Latvia Society, Economy and Defense
Population, society and rights
Since independence, the population of Latvia has decreased by 22.5% (about 600,000 residents) due to massive emigration (mainly by citizens of Russian origin or from other former Soviet republics) and due to the decline in births. Under Soviet rule, the ethnic composition had seen the percentage of Latvians decline due to mass deportations and immigration from the USSR.and other neighboring states. The phenomenon had been so massive that it jeopardized the indigenous majority itself within the Soviet Socialist Republic of Latvia. Since independence, the Latvian population has decreased in absolute terms but has increased in relative terms compared to the country’s overall population. However, a new wave of emigration was registered following the economic crisis, with the abandonment of Latvia especially by young and educated people, a phenomenon that caused a serious drain of human capital for the country.
The majority ethnic group in the capital is still the Russian one and the same goes for the eastern region; the rest of the Russian minority (today about one third of the population) is concentrated in the major cities of the country. There are also Belarusian (3.5%), Ukrainian (2.3%), Polish (2.2%) and Lithuanian (1.3%) minorities. The strong Russian minority is at the center of growing tensions with Moscow, whose aggressive policies towards Ukraine (and the annexation of Crimea) have raised fears about a possible intervention by Putin in Latvia in defense of the Russian-speaking community.
Latvia guarantees and respects the freedoms of association, expression, religion and information. Gender equality is also protected even if currently only 18% of parliamentary seats are occupied by women. The country ranks 43rd out of 145 states in Transparency International’s ranking on perceived corruption; according to Freedom House, corruption is not deeply rooted in the lower and middle strata of institutions and politics, but is particularly widespread in the upper strata. An agency for the prevention and fight against corruption is also active in Latvia. A phenomenon, that of the underworld, closely monitored also by the Center for Public Policy Providus, financed by the Soros Foundation.
Economy and energy
Latvia experienced a phase of strong economic expansion in the period preceding the 2008 international crisis, driven by the growth of domestic demand, which was in turn made possible by an expansion of credit. Between 2004 and 2007 the GDP Latvian has more than doubled, so much so that the country has earned the nickname ‘Baltic tiger’. However, the crisis hit Riga harder than many other European states and led to a steep drop in consumption, investment and foreign trade, alongside a rapid increase in debt. The consequent collapse of the economy led Riga to negotiate a loan with the International Monetary Fund amounting to about 10.5 billion dollars and to adopt austerity measures that have aroused strong protests from the population.
The signs of recovery began to manifest themselves from the second half of 2010. In 2013 the country recorded a growth in GDP of 4.2%, the highest among the EU countries, which then fell to 2.4% the following year. due to the decrease in external demand, in particular from Russia (hit by the collapse in oil prices and Western sanctions following the Ukrainian crisis). For 2015, the increase in GDP stopped at 2.2%, confirming a slowdown in economic growth.
Latvian trade has a distinctly regional dimension and is mainly directed towards the neighboring Baltic republics, Russia and Germany. A forest-rich country, Latvia mainly exports timber and derived products. Transport services, linked to a highly developed infrastructure network and improved dramatically over the last two decades thanks to an influx of funds related to projects of E u, constitute more than half of national exports. The peculiar geographical position of Latvia, on the other hand, makes it a natural transit territory for Russian goods bound for the markets of Central and Western Europe. Precisely these characteristics have made the impact of Western sanctions against Russia quite relevant for the national economy: however, Latvia was one of the main supporters of their renewal until 2016.
The largest share of the national GDP is generated by services, a sector which, as in many former Soviet republics, has gone from representing one third of GDP at the time of independence to the current 80%. A shrewd privatization policy, supported by the programs of international financial institutions, has also enabled the private sector, which did not exist in 1991, to generate 70% of all wealth today. The transition from the Soviet-style economy to the free market has instead drastically reduced the weight of agriculture, which today guarantees a share of GDP just over 3%.
Finally, in the energy field, Latvia aims to exploit its renewable energies to reduce imports, which currently exceed 60% of national consumption. In this sense, the dependence on gas supplies from the Russian Federation, the only foreign supplier of methane for Latvia, is particularly significant. The 2009 closure of the Ignalina nuclear power plant in Lithuania made the problem more urgent and pushed Riga to firmly support the European policy of developing energy interconnections between EU member countries.
Defense and security
The process of approaching and joining NATO (2004) has in fact confirmed the direction taken by Latvia since the end of the Cold War, thus sanctioning both its entry into the orbit of Western influence and its definitive detachment from Moscow. Collective defense within NATO and active engagement in its military operations, together with participation in the defense and security policy of the EU, have therefore become the new cornerstones of defense. The current strategic doctrine, already enunciated in 2003, outlines its strategic and operational implications and identifies four basic pillars for national security: collective defense, professionalization of the armed forces, cooperation between the latter and civil society and international military cooperation. The country’s armed forces reached full professionalization in 2006 and military spending in relation to GDP increased in 2009. However, the unstable economic situation dictated by the eurozone crisis made it difficult for Riga to meet the set target of allocating annually 2% of GDP for defense, as requested by NATO(currently military spending on GDP equates to 0.9%). The significant commitment of Latvia, higher percentage than the average of the other European nations, in operations peacekeeping -led Nato (in Kosovo and Afghanistan before then) testified the importance of Riga attaches to its participation in the Atlantic Alliance. It is no coincidence that Riga became, in 2006, the first capital of a former Soviet republic to host a NATO summit.
