Books on Latvia
Update No: 306 - (29/06/06)
Latvia to host NATO summit
Latvia is hosting this year's summit in November, an almost unconceivable event
ten years ago, let alone twenty years ago. With its one third Russian
population, it was considered unrealistic that any such thing could happen even
But the Russian Latvians, in the majority in the seven largest towns, are
becoming more Latvian and less Russian by the year. They see Latvia as the
entry-point to the West.
There is no doubt who is Latvia's great standard- bearer in clinching Latvia's
adhesion to the Western world, President Vaira Vike-Freiberga, who long lived
George W. Bush and US leaders praised Vike-Freiberga's speech at the US
The Americans have soft spot for the Balts, the pioneers of independence from
the USSR, in which they had been forcibly incorporated by Stalin in 1940 under
the terms of the infamous Nazi-Soviet Pact (which was, nevertheless, inevitable
after the even more infamous Munich Pact). George W. Bush has made a point of
cultivating close ties with all three Baltic states.
In preparation for the summit the Latvian President met him on June 8 in the
White House in Washington, where he congratulated the Latvian leader on her
speech at the US Congress on June 7.
During her weeklong working visit to the US, the Latvian president met not only
Bush, but also US Vice-President Dick Cheney and together with the president
they discussed Latvian-US relations, energy issues and international
developments, as well as the upcoming NATO summit in Riga. The current situation
in Iraq and the fight against terrorism were also discussed.
When speaking about the planned G8 summit in St. Petersburg, Russia,
Vike-Freiberga told the US leaders about Latvian-Russian relations, noted the
positive outcome of the visit by His Holiness Patriarch Alexy II of Moscow and
All Russia to Latvia. She stressed that Latvia was interested in building
pragmatic, future-oriented relations with Russia.
IMF urges caution
Latvia, which joined the EU in 2004, has been an astonishing success story.
The economy grew by 10.2 per cent in 2005, the fastest rate of any EU country.
In the first quarter of 2006 it grew by 13.1 on annual basis.
But it had one of its highest inflation rates, at 6.1 percent in April over the
IMF official warns Latvia on economy
An International Monetary Fund official monitoring Latvia's economy said on
June 6 that the government should take steps to slow its growth to stop it from
Rachel Van Elkan, head of an IMF mission reviewing the Baltic country's economic
progress, said Latvia's large current account deficit, foreign debt, high
inflation rate and rapidly increasing labor costs threatened to cause it to
"The recent steep rise of domestic demand that was brought about by
accession to the EU has caused vulnerability in several areas, including a high
current account deficit, large and increasing burden of foreign debt, high
salary and price inflation, strong increase in housing prices and growing amount
of transactions borrowers are carrying out in foreign currencies without
guarantees against risks," Van Elkan was quoted as saying by the Baltic
Van Elkan recommended the government take steps to freeze state lending, make
bank loans harder to get, slow wage increases, consolidate banking regulation
and monitoring principles and make Latvian exports more competitive.
She also recommended the postponement of a planned cut in personal income tax
and the introduction of a tax on real estate transactions.
Vodafone welcomes Latvia to its global community
Vodafone has announced that it has signed an extension to its Partner Network
Agreement with BITE Group, enabling its Latvian subsidiary BITE Latvija to
become the latest member of Vodafone's global community. With the addition of
the extended agreement, Vodafone customers will shortly be able to 'enjoy
seamless access' to Vodafone services across all three Baltic States, New Europe
Vodafone began its relationship with BITE Group through a partnership in
Lithuania in 2003. BITE launched its new Latvian operation in September 2005.
Under the agreement, BITE Latvija's worldwide service offering will be
dual-branded with Vodafone. BITE will also cooperate with Vodafone in developing
services to international and domestic customers. BITE Latvija's customers will
shortly be able to enjoy the benefits of Vodafone's international services
across the Vodafone global footprint, while Vodafone and its partners' customers
will have seamless access to Vodafone's international mobile services while
travelling in Latvia.
Latvian government to sell LMT
The economy minister of Latvia said that the government will allow Telia Sonera
to acquire 100 per cent of LMT, the country's leading mobile phone operator, but
that the Swedish-Finnish telecommunications company would not take over
Lattelekom, the dominant fixed-line operator, according to the website,
Business daily Dienas Bizness quoted Aigars Stokenbergs as saying he had
telephoned Telia sonera Vice President, Kenneth Karlberg, to inform him of the
decision. For more than two years, TeliaSonera has been trying to increase its
stakes in both Lattelekom and LMT, but with no success. Government officials do
not want any one foreign investor to control both companies. "Let it be
fully clear to both Swedes and Latvians. The answer is an absolute,
crystal-clear 'no.' They won't get Lattelekom," Stokenbergs said. He
further added that he had made the decision out of a desire to let Lattelekom
develop its business strategies and directions, which probably did not coincide
with Telia Sonera intentions and regional interests. Stokenbergs said that talks
over a sale of LMT would continue, and the main point was to agree on
Latvia looks to forge new Silk Road to China
The small Baltic state of Latvia, which forms part of the European Union's new
border with Russia, moved recnetly to position itself as the EU's gateway to
Asia's booming markets. Freight volumes from China to Western Europe are
growing, making the development of a new transit corridor from China through
Kazakstan, Russia and Latvia to the EU a necessity, Prime Minister, Aigars
Kalvitis, said on May 31st, New Europe reported.
Kalvitis was speaking at a meeting with the Chinese, Kazak and Russian
ambassadors. "Latvia's geopolitical position makes it the gateway between
markets in the EU, Russian Federation and CIS," said Transport Minister,
Krisjanis Peters, opening a conference recently of the International Federation
of Warehousing and Logistics Associations. Among the attendees were companies
from Kazakstan, India, China and Russia. Latvia's ambitions met with mixed
reactions. "Our cargoes usually go through Rotterdam and Amsterdam, and
that suits us perfectly," Chinese Ambassador, Jiang Li-Min, said. "But
the proposed route would halve freight transit times, and therefore costs."
"Kazakstan is interested in wide-ranging transit cooperation. We are
looking for new routes and reckon that the prospects for Latvian ports are very
good," Kazak Ambassador, Zhalgas Adilbayev, said. The transit business
already accounts for around seven per cent of Latvia's GDP. The most important
transit products are Russian coal and oil, but this situation is now under
review. "Our priority is to diversify the transit sector, developing
facilities for container freight," said Andris Maldups, head of transit
policy at the Latvian Ministry of Transport. "One of our aims is to attract
new cargo flows from Asia and the Far East." Latvia certainly has the
capacity to become a major transit country. Its three major ports are directly
linked into Russia's European and trans-Siberian rail networks, and have far
more capacity than the domestic market can use. "Latvia's infrastructure is
far too big for its domestic needs," admitted Gundars Liberts, president of
the Latvian Association of Freight Forwarders.