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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

Update No: 322 - (25/10/07)

Calls for premier to resign
Thousands of protesters called on Latvia's prime minister to resign on October 18 in a mounting political crisis over the government's efforts to fire the Baltic country's top anti-corruption investigator.

Police said some 5,000 people, including leading academics, business leaders and members of the opposition gathered outside Parliament for one of the biggest political protests in Latvia since it regained independence from the Soviet in 1991.

Prime Minister Aigars Kalvitis has come under heavy criticism for his decision in September to suspend the country's top anti-corruption investigator, Aleksejs Loskutovs. Kalvitis has asked lawmakers to vote to permanently to oust Loskutovs from the job, and said he would resign if the vote fails.

Kalvitis' move came after an audit said the anti-corruption bureau, which is tasked with fighting corruption and fraud, had improper accounting. However, auditors said the irregularities were minor, and critics have accused Kalvitis of exaggerating the issue to disrupt the bureau's work.
Kalvitis, who leads a four-party centre-right government, has been in power since December 2004. He is the longest-serving prime minister since Latvia broke free from Soviet domination.

Opponents believe Kalvitis' move had political motives, because Loskutovs had been investigating alleged irregularities involving campaign contributions to Kalvitis' People's Party before last year's election.

In the demonstration, protesters carried signs that read "Kalvitis Go Home!" and shouted calls for him to resign. As lawmakers from the four-party coalition government arrived, they were met with shouts of "traitor" and "down with Kalvitis."

"Rising by the hour"
With pressure increasing on Latvia's ruling coalition government by the hour, Prime Minister Aigars Kalvitis has acknowledged that a forthcoming parliamentary vote on the sacking of anti-corruption chief Aleksejs Loskutovs will also decide his own fate. 

"It's hard, but I am strong," Kalvitis said, adding that if parliament does not vote to dismiss anti-corruption bureau (KNAB) head Aleksejs Loskutovs it would force his resignation. Kalvitis added that a parliamentary "no" to the proposed budget on Oct. 31 would have a similar effect. 

Kalvitis reaffirmed that the government will not recall its decision to let parliament have the final say on Loskutovs' dismissal, as it would amount to an acknowledgement of its mistakes. Kalvitis stands by his decision to unilaterally fire the anti-corruption chief, despite criticism that in doing so he was exceeding his authority. 

In a lengthy debate on TV show 'What's Happening in Latvia?' on the evening of Oct. 17, the government wheeled out three of its big guns to justify the dismissal of Loskutovs. Foreign Minister Artis Pabriks, Interior Minister Ivars Godmanis and Education Minister Baiba Rivza all defended the government's stance and deflected accusations that whatever budgetary irregularities had occurred within KNAB paled into insignificance besides the overspending and missing sums in various government ministries. 

However, by the next morning Pabriks appeared to have performed a humiliating U-turn. Pabriks told the Baltic News Service that he would ask Kalvitis "to call off the government decision," and consult with Prosecutor General Janis Maizitis, who also appeared on the TV show to confirm that he felt Loskutovs had been unfairly dismissed. 

"The government's decision on moving Loskutov's issue to the parliament was hurried and inconsiderate. I have to admit that I have taken a premature decision by supporting our prime minister. The public attitude and study of the issue have changed my mind on it, public opinion cannot be ignored," Pabriks admitted. 

A telephone poll taking place during the live broadcast showed around 500 people in favour of or neutral about Loskutovs' sacking, while more than 12,000 callers registered the belief that it was illegal and undemocratic. 

By the morning of Oct. 18, several thousand people had converged outside Saeima despite driving rain to protest against the government and in favor of Loskutovs. Holding placards saying "Kalvitis go home" and "Game Over" they chanted anti-government slogans before retiring to Riga's coffee shops to warm up, prompting some of them to dub their action "the cappuccino revolution". 

Latvia's opposition parties are set to submit a letter to President Valdis Zatlers calling for the dissolution of parliament. 

After a meeting between the leftist Harmony Center and the right-wing New Era factions, both sitting in the opposition in the Latvian parliament, New Era faction head Dzintars Zakis told journalists that signals from the people suggested that the present parliament had lost public confidence, and that the two opposition parties had therefore decided to petition the president. 

"The situation is so bad it cannot deteriorate further," Zakis said. 

Janis Urbanovics, chairman of the Harmony Centre faction, said Zatlers has to make up his mind whether he wants to be the people's president or a "government assistant". If the president cannot fire the government outright, he should at least initiate the dissolution of the parliament, Urbanovics said. 


