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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: 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 in 1996.
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 there.

George W. Bush and US leaders praised Vike-Freiberga's speech at the US congress
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 previous year.

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 overheating. 
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 overheat. 
"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 News Service.
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.

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TELECOMMUNICATIONS

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 reported.
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, www.baltictimes.com. 
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 compensation.

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TRANSPORT

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.

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