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LATVIA


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
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

REPUBLICAN REFERENCE

Area (sq.km) 
64,589

Population
2,306,306

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

Capital 
Riga

Currency 
Lats

President
Mrs Vaira 
Vike-Freiberga




Update No: 310 - (26/10/06)

The presidential republic
The presidency has few formal powers in Latvia. But it is somehow the important job. Latvia has had 12 governments in 15 years of post-Soviet independence. It is the president who gives continuity and stability to the Latvian body politic.
Latvian politics has become rather complacent. The president is an excellent woman, Vaira Vike-Freiberga, re-elected in 2003. She was an American in nationality and in all but ethnicity. She guarantees the Western orientation of her country and is the person who really matters in Latvian politics. 
Nevertheless, governments do govern after a fashion; and parliamentary elections recently took place. 

The ruling coalition wins parliamentary elections
Latvia's ruling three-party coalition narrowly won the former Soviet republic's first parliamentary elections since it joined the European Union two years ago, the Central Election Commission said on October 8th. Latvia's ruling coalition narrowly managed to win enough seats to form a majority government in the Baltic state's general elections. 
Led by Prime Minister Aigars Kalvitis, the three-party coalition won 51 seats in the Saeima, or parliament - six more seats than it currently has, the Central Election Commission. It is the first time in Latvia that a sitting government has maintained its grip on power since the country broke away from the Soviet Union in 1991. 
Some 901,800 Latvian voters, or about 62.3 percent of eligible voters in the Baltic country with a population of 2.3 million, cast ballots in October 7th's elections. 
With all votes counted, the ruling coalition had 44.8 percent, with the People's Party gathering 19.5 percent of the vote, the Union of Greens and Farmers 16.7 percent, and the First Party 8.6 percent, according to the statistics posted on the Commission's website. 

Main reasons for the victory 
Foreign Minister Artis Pabriks said the victory was ensured because "we never promised more than we could." He said his party and the coalition had appealed to voters because "we have shown ourselves to be pragmatic, patriotic and efficient. We have proven to be reliable." 
The fractured opposition took the remaining 49 seats, with the right-wing New Era party, a bitter rival of Kalvitis' People's Party, mustering 18 seats, and the Harmony Centre, a left-wing force that represents Latvia's large ethnic Russian minority, received 17 seats. 
The coalition parties announced they would meet for government talks, although it is up to President Vaira Vike-Freiberga to nominate the prime minister. 
New Era and the People's Party are both right-wing parties but have historically been at odds, and earlier this year New Era dropped out of the coalition government. 
With few hot issues in the campaign, the main question was which of Latvia's centrist or conservative parties would be given a mandate to lead the traditionally shaky coalition government. 
Gaining admission to the EU and NATO were the dominant goals after winning independence. With that achieved, a sense of complacency set in, analysts said. 

Hosting the next NATO conference 
Perhaps the biggest event in Latvian history is looming - the hosting of the next conference of NATO no less in November. 
One simply has to go back two decades to realize the sheer enormity of it. Who would have thought in 1986 that the organization was to hold its 2006 conference in Riga?
World history has moved on - and how!
Nobody now believes that the Russians want to re-occupy the Baltic states. But it is still a staggering event for all that.

                                        ******

The following article is worth considering, however, concerned with the decades when Moscow was a predator of the Baltic states:- 

Still Haunted By Soviet Past 
By Claire Bigg 
August 21 marked the 15th anniversary of Latvia declaring full independence from the Soviet Union, after the failed coup attempt in Moscow a few days earlier. Since then Latvia has gone from strength to strength, joining the European Union and NATO in 2004.
"June 17, 1940, the Soviets came in, and in 1941, the Germans came in and pushed back the Soviets," says Oskars Gruzins, a young guide at the Museum of Occupation in the heart of old Riga, as he shows tourists a large map of Latvia. "After the Germans were defeated, the Russians took the Baltic countries once again and we were occupied until 1991."
Running his fingers along the lines crisscrossing the small Baltic country, he's showing them the different stages of Latvia's occupation.

