Latvia: development results for 2007-2017 and the forecast for 2018-2022.


 

Contents

 

INTRODUCTION                                                                                                     5

1.0.0. RESULTS OF SOCIAL AND ECONOMIC DEVELOPMENT OF LATVIA FOR 2007-2017.                                                                                                        6

1.1.0. External factors of influence on socio-economic process                               6

1.1.1. Foreign policy factors of influence                                                                                  6

1.1.2. Internal political factors of influence                                                              8

1.1.3. Factors of spiritual influence                                                                         10

1.2.0. Socio-economic processes in Latvia in 2007-2017.                                      12
1.2.1.  Production                                                                                                     12

1.2.2. Energetics                                                                                                      13

1.2.3. Investments                                                                                                    14

1.2.4. Consumption of the population                                                                     16

1.2.5. Working Power and Wages                                                                            17

1.2.6. Export and import                                                                                          19

1.2.7. Finances and credit                                                                                        21

1.2.8. State Budget                                                                                                  22

1.2.9. Population: natural movement and migration                                               23

1.2.10. Problems of social development of Latvian society                                    24
1.2.11. Latvia and the EU                                                                                        26

2.0.0. FORECAST OF SOCIAL AND ECONOMIC DEVELOPMENT OF LATVIA FOR 2018-2022.                                                                                       27

2.1.0. Factors of influence on socio-economic processes                                        27

2.1.1. Foreign policy factors of influence                                                         27

2.1.2. Internal political factors of influence                                                             27

2.1.3. Spiritual factors of influence                                                                         30

2.2.0. Forecast of social and economic development of 2018-2022                     30

2.2.1. Pessimistic version of the forecast                                                                 30

2.2.2. Optimistic version of the forecast                                                                  32

CONCLUSION                                                                                                       34

                                             INTRODUCTION.

 

In the present report the analysis of the key social and economic processes developing in Latvia in the period from 2007 to 2017 is carried out. This period is taken for studying because in 2007 the economy of the republic has reached the highest indicators on the output for the entire period after obtaining independence by her then has plunged into deep crisis from which exit was outlined only by the end of 2017. The economic crisis has essentially influenced many social processes happening in the republic. The most important changes are mentioned in the given material.

Political factors are considered in work as external in relation to basic – social and economic processes. As independent the factor of influence of cultural wealth on course of all public processes is considered.

The authors of the report give their vision of changes in social processes, primarily on the basis of an analysis of statistical and economic data published by Eurostat, the Central Statistical Bureau of Latvia, the Bank of Latvia, the Ministry of Economy, the Ministry of Finance, the State Treasury, and the Finance and Capital Market Commission of the Republic.

The report makes a forecast of the socio-economic development of Latvia for the period from 2018 to 2022. The forecast is given in two versions: pessimistic and optimistic. The pessimistic forecast is based on the assumption that the existing inertia of all socio-economic processes will remain, and the optimistic one assumes the introduction of significant adjustments to the policies of the current power elites.

The report is prepared by employees the Institute of European Studies (IES): Dr Oec. Alexander Gaponenko (head), mag.ec. Evgenia Zaytseva, Ph.D. Mikhail Rodin and doctoral candidate Andrey Starikov.

The report is continuation of development of IES “System crisis of the Latvian society: the reasons, scenarios of development, a possibility of overcoming”, published in 2009 (https://www.academia.edu/28217839).

 

 

1.0.0. RESULTS OF SOCIAL AND ECONOMIC DEVELOPMENT OF LATVIA FOR 2007-2017.

 

1.1.0. External factors of influence on social and economic processes

 

                   1.1.1. Foreign policy factors of influence

The collapse of the USSR in 1991 has led to a possibility of education on the basis of the federal republic the Latvian SSR of the independent Republic of Latvia. The active imitation and borrowing of Western political structures and institutions led to a broad democratization of the Latvian political system, while the political culture of society significantly reflected the models of the authoritarian past. According to researches prof. A. Gaponenko and prof. M. Rodin, change of a former political regime and Latvia on new, democratic has happened without any elite changes. The former communist power elite formed the current bodies of government and distribution of state political power. The elitism of the Latvian regime, originally built into the system of Western external governance, largely determines the continuing deficit of Latvian democracy.  In other words, there was a radical transformation of domination of the USSR to the Soviet Latvia on political hegemony of the USA and economic influence of the European Union (EU) on the Republic of Latvia.

In 2004, Latvia became a member of the EU. This opened up wide access to financial and credit resources for her, both the union itself and its members. However, accession to the EU led to the loss of many levers of management of the commodity market, capital and labor markets. In the developed competition, a significant part of the national industrial and banking potential was lost; the national wealth began to pass into the hands of foreigners. The opening of the European labor market caused the departure of the most qualified Latvian workers abroad. The economy of the republic was very unbalanced.

The greatest influence on the economy of Latvia is currently provided by Scandinavian capital. Four of the five largest landowners in the country are Scandinavian companies, and only one is Latvian[1].

The Scandinavian capital is plentifully presented in telecommunications and media. As owners of the largest banks of Latvia citizens of the Northern countries also act: SEB, Nordea and Swedbank – Swedes, DNB – Norwegians.

World crisis of 2008 has very strongly affected on Latvia owing to the fact that her economy has been rebalanced after the accession to the EU. However the European Union hasn’t rendered the significant help of Latvia in overcoming crisis.

In 2004 Latvia has entered NATO. It has sharply strengthened influence of the USA on political life of the republic. The Latvian emigrants who have come back to the republic from the USA and other western countries after 1991 became driving belts of this influence. Emigrants fought for the entry of Latvia into NATO, helped to establish relations in Washington and Brussels.

The USA have allocated for Latvia as a barrier between Russia and countries of Western Europe. Such barrier had to weaken competitors, interfere with forming of uniform geopolitical space from Lisbon to Vladivostok.

In 2014 the USA initiated political and economic sanctions against Russia, has forced to join them EU countries including Latvia.  In response to these sanctions, Russia imposed counter sanctions – it banned the import of agricultural and food products. Latvia has lost in this connection a significant part of the markets for its products, both in Russia and the CIS as a whole. In addition, in response to unfriendly rhetoric, for example, the presentation of accounts for the “occupation”, Russia began to reduce the volumes of transit traffic through the Latvian ports[2].

Under pressure from the United States and the EU, Latvia announced the withdrawal from the infrastructure systems created in the Soviet era: electric – BRELL, gas transport, rail, and such reorientation required significant investment, but did not have a clear economic impact.

The ruling elites of the republic in the current conditions differed in their low independence in making economic and social decisions. This prevented them from defending the interests of the republic on international platforms.

 

1.1.2. Internal political factors of influence.

The population of Latvia consists of Latvians (including Latgal), Russian and national minorities. According to the 2011 census, 62.0% of Latvians, 37.2% of Russians and 0.8% of national minorities lived in the republic[3].

After obtaining independence in Latvia the set of the Latvian national-democratic and national-radical parties constantly is in power. The parties representing the interests of the Russian part of the population remained in opposition. In Latvia, leftist political forces reflecting the interests of wage workers and socially weak sections of the population were not formed. Although the ideologically leftist spectrum of values and notions is quite widespread exists in the public consciousness.

The reason for the current political situation was the deprivation in 1991 of two-thirds of the Russian population of citizenship rights[4].

The ruling elites of the republic invariably conduct a liberal course in the economy and a national course in the social sphere.

