Central Europe Review: politics,
society and culture in Central and Eastern Europe
Vol 0, No 30
19 April 1999

The Amber Coast T H E   A M B E R   C O A S T:
The Telephone War and the Presidency

Mel Huang

A small telephone tariffs war in Latvia has the makings of a presidential campaign. The current battle over a tariffs hike conjures up all the past telecommunications battles: privatisation, tariff regulations, control, monopoly and public relations. It does not help when current Transport Minister Anatolijs Gorbunovs has been frequently mentioned as a presidential candidate.

As the Latvian presidential election is set for the summer, Gorbunovs needed to do something to establish his front-running position. Among the presidential candidates, Gorbunovs remains one of the most popular individuals. Current President Guntis Ulmanis cannot run again due to term limits and other popular individuals are not in position or are not interested to run for President. As the election is carried out in the Saeima (Parliament) and a simple majority of 51 (out of 100 members) elects a President, Gorbunovs is also playing to the sympathies of centre-left forces in order to secure the majority.

The telephone controversy

In most former command-economy countries, the issue of telephone service is usually one that immediately gains national attention and the wrath of angry customers. There have been more protests for phone rates than nearly any other issue throughout the region. Latvia is no exception, especially with foreign control over the fixed-line monopoly Lattelekom.

The privatisation of Lattelekom has already brought enough PR headaches. The lack of presentation by the government created a scenario of a foreign-owned monopoly gouging poor people for phone calls. The PR team of Lattelekom had a difficult battle to fight the entire way. Disputes over the status of Lattelekom as the sole provider of fixed-line telephone service has raged between several bodies. Fighting against Lattelekom, as many politicians discovered, is good PR during election time and can score easy populist points.

The current controversy involves a planned tariffs change. One of the sticking points is the establishment of a restitution system for poor quality lines with the rise in subscription fees. Angry consumers have protested in front of the main Lattelekom office whenever tariffs changes were proposed, and this was no exception. However, an ironic scene was captured when elderly Russophone protesters held signs, in Russian, calling for "foreign invaders" to "go home".

Gorby to the rescue

Therefore, when Transport Minister Gorbunovs cancelled the decision of the Tariffs Council on the final day, it made front-page headlines. The dramatic cancellation, which was confirmed by the Justice Ministry when it was challenged by the Tariffs Council, made Gorbunovs look like the hero to those poor telephone customers.

This move also endeared him to other political parties in the Saeima. As his party, the liberal-centrist Latvia's Way, holds 21 seats in the chamber, Gorbunovs would need plenty more help. Despite Latvia's Way leading the three-party coalition, chances are that other coalition members would launch their own candidates. However, Gorbunovs will most likely be the coalition candidate who reaches the run-off. And as the ruling coalition holds only 46 seats (5 short of a majority), this stand on phone tariffs may have solidified his position among the two left opposition groups. Most likely, several Social Democrats would go over to the side of Gorbunovs as they have championed those "suffering" under the high telephone tariffs.

Gorbunovs himself would likely be easier to swallow than any other coalition candidate for the leftist forces. Many remember Gorbunovs from his days as the chairman of the Latvian Supreme Soviet (later Supreme Council). Though he broke with the Communists and played a large role in the Popular Front and later Latvia's Way, he was still a major player in the Communist period in the 1980s. As the Chairman of the Supreme Council when Latvia restored its independence in August 1991, Gorbunovs served as the de facto president until the election of Guntis Ulmanis in 1993.

In many ways, the ongoing war over phone tariffs has as much to do with normal working folk as with the quiet but brewing presidential race in Latvia. Even before this crisis, Anatolijs Gorbunovs was considered the front-runner. With this under his belt, he may have just stolen the big prize.

Mel Huang, 19 April 1999


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