Books on Latvia
Update No: 293- (27/05/05)
The 60-year old boomerang
President Vaira Vike-Freiburg of Latvia, as feisty a lady as Condi Rice, US
Secretary of State herself, was the only Baltic president to attend the
ceremonies in Moscow, that is for the 60th anniversary of the victory over the
Nazis by the USSR. But she made it quite clear that she and her Latvian
countryfolk regard 1945 as a moment of infamy for them, when a new tyranny was
imposed, nor a true liberation. Everyone but the Russians knows this to be the
Rice privately, and then Bush publicly, made it clear which side they were on in
this clash of minds, indeed of mindsets. Bush said that the subjection of whole
nations by the USSR was one of the 'great wrongs of history.' He was speaking in
Riga, which he visited ahead of going to Moscow.
Bush visit marks Baltics dramatic economic change
The region has been transformed since the implosion of communism more than a
decade ago and by its integration a year ago into the European Union, Deutsche
Presse-agnetur said in a special report.
Buoyed by a flood of foreign investment, sharply growing exports and private
consumption, the three so-called Baltic tigers - Estonia, Latvia and Lithuania -
are again expected to chalk up high-octane growth rates this year that are the
envy of most nations around the world. After racing ahead by 6% plus last year,
the three nations are projected to turn in similar feverish growth rates this
year with the region emerging as a major winner of EU membership.
Moreover with Estonia having spearheaded the push across Central and Eastern
Europe a decade ago towards a flat-tax and having joined Latvia and Lithuania in
rapidly dismantling their public sectors, the Baltic states have also emerged as
a model for free-market economics. Said Liene Kule, economist with Hansabank in
the Latvian capital, Riga, "everything follows the market economy,"
with Estonia, Latvia and Lithuania having joined the EU in May last year.
"We look towards the economic models of the United States, Ireland and the
United Kingdom rather than France and Germany," said Andris Vilks, senior
economist with SEB Unibanka in Riga.
The booming economy
Latvia is doing very well out of its accession to the EU. Latvia's gross
domestic product (GDP) in 2004 increased by 8.5% versus the previous year, the
Central Statistical Bureau announced recently. The increase in GDP in this
period was due to the rises in the following sectors: 10.1% in trade (share in
GDP structure 18.4%), 12.9% in transport and communications (15.7%), 7.9% in
manufacturing (14%) and 13% in construction (5.8%).
GDP in the fourth quarter increased by 8.6%. The increases were 10.9% in trade,
15.8% in transport and communications, 6% in manufacturing and 15.7% in
construction. Public, social and individual services rose on average by 11%,
mainly due to an increase of 17.7% in the cultural, recreational and sports
There was a rise of 5.1% in the sector of business services owing to increases
in real estate operations, legal, accounting, consulting and advertising
services. Electricity, gas and water supply increased 2.9%. The rise of 25% in
the fisheries sector was accounted for by the increase in fish catch in the
Baltic Sea and the Gulf of Riga. The increase in production output in
agriculture was 2.6% at constant prices and 17% at current prices.
Incomes are growing solidly and unemployment is edging down. At the same time,
some economists are forecasting that growth in retail sales in Latvia this year
could hit a staggering 20% as consumer spending helps to power the nation's
growth to more than 7% in the coming 12 months. Despite the global economic
slowdown, Latvia's exports are tipped to grow by 16% in 2005, mortgages have
jumped dramatically and car sales booming across the region.
During the first three quarters of last year, new car registrations in Latvia
rose by 25% compared to the same period in the previous year.
Recently Latvia joined Estonia and Lithuania as a member of the European
Exchange Rate Mechanism (ERM-2), which is a key step towards joining the Euro.
This means all three nations could be members of Europe's common currency in the
next two or three years.
The main problem facing the region has been the threat of a brain drain of
skilled workers to other EU states where wages can be four or five times higher
than the pay scales on offer in the Baltics.
But having come so far so fast since the fall of communism, the three Baltic
states also fit the mould of what US Defence Secretary Donald Rumsfeld, once
famously described as "new Europe."
Apart from having troop contingents in Iraq, the Baltic states are a suitable
backdrop for the overseas visit of any US president with the region seen as
having stood up to Moscow and has remained critical and suspicious of the
ambitions of the new Russia.
Bush's visit to Riga also coincided with Latvia marking another anniversary of
independence from Soviet rule and one year of membership of NATO. After Riga,
Bush travelled on to Moscow to commemorate the 60th anniversary of the defeat of
Nazi Germany. It was the third visit by a US president to the Baltics and the
second to Latvia.
But as a sign of the ongoing tensions between the Baltics and their former
Soviet rulers, only the President of Latvia, Vaira Vike-Feiberga travelled to
Moscow for the VE day celebrations, which are seen by the Baltic rim nations as
marking the launch of a dark chapter in their history. Lithuania President
Valdas Adamkus and Estonia's Arnold Ruutel met Bush in Riga, but did not travel
That said, however, Russia is now taking on a new meaning in the Baltics as
economic change takes hold and the region sees itself as strategically
positioned economically to take advantage of both the EU and the new emerging
economies of the former Soviet bloc.
US, Latvia ink new energy pact
The US Department of Energy (DoE) and the Latvian Ministry of Environment signed
an agreement in Washington on April 25th that will allow collaboration in
non-proliferation and threat reduction areas. The agreement allows the DoE's
National Nuclear Security Administration (NNSA) to remove and return to Russia
the highly enriched uranium (HEU) of Soviet/Russian-origin from Latvia's
shutdown research reactors at Salaspils, as well as to enhance security of the
reactor site and storage of the nuclear materials at the site. The Salapils
research reactor was permanently shut down in 1998 and is being prepared for