Gaze, have managed to acquire 15,642 of the company's shares, or 0.4 per cent of charter capital, from minority shareholders, a source in the Riga Stock Exchange told the Baltic News Service recently. The source said that this number of shares was sold during 81 deals, worth a total of 86,031 lats. 
The large shareholders - Germany's Rhurgas and E.ON. Energie and also the Latvian Economics Ministry - paid 5.5 lats for the shares, and offered them at this price. The offer was available from November 20th until December 17th. Parex Asset Management financial manager, Sandijs Martinovs, said that this result should have been expected as the proposed price was not so attractive as to make minority shareholders sell. The average weighted price is 5.94 lats. In addition, the investors themselves were too interested in buying up the shares. It was a forced proposal, Martinovs said.

City parliament approves oil terminal for Riga

The Riga city parliament has approved a proposal from OOO Naftimpeks to build a new oil product terminal at the city's port at a cost of about US$6.5m. Naftimpeks Director, Armand Sadauskis, said that construction was due to begin at the end of 2003, Interfax News Agency reported. A source in the city government said environmental organisations opposed the proposal, claiming that the new terminal will increase the intensity of transportation of dangerous freight in the Baltic Sea and in the Gulf of Riga. They said that projects like this could only be approved after a strategic environmental impact study had been carried out. Riga Deputy Mayor, Aivar Kreituss, said that movement of ships in the Baltic is already intensive and the risk of accidents will not increase with the appearance of one more terminal. He also said that soon single-hulled ships would not be able to enter Latvian ports.

New oil product terminal to be built

In the Latvian capital, the Riga city parliament recently approved a proposal from Naftimpeks to build a new oil product terminal at the city's port at a cost of about US$6.5m. Naftimpeks Director, Armand Sadauskis, said that the construction may begin at the end of 2004. A source in the city government told the Baltic News Service that environmental organisations opposed the proposal, claiming that the new terminal will increase the intensity of transportation of dangerous freight in the Baltic Sea and in the Gulf of Riga. They said that projects like this can only be approved after a strategic environmental impact study has been carried out. Riga Deputy Mayor, Aivar Kreituss, said that movement of ships in the Baltic is already intensive and the risk of accidents will not increase with the appearance of one more terminal. He also said that soon single-hulled ships will not be able to enter Latvian ports.

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