U.S. Ambassador to Latvia, Catherine Todd Bailey, finds herself an unlikely focus of the nation's political life after delivering a speech at the University of Latvia that included a strongly-worded attack on corruption and a warning that the country could be backsliding on its commitment to democracy. 

Speculation had been rife about the speech for some days after what appeared to be leaked accounts of its contents found their way into the media, with the result that the hall was packed with journalists, politicians and other public figures as well as the intended audience of students. One of the highest-profile attendees was Aleksejs Loskutovs, the KNAB anti-corrpution head who was being controversially kicked out of his job at a cabinet meeting on the same day. 

Todd Bailey started conventionally enough, noting that Latvia and the United States share many common values and that so far cooperation between the two countries has been dominated by "our shared commitment to freedom, to democracy, to the rights of the individual and to basic standards of fairness." 

The ambassador pointed out that Latvia has undergone an "amazing transformation." 

"A market economy and free enterprise have replaced state command and control. Free and fair elections have been held to elect members of Saeima [parliament] and to resolve essential questions in referendums. New institutions have been developed to ensure the protections of the rights of the individual. As a result of this difficult work, Latvia took its rightful place as a part of Europe and the Trans-Atlantic community, joining the European Union and NATO in 2004. Students here today benefit from this with opportunities of work, study and travel available to them, that even five years ago seemed hard to imagine," the American diplomat said. 

So far, so predictable. But then Todd Bailey dropped the dull diplomacy and posed some uneasy questions. 

"Will Latvia, safe in the European Union and NATO, decide that it is has done the hard work and let the state become the playground of a few individuals where they go to line their own pockets and those of their friends?" she asked. 

"To put it a different way - it is hoped Latvia will continue the hard work of building the institutions and judicial system that are needed to ensure a democratic and prosperous future for the people of Latvia, or is there a possibility Latvia will slide back and begin to resemble those countries that have not undertaken extensive reforms?" 

"Attempts to pack the courts, with judges who "will know what to do," efforts to manipulate the laws governing the security services to allow greater avenues for political interference in their operations, and, public campaigns to discredit the institutions of justice and the rule of law in the country. 

"I have tremendous respect for so many Latvians, that I have met… These are hardworking, committed individuals who want to see Latvia succeed and prosper. But, I have to say, I have also seen them beaten down by having to take instructions from unelected officials in the clouds or down by the sea." 

That last, enigmatic phrase has caused perhaps more debate than any other of Todd Bailey's words. Various theories as to what she meant are circulating with the most persuasive being that she is referring to Latvia's two highest-profile court cases, one involving shady dealings over digital TV rights (the TV building is a prominent Riga skyscraper) and the other involving corruption in the coastal town of Ventspils. 

Todd Bailey also drew attention to the need to reassure potential investors that Latvia is a good place to do business, saying: "The development of the rule of law in Latvia is also an important issue for the global business and investment community. I have actively encouraged American companies to consider Latvia as a place to do business. 

"But investors want to know that their money is safe and their investment protected. They need to know that they will be able to do business without being asked to pay bribes or 'protection money,' and that their bids for contracts will be considered on their merits." 

Clearly, the ambassador's speech must have been given prior approval by her bosses in Washington and as such it should act as a huge wake-up call to the Latvian government. 

After listening the speech, Latvian Institute director Ojars Kalnins told journalists that the address was in line with U.S. President George W. Bush's policy in the Baltics and the region in general. 

"Americans have a tradition of influencing politicians in those countries in which they have interest. If the U.S. did not have such an interest, there would be nothing. It means that we are in the spotlight," Kalnins said. 

"The speech was meant to remind [us] that we have agreed on common values," Kalnins concluded. 

Despite the presence of numerous opposition politicians in the audience, no members of the government attended the address, and their reaction was generally dismissive. 

Prime Minister Aigars Kalvitis said: "As to the imperfections of the judiciary, we have identified them, and both the political power and judiciary are aware of these issues. Such problems exist in many countries that have been founded or restored recently." 

The only real note of acknowledgement from the government came from Foreign Minister Artis Pabriks. 

"We appreciate the ambassador's willingness to meet with the public, and it facilitates mutual confidence," Pabriks said. "The strength or weakness of a state is based on trust, but the confidence of our society in state institutions is not strong, and we politicians, must work to boost this confidence." 

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