BASIC INFORMATION

Full Country Name: Latvia

Area: 64,100 sq km (24,938 sq mi)
Population: 2.31m
Capital City: Riga (pop: 747,200)
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: New Era, Green and Farmers Union, First Party, People's Party, Latvia's Way, For Fatherland and Freedom, For Human Rights in United Latvia, Social Democratic Workers Party
Government: Parliamentary Democracy
President: Mrs Vaira Vike-Freiberga (1999, re-elected 2003)
Prime Minister: Mr Aigars Kalvitis (December 2004)
Foreign Minister: Mr Artis Pabriks
Economic information: See below
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)

GEOGRAPHY

The country is flat and forested, with some rolling terrain in the south-east where many lakes lie. The highest point in is Gaizinkalns (312 m) in the south-east. The 1030 km River Daugava enters the Baltic Sea in Riga Bay.

HISTORY

Recent History

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

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 's Way electoral bloc) did much to promote consensus. The government was headed by Ivars Godmanis from 1990-93. During this period reverted to its 1922 Constitution. ( 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 in the Soviet period.)

In June 1993 '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. The next presidential elections are in July 2007, when current President Vike-Freiberga’s second term ends.

Parliamentary Elections

On 7 October 2006 held elections for the ninth Saeima (Parliament). The allocation of seats in the Saeima is currently as follows:

Party Name, Percentage of Vote, Seats

People's Party (TP) *: 19.49 (16.6): 23 (20)
Greens' and Farmers Union (ZZS) *: 16.69 (9.4): 18 (12)
New Era (JL): 16.38 (23.9): 18 (26)
Harmony Centre (SC): 14.42 (part of PCTVL at last elections): 17 (-)
Latvia's First Party/Latvia's Way (LPP/LC)*: 8.59 (9.5): 10 (10)
For Fatherland and Freedom/Latvian National Independence Movement (TB/LNNK): 6.95 (5.4): 8 (7)
For Human Rights in a United Latvia (PCTVL): 6.02 (19) 6 (25)

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.

ECONOMY

Basic Economic Facts

GDP: �8.7bn (2005)
GDP per capita: �3,804 (2005)
Annual Growth: 13.1% (H1 2006) Average gross monthly salary: �280 (Q2, 2006)
Consumer Price Inflation: 6.87% (2005)
Wage Inflation: 21.8% (Q2, 2006)
Unemployment: 7.8% (Q1, 2006)
Major Industries: timber, textiles, transit, food processing
Major trading partners: the EU, Russia


The break-up of the Soviet Union led to real GDP falling by around 50% during 1990-93. Since then the economy has been in recovery with GDP increasing by around 12% over 2006 The Lat remains strong and stable and has been pegged to the Euro since 2005. Latvian macro-economic policy has been a success particularly in terms of growth (privatisation less so - see below).

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, ’s trade with EU partners has doubled and now accounts for 75% of ’s total trade. The , , and are now the biggest markets for Latvian goods (most Latvian timber products go to the ).

joined the World Trade Organisation in 1998. The National Bank confirmed its future strategy, taking into ERM II in 2005 and hoping to adopt the Euro, at the earliest, on 1st January 2008. However, 's GDP per capita is still anongst the lowest amongst the new EU countries and remains a concern for the National Bank.

INTERNATIONAL RELATIONS

's Relations with Neighbours

Deportations and an influx of Russians into during the Soviet period have resulted in a situation in which native Latvian speakers comprise only 59% of the population. 21% 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 400,000 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 .

Latvian-Russian relations continue to be complicated by questions concerning the rights of the ethnic Russian minority in .

A difficult issue in the relationship with 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. 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.

Since the beginning of 2007 there is evidence of renewed diplomatic efforts to sign the Latvian/Russian border agreement, which, though agreed in all technical aspects (and initialled) in 1997, has not yet been signed. Plans to sign in 2005 stalled over disagreements on historical issues and possible future Latvian claims to an area in which belonged to until its occupation.

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 and , and participated in building up a joint Baltic capacity in the area of defence, especially the joint battalion, BALTBAT, which is based near Riga.

's Relations with the International Community

European Union

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. 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 . 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

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. 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 , Kosovo and and .

hosted the NATO Summit in Riga in November 2006.