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LATVIA

 

 

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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: 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 case.
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 services.
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 to Moscow.
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.

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ENERGY

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 decommissioning.

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