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Vol 3, No 1
8 January 2001
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Baltic mapNews from Latvia
All the important news
since 1 January 2001

Daria Kulagina



Polls in the three Baltic states showed that Latvians are the most Euro-enthusiastic Baltic nation. A coordinated poll of public support for integration into the EU and NATO, conducted in Estonia, Latvia, and Lithuania, found the highest support for EU integration in Latvia, while Estonians were the most enthusiastic about NATO.

Supporting Baltic aspirations, Sweden, which currently holds the EU presidency, promised that all negotiating chapters with Latvia and other Baltic states will be opened during the first half of 2001. See the Work Program of the Swedish EU Presidency.

Swedes are also serious about reinforcing the Union's "Northern Dimension." Anna Lindh, Sweden's foreign minister, and EU Commissioner Chris Patten, published an article in the Financial Times, saying that "the Northern Dimension must be seen as an all-European commitment, just as much as the EU's policies towards the Mediterranean and the western Balkans. It is just the sort of area where the EU should be cutting its foreign policy teeth."

A step closer to the EU came with the uniform transit procedure among the Baltic states that took effect on 1 January. The agreement unifies the customs requirements for truckers carrying transit cargo, so they don't have to produce different documents in each of the Baltic states. This is designed to simplify and speed up cargo transportation across the Baltics.


Cautious reaction to nukes report

Latvian officials reacted cautiously to press reports about the possible movement of Russian nuclear weapons to Kaliningrad. The Washington Times' Bill Gertz, quoting sources in the US intelligence community, broke the news about Russian moves to bring nukes to Kaliningrad last summer.

While US government spokespersons declined to comment on the substance of intelligence findings, unnamed sources continued to leak more and more details. Latvian diplomats tried to keep a low profile on the issue and to "disconnect" the Kaliningrad nuclear news from NATO enlargement rationale.


The latest polls

President Vaira Vīķe-Freiberga is the most popular politician in Latvia, according to a poll conducted in December by the public opinion studies centre SKDS. Vīķe-Freiberga's rating was 54.6 points on a -100 to +100 scale. Bank of Latvia President Einars Repše is in second place, with 52.5 points. Riga Mayor Andris Ārgalis remained the third most popular politician, totaling 35.4 points.

If parliamentary elections in Latvia were held in December 2000, Latvians would vote for:

  • Social Democratic Workers Party (LSDSP), 17.8 percent
  • For Fatherland and Freedom-LNNK (TB-LNNK) 13.3 percent
  • Latvia's Way 11.6 percent
  • Left-wing Alliance For Human Rights in a United Latvia 6.9 percent
  • People's Party (Tautas partija) 6.7 percent

Some 16.9 percent could not say which party they would vote for and 12 percent said they would not take part in the elections, according to the SKDS poll.

In the meantime, the most significant probe of forces before the 2002 parliamentary election will be municipal elections in March. Nine candidates are running for Riga mayor, including incumbent Andris Ārgalis (For Fatherland and Freedom) and former cabinet ministers Aija Poča (Latvia's Way) and Edmunds Krastiņš (People's Party).


Prosecuting extremists

A Riga city court sentenced Juris Rečs, one of the leaders of radical Latvian nationalist organization Pērkonkrusts (Thunder Cross), to a three-year jail term. He was convicted of bombing the Victory Monument in Riga and other offences.

Latvian prosecutors sent a criminal case to court against members of Russia's radical National Bolshevik movement. Members of the movement were charged in Latvia with terrorism and illegal border crossing.

Last November, three members of the group blocked off the observation platform of a landmark church's 123-meter tower in the heart of Riga, unfurling Communist flags from the tower and threatening to blow themselves up with grenades.


Contract killing?