Social policy is reduced primarily to the construction of an ethnic hierarchy, in which the upper stages are occupied by the Latvian bureaucracy and the oligarchy, while the lower ones are reserved for Russian wage workers. Instruments of this kind of policy were: the preservation of mass statelessness in the Russian environment; prohibition of Russians to public service and “intellectual” professions; use of the Latvian language as an instrument of marginalization of Russians in the private sector; the liquidation of social institutions for the reproduction of Russian identity (universities, schools, museums, mass media).

As a result of this social policy, the Latvian-Russian conflict developed in the republic[5].

During the considered period this ethnic conflict repeatedly was shown outside: in 2012 in the form of holding a referendum for giving to Russian of the status of the second state; in 2013-2015 in the form of social movement Congress of aliens; in 2017 in the form of mass protests against compulsory transfer of the Russian schools into training Latvian.

After 2012, the national radicals began to dominate not only in the social, but also in the economic policy of the republic. This had a negative impact on its socio-economic development. For example, in 2016 national radicals have carried out in the Seema’s  of the amendment to the law on providing residence permits in exchange for investments. As a result of adoption of these amendments foreigners, and it were generally Russians, have practically ceased to take residence permits, and the budget has lost income of about half a billion euro a year[6].

And the ban on entry into Latvia of a number of the Russian actors initiated by national radical in 2014 has led to closing of large cultural projects in Jurmala and to turning of a stream of the Russian investments and tourists[7].

National-radicals in power did not prevent the mass emigration of Latvians abroad, but prevented the import of cheap foreign labor, which the national economy needed. The policy of imposing unreasonably high demands on the knowledge of the Latvian language frightened not only Russians, but also European entrepreneurs and investors[8].

The exclusion of large masses of population from the political process adversely affected the quality of the Latvian political elite. Out of the control of the electorate, it ceased to be updated, and corruption developed in its environment. The most revealing cases were the participation of the country’s top leadership in the ruin of the Parex Bank and Kraibank, bribery of the military command in the purchase of unsuitable military equipment,  bribery of the head of the Bank of Latvia for covering money laundering through the country’s banking system.

                     1.1.3. Factors of spiritual influence.

 

In the early 2000s, liberal democratic values dominated in Latvian society, covered with a touch of Latvian nationalism.

After 2012, the ruling class chose radical Latvian nationalism as its official ideological doctrine. The change in the value system was recorded in the preamble to the constitution. In this document, the Latvians were declared a privileged ethnic group[9].

Forms of manifestation of a new ideology were: the persecution of Russian activists[10]; hate speech of the ruling Latvian elite against non-Latvians[11]; formation of national socialist gallery of heroes and organization of worship by him[12], demolition of monuments to soldiers of the Red Army[13], attempts of revision of results of World War II[14].

The main reason for the change of spiritual orientations was the desire of the ruling elite to divert the attention of the masses from its serious failures in solving social and economic problems, as well as attempts to hide the facts of large-scale corruption in its ranks.

Nationalist rhetoric was combined with the ruling parties with actions that in fact destroyed not only the Russian, but also the Latvian ethnos. Thus, nationalist parties contributed to the mass emigration of Latvians, did not take measures to stimulate the birth rate and reduce mortality in their midst. On the contrary, they financially supported symbolic actions that stimulate the depopulation of their ethnic group[15].

Simulation of activity by closing Russian schools did not save Latvians from depopulation[16].

In general, a serious crisis of spiritual values developed in the republic. It was under the influence of this crisis that the confidence of the masses in all social institutions fell. Trust remained only with the Church[17].

Latvia is a Christian country and the number of believers in it has grown to the very latest. In 2015, 77.5% of the population of the republic referred to one or another Christian denomination. Latvians traditionally professed Lutheranism, Latgalians – Catholicism, Russian – Orthodoxy. Among all Christians of the republic, 46.2% considered themselves Lutherans, 27.4% – Catholics, 27.4% – Orthodox Christians[18].

Leaders of the Christian communities regularly performed with estimates of the negative phenomena in life the Latvian society. They brought up questions of the growing ethnic and social inequality, impermissibility of orientation in life to a profit and unlimited material consumption, protected traditional family values. However these estimates had no significant effect on behavior of ruling elite. The lack of systematic missionary work outside temples was one of the reasons of it; orientation of clergymen is observance ceremonialism’s more, than on entering into society of examples of Christian behavior.

 

 

1.2.0. Social and economic processes in Latvia in 2007-2017.    

 

                                 1.2.1. Production

  

In 2007, production in Latvia reached its highest level since independence: GDP was 22.62 billion Euros[19].

This output of goods and services became result of inflow to the republic of large volume of financial and credit resources from funds of the European Union in connection with preparation, and then the entry of Latvia in it. Both private financial and credit receipts in the Latvian economy from Europe were high.

In 2008, in connection with the broken-out world economic crisis, declining production has begun. In 2010 production of GDP in Latvia has made only 17, 94 billion Euros, that is has dropped by 26, 1% in relation to the level of 2007 (calculation is made in the comparable prices of 2010).

Crisis falling of production in the republic was the deepest in Europe. Receipts foreign private capital investment and the credits were sharply reduced. The government had to resort to big external loans for ensuring needs of the budget.

The Latvian economic crisis was the longest in Europe. By the end of 2016, GDP production reached a value of 21.79 billion Euros, that is, only 96.3% of the 2007 level. According to preliminary data for 2017, GDP growth was 1.5%[20].

The basis of the Latvian economy is made by services – 74.9% of GDP. Industrial production accounts for 21,9% of GDP, agriculture – 3.2% of GDP.. The geographical location of the republic causes development of transit services and also a woodworking, the agrarian sector[21].

                                  1.2.2. Energetic.

 

We will consider problems of development of branches of the national economy of Latvia on the example of one of the major – energetic.

The Latvian economy is dependent on external sources of energy supplies. In 2007, the volume of own energy production was 1802 thousand tons in oil equivalent (tone of oil equivalent; toe). In addition, 3883 thousand toe were imported. Exchange transactions added to the total primary energy supply of 91 thousand toes. The total final energy consumption in Latvia in 2007 was 4,386,000 toes.

In 2015, this indicator decreased to 3,971,000 toes. Energy consumption in transport fell by 17.0%, household consumption – by 24.1%[22].

The reduction in consumption was due to the reduction in the population of the republic, as well as to the fall in real incomes of the inhabitants of Latvia. The influence of the energy efficiency growth factor in the process of decreasing energy consumption was insignificant.

The largest level of dependence of Latvia on external energy supplies was observed in the sphere of import of natural gas. However in this sphere there was a reduction of volume of consumption. In 2016 consumption of gas has made 1372 million m3 that is 19, 3% less than indicators of pre-crisis 2007. [23].

Russian Gazprom was an exclusive supplier of natural gas to the republic since 1991. In April, 2017 in Latvia liberalization of the gas market has officially begun that has given to consumers the chance of the choice of suppliers.

However Gazprom remained the only real supplier of natural gas. Opening of domestic market, in turn, has led to increase in tariffs for heating.

Alternative to the Russian gas is the liquefied natural gas (LNG) from Norway which is possible for receiving via the floating terminal in the Lithuanian Klaipeda which objectively is much more expensive. Costs for transportation of gas from the LNG terminal in Klaipeda can reach up to 40% of final cost of a product that does such deliveries unprofitable. Guided by economic expediency, the Latvian side rejects Lithuania’s offer to buy a Norwegian LNG from it, thereby undermining the project of creating a single Baltic LNG market with the regional LNG terminal promoted by the Lithuanians.

