Central Europe Review The Central European Initiative Economic Forum is a major CEI business event
Vol 2, No 40
20 November 2000
front page 
our awards 
CER cited 
jobs at CER 
CER Direct 
e-mail us 
year 2000 
year 1999 
by subject 
by author 
EU Focus 
music shop 
video store 
find books 


Latvian News News from

All the important news
since 11 November 2000

Daria Kulagina


Russian National Bolsheviks detained

Three members of the Russian nationalist extremist group National Bolsheviks blocked off the observation platform of a landmark church's 123-meter tower in the heart of Riga Friday morning, demanding the release of jailed colleagues, unfurling Communist flags from the tower and threatening to blow themselves up with grenades. The men occupied the picturesque St Peter's Church platform for several hours before an anti-terrorist squad managed to detain them.

Police said they appeared to be protesting the prospect of Baltic NATO membership; they also demanded the release of convicted Russian war criminals.

Earlier in the week, four other "Bolsheviks" of the extremist Russian party, which advocates the restoration of the Soviet Union, were detained by Latvian police after jumping off a St Petersburg-Kaliningrad transit train. They were suspected of planning to disrupt upcoming Independence Day festivities. Heightened security has been announced after the two incidents.

National Bolsheviks have been fined in the past for staging unauthorized rallies, defacing public property and carrying illegal symbols, like the Soviet hammer-and-sickle, at public events. According to BNS, the Russian Embassy in Riga was told by telephone this morning that a similar action was being prepared for the consular section of the embassy. Ambassador Udaltsov expressed readiness to cooperate with the Latvian police in the investigation of the incidents.

Earlier in the week, Foreign Ministry Permanent State Secretary Māris Riekstiņš met his Russian counterpart, Deputy Foreign Minister Aleksandr Avdeyev. The Foreign Ministry said they discussed bilateral relations, opportunities to cooperate in the Council of Europe (of which Latvia now holds the rotating presidency), as well as the process of social integration in Latvia, and found "certain progress in the relations between the two countries."


Agreement on privatization reached

Three major political parties may have reached a political agreement not to purchase new tankers for the Latvian Shipping Company (LASCO) before going ahead with its privatization. Latvia's ruling coalition partners shelved LASCO's USD 125 million tanker project, which was one of the major controversies that brought down the government of Andris Šķēle earlier this year.

A 68 percent stake in the firm is planned to be sold to a strategic investor. LASCO is among the largest transnational companies in Eastern Europe. Latvian Privatization Agency head Jānis Naglis said if there is no change in government, the privatization of Latvian Shipping could be completed by 1 June 2001.


Subscription to public electronic media pending

State-owned Latvian Television and Radio favor an introduction of subscription fees to their broadcasts, according to the Neatkarīgā Rīta Avīze daily. Heads of both companies believe the move would relieve them from financial pressures and curb commercial advertising in the long run.

Politicians, however, resist the idea, as they believe the new system would be excessively difficult to administer. They also emphasize that TV is the only source of information for many households. Some view the subscription as a new kind of tax.


Latvian pulp mill to supply European paper producers

If a USD 900 million Latvian pulp mill project gets the go-ahead, it could be supplying Finnish and other European paper producers by 2005, Dow Jones reported. Baltic Pulp is a joint venture between Finnish forestry company Metsäliitto, Swedish forestry association Södra and the Latvian government. The Riga-based project will examine the feasibility of building a 600,000-metric-ton, bleached sulphate pulp mill in central Latvia in what would be one of the largest-ever investments in the Baltic States.

Following planning and financing, a final decision on the mill is expected in 2002. If it goes ahead, the mill could start commercial operations in 2005 and produce market pulp, of which a substantial part would be delivered to Metsä-Serla's paper mills in Central Europe. In return for its stake, the Latvian government has initially agreed on substantial tax initiatives for Baltic Pulp, supply of raw material and infrastructure.


President: Cases against Kalējs and Kononov commotion

Latvian President Vaira Vīķe-Freiberga told the TVNET.lv portal that the war crimes and genocide cases against Konrāds Kalējs and Vasili Kononov have caused quite a commotion, proving that Latvian residents do not have a unified view of the past.

