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Europe
Latvia |
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| Last reviewed: 31 March 2009 |
Country information
Area: 64,100 sq km (24,938 sq mi)
Population: 2.27m
Capital City: Riga (pop: 731,000)
People: 58.8% Latvian, 28.6% Russian, 3.8% Belarussian, 2.6% Ukrainian, 2.45% Polish, 3.7% Other
Languages: Latvian (state language), Russian
Religion(s): Lutheran, Catholicism, Russian Orthodox
Currency: Lat
Major political parties: Governing coalition: New Era, Greens and Farmers Union, People's Party, For Fatherland and Freedom/LNNK and Civic Union. Opposition parties: First Party/ Latvia's Way, For Human Rights in United Latvia, Social Democratic Workers Party, and political association ‘Harmony Centre’
Government: Parliamentary Democracy
President: Mr Valdis Zatlers (elected May 2007)
Prime Minister: Valdis Dombrovskis (March 2009)
Foreign Minister: Maris Riekstins
Membership of international groupings/ organisations: Council of the Baltic Sea States (CBSS), Council of Europe (COE), Euro-Atlantic Partnership Council (EAPC), European Bank of Reconstruction and Development (EBRD), European Union (EU), Food and Agriculture Organisation of the United Nations (FAO), International Atomic Energy Agency (IAEA), International Bank for Reconstruction and Development, ICAO, ICFTU, ICRM, IDA, IFC, IFRCS, International Labour Organisation (ILO), International Monetary Fund (IMF), International Maritime Organisation (IMO), Interpol, IOC, NATO, Organisation for Co-operation and Security in Europe (OSCE), Partnership for Peace (PfP), United Nations (UN), WEU (associate partner), World Health Organisation (WHO), WIPO, WMO, World Trade Organisation (WTO)
ECONOMY
Basic Economic Facts
Source: Latvian Statistical Bureau and Eurostat
GDP: £20.9 bn (2008) *estimate
GDP per capita: £9,086 (2008) *estimate
Annual Growth: - 4.6% (2008)
Average monthly salary: £632 (2008)
Consumer Price Inflation (yoy): 9.6% (February 2009)
Average
Wage Inflation: 20.7% 2008
Unemployment: 12.3% January 2009
Major Industries: timber, textiles, transit, food processing
Major trading partners: the EU, Russia
Further information about Latvia's economy can be found at:
UK Trade & Investment Country Profile: Latvia.
The break-up of the Soviet Union led to real GDP falling by around 50% during 1990-93. Since then the economy had been in recovery with GDP increasing by around 12% over 2006. However, after enjoying years of rapid growth the global financial crisis has hit hard and as a result Latvia was forced to seek a loan from the International Monetary Fund, the World Bank and the European Union in December 2008.
HISTORY
Recent History
Latvia first gained independence in 1918. In 1940-41 it was occupied by the Soviet Union under the provisions of the 1939 Molotov-Ribbentrop Pact with Nazi Germany, by Nazi Germany from 1941-1944, and again by the Soviet Union from 1944-91. Under the Nazi occupation the significant Jewish community was practically wiped out; under the Soviet occupation thousands of Latvians were deported to Siberian camps, executed or forced into exile. Society and industry were modelled along Soviet lines and absolute power rested with a Communist regime under Moscow's control.
The more tolerant political atmosphere in the Soviet Union under Gorbachev in the late 1980s allowed pro-independence and reform groups to come to the fore. Independence was proclaimed in May 1990, and international recognition followed after the failed Moscow coup in August 1991.
Longer Historical Perspective
BBC News Country Timeline: LatviaINTERNATIONAL RELATIONS
Latvia's Relations with Neighbours
Deportations and an influx of Russians into Latvia during the Soviet period have resulted in a situation in which native Latvian speakers comprise only 59% of the population. 16% of Latvian residents do not have citizenship: the majority of these people are Russian-speaking. By the citizenship law (ratified in a 1998 referendum) they have the right to apply for citizenship, but must pay a fee and demonstrate their loyalty to the state by passing a Latvian language and history exam. The rate of naturalisation increased after the EU referendum of September 2003 and by late 2005 100, 000 non-citizens had been naturalised, Some 370,000 non-citizens remain.
Russian allegations of systematic violation of the human rights of ethnic Russians have been declared unfounded by UN, OSCE and Council of Europe experts, as well as human rights organisations in Latvia.
Latvian-Russian relations continue to be complicated by questions concerning the rights of the ethnic Russian minority in Latvia, although the first half of 2007 has seen improved relations mainly due to the signing of the border agreement between the two countries.