Political orientation of the Latvian ruling elite to the USA, defines participation of Latvia in torpedoing of the Russian-German main gas pipeline “Nord Stream-2”. Russia speaks at the European gas market as the competitor of the American companies expecting to export own liquefied gas. Supporting the American companies, the Latvian ruling elite uses political arguments about undesirability of rapprochement of Moscow and Berlin. The project “”Nord Stream-2” directed to satisfactions of demand of EU countries for import of natural gas and increases in level of safety of energy supplies, at the same time, has no direct negative economic consequences for Latvia.

This kind of argumentation (in particular, the statement on the need to boycott the Belarusian NPP) is also used in the intentions of the Latvian leadership to withdraw from the BRELL energy ring that connects the electrical systems of Latvia to Russia and Belarus and also to synchronize with the energy systems of continental Europe by 2025. Latvia’s exit from the energy ring will require large investment (laying cables, installing DC inserts, building new power lines), and the specificity of the new pricing, in its turn s, risks turning consumer price increases.

The primacy of political preferences over financial expediency makes the energy policy of Latvia economically inefficient. It leads to an increase in energy prices and, as a result, to a decrease in the competitiveness of local production.

 

1.2.3. Investments

The economic crisis in the republic was accompanied by a sharp reduction in investment. If gross investments in 2007 amounted to 8.69 billion Euros, in 2010 they fell to 4.31 billion Euros and remained for a long time at this level (calculated at comparable prices in 2010)[24].

In 2011, the volume of investment grew slightly and reached 5.19 billion Euros, but in 2016 it fell again to 4.56 billion Euros. That is, investments remained the entire decade under consideration at a level almost two times lower than in the pre-crisis period.

Reduction of the volumes of investment was followed by decrease in their share in structure of GDP. If in 2007 investments into fixed capital equaled 41,5% of size of the consumed GDP, then in 2016 only 19,6%, that is a share of real investments in the made gross product were reduced more, than twice. All this explains the reasons of low rates of recovery growth of economy of the republic in the last decade.

It did not contribute to the economic recovery and the change in the structure of investments. If in 2008 the share of investments in the agriculture, industry and construction sectors that give the highest return was 36.1%, then by 2016 it decreased to 33.8%.

The bulk of the investment initially went to Latvia from abroad. In 2007 foreign investment reached 7.5% of GDP. In 2009, they equaled only 0.4% of GDP, and then slightly increased, but in 2016 they fell again to the level of 0.5% of GDP[25].

In 2017, the accumulated foreign investment was 14.4 billion Euros. Foreigners were attracted by finance, insurance, real estate, trade, infrastructure facilities.

In 2016, foreign investors for the first time since 1991 reduced their investments in the fixed assets of Latvian enterprises. The recession was 211 million Euros. The main role was played by the decrease in the capital of Swedbank’s backbone bank by 368 million Euros[26].

For 10 months of 2017, the accumulated foreign investment in the country decreased by another 81 million Euros.[27]

According to the research of the Riga Higher School of Economics (SSE Riga), only half of the largest foreign investors plan to continue investing in Latvian business[28].

Much more serious financial help, than foreign investments, became a grant of Latvia from structural funds of the EU. During the period from 2007 to 2015 the Baltic republic has received from the European budget of grants for the sum of 4, 5 billion Euros. The European grants make 70% of all foreign investments in economy of the republic, more than 10% of annual budget revenues[29].

                             

1.2.4. Consumption of the population

  

The economic crisis has caused a drastic reduction in the volume of personal consumption of the population in the republic. In 2007, the volume of household consumption was 14.14 billion Euros, by 2009 consumption had fallen to a value of 10.92 billion Euros or 23% (hereinafter calculations were made on the basis of comparable prices in 2010).

Since 2010, a slow increase in the consumption of the population began, and by 2016 it has reached a value of 13.46 billion Euros. It turned out that in 2016 the consumption of households reached only 95.2% of the consumption level in 2007.[30].

Thus, in the analyzed decade, household consumption grew more slowly than GDP growth, and could not serve as a source of economic growth in production in the republic.

 

                        1.2.5. Working Power and Wages

 

The fall in production in the republic during the past decade was accompanied by a sharp reduction in the number of jobs. If in 2007 in the national economy 1057.5 thousand people were employed, then by 2017 only 898.0 thousand people, that is, the number of employed decreased by 159.5 thousand people or by 15%[31].

The people who lost their jobs joined the army of the unemployed. If in 2007, 68.1 thousand unemployed were officially registered or 6.4% of the total number of employees, by 2010 they were already 205.8 thousand people or 22.9% of the number of employees. Thus, the number of unemployed has tripled in three years. Really unemployment was even higher, since many laid-off workers were not registered at the labor exchange because of a lack of hope to find a job or because they did not have the right to do so, because they had not been officially registered at work before.

Due to the sharp increase in the number of unemployed and the shortage of funds in the budget, the government has reduced the payment term and the amount of benefits paid. Desperate to find a job and not receiving unemployment benefits, people began to emigrate massively from Latvia abroad.

By 2017 as a result of mass emigration, the number of unemployed in Latvia dropped to 80 thousand people or 8.9% of the number of employed[32].

At the same time, in 2017, there were 17.5 thousand vacancies, mainly for highly skilled workers and specialists. These vacancies were not filled because of the low level of wages offered by entrepreneurs and the state.

According to the survey of the Latvian Chamber of Commerce and Industry, 61.2% of Latvian entrepreneurs already experience difficulties in finding qualified employees[33].

The government tried in 2013-2016 to realize the program of returning of Latvians home, but it has not given results because of that it was poorly financed and was poorly worked.

Businessmen began to demand from the authorities of the admission on labor market of cheap foreign labor[34].

Now in the Latvian labor market demand doesn’t correspond to the offer. According to forecasts of the Ministry of Economics in 2022 Latvia at 10-thousand surplus of experts in humanitarian and social sciences is expected by deficit of 16 thousand experts with the higher education in mathematics and engineering sciences and in 30 thousand workers with professional education[35].

All considered period labor cost grew in the republic. If in 2007 the average nominal monthly salary of the worker in the republic equaled 566 Euros, then by 2016 she has grown to 859 Euros, or for 51,6%[36].

We will note that reduction of the real income working in 2009-2010 more than on a quarter happened due to increase in prices and taxes, but then increase in prices was slowed down, and the tax system a long time didn’t change.

Nominal growth of wages of workers raised the cost of production and reduced the competitiveness of Latvian goods and services. If in 2007 the hour of labor of the Latvian worker cost 4.6 Euros, then in 2016 already 7.3 Euros, that is, increased by 58%[37].

 

                                1.2.6. Export and import

 

The main export goods of Latvia are food, wood, metals, machines and the equipment, textiles. The largest export partners in 2016 – Lithuania (17, 3%), Estonia (11,5%), Russia (11,4%), Germany (6,8%) [38].

In 2007 the republic exported goods and services for the sum of 8, 69 billion euros and imported goods and services for the sum of 12, 98 billion Euros. The negative balance of trade in goods reached 4, 29 billion Euros. The deficit in trade in goods was covered by positive balance in trade in services and also due to foreign capital investments, grants of the EU and the credits[39].