According to the President, the commotion over these cases also proves that issues linked with events of the past are emotionally charged. The President stressed that nostalgia is characteristic of Latvians. "One should live for today and the future," she noted.


Back for the European title

Latvian President Vaira Vīķe-Freiberga and DJ and pop singer Renārs Kaupers of the popular band Brainstorm are running neck-to-neck for the title of "European 2000." The title is awarded by the Europe Movement Latvia to the person who has contributed the most to Latvia's accession to the EU. The recipient of the title will be decided by popular vote via regular mail or on the Web.


Mobile phones: Rates cut, usage increased

Latvian mobile phone operator Baltcom GSM, recently acquired by Sweden's NetCom for about USD 277 million, cut usage tariffs and expanded services in a bid to gain market share. NetCom bought Baltcom with an eye to making it Latvia's price leader through a combination of tariff reductions and a USD 50 million investment to widen mobile coverage by 2002 to 2003. Around 15.4 percent of Latvia's 2.4 million inhabitants are mobile phone users, up from 14.4 percent at the end of summer.


Government to prioritize balanced budget for 2002

Latvian Finance Minister Gundārs Bērziņš said the government will prioritize having a balanced budget in 2002, which will be based on a predicted gross domestic product growth of seven to eight percent. The cabinet, however, failed to keep its promise to limit the 2000 budget deficit to two percent of the GDP and was forced earlier this month to push amendments through the parliament that took it to 3.18 percent. The 2001 budget draft has a planned deficit of 1.74 percent of the GDP, up from the government's earlier pledge of one percent.

Minister Bērziņš also said increasing pressures on spending due to NATO and EU accession preparations will make setting spending priorities a hot issue, with the government committed to reducing the overall tax burden. "This will call for unpopular political decisions," the Finance Minister said.


And in other news...

  • Pollution levels in the Gulf of Riga have decreased since 1992 to the extent that Helsinki Convention body HELCOM has agreed to take it off its hot spot list.
  • Sweden's Skandinaviska Enskilda Banken (SEB) now holds 98.2 percent of shares in Latvia's second largest bank Unibanka following a minority buyout that ended on November 13. SEB's buyout at LVL 2.05 per share brought in 16.5 million Unibanka shares for SEB, worth over LVL 33 million.
  • Total cargo turnover at Latvia's ten ports came to over 43 million tons during the first ten months of the year, a rise of 3.6 percent over last year.
  • The Economic Reform Monitor, the European Commission's publication on the EU candidates' economies, said Latvia's economic climate improved over the first half of 2000, pushed by the annual 5.1 percent services growth and 5.5 percent annual rise in production. The Latvian experience shows that slow privatization on its own does not automatically mean an impediment to economic growth, the report said.
  • According to the Naturalization Board, the number of naturalized citizens is expected to have increased by 28 percent in 2000 and reach 16,000 this year.


Exchange Rates
As of 17 November 2000
Currency Latvian
1 US dollar 0.63
1 British pound 0.89
1 German mark 0.27
1 euro 0.54


Daria Kulagina, 17 November 2000

Moving on:


Neatkarīgā Rīta Avīze
Dienas Bizness
Bizness Baltija



Tim Haughton
Mečiar's End

Michael Kopanic
Slovakia's Future

Sam Vaknin
The Black Market

Delia Despina Dumitrica
Integrating Romania

Jan Čulík
Czech Political Legitimacy

Beth Kampschror
Bosnian Elections

Gusztáv Kosztolányi
Hungarian Corruption

Mel Huang
Everything Must Go

Brian J Požun
Multi-ethnic Outpost

Daniel Lindvall
Russian Cinema

David Nilsson
Czech Fiction

Brian J Požun
Shedding the Balkan Skin NEW!

Martin D Brown
Czech Historical Amnesia

Dejan Anastasijević (ed)
Out of Time

Gusztáv Kosztolányi
Hungarian Oil Scandal

Sam Vaknin
After the Rain

Press Reviews:
Andrea Mrozek
Time to Vote

Oliver Craske
The Heart of Chernobyl


Mixed Nuts

CER eBookclub Members enter here