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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 9,671 8,406 7,500 94
GNI per capita
 US $ 4,070 3,480 3,230 79
Ranking is given out of 208 nations - (data from the World Bank)

Books on Latvia


Area ( 


ethnic groups 
Latvians 52.0%
Russians 34%
Belarusians 4.5%



Mrs Vaira 

Update No: 295 - (26/07/05)

Russian blues
Latvia is securely inside the EU, which gives ethnic Latvians a great deal of relief. All but the youngest can remember what it was like to have been inside a very different entity - the USSR. As it so happens, Latvia has more detritus from the Soviet epoch than any other Baltic state. 
During the Soviet period hundreds of thousands of mainly slav people were moved to Latvia by the Soviet authorities, bringing the share of ethnic Latvians drastically down from 75% of the pre-war population to little over half following the end of communist rule. Russians predominate in its seven largest cities, notably so in Riga, its capital
Relations between Latvia and Russia, have long been contentious since the fall of the Soviet Union in 1991. The two nations have recently clashed over the meaning of the end of the Second World War. While the three Baltic States - Estonia, Latvia and Lithuania - say it was the beginning of the Soviet occupation, Russia denies this, saying they joined the Soviet Union of their own accord, a view that surely only Russians would asseverate in all earnestness.
Even Russian-language mass media, however, were outraged by the statement of Russian deputy Vladimir Zhirinovsky, who had congratulated the Baltic people with the anniversary of joining the Soviet Union. As one commentator put it, "the Soviet interpretation of history is typical not only for Zhirinovsky, but also for the Kremlin. The pseudo-opposition political clown may afford jokes that are unacceptable for the official authorities." 
Recently Moscow and Riga have been involved in a war of words over a border agreement. A treaty with Latvia can only be signed if the government in Riga relinquishes territorial demands dating to 1920, the Foreign Ministry in Moscow said. At the centre of the dispute is the Russian Pytalovo region, which Latvia calls Abrene. Russian President Vladimir Putin has dismissed the Latvian land claims as "idiotic."

Paegle casts off treaty deadline
Latvia is the only Baltic state not to have resolved its territorial disputes with Russia so that signing the Latvian-Russian border treaty is a top priority. Nevertheless, the new head of the Latvian parliament foreign relations committee does not think that a specific deadline should be set for signing the treaty. 
"Of course I want a border treaty in line with the Constitution and national interests to be signed, but it does not mean that we should set deadlines for signing the document," Foreign Relations Committee Chairwoman Vaira Paegle, an MP from the conservative People's Party, said in an interview published by Latvijas Avize newspaper on June 29th. She believes that Latvia "can wait for a favourable time for negotiations with Russia." 
The Latvian government does not rule out that the treaty, which is being discussed by the Constitution Court, may be soon put up for a referendum. Says Latvian President Vaira Vike-Freiberga: "At referendums people usually express their dissatisfaction with many issues. Now our cost of living is growing. We cannot rule out that people will say no, only because they are dissatisfied with their lives." The Latvian mass media actively promote the thesis about an early collapse of the Russian economy. They publish data on the decline in oil output, the high level of corruption and ensuing low investment attractiveness.

Into the EU
The two 'no's in France and Holland have put the EU into turmoil. Latvia, as it so happens, recently earned its European spurs when its parliament ratified the EU constitution.
Also, more importantly, while other EU countries are wondering about the future of the euro, Latvia in April joined up to the European Exchange-Rate Mechanism (ERM 11), the prelude to full membership in 2007. There is no doubt where Latvia is heading - to the West. 

Latvian talks focus on defence and Europe 
This last, however, includes, not just the EU, but Switzerland. Swiss President Samuel Schmid has wrapped up an official visit to Latvia after talks with Defence Minister Einars Repse on July 5th. European issues, specifically Switzerland's agreement with the European Union on the free movement of people, were the focus of discussions during the two-day visit.
President Vike-Freiberga told Schmid she hoped Swiss voters would agree to extend the treaty to the ten new EU member states, which include Latvia, when they go to the polls on September 25th. "A yes vote would be in the interests of Switzerland and the EU," Vike-Freiberga told a joint news conference.

Latvian president meets with Pope 
Pope Benedict XVI met on June 30 with President Vike-Freiberga. The Latvian leader, who was making a state visit to Italy, met with the Pope privately for about 15 minutes. The Vatican did not disclose the topics that were discussed. 
President Vike-Freiberga, who was accompanied by her husband and small delegation of Latvian government officials, followed their private talks with an official reception and exchange of ceremonial gifts. 
Latvia, which regained its independence from the Soviet Union in 1991, approved a concordat with the Holy See in 2000. The Baltic state, which joined the European Union in 2004, has a population of 2.3 million, of whom about 15 per cent are Catholics.

Polish president awarded for diplomacy
Relations with the Vatican are important, but those with the largest Catholic population in Central Europe, Poland, are even more so. Polish President Aleksander Kwasniewski, who began his state visit to Latvia on July 6th, was presented with the Cross of Merit for his contributions to Latvian-Polish relations. Kwasniewski's wife, Jolanta, was awarded with Latvia's national decoration, the Tristar Order of Class I. 
President Vike-Freiberga's spokeswoman explained that Kwasniewski had already been given the Tristar Order of Class I earlier. Therefore, he was to be awarded the Cross of Merit. 
The Latvian Order Council also decided to award the Tristar Order of Class III to a number of high-ranking Polish officials.

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Latvia records most new cars in EU 

Passenger car registrations in Europe this past May amounted to 1,290,933 units, representing a decrease of 1.7 per cent with respect to May 2004, according to the European Automobile Manufacturers' Association's (ACEA) report published on June 17. 
Passenger car registrations in Latvia increased 70.3 per cent, the biggest increase in Europe. The report covers data on all European Union member states except Cyprus and Malta and the European Free Trade Association member states - Switzerland, Norway and Iceland. 

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Latvijas gaze profit rises 45%

The joint-stock natural gas company, Latvijas gaze (LG) posted 18.761m lats in profit last year, 44.9% up from 2003 (12.989m lats), according to the company's non-audited annual report, New Europe reported.
LG's turnover in 2004 amounted to 121.119m lats, 1.4% up from 2003 (119.435m lats). The company's profit in 2004 was projected at 10.086 lats originally, but near the year end the company said that the profit would be larger, thanks to increasing natural gas sales and fluctuations in the lat/US$ exchange rate.

Gazprom to hike Baltic prices

Gazprom plans to implement a three-year programme aimed at equalling prices for Baltic customers with those for European ones, Gazprom Deputy CEO, Alexander Ryazanov, told a press briefing on June 7th. Currently, Latvia buys Russian gas at US$92-94 for 1,000 cubic metres, RBCNews reported.
The rate for Lithuania and Estonia is US$85 and US$90, respectively. But the price for neighbouring Poland is significantly higher. There should be parity, Ryazanov said. The exact quantum of price increase has not been disclosed yet. As for the possibility of finding other gas suppliers for the Baltic States, Ryazanov said it was a good decision for every country to have an alternative source of gas supplies. However, Gazprom believes that Russian gas will be the most advantageous option even after the price hike. In 2004, Gazprom supplied 1.5bn cubic metres of gas to Latvia, 2.93bn cubic metres to Lithuania and 0.92bn cubic metres to Estonia.

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