Crisis has led to essential decrease in a foreign trade turnover of the republic. By 2016 the volume of export has increased and has reached 14.97 billion Euros. The Latvian businessmen during crisis managed to increase export orientation of production. The export share as a part of GDP has risen from 38, 4% in 2007 up to 60, 0% in 2016. Import to the considered decade grew at moderate rates and has reached size only in 14.72 billion Euros. In general the republic reached small positive balance of trade in goods and services.

The introduction of economic sanctions against Russia led to a reduction of Latvia’s exports to the CIS countries as a whole. From 2013 to 2016 export volume fell by 420 million euro or by 4.6 percentage points. The main impact was on agricultural products and products of the food industry. Losses in exports were gradually offset by the growth of supplies to the countries of Western Europe. However, the overall growth of exports in this period was practically not observed[40].

One of the major services which is exported by Latvia is transfer of transit freights. As a part of transit an overwhelming part is made by the Russian freights. In 2007 transport services brought 8, 5% in structure of the created value added, in 2014 their share has grown to 10,0%, but in 2016, at the initiative of the Russian side, has fallen up to 8,7% [41].

In 2016 83, 3 thousand people or 9,3% of all working population have been engaged in the sphere of transport and logistics [42].

In 2007 the largest Latvian ports are Ventspils, Riga and Liepaja – crossed over 61 million tons of cargo. In 2012 the cargo turnover of the Latvian sea harbors reached 73.8 million tons According to the results of 2016 this indicator amounted to 61.4 million t. that is, it has returned to the level of ten years ago[43].

The consequence of the reduction of transit is the degradation of infrastructure. Between 2007 and 2016 road fund decreased from 20, 2 thousand km to 20,1 thousand km, the length of the railway line – from 2265 km to 1860 km  [44].

During the same period, transportation by rail decreased from 52.2 million tons to 47.8 million tons[45].

 

                                 1.2.7. Financial and credit

 

According to the Bank of Latvia, in 2007 Latvia’s current financial account was negative – it was minus 20.8 percent of the GDP. By 2009, it has become positive due to a sharp drop in imports of goods in the context of an unfolding crisis. Since then, the balance of payments fluctuated at the level of plus or minus one and a half percent of GDP[46].

Latvia’s net foreign debt increased from 46.3% of GDP in 2007 to 58.3% in 2009, but then began to decline and is currently only 28.8% of GDP. These indicators suggest that Latvia has managed to achieve a fairly stable state of the payment system. The total amount of loans issued by banks in 2007 amounted to 15905 million Euros, of which for enterprises 7658 million Euros, and for households 6484 million Euros. The volume of issued loans amounted to about 70% of GDP.

In the period of a sharp phase of crisis neither the enterprise, nor a household couldn’t return the credits to banks and only borrowed the new sums. By 2009 the volume of the credits issued by banks has reached the size of 22750 million Euros that was one quarter higher than the size GDP of this year. After that banks began to close up programs of crediting that led to mass ruin in the republic, both the enterprises, and households.

By the middle of 2017, the volume of loans issued by banks amounted to 14546 million euro or two thirds of GDP. The enterprises accounted for loans of 7267 million euro, households 5581 million Euros[47].

There is a steady tendency to reduce the volume of lending by banks of the national economy and households. This credit policy significantly constrains economic growth.

On the eve of the accession of Latvia to the Organization for Economic Cooperation and Development (OECD) in 2016 the republic has tightened banking legislation. The credit and financial institutions have strengthened the verification of depositors and raised service tariffs. The Latvian banking sector was prepared for the automatic exchange of information under the OECD program. The country has lost its reputation as an offshore zone for capital from the post-Soviet space. As a result of this, since December 2015 by November 2017 the share of foreign deposits in the Latvian banking sector decreased from 52.7% to 38.9% of the total deposits (from 12.1 billion euro to 7.8 billion Euros)[48].

 

1.2.8. State budget

               

During the crisis and subsequent reduction of incomes of the population and entrepreneurs, the government has chosen a policy to increase the tax burden on them. If in 2007 the total tax amounted to 33.5% of GDP, then by 2009 it has risen to 35.0% of GDP. This was one of the most important factors that deepened and increased the duration of the crisis.

At the end of the acute phase of the crisis, the tax burden on the economy continued to increase. In 2016 it was already 37.3% of GDP, and in 2017, according to preliminary data, 37.7% of GDP[49].

At first, authorities used money to cover the budget deficit. In 2007, the budget was deficit-free; in 2009 the deficit was 9.1% of GDP. Later, under the pressure of Brussels, the deficit began to decline and by 2017 it was only 1% of GDP.

In addition to increasing taxes, the state spent a considerable amount of money during the whole period under review, which meant transferring the tax burden to future generations. If in 2007 the public debt was 7.8%, then by 2016 it increased to 46.1% of GDP.

During the analyzed years, the policy of spending budget funds has changed significantly. Expenditures for the maintenance of the state apparatus increased from 11.3% in 2007 to 11.9% in 2016. During the same period social expenditures (health, education, and culture) fell from 33.1% to 28.5% of total budget expenditures. In connection with the aging of the population, the share of social security expenditures has increased significantly from 23.3% to 32.1%[50].

In recent years, the amount allocated from the state budget for defense needs is growing rapidly. In 2015 these costs were 1.02%, in 2016 – 1.4%, then in 2017 – 1.7% of GDP. In 2018, a budget was adopted, in which it is envisaged to allocate 576 million Euros for defense needs, which will be 2% of the GDP of the republic[51]   

Growth of costs of defense went due to reduction of a share of the expenses of the budget allocated for social needs.

                       

       1.2.9. Population: Natural Movement and Migration 

 

The total population of the republic is rapidly declining since independence.
According to the CSO, in 2007 there were 2,281,000 permanent residents in the republic. The 2011 census showed the population is much lower than the demographers expected before – 2,071 thousand people. At the end of 2017 there were already only 1931,000 people living in the republic. Thus, for ten years the population of Latvia has decreased by 350 thousand people or by 15.3%. This meant that the population is declining at a rate of 1.5% per year[52].

The reason for the population decline was both the excess of death rate over birth rate (actually depopulation), and the excess of the number of emigrants over the number of immigrants.

Depopulation led to a reduction in the population of the republic on average by 5-6 thousand people per year. It gave a third of the total population decline.

Two thirds of the reduction in the population of the republic was caused by migration. If in 2007 the excess of emigration over immigration in the republic was 7.9 thousand people, in 2010 it was already 35.6 thousand people[53].

In recent years, the negative balance of migration has decreased to 10-12 thousand people per year. However, this is also a very significant loss.

The emigration was mainly young, active in labor and highly skilled workers. After a while, they took their families to their homes and, as the results of opinion polls show, did not intend to return to Latvia.

Reduction of the population of the republic was accompanied by deterioration in its age structure. In 2007, out of the total number of able-bodied residents aged 14-64, there were 68.4%, in 2017 there were only 64.5%[54].

The burden on the working people increased, and the question arose that they could not provide the maintenance of the pensioners remaining in Latvia.

                                       

        1.2.10. Problems of social development of Latvian society

 

Unfair distribution of income and wealth has caused during an economic crisis strengthening negative social the phenomena in the Latvian society. The index of risk of material neediness can judge it, for example, on Jeanie’s coefficient and change.

In 2015 Jeanie’s coefficient in Latvia was very high – made 34, 5 (the smallest value in Finland – 21, 5) [55].

