CER | Latvia: New mayor seeks coalition

Latvian GDP surpasses Estonia and Lithuania

Latvia had the greatest gross domestic product (GDP) growth among the Baltic states in 2000, according to the Latvian Central Statistics Office.

Latvia experienced a GDP increase of 6.6 percent, while Estonia posted 6.4 percent growth and Lithuania at 2.9 percent. Latvia also had the highest GDP growth in the fourth quarter of 2000, with the GDP growing by 8.7 percent, compared to Estonia's 5.9 percent and Lithuania's 4.7 percent.

The GDP figures exceeded all expectations. In a recent Reuters survey, eight analysts predicted, on average, full-year 2000 GDP growth of 5.48 percent, with forecasts ranging from 5.0 percent to 6.0 percent. The Bank of Latvia is predicting a 6.0 to 6.5 percent GDP growth this year, and the Ministry of Economy is expecting 6 percent growth.

Riga's Social Democrat mayor seeks coalition

Social Democrat Gundars Bojārs was elected mayor of Riga last week. Bojārs is the 34-year-old son of Latvian Social Democratic Workers Party (LSDSP) Chairman Juris Bojārs. He will be joined in office by new Deputy Mayor Sergejs Dolgopolovs, who is a member of the leftist association For Human Rights in a United Latvia (PCTVL). Dolgopolovs is the first member of PCTVL, mainly supported by ethnic Russians, to take a top post in the Riga City Council.

Bojārs said he will initiate new coalition talks, but hinted that a cooperation agreement between his Social Democrat party and PCTVL might not be the base for the coalition.

Fatherland and Freedom/LNNK, one of the ruling parties at the national level that placed third in local elections, said they would like to be in opposition at the Council, but still head four committees, offered by Social Democrats.

Two other political parties, the People's Party and Latvia's Way, called Fatherland's actions confusing and contradictory to its ideology. Prime Minister Andris Bērziņš of Latvia's Way said right-of-center Fatherland's participation in the leftist-dominated Council coalition "won't promote government stability."

The People's Party and Latvia's Way signed an agreement about remaining in opposition in the Council and regarding outgoing Mayor Andris Ārgalis of Fatherland as their candidate for mayor. Fatherland, however, wouldn't join the agreement.

Transit visas for Kaliningrad travelers meet EU rules

The government decided to end visa-free railway transit for Russian citizens, as one of its final steps in adjusting border-crossing rules to European Union norms. The 1993 transit agreement with Russia allowed Russian travelers visa-free access to the Baltic Sea enclave, Kaliningrad.

The Kaliningrad railway administration will change the St. Petersburg-Kaliningrad route. Effective June 2001, the route will bypass Latvia via Vilnius and the Belarusian city of Polatsk.

EU accession to cost LVL 1.2 billion

Integration into the European Union would cost Latvia about LVL (Latvian lats) 1.2 billion (USD 1.9 billion) over the next 10 years, according to the Finance Ministry.

The greatest share of the expenditures, LVL 646 million (USD 1.025 billion), is to come from the state budget, with LVL 202 million (USD 320 million) expected from bilateral assistance; LVL 168 million (USD 266 million) from the EU as financial assistance; and LVL 184 million (USD 292 million) from loans.

The largest expenses—LVL 800 million (USD 1.2 billion)—are foreseen for the Ministry of Environmental Protection and Regional Development.

Eight EU accession chapters opened

Brussels opened eight EU negotiation chapters for Latvia last week, while closing two.

Among those opened were the free movement of goods, social policy and employment, energy, telecommunications and information technology, regional policy and co-ordination of structural instruments, environment, customs union and financial and budgetary provisions.

The EU, last week, closed chapters on the free transportation of goods and cultural and audiovisual policies, leaving Latvia with 24 of 31 chapters opened.

Government to announce oil licenses

The Latvian Economic Ministry will announce the first licensing round for the pre-investigation, exploration and production of its offshore Baltic Sea crude oil on 19 April.

"There are seven offshore blocks for exploration and production as well as 66 blocks for pre-investigation in the Latvian shelf of the Baltic Sea," the Ministry said in a statement.

The Economic Ministry will hold a presentation of the licensing round in London one week after the announcement.

Riga bourse seeks partners

The Riga Stock Exchange said last week it wanted to widen its pool of potential strategic or alliance partners to include Euronext, or other central and eastern European bourses. The Riga bourse, which has held talks on joining the Nordic Norex alliance, said it would seek more offers in April, wanting to make a final decision in autumn 2001 on whom to sell either a majority stake or to join in alliance.

The Helsinki Exchanges Group (HEX), which recently announced it is buying a majority stake in Estonia's Tallinn Stock Exchange, has also expressed interest in Riga and Vilnius bourses.

President pins hopes on Putin talks

Latvian President Vaira Vīķe-Freiberga told the BBC Russian Service that she viewed the recent meeting with her Russian counterpart, Vladimir Putin, as a sign that Moscow is ready to continue dialogue with Latvia.

Vīķe-Freiberga said problems with national minorities in Latvia stemmed from the Soviet occupation and would be resolved as Latvia becomes integrated into the EU. The President said she hoped Western countries would not give in to Russian objections and would admit the Baltic countries into NATO.

New Russian ambassador starts term

Igor Studennikov, Russia's new ambassador to Latvia, presented his credentials to the Latvian President last week and met Latvian Foreign Minister Indulis Bērziņš and Seima Chairman Jānis Straume.

Studennikov said he is committed to "developing good relations with Latvia."

Russia bans Baltic food imports

Russia's Agriculture Ministry extended its ban on the import and transit of meat and meat products, dairy products, fish and fish products, as well as animal feed from the European Union, Eastern Europe and the Baltic states.

Latvian Prime Minister Andris Bērziņš said the ban on fish and fish products was "illogical," as fish do not carry foot-and-mouth disease.

Latvia considers F&M vaccination

Still torn between a wish to preserve herds and the cost of a possible export ban, Latvia this week considered vaccinations against foot-and-mouth disease. The Latvian veterinary service has ordered a shipment of 30,000 vaccinations.

The European Union opposes vaccination, because it introduces foot-and-mouth antibodies into the livestock population.

And in other news...

Immigration and emigration rates fell in Latvia last year, according to the Latvian Central Statistics Office. A total of 8030 people left Latvia for permanent residence abroad. 1627 people moved to Latvia, nearly a 50 percent decrease from 3123 immigrants two years ago. About 70 percent of people immigrated to the CIS countries.
The EU and Latvia signed the annual SAPARD [Special Accession Program for Agriculture and Rural Development] agreement on this year's LVL 13.6 million (USD 21.4 million) funding for Latvia.
The Central Bank is expected to launch a register of commercial banking loans on 1 July. The register will initially track loans of LVL 100,000 (USD 158,000) and more, with those of LVL 5000 (USD 7900) and higher to be added later.
The Latvian government decided to follow a European Union directive by moving clocks forward one hour on 25 March. Latvia will have a one-hour time difference from Estonia and Lithuania, which won't implement daylight-saving time changes.
Latvia held commemorative events to mark the 1949 mass deportations by the Soviet regime, when some 40,000 people were sent to Siberia.

Ieva Raubiško, 30 March 2001

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