Memories Of The Gulag
The museum tries to give a sense of what life was like for Latvians in Soviet times, in particular for those deported to Siberia or sent to the gulag. The first deportations took place in 1940.
Hundreds of personal items smuggled out of the camps are on display -- drawings, pictures, clothes, and makeshift musical instruments. The collection also features a life-size reconstruction of a gulag barracks.
Last year, the museum started recording video testimonies of Latvians deported under Soviet rule. The museum hopes that some of these testimonies will be shown in schools and inspire documentary films and literary works.
The Museum of Occupation is one of the most visible signs of Latvia's efforts to come to terms with its history. There are many unanswered questions about what took place here under Soviet rule. In today's Latvia, ethnic Russians make up around 30 percent of the population.
Gunars Resnais, a 70-year-old Latvian, agrees that Latvia needs to speak up about its past. Like many elderly Latvians, Resnais can talk firsthand about Soviet repression.
His father, a farmer, was sent to a Siberian gulag in 1945 after helping German troops locate a field where a Soviet plane had crashed. He died of hunger within the first year of detention.
Resnais and his mother were then deported to Siberia during the second mass deportation of Latvians, in March 1949. They took us away at night, as quickly as possible, and we were loaded on trains," Resnais recalls. "We were sent to different villages. Within a month we all had to sign a document saying we had voluntarily relocated. If you didn't want to sign, they would tell you: 'You are resisting. Then we will take you to court and from this village you will go to prison.' End of conversation. I signed: I agree to live here my whole life without changing home."
Resnais was sent to a small village 50 kilometres north of Omsk, where he worked as a mechanic in a collective farm.
His mother milked cows at the same farm. The job was dull, but the milk smuggled out of the farm helped both of them survive the famine that ravaged post-war Russia.
Stalin's death in 1953 meant the tens of thousands of deported Latvians were able to return home. Resnais and his mother returned in 1954. But the stigma of deportation continued to affect the Resnais family right until the collapse of the Soviet Union.
"The regime continued to check thoroughly the biographies of [deported] people, of their children," Resnais says. "It was totally forbidden for us to study law, to study in the navy, where you had opportunities to go abroad. Aviation: forbidden. Diplomacy: forbidden."

Hopes Of Compensation
Resnais says he bears no grudge towards Russia. But he would like to see Russia, the Soviet Union's legal heir, offer financial compensation to those it repressed, like Germany recently did. His hope lies with the commission set up last year by the Latvian government to calculate the damage, both human and financial, caused by five decades of Soviet occupation.
Edmunds Stankevics, the head of the commission, says his team will need another five or six years to go through the stacks of KGB files held in Latvia's state archive. Most of these files have not been read. The commission's final results could then be used to claim reparations from Russia. But Stankevics insists that his commission is not all about money. "This will be the government's decision. We are working above all for our population, to know our history better so that we can build relations on a sounder basis and think about the future," he says. "Our second goal is to inform the international community so that all those who visit our country can be informed about the occupation, which is part of our history."
Resnais himself says he has little hope of seeing Russia offer words of apology, let alone reparations, in his lifetime.
Moscow has consistently snubbed Latvia's demands that it publicly acknowledge the occupation of Latvia. Its view is that the Soviet army liberated the Baltic states from the Nazis and that these countries willingly joined the Soviet Union.
The commission's result will help illuminate a painful part of Latvia's history. But perhaps more importantly, it could end the dispute that has poisoned Latvia's relations with Russia and the hundreds of thousands of ethnic Russians living by their side.

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BANKING

Latvian banks eye emigrants in Ireland 

Latvia's banks are assessing the possibility of following the country's flood of emigrants to Ireland, spokespersons confirmed on October 11th. "We're analysing the situation (in Ireland) at the moment ... The main aim would be to follow our clients, because lots of people of Latvian origin are now working in Ireland," Agnese Gribuste, spokeswoman for SEB Unibanka, told Deutsche Presse-Agentur (dpa). 
"Ireland looks interesting because of the amount of money which Latvians living there send back to Latvia," agreed Viktors Zakis, spokesman for Parex bank. 
Since Latvia joined the EU in 2004, thousands of workers of all ages and skill levels have left the country to work in the west. An estimated 100,000 are thought to have left in total, with up to 40,000 finding work in Ireland. The flood of emigration has had a serious impact on the Latvian economy. Employers across Latvia have complained of a critical lack of skilled workers in such areas as construction and transport. 
At the same time, however, money remitted home by émigrés has provided a substantial boost to the Latvian economy. In 2005, the Latvian expatriate community as a whole sent home 306 million Euro - more than two per cent of the national GDP, according to Martins Gravitis, spokesman for the Bank of Latvia. Remittances from Ireland made up almost a third of that sum. 
And in the first half of 2006, the total jumped to 185 million Euro - over 2.6 per cent of GDP. Remittances from Ireland reached 45.8 million Euro. "According to our calculations, the potential level of remittances from Ireland to Latvia could reach 300 million Euro per year," Gribuste said. 
Plans to establish a presence in Ireland remain in their infancy, however. While the Latvian community is substantial, the banking market is highly competitive, with major local banks already offering services in Latvian and other Eastern European languages. 
And the relatively low level of remittances per worker - an average of around 2,500 Euro in 2005 - means that profits from such business are unlikely to be high. "We have several spheres of interest where larger sums are involved, such as long-term deposits and investment funds. For that reason, we tend to look first to markets where more capital has accumulated, such as Sweden and Germany," Zakis said. 