In 2008 – the period still of rather safe development – the index of material neediness of the population was equal to 19,3%. During the economic crisis this index has sharply risen and by 2011 has reached the size of 31,0%. After that the index of material neediness has begun to decrease, and by 2016 it has reached, apparently, small size – 12, 8% [56]

However the serious pathological social phenomena were behind external improvement of a situation in the last five years. So, in 2016 the index of risk of poverty in the households consisting of lonely old men equaled 72, 8%, from incomplete families – 34, 3%, from large families of 19,8%.[57]

It turned out that society was not in a position to ensure the redistribution of incomes in favor of the elderly who had already made their contribution to the creation of the national wealth of the republic and children who would have to make a similar contribution. A disproportionately large share of national wealth went to working-age adults who avoided responsibility for keeping children and the elderly if they did not belong directly to their families. It was a model of the social behavior of a pre-industrial society based on blood-family ties. The application of this model to the conditions of industrial and postindustrial society also caused depopulation of the republic’s population.

The poverty risk index varied widely among ethnic groups. So, in the accounting group the citizens of Latvia, where three-quarters were Latvians, the poverty risk index in 2016 was 21.0%. In the accounting group, non-citizens, almost entirely consisting of Russians, the poverty risk index was almost half as high – 29.4%[58].

In the public administration in 2008, 83.9 thousand people or 8% of all employed were employed. In 2016, the number of employed in the public sector fell to 62.2 thousand people and accounted for 7.0% of all employed[59].

In the state administration, almost exclusively Latvians worked. Recruitment to power bodies, as well as to socially prestigious and profitable vacancies, is carried out on the basis of the correct ethnicity and loyalty to the regime and patron. Elitarian and clientilistic regime in Latvia initially leads to a deficit level of professionalism and efficiency. The income of public administration employees, especially in the higher and middle levels, was much higher than that of private sector workers.

                                       1.2.11. Latvia and the EU

 

With accession to the EU, the ruling elites promised the masses that this step will ensure a significant growth of the economy and the level of well-being, and will quickly achieve the performance of developed European countries.

In 2008, the level of GDP per capita production in Latvia was 11,200 Euros, and in 15 EU countries, of which the union was at the time of its expansion in 2004, there was an average of 30,400 Euros. That is, the level of production efficiency in Latvia was 36.8% of the level of “old” European countries.

In 2016, per capita GDP in Latvia was 12,200 Euros, while in the “old” countries of Europe it was already 33,700 Euros. The republic reached the level of efficiency only in 36.2% of the average for the “old” Europe[60].

It turned out that the absolute level of production efficiency in the country after joining the EU increased slightly, while the relative level dropped. The level of welfare of the population can be estimated by the average income of households. Here we take the indicator EA-11 (euro area 11) for analysis, since Eurostat does not give the consumption indicator for the EU-15.

In 2008, the average income of a household EA-11 was 17,100 Euros, and in Latvia 4,740 Euros, that is, the republican level was 27.7% of the level of “old” European countries. In 2016, in EA-11 average household income was 18240 Euros, and in Latvia 6365 Euros or 34.8% of the average “old” European level[61].

Thus, the level of consumption in Latvia was a little “pulled up”, however it remained three times less than in the “old” European countries.

 

2.0.0. FORECAST OF SOCIAL AND ECONOMIC DEVELOPMENT OF LATVIA FOR 2018-2022.

2.1. Factors of influence on socio-economic processes

                2.1.1. Foreign political factors of influence

 

In the next five years, the configuration of factors of foreign policy influence on Latvia must undergo a significant change.

After the election of President D. Trump, the United States is gradually moving the center of its political influence from the Atlantic to the Pacific basin. In this regard, the US will shift concerns about ensuring Europe’s security to its inhabitants. This means that in the near future, the demand from the US for Latvia to fulfill the role of the separation barrier between Western Europe and Russia will significantly weaken.

The European Union will weaken economically after its withdrawal from the UK. Western European countries will lead the policy of building a “Europe of two speeds.” In this “new” Europe Latvia will be left outside the accelerated integration processes that will lead Berlin and Paris. Europeans will have a demand for Latvia’s ruling elites that are more acceptable to it, but the EU will not have instruments of political influence on the situation in the country. This is indicated, for example, by the negative experience of building Brussels’ relations with Warsaw and Budapest.

The influence of Russia, which is building a strategic alliance with China, will gradually increase and it will also demand more acceptable local political elite for them. However, these two actors will have no tools to influence the internal situation in the country.

 

            2.1.2. Internal political factors of influence

               

The most important internal political factor of influence on social and economic processes in the republic can be provided by the tax reform adopted by the Seema’s in late 2017. According to the authors, it should improve the conditions for doing business and reduce the level of social inequality in the republic  [62] [63].

In accordance with the new legislation, from January 1, 2018, the company’s profits are no longer subject to income tax if it is invested, and dividends are taxed at an effective rate of 20%, as before. This should stimulate the growth of investment, and the creation of new jobs. The budget revenues from the corporate profit tax were planned to be replaced by consumption taxes, primarily by raising excise rates for gasoline, tobacco and alcohol.

We will note that this measure is implemented, only with an essential growth of economy and growth of consumption of the population.

At the same time tax reform provides growth of contributions of social insurance from 34% to 35% of the sum of the charged wage. It means increase in costs of production and decrease in competitiveness of the enterprises. This measure contradicts the purposes of reform and has been accepted in connection with already come to light difficulties in financing of the social sphere in the conditions of the sharp growth of a defense expenditure.

The reform purposes are also contradicted by increase in a tax on turnover of the micro enterprises on 9% in 2016 up to 15% in 2018. This measure meant rather serious deterioration in conditions of business activity for a large number of people.

Instead of a flat scale of the taxation of income of the population the differentiated tax scale is entered into 23% in 2017 in 2018 in the republic: 20% for revenues up to 20000 Euros, 23% for income from 20000 to 55000 Euros and 31,4% for income are higher than 55000 Euros. And at the same time for two years transition to the system of the annual differentiated minimum which cancels the general for all working the fixed monthly free minimum comes to the end earlier and enters only an annual minimum which right and the size depends on the size of total income (and not just salaries) the person.

The greatest benefit from the introduction of this measure will be employees who have incomes up to 440 Euros a month, that is, on the verge of survival. If the income exceeds 440 Euros, the amount of the applied non-taxable minimum starts to decrease, and when the average monthly income of 1000 Euros per month is reached, the benefits for the employee from the tax reform practically disappear[64].

The bulk of workers who receive income in the amount of 1667 to 4583 Euros a month will not feel any changes in their financial situation after the introduction of tax reforms, and will not change their labor activity accordingly. And also there will be no growth in domestic consumption.

Taxes in the republic were to increase for persons receiving income of more than 4583 Euros per month. Basically, these are high-level hired managers up to 10 thousand people in the whole country. However, they will be able to easily raise their nominal wages and compensate for losses in income without applying additional labor costs.

In general, we can say that the tax reform will reduce the injustice in the distribution of incomes only for a small part of the population and will not lead to an increase in the labor activity of workers.

The ongoing reform will not bring benefits to pensioners, disabled people, incomplete and large families, because they do not provide a significant reduction in their taxes or increase their incomes.