A difficult issue in the relationship with Russia is that of the – now adopted – draft 'language law'. As initially drafted, this sought, against international norms, to impose the use of Latvian in private enterprises as well as in official institutions and public life. In December 1999, following pressure from the OSCE, Council of Europe, EU, and bilaterally, the Latvian Parliament adopted a largely acceptable law, which came into force in September 2000. Russia has complained about the new Latvian education law, which envisages a progressive transfer to predominantly Latvian language as the teaching medium in all state schools by late 2004. The High Commissioner for National Minorities has affirmed that this is in line with international norms.
In March 2007 Latvia and Russia finally signed the outstanding 2005 border agreement which had been stalled over historical land issues. The treaty came into force after exchange of ratification books in 18 December 2007.
Latvia has good relations with its Nordic neighbours and has built up links with the Nordic Council and the Council of the Baltic Sea States. It has also maintained close ties with Estonia and Lithuania, and participated in building up a joint Baltic capacity in the area of defence, especially the joint battalion, BALTBAT.
Latvia's Relations with the International Community
European Union
Latvia joined the European Union on 1 May 2004, having signed an accession treaty in March 2003. The referendum on EU membership on 20 September 2003 resulted in 67% support for EU membership. Latvia signed a Free Trade Agreement with the EU in 1994, and an Association (Europe) Agreement in 1995, paving the way to eventual accession to the EU. In October 1999 the European Commission recommended that an invitation to begin accession negotiations be extended to Latvia. This recommendation was endorsed at the Helsinki European Council on 10-11 December. Negotiations began in February 2000 and were completed on 13 December 2002.
NATO
Latvia was invited to join NATO at the summit in Prague in November 2002 and has formally joined in April 2004. This completed several years of preparation for NATO membership, including participation in the Membership Action Plan (MAP) process. The path to membership had been set out at summits in Madrid in July 1997 and Washington in April 1999. Latvia participated enthusiastically in NATO's Partnership for Peace, and became an Associate Partner of the WEU in 1994. Latvian soldiers have participated in peacekeeping operations in Bosnia, Kosovo and Iraq and Afghanistan.
Latvia hosted the NATO Summit in Riga in November 2006.
Latvia's relations with the UK
Britain had strong links with Latvia before the Soviet occupation and annexation in 1940, which the UK never recognised de jure. Latvia's struggle for independence in 1918 was assisted by the Royal Navy (supported by the French Navy). With her European Partners, the UK recognised the restoration of Latvian independence on 27 August 1991. Diplomatic relations were restored in early September 1991 and the British Embassy opened in Riga in October of the same year. Relations with Latvia are very close and friendly.
UK Development Assistance
Latvia benefited from many programmes under DFID's bilateral programme (former Know How Fund). This assistance ended in 2003 because of Latvia's imminent accession to the EU. But the UK continues to fund a bilateral action plan to help Latvia adjust to membership.
The UK has also provided considerable training for Latvia's military forces and support for its NATO ambitions. These have been delivered through multilateral programmes – the BALTIC projects, and the bilateral programme – the Outreach Programme. Key areas are English Language Training (ELT) (Outreach) and basic infantry training (BALTIC - for BALBAT, the joint Baltic Peacekeeping Battalion).
Cultural Relations with the UK
The British Council has an office in Riga.
Recent Visits
Inward
- Maris Riekstins (Foreign Minister) October 2008
- Edgars Zalans (Minister of Regional Development and Local Government) in July 2008
- Aigars Stokenbergs (Finance Minister) in July 2006
- President Vaira Vike-Freiberga in July 2006
- President Vike-Freiberga in May 2004
- Sandra Kalniete (Foreign Minister) in July 2003
- Andris Berzins (Prime Minister) in March 2002
- Indulis Berzins (Foreign Minister) in January 2002
Outward
- Lord Greville Janner of Braunstone QC in May 2008
- John Mann MP (Parliamnetary Committee Against Antisemitism) in December 2007
- Mr Tony Blair (Prime Minister) for the NATO Summit, Riga in November 2006
- Mr Rhodri Morgan (Welsh first Minister) in October 2006
- Margaret Beckett (Minister for Foreign Affairs) in October 2006
- State Visit by HMQ Elizabeth II and Duke of Edinburgh in October 2006
- Douglas Alexander (Minister for Europe) in June 2005
- Dr Stephen Ladyman (Transport Minister) in June 2005
- Ivor Caplin (then Defence Minister) in January 2005
- All-Party Arts and Heritage Group in September 2004
- Alderman Robert Finch, Lord Mayor of London, in June 2004
- Gerry Sutcliffe (then Trade Minister) in May 2004
- Mr Rhodri Morgan (Welsh First Minister) in September 2003
- Lord Irvine of Lairg (then Lord Chancellor) in May 2003
- Denis MacShane (then Minister for Europe) in March 2003
- Baroness Blackstone (then Culture Minister) in February 2003
- Mr Hoon (then Defence Secretary) in February 2002
- HRH the Prince of Wales in 2001
- Mr Spellar (then Minister for the Armed Forces) in 2000
GEOGRAPHY
The country is flat and forested, with some rolling terrain in the south-east where many lakes lie. The highest point in Latvia is Gaizinkalns (312 m) in the south-east. The 1030 km River Daugava enters the Baltic Sea in Riga Bay.