Police have detained five National Guard reservists in connection with the killing of entrepreneur Dainis Peimanis, who was shot on 15 December. Peimanis was to receive a USD 14.5 million state guarantee to build a bioethanol plant that would give a boost to Latvia's farmers. But the facility also was to produce grain alcohol and provide a major shake-up in the fierce Latvian alcohol market, which has seen the murder of four top industry executives in the past four years.

A Latvian National Guard reservist suspected of killing a prominent businessman has himself been found murdered. Police said they have not excluded a personal motive for the killing, but one law enforcement source told the NRA daily that the person who ordered Peimanis's killing is thought to be in hiding in Russia.


A rosy economy

Economists celebrated the New Year by calculating results of 2000 and making forecasts for 2001. GDP is expected to rise between five and six percent year-on-year in 2001, while inflation will remain at three percent, the central bank said.

Economics Minister Aigars Kalvītis was even more optimistic, forecasting 2001 GDP growth of some seven percent. The overall tax burden should ease in 2001, following a one percent cut in the social tax. Newly built production facilities are enjoying a year-long tax holiday, as well as a break in annual increases in excise tax on fuel and alcohol.

The current account deficit eased to 5.8 percent of GDP in the third quarter—or LVL (Latvian lats) 63.4 million (USD 103.3 million)—versus seven percent in the second quarter, while the shadow economy made up 17 percent of economic activity, according to EU-compliant calculations of the national statistics office.

The Latvian securities commission expects a 17 percent jump in total securities market volumes in 2001, to over LVL four billion (USD 6.5 billion) from 2000, with foreign securities to see the highest increase.


Privatization saga continues

The saga that is the privatization of the Latvian Shipping Company (LASCO) continued. For Fatherland and Freedom, a junior coalition partner, said it was not satisfied with the privatization rules for LASCO, because they allow for a very narrow range of potential bidders.

For Fatherland's faction in parliament and the opposition Social Democrats said newly approved privatization rules for LASCO do not ensure the transparency and openness of the sell-off process.


Westernization of banking continues

The central bank allowed Rietumu Bank, the sixth largest bank in Latvia, to acquire 100 percent of Saules Banka, the fourth largest by way of assets. Rietumu Banka itself recently attracted a strategic investor from Iceland, Islandsbanki-FBA.

Latvia's biggest bank, Parex, is looking for Western investors. Parex president Valeri Kargin said the bank was not looking for a portfolio investor but "a bank with a well known brand name from a resource-rich and influential state." Parex has been working with the Netherlands' ABN AMRO on a stake sale.


Digital news

Latvia plans to have all-digital TV by 2006. European-based DVB-T will be adopted as its digital television standard in three-stage transition, with the goal of shutting off analog broadcasts as early as 2006. In the first stage, Riga will launch digital broadcasts by the end of 2001 reaching 45 percent of the country's population.

The government adopted guidelines for the "e-Latvia" program aimed at promoting information technologies (IT) in the country, while the Agriculture Ministry said it would launch an on-line database for the food processing sector.

Daria Kulagina, 5 January 2001

Moving on:


Neatkarīgā Rīta Avīze
Dienas Bizness
Bizness Baltija


Ivana Gogova

Bernhard Seliger
Ten Years After

Mel Huang
Lithuania Fumbles

Sam Vaknin
Dirty Diplomats

Gusztáv Kosztolányi
Caring for Your Own

Slavko Živanov
A Lesson in Democracy

Gerhard Jochem
Paying for the Past

CzTV Crisis:
James Partridge
Getting Ahead in TV

Jan Čulík
Taking Them to
the Streets

Robert M Kokta
More of the Same?

Andrew Stroehlein
A Revolution in Television

Jan Čulík
Dead Air

Jana Dědečková

Miloš Zeman

Steven Saxonberg
Social Costs of Transformation

Henryk Grynberg:
Christina Manetti
Z ksiengi rodzaju

Christina Manetti

Brian J Požun
Shedding the Balkan Skin

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
Who's the Boss?

Oliver Craske
Zoran and Göran


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