Based on the current balance of power of political parties, after the elections of 2018, the alliance of national liberals and national radicals will remain in power. The ethno-social hierarchy in society will remain. However in the conditions of increase of the crisis phenomena there will be a reorganization of ruling coalition. In the first option national radical will strengthen positions and will subordinate themselves national liberal. In the second option national liberal will try to weaken influence of national radical and will take themselves in “younger: partner’s party which represents the interests of the Russian business now. In that case this party will have to refuse protection of interests of broad masses of the Russian population.

 

                                  2.1.3. Spiritual  factors of influence

 

In the next five years, Latvian radical nationalism will remain the official ideological doctrine in Latvia, which serves the interests of the current ruling elite. He will receive a new impetus to development in connection with the celebration In 2018 of the 100th anniversary of the formation of the Republic of Latvia.

National liberals will not interfere with the development of Latvian nationalism, since they do not have their own developed ideology, relevant personnel and institutions. Most likely, the national liberals will simply try to adopt the nationalist rhetoric of the national radicals.

Attempts by the ruling Latvian elite to increase ideological pressure on the Russian community will be provoked by resistance from the Russian elite. Development will receive Russian nationalism.

There is no hope for a significant spread of the left ideological doctrine.

The only acceptable social doctrine remains Christianity, which does not know the difference between the “Hellenes and the Jew.” Under the influence of the values disseminated by the leaders of Christian communities, it is possible to form parties and public organizations that will strive to resolve the urgent social and economic problems of Latvian society. However, this possibility can be realized only beyond the year 2022.

2.2.0. The forecast of social and economic development 2018-2022 g .

 

           2.2.1. Pessimistic version of the forecast

      

The next two years, the growth of the Latvian economy will be 1.5% per year and by the end of 2019 it will reach the GDP production index of 2007 – 22.6 billion Euros (in 2010 prices).

By early 2020, domestic sources of production growth will be exhausted. This will happen for the following reasons:

First, all the able-bodied will be involved in production and the national-radical political forces will not allow the program of importing cheap labor from abroad by entrepreneurs.  The program of return of emigrants will not be realized because of low level of payment in the republic.

Secondly, it is impossible to expect foreign investment in the economy in a state of stagnation. This will be hindered by the actions of national radicals.

Third, there will be no growth in exports, as there are no sales markets for Latvian products. The products produced in the republic will become more expensive due to the growth of workers’ wages.

Fourthly, from 2020 Russia will completely stop transshipment of its cargoes via Latvian ports, divert part of Belarusian and Kazakh cargo. Paradoxically, the complete cessation of Latvia’s use of its geographic transit and promising logistics as the only goods for export for the needs of its eastern neighbor will not reduce Latvian radical nationalism and Latvia’s sanctions against Russia in line with EU mandatory requirements.

Fifth, the total domestic consumption of households will decline due to the continuing emigration of the population, even with a small increase in the consumption of the remaining

In the sixth, the tax reform will not improve the conditions for entrepreneurial activity; the national capital will not make investments, but will “leave” the country.

In the seventh, since 2021, the receipt of funds from the EU structural funds will be reduced by 40%.

Eighth, military spending will remain at 2% of GDP. This will significantly limit the ability to solve accumulated social problems. There will be a reduction in funding for education, health and social security.

As a result of all these factors in 2020-2022 there will be a decline in production volumes, at least by 6%. GDP production will return to the level of 2014. The level of employment and consumption volumes of households will correspondingly fall. Unemployment and a drop in the standard of living will give rise to a new wave of emigration.

Reducing consumption will again affect the weakest segments of the population. Pathological phenomena in the social sphere, and, together with them, depopulation will intensify.

The population of the republic and the next five years will decline at a rate of 1% per year in the period until 2019 and at a rate of 2% per year in the next three years.

In 2022, less than 1800 thousand people will live in Latvia. This number will not be enough to maintain the entire social and production infrastructure. Schools, hospitals, libraries will be closed, the road will be decommissioned, the housing stock will be reduced.

The gap between Latvia and the “old” EU countries on labor productivity and material consumption will increase by 4 percentage points.

Liberalism will not restore its position, and Latvian nationalism will become the undivided dominant ideology in society. This will allow the national radicals to strengthen their positions in the Latvian parliament during the 2018 elections.

After the election victory, the national radicals will increase pressure on the Russian part of the population. With the transition to open repression against Russian activists, Russia will have to intervene in the ethnic conflict.

This scenario will not satisfy either the EU or the US and they will try to prevent this interference. Perhaps the development of the conflict to the level of non-nuclear armed clashes between NATO and Russia.

An alarming argument in this case is the expansion of the nuclear zones of the EU in the territory of non-nuclear countries, as well as the military strategy of the US President’s Administration of Trump using nuclear weapons against unwanted regimes that do not possess this type of weapons.

                      2.2.2. Optimistic version of the forecast

 

In Latvia, the economy will continue to grow at a rate of 1.5% per year until 2019, and the volume of GDP production will be equal to this year’s 22.6 billion Euros (in comparable prices in 2010). Further, multidirectional factors will begin to act:

First, the import of cheap foreign labor will start in the amount of 30 thousand people for three years.

Secondly, foreign and local capital investments won’t decrease owing to the fact that tax reform will be modified in the party, favorable for businessmen.

Thirdly, significant expansion of sales market of the Latvian goods won’t happen.

In the fourth, decline in demand from households will manage to be stopped due to inflow of the labor imported by the state and the small growth of consumption of the remained Latvians.

In the fifth, Russia will reduce the volume of transit transportations through Latvia only half.

In the sixth, receipts from structural funds of the EU in the national economy of the republic will be reduced only by 20%.

In the seventh, expenses on military needs will remain at the level of 1, .5% of size GDP. It will allow reducing reduction of the amount of funds allocated from the budget for needs of health care, education and social security.

As a result of action of all these factors in 2020-2022 it will be possible to prevent falling of economy and the output of GDP will remain at the level of 2019.

The depopulation of the Latvian people will remain at the same level. However, due to the growth of immigration, the rate of decline in population will decrease to 0.5% per year. In 2022 in Latvia will live 1850 thousand people.

This will reduce half the pace of the collapse of society, the degradation of social and industrial infrastructure, but will not stop them at all. The gap between Latvia and the “old” EU countries on labor productivity and material consumption will increase by 2 percentage points.

All these changes are possible only if national liberal manage to restore the leading positions and to weaken strongly National liberals. By the fall of 2018, this can only be done through a campaign to combat corruption. The key national radical politicians must be neutralized politically by the national liberals controlled by the security forces. At the same time, the national liberals will need to weaken the party, which represents the interests of the Russian population and deprive its instrumentation of mobilizing the masses for its support.

National liberals will have to suspend the attempts of national radicals to strengthen ethnic conflict. In particular, they will have to abandon the elimination of Russian schools and the introduction of restrictions on the reproduction of Russian culture. At the same time, national liberals will take steps to limit the development of Russian national identity.

In the long term, an alternative ideology, Christianity, must be opposed to Latvian nationalism. It can carry both the right and the left political shade. By spreading Christian values, ethnic conflict can be weakened. The strengthening of the influence of Christian ideology on political processes can only be expected in the parliamentary elections of the autumn of 2022.

Under this scenario, Latvia will be able to escape the open Latvian-Russian conflict, its interference with Russia, and the development of a military clash between NATO and Russia in Latvia.

 

                                      CONCLUSION

          In the international political division of labor Latvia is currently assigned the role of a barrier between the countries of Western Europe and Russia. Realizing this external request, the ruling elites of the republic are pursuing a line of confrontation with Russia, often to the detriment of national and economic interests.