TRADE AND INVESTMENT
Latvia has stuck to the path of economic reform. Privatisation moved at a steady pace until 1998 when political disputes held up the sale of the remaining large State-owned enterprises (shipping, telecoms and electricity). These remain in state hands. Spurred by the 1998 Russian economic crisis, trade has steadily been reoriented to the west Since joining the EU in 2004, Latvia’s trade with EU partners has doubled and now accounts for 75% of Latvia’s total trade. The UK, Germany, Lithuania and Sweden are now the biggest markets for Latvian goods (most Latvian timber products go to the UK).
Latvia joined the World Trade Organisation in 1998. The National Bank confirmed its future strategy, taking Latvia into ERM II in 2005 and is hoping to adopt the Euro.
Trade and Investment with the UK
There is an active British Chamber of Commerce in Latvia. Britain's exports of goods into Latvia in 2008 was 166 million GBP. Britain, in reply, substantially imported Latvian goods in 2008 to the figure of 347.46 million GBP, notably timber and petroleum products/related materials.
For more information on general figures and trade opportunities, visit the UK Trade & Investment Country Profile: Latvia.
POLITICS
Recent Political Developments
In March 1990 a new Supreme Council was elected, which on 4 May 1990 voted for the Declaration of the Restoration of Independence. The Supreme Council was dominated by the Popular Front, but managed to reach a consensus with other groups. Supreme Council Chairman (and Head of State) Anatoljjs Gorbunovs (a Reform Communist who later joined the Latvia's Way electoral bloc) did much to promote consensus. The government was headed by Ivars Godmanis from 1990-93. During this period Latvia reverted to its 1922 Constitution. (Latvia moved more slowly than the other Baltic States towards a new constitution and party political system, and reform in general, partly because of its large Russian minority. One cause of delay was indecision over the question of citizenship for the Russians who had settled in Latvia in the Soviet period).
In June 1993 Latvia's first post-independence parliamentary elections resulted in the formation of a minority centre-right nationalist coalition government committed to free market reform. Centre-right governments have been the norm since then.
Electoral System and Elections
The 100-seat Saiema (parliament) is identical to the legislature, which existed before the Second World War. Deputies (MPs) are elected for a four-year term.
Presidential Elections
The President is elected by parliamentarians for a four-year term and can hold office for no more than two consecutive terms. Any Latvian citizen enjoying full rights over the age of forty may be elected. People holding dual citizenship cannot stand. In May 2007 Valdis Zatlers was elected Latvia’s new President, taking over from long-standing incumbent President Vaira Vike-Freiberga, who had been in office for the maximum two term period. Zatlers was officially inaugurated on 8 July.
Parliamentary Elections
On 7 October 2006 Latvia held elections for the ninth Saeima (Parliament). The allocation of seats in the Saeima is currently as follows:
Party Name, Seats
People's Party (TP) 21
Greens' and Farmers Union (ZZS) 17
New Era (JL): 14
Harmony Centre (SC): 17
Latvia's First Party/Latvia's Way (LPP/LC)10
For Fatherland and Freedom/Latvian National Independence Movement (TB/LNNK): 5
For Human Rights in a United Latvia (PCTVL): 6
Independent (MP's who have split from the People's Party, For Fatherland and Freedom, New Era and Greens' and Farmers Union): 10
Another 12 parties failed to reach the 5% threshold. Turn-out was 62.28%, well down on the 71.51% achieved in 2002.
Prime Minister Aivars Kalvitis became the first sitting Prime Minister to retain his position after the elections. He created a coalition of his own People’s Party, Greens and Farmers Union, LPP/LC and TB/LNNK. His government resigned in December 2007. Ivars Godmanis (LPP/LC) became Prime Minister with the support of the same coalition but resigned in February 2009 after the government was unable to come to a consensus over their response to the financial crisis. Valdis Dombrovskis was nominated by President Zatlers as his successor. Dombrovskis’ Cabinet of Ministers was approved in March 2009 and saw Godmanis’ First Party/Latvia’s Way leave the governing coalition and both Dombrovskis’ New Era Party and the Civic Union join the new five party coalition.
