Central Europe Review - Latvian News Review

Widening the gap

The Saeima amended the 2000 budget by widening the deficit gap to 3.6 percent of GDP using International Monetary Fund (IMF) methods of calculation (3.2 percent of GDP by Latvian calculations). Finance Minister Gundars Bērziņš said Latvia will ask the IMF and World Bank to conduct an audit of the country's financial system, including the budget and banking sector in the first quarter of 2001, to find areas of potential savings to cut the budget gap.

The amendments approved by the Saeima allocated about USD one million for emergency medical care, USD 1.5 million for intelligence equipment to tap mobile phones and USD three million for a new embassy building in Washington.

Up to code

The Latvian government approved the negotiation position for the chapter on agriculture in the pre-accession talks with the European Union (EU). Latvia is asking for several transition periods to introduce EU requirements, such as a transition period until early 2005 for bringing its meat processing sector up to European standards and another until 2010 in order to reconstruct and develop cattle and pig farms.

Inspecting the guard

Commander of the National Armed Forces Home Guard Colonel Raimonds Graube visited the troops of unit II of Latvia's KFOR contingent in Priština. Graube's aim was to become acquainted with the Latvian soldiers' living conditions and with the tasks they carry out in Kosovo.

The Defense Ministry announced that in order to step up international military cooperation, it is planning to send five more defense attaches abroad next year.

LATO in ATA

The Latvian Trans-Atlantic Organization (LATO) became an official member of the Atlantic Treaty Association (ATA) at the Association's general assembly in Budapest. The Atlantic Treaty Association is a unique confederation of non-governmental organizations from 32 NATO and "Partnership for Peace" member states and has official links with the North Atlantic Treaty Organization. LATO's accession to ATA is an important milestone in Latvia's integration into NATO, said Latvian Institute director Ojārs Kalniņš, who represented LATO at the assembly.

Ready to join

Latvia will be ready for EU and NATO membership in early 2003, President Vaira Vīķe-Freiberga told her British hosts, who included Prime Minister Tony Blair and the Queeen, during an official UK visit.

Blair said it is important for Latvia to maintain a dialogue with the candidate states and with the current and two future EU presiding states—France, Sweden and Belgium. British officials told Vīķe-Freiberga they backed Latvia's pending membership in the EU and NATO.

Becoming president

Latvia takes over the presidency in the Council of Europe from Italy on 9 November. The presidency is a unique opportunity for Latvia, said Prime Minister Andris Bērziņš, who expressed confidence the country would perform the role successfully.

According to the Prime Minister, a much greater number of countries are included in the Council of Europe than in the European Union, and the range of issues to be tackled by the Council is broader.

Warranting extradition

The Rīga Regional Court turned down an appeal against the decision to issue an arrest warrant for suspected war criminal Konrāds Kalējs. The Prosecutor-General's Office can, therefore, start preparing documents to request extradition of the 87-year old from Austrailia—where he is a naturalized citizen—to answer charges of participating in the mass murder of thousands of Jews during World War II.

The court took into consideration the state of Kalējs's health, where it is pointed out that, despite his various health problems, Kalējs is "coherent." Kalējs's attorneys reported that Kalējs is legally blind, has incurable prostate cancer and an acute respiratory disease.

Closing LPA

The cabinet agreed in principle to start winding down operations of the Latvian Privatization Agency (LPA), as of next January, and entrusted the Economics Ministry with preparing relevant legal amendments by 1 December.

The LPA, which, meanwhile, hopes to have the sell-off rules of the Latvian Shipping Company (LASCO) reviewed by the cabinet on 14 November, said a strategic stake would be "at least" 50 percent. Another 15 percent would be sold for privatization vouchers.

Buying the market

After buying Latvia's number two mobile phone provider in the largest private transaction in Baltic history, Sweden's Netcom AB will move aggressively to strengthen its position in the fledgling market, a Netcom executive said in an interview with the Wall Street Journal Europe.

The company's USD 277 million purchase of Baltcom GSM will lead to increasing the size of the undeveloped Latvian market, rather than going head-to-head with the majority state-owned AS Latvian Mobile Telephone (LMT) for a share of the existing market.

e-Latvia

Economics Minister Aigars Kalvītis and Transport and Communications Minister Anatolijs Gorbunovs agreed to demand from fixed-line telecom monopoly Lattelekom, and its strategic investor, Finland's Sonera, to invest heavily in providing more affordable Internet access to all residents of Latvia.

Universities lack funding to increase the number of IT sector students from the approximately 350 diplomas granted every year, which is three times below market demand, said Juris Borzovs of Latvia IT Institute.

The University of Latvia, however, has reached an agreement with Cisco Systems to create a "Cisco Networking Academy" on the premises of the University's Institute of Mathematics. The Academy will teach students to design, build and maintain computer networks.

False domains

AltaVista won a cyber-squatting dispute against a company in Latvia that had registered 43 domain names that are variations or misspellings of the altavista.com domain. According to the WIPO, Grandtotal Finances Ltd SA, which has offices in Panama and Rīga, provided no factual information on the case, and it is not clear exactly what Grandtotal does, although it appears there are links to the Latvian banking community through the Grandtotal sites.

And in other news...

Premier Andris Bērziņš of Latvia's Way, the second largest party in the ruling coalition, is expected to be elected to the party chairman post at a congress on 9 November. The party is currently headed by Andrejs Panteļējevs.
The Economic Freedom Index prepared by American think-tank The Heritage Foundation ranked Latvia 46th, among the "mostly free" economies, while Lithuania ranked 42nd and Estonia ranked 16th. The generally successful reform process in Latvia has been hindered by frequent changes in government, the Index said.
Visiting World Bank experts said Latvia has the lowest level of administrative corruption among the Baltic states. A World Bank mission, evaluating Latvia's performance under a structural loan program, said, however, that disbursement of the second USD 40 million tranche, from a total program of USD 120 million, would depend on amendments in the pensions law, further steps in privatization and improvements in public administration.
Noord Natie, a Belgian stevedore firm in the western port of Ventspils, which this autumn launched a USD 40 million terminal, has started evaluating bids for two more piers, estimated at USD 30 million.
Latvia's average gross salary is the smallest in the Baltics, according to the Central Statistics Bureau. In the second quarter of the year, the average gross wage was USD 300.20 in Estonia, USD 266.40 in Lithuania and USD 247.60 in Latvia.
The Rīga Narcotics Bureau, in collaboration with the media, launched a drug prevention campaign. A central newspaper will be featuring the bureau's educational articles for parents and youth on a weekly basis for one year, and the popular TV channel LNT will start airing special clips in Latvian and in Russian by next fall.

Exchange Rates As of 3 November 2000
Currency	Latvian lats (LVL)
1 US dollar	0.62
1 British pound	0.90
1 German mark	0.28
1 euro	0.54

Daria Kulagina, 3 November 2000

Moving on:

Sources:

Diena
Reuters
Neatkarīgā Rīta Avīze
LETA
BNS
Dienas Bizness
Bizness Baltija