On an economic plane, the republic is a market of sales and a source of raw materials for the “old” European countries, supplying them with labor. Over the past decade, European private capital has strongly pushed national capital and has taken key positions in the banking, insurance, land and real estate, wholesale trade and communications. Receipts from the EU structural funds provided development of the infrastructure serving these industries.

After the accession in 2004 into the EU, Latvia has lost national control for itself. In 2008 badly balanced and operated national economy of the republic has fallen into an economic crisis. He has led to very strong decline in production and loss of a considerable part of national production capacity. Consequences of this crisis aren’t overcome still.

Crisis has caused rise in unemployment and decrease in volumes of personal consumption of the population. First of all representatives of the lower social groups have suffered. The bureaucracy managed to avoid both numerical reduction, and reduction of income.

The consequence of the crisis was a fall in the level of material consumption and a mass departure of Latvians for earnings in the EU. Cut in expenditure of the state on social needs has caused social degradation of the remained Latvians. Especially strong blow has been struck to old men, disabled people, incomplete and large families. All this has caused depopulation process acceleration.

Over the past ten years, Latvia has not come close to the level of “old” European countries either by level of production or by the level of material redeems.
Crisis phenomena in the Latvian society developed on the background of the Latvian-Russian conflict, which was laid by the ruling elite in 1991. The authorities, wishing to avoid responsibility for failures in socio-economic policy, in 2012 went to exacerbate this conflict. This made it possible to take the first place in the policy of the Latvian national-radical parties.

The liberal ideology never had in the Latvian society of a serious personnel and institutional basis. Also the left ideology hasn’t developed in him. I have turned out to be consequence of it in the last five years in public consciousness to dominate ideology of the Latvian nationalism. Only the Christian outlook can compete with it, but the leaders of the Lutheran, Catholic and Orthodox denominations do not take steps to consolidate the elites on a new spiritual basis.

In the next five years it isn’t necessary to expect essential change of a role of Latvia in the system of the international political and economic division of labor. Latvia still remains to the statehood ranged in the system of hierarchical socio-political inequality as the peripheral region with blurred attributes of statehood.  External unconditional management is combined with the increasing political irrationalism and economic not pragmatism. External actors will be engaged in clarifying relations between themselves, while Latvia will seek to strengthen the sanctions policy and Russophobia against Russia and seek lobbying in the EU.

The domestic political potential in the republic is insufficient for initiating serious positive changes. Therefore, the development of socio-economic processes, most likely, will follow inertia – in a pessimistic scenario.

The pessimistic scenario implies a fall in GDP production by 2022 by 3% against the level achieved by the republic in 2017 accordingly, the number of jobs and the volume of material consumption of the population will decrease.

The process of degradation of social structures will continue, and with it the process of depopulation and emigration of the population will intensify. Presumably, by the year 2022 in Latvia will live only 1800 thousand man.

Against the backdrop of deteriorating socio-economic situation it is possible to initiate national radicals open ethnic conflict and intervention in Russia. United States and the EU will try to prevent such a scenario. If they fail to keep Latvian National radicals from reprisals against Russian activists, it is not excluded military confrontations between NATO and Russia.

The optimistic scenario of the development of events suggests that the national radicals will be removed by the national liberals from making the most important socio-economic decisions. This will improve the conditions of entrepreneurship; attract additional labor to the republic from outside.

The economy of the republic will grow to 2022 by 3% to the level of 2017 Consumption volumes will not decrease, social degradation will stop. The reduction in the population will be at a rate of only 0.5% per year and by 2022 it will be 1880 thousand man.

The development of the ethnic conflict in the republic will be stopped by the use of methods of force pressure by the national liberals on the national radicals and the involvement of Russian businessmen as party allies. This will avoid Russia’s interference in the domestic affairs of Latvia.

In the long term, an alternative ideology, Christianity, must be opposed to Latvian nationalism.

 

 

 

 

[1]  Legal entities – owners of the largest land plots of Latvia

                http://vesti.lv/file/download?file=juridicheskie_lica.pdf

[2] Latvia increased the account for “Soviet occupation” to 300 billion Euros

http://www.ntv.ru/novosti/1624037/

[3] Calculated according the data: http://www.csb.gov.lv/sites/default/files/publikacijas/2015/Nr%2012%20Latvijas%202011.gada%20Tautas%20skaitisanas%20rezultati_Results%20of%20the%202011%20Population%20and%20housing%20census%20in%20Latvia%20%2815_00%29_LV_EN.pdf , p.108. Ethnicity recoded on declared mother-language

[4] Legal and actual position of ethnic minorities in Latvia the Edition V.V. Buzayev. Riga: Averti-R, 2015. ISBN 978-9934-8245-8-6 http://www.russkije.lv/files/images/text/PDF_Files/Buzaev_book_2.pdf

[5] Ethnic conflicts in the Baltic States in the post-Soviet period.  https://www.academia.edu/9821401/%D0%AD%D0%A2%D0%9D%D0%98%D0%A7%D0%95%D0%A1%D0%9A%D0%98%D0%95_%D0%9A%D0%9E%D0%9D%D0%A4%D0%9B%D0%98%D0%9A%D0%A2%D0%AB_%D0%92_%D0%A1%D0%A2%D0%A0%D0%90%D0%9D%D0%90%D0%A5_%D0%91%D0%90%D0%9B%D0%A2%D0%98%D0%98%D0%92_%D0%9F%D0%9E%D0%A1%D0%A2%D0%A1%D0%9E%D0%92%D0%95%D0%A2%D0%A1%D0%9A%D0%98%D0%99_%D0%9F%D0%95%D0%A0%D0%98%D0%9E%D0%94

[6] The program for obtaining residence permits in exchange for investment was completed. No interested people  http://baltnews.lv/riga_news/20171024/1021242741.html

[7]  Latvia has placed in Kobzon, Valery and Gazmanov’s black list     http://rus.delfi.lv/news/daily/latvia/latviya-vnesla-v-chernyj-spisok-kobzona-valeriyu-i-gazmanova.d?id=44749928

[8] Businessman from Italy was fined for ignorance of the Latvian language  http://infoliepaja.lv/2017/06/09/biznesmen-iz-italii-oshtrafovan-za-neznanie-latyshskogo/

[9] Latvia: a new preamble to the constitution split the country.

                 http://www.bbc.com/russian/international/2014/07/140714_latvia_constitution_debates

[10] Prosecution of human rights activists in the Baltic States. https://www.academia.edu/28645880/PROSECUTION_OF_HUMAN_RIGHTS_ACTIVISTS_IN_THE_BALTIC_STATES

[11] Schnor was punished for ”Russian lice”. But the commission of the Seimas did not consider the violation significant  http://baltnews.lv/news/20170614/1020054208.html

[12]  Day of remembrance of legionaries: what will occur in Riga on March 16

http://rus.delfi.lv/news/daily/latvia/den-pamyati-legionerov-chto-budet-proishodit-v-rige-16-marta-utochneno.d?id=48626293

[13] After the Limbazi monument, they want to demolish the monument to the Liberators.

https://ru.sputniknewslv.com/Latvia/20160901/2719198/pamjatnik-osvoboditeljam-riga-jastreby-daugavy.html

[14] The President of Latvia signed a law that degrades the veterans of the Great Patriotic War.  http://www.mk.ru/politics/2018/01/04/prezident-latvii-podpisal-zakon-unizhayushhiy-veteranov-velikoy-otechestvennoy.html