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ENERGY

Latvia sells last stake in oil industry for US$130m 

The Latvian state sold off its final stake in the nation's Soviet-era oil infrastructure for a price of just over US$130 million on October 5th. At an open auction hosted by the Riga Stock Exchange, the state's holding of over 40 million shares (38.62 per cent) in the oil-transit management company Ventspils Nafta was sold for a price of 1.84 lats (US$3.33) per share, Deutsche-Presse-Agentur (dpa) reported. 
The total sum raised by the sale was 74.2 million lats (US$134 million), marginally more than the minimum sum of 73 million lats the government had established. 
"Every centime more made us about another 400,000 lats. We're happy with the result," said Martins Jaunarajs, leader of the consortium of consultants which organised the sale. 
Thirty-seven potential buyers bid for varying sizes of holding, the minimum purchase volume being set at 19,415 shares. The prices bid ranged from the state's minimum of 1.81 lats per share to 3.50 lats per share. 
Organisers would not reveal how many bidders had succeeded in buying shares, nor who the winning bidders were. The sale was organised according to the Dutch system, whereby all shares are sold at the lowest price necessary for the holding to be cleared. 
Ventspils Nafta controls two Soviet-era pipelines carrying crude oil and oil products from Russia to the Latvian port of Ventspils. The oil pipeline was closed in 2002 after a series of disputes with Russia, but the oil-product pipeline is still flowing.
The company also owns shares in Latvia's largest shipbuilding firm, Latvijas Kugnieciba, and in property, printing and publishing companies.
The largest shareholder (48 percent) in Ventspils Nafta is a Latvian holding company, Latvijas Naftas Tranzits, which is in turn owned by the company managing oil transshipment in Ventspils, Ventbunkers.
Ventbunkers is owned by an offshore company, Yelverton Investments, whose ownership is unknown. A group of Austrian investors recently announced that they were interested in buying Ventbunkers, but no deal has yet been confirmed.

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FOREIGN RELATIONS

Vike-Freiberga, Aliyev discuss bilateral, EU, NATO links 

The presidents of Latvia and Azerbaijan, Vaira Vike-Freiberga and Ilham Aliyev, met in Riga on October 4th to discuss bilateral, European and Euro-Atlantic cooperation. "Latvia's constant support (in the framework of EU relations) has been very significant ... I am confident that Latvia will support Azerbaijan's integration into Euro-Atlantic structures," Azerbaijan's president Aliyev said after the meeting, New Europe reported.
Azerbaijan has been a participant in NATO's Partnership for Peace programme since 1994. Latvia, which joined the partnership programme in the same year, became a fully-fledged NATO and EU member in 2004 and is due to host a NATO summit in November.
"Latvia expressed its readiness to share with Azerbaijan the experience gained by its state institutions in the process of its integration into European and Euro-Atlantic structures," a Latvian presidential press release stated. The presidents also discussed energy cooperation, seen as a key strategic need on both sides. Azerbaijan's economy is largely based on oil and gas exports, while Latvia relies on Russian imports - a situation which has led to fear of pressure from Moscow. "Europe needs to diversify its sources of energy ... Any situation in which there is only one supplier creates disequilibrium and can become a tool of political pressure," Vike-Freiberga said. The presidents "stressed the international importance" of opening oil and gas pipelines from Baku, via Tbilisi, to Turkey "to strengthen the ties between the European Union and the Caspian Sea region in terms of energy cooperation," the press release said.
This was the first visit of an Azeri president to Latvia. Last October Vike-Freiberga paid a state visit to Azerbaijan, signing several agreements on economic cooperation. Trade between the countries has doubled in two years, and Latvia's national airline has opened direct flights to Baku, Vike-Freiberga said. The two presidents signed a further six agreements on economic, cultural and scientific cooperation on Wednesday. 
Latvia and Azerbaijan were both part of the Soviet Union until 1991. Since joining the EU and NATO, Latvia has been keen to strengthen the organisations' relationships with other western-leaning former Soviet states, such as Ukraine and Georgia.

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