 

15  “Pride” to the 100 anniversary of Latvia will last in Riga within a hundred days            http://vesti.lv/news/praid-2018-k-100-letiyu-latvii-budet-prohodity-v-rige-v-techenie-100-dnei

[16]  The Cabinet of Ministers adopted a decision. Defenders of Russian schools are preparing a response     http://baltnews.lv/Interview/20170907/1020810938.html

[17] Research: Latvians trust the president and the Church, but do not believe the government and the Bureau for the Prevention and Combating of Corruption  http://rus.delfi.lv/news/daily/latvia/issledovanie-latvijcy-doveryayut-prezidentu-i-cerkvi-no-ne-veryat-pravitelstvu-i-bpbk.d?id=47278889

18 In Latvia the number of believers has decreased      http://vesti.lv/news/v-latvii-sokratilosy-kolichestvo-veruyushtih
[19] Data on the section are calculated on materials: http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__ikp/IK10_0020.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0
[20]  Calculated : http://www.csb.gov.lv/statistikas-temas/iekszemes-kopprodukts-galvenie-raditaji-30248.html
[21] The World Factbook – C I A https://www.cia.gov/library/publications/the-world-factbook/geos/lg.html
[22] Calculated : International Energy Agency

https://www.iea.org/countries/non-membercountries/latvia/
[23] Data on the section are calculated from the following materials:           http://data.csb.gov.lv/pxweb/lv/vide/vide__ikgad__energetika/EN0010.px/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

 

[24] Data on the section are calculated from the following materials:  http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__ikp/IK10_0030.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0
[25] Data on the section are calculated from the following materials:  http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__ikp/IK10_0030.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0
[26] Žukova K. Infographics: Due to unpredictable tax policy, foreign direct investment has fallen last year  http://www.delfi.lv/bizness/biznesa_vide/infografika-neprognozejamas-nodoklu-politikas-del-pern-sarukusas-arvalstu-tiesas-investicijas.d?id=48376795
[27] Foreign investors continue to withdraw money from Latvia

http://www.delfi.lv/biznes/bnews/inostrannye-investory-prodolzhayut-vyvodit-dengi-iz-latvii.d?id=49423073
[28] Foreign investors: there is no incentive to invest in Latvia  http://www.delfi.lv/biznes/bizopinion/inostrannye-investory-net-stimula-vkladyvat-dengi-v-latviyu.d?id=48262595

[29] EU Funds in Central and Eastern Europe Progress Report 2007–2015 // KPMG in Central and Eastern Europe https://assets.kpmg.com/content/dam/kpmg/pdf/2016/06/EU-Funds-in-Central-and-Eastern-Europe.pdf
[30] Household consumption is calculated by:                          http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__ikp/IK10_0030.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[31] The size of employment and unemployment are calculated according to: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__nodarb/NB0010.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

[32] Data on the section are calculated from the following materials:   http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__nodarb/NB0010.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe
[33]  Latvian Chamber of Commerce and Industry. The survey of entrepreneurs: already there is a shortage of labor force, and calls for the integration of foreign students into the labor market

https://www.chamber.lv/lv/content/jaunumi/1867

[34]  Businessmen have not persuaded Kuchinskis to let guest workers go to Latvia.  https://ru.sputniknewslv.com/economy/20171213/6749613/gastarbajtery-kucinskis.html               Read more : https://ru.sputniknewslv.com/economy/20171213/6749613/gastarbajtery-kucinskis.html

[35] Ministry of Economics. Informative report on medium and long-term labor market forecasts  https://www.em.gov.lv/lv/nozares_politika/tautsaimniecibas_attistiba/informativais_zinojums_par_darba_tirgus_videja_un_ilgtermina_prognozem/

[36] Data on the section are calculated from the following materials:    http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__dsamaksa/DS0010_euro.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0
[37] Data  are calculated from the following materials: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__dsp_izmaksas/DI0010_euro.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe
[38] The World Factbook – Central Intelligence Agency

                https://www.cia.gov/library/publications/the-world-factbook/fields/2050.html#lg

[39] Dynamics indicators to foreign trade are calculated by data: http://data.csb.gov.lv/pxweb/lv/atirdz/atirdz__ikgad__atirdz/AT0010_euro.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[40] Indicators of structure of foreign trade are calculated by data: http://data.csb.gov.lv/pxweb/lv/atirdz/atirdz__ikgad__atirdz/AT0010_euro.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[41] http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__ikp/IK10_0050.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[42]  Central statistical bureau                 http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__nodarb/NB0081.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

 

[43] Information-analytical agency PortNews                 http://portnews.ru

[44] Central statistical bureau. http://data.csb.gov.lv/pxweb/lv/transp/transp__ikgad__transp/TR0010.px/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[45]           Central statistical bureau
http://data.csb.gov.lv/pxweb/lv/transp/transp__ikgad__transp/TR0134.px/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[46] Data on the current financial account are obtained: https://statdb.bank.lv/lb/Data.aspx?id=134

[47] Data received : http://www.fktk.lv/lv/statistika/kreditiestades/menesa-parskati.html

 

[48]  Bank of Latvia: MFI balance sheet and monetary statistics

                https://www.bank.lv/statistika/dati-statistika/mfi-bilances-un-monetara-statistika-k/mfi-bilances-un-monetara-statistikas-raditaji

[49] Calculated from the data:             http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__valdfin/VF0010_euro.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

 

 

[50] Calculated from the data:  http://data.csb.gov.lv/pxweb/lv/ekfin/ekfin__ikgad__valdfin/VF0040_euro.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[51] https://ru.sputniknewslv.com/Latvia/20171011/6143937/oborona-rashody-bjudzhet.html

[52] The movement of the population is calculated according to:  http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__iedz__iedzskaits/IS0020.px/table/tableViewLayout2/?rxid=09cbdccf-2334-4466-bdf7-0051bad1decd

[53] The migration dimensions are calculated from the data:  http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__iedz__migr/IB0010.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

 

[54] Calculated from the data: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__iedz__iedzskaits/IS0022.px/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[55] Central statistical bureau:

http://www.csb.gov.lv/notikumi/nabadzibas-riskam-latvija-paklauti-424-tukstosi-jeb-218-iedzivotaju-45823.html

[56] It is calculated by data: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__matnenodr/MNG0140.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

 

[57] It is calculated by data: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__monetara_nab/NI0050.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

[58] Calculated from the data: http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__monetara_nab/NI0200.px/table/tableViewLayout2/?rxid=562c2205-ba57-4130-b63a-6991f49ab6fe

[59] Calculated from the data:  http://data.csb.gov.lv/pxweb/lv/Sociala/Sociala__ikgad__nodarb/NB0081.px/table/tableViewLayout2/?rxid=cdcb978c-22b0-416a-aacc-aa650d3e2ce0

[60] Calculated from the data:   http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_10_pc&lang=en

[61] Calculated from the data: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di03&lang=en

[62] Information material  https://www.vid.gov.lv/sites/default/files/iin_grozijumi_informativais.pdf

[63] Information material
https://www.vid.gov.lv/ru/s-2018-goda-novyy-poryadok-uplaty-podohodnogo-naloga-s-predpriyatiy

[64] The result of the tax reform may turn out to be zero. https://imhoclub.lv/ru/material/rezultat_nalogovoj_reformi

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