Nations in transit 2004

Executive Summary: 

Latvia, slightly smaller in area than Ireland and situated on the eastern shores of the Baltic Sea, has had a complex and checkered history. After winning independence in 1920, Latvia was able to strengthen its state institutions over two decades of self-rule. Its independence was abruptly terminated during World War II, first by the Soviet occupation from 1940 to 1941, then by the Nazi occupation from 1941 to 1945. From 1945 to 1991, Latvia remained under Soviet control as 1 of 15 republics of the USSR. It was able to declare its independence following the unsuccessful putsch against Soviet premier Mikhail Gorbachev on August 21, 1991.

The road to a fuller democracy, a viable market economy, and an improved civil society has been made much easier by Latvia's historical exposure to two decades of independence, which most former Soviet states (other than Estonia and Lithuania) did not experience. After a decade of improvements, often supported by world organizations and prosperous neighboring countries, Latvia has reached a much more secure level of "normalization" reflected by greater stability and predictability in economics, politics, and civil society.

A new spirit of optimism has slowly replaced the gloomy pessimism of the immediate postindependence period in Latvia. The prospect of joining the European Union (EU) on May 1, 2004, and imminent membership in NATO have created a greater sense of economic and national security. The increasing awareness of the value of nongovernmental organizations (NGOs) as well as liberal Internet access to all types of government information have slowly built a sense of democracy and a more informed electorate. The highly competitive Latvian mass media are proving to be reliable sources of information and watchdogs against governmental and big business malfeasance.

Latvia's political system functions well despite a perpetual series of minority governments. By contrast, the continuity and regal character of the presidency has made the executive one of the pillars of political stability. Consequently, the presidential elections of June 20, 2003, were uneventful given the choice of a single candidate. Vaira Vike-Freiberga, the Canadian-educated former psychology professor, was reelected by Parliament for another 4-year term, receiving 88 of the possible 100 votes. Nevertheless, some problems do persist in Latvia, such as corruption and poverty. On September 20, 2003, the Latvian electorate participated in a watershed referendum when 67 percent of voters agreed that Latvia should join the EU. Unfortunately, the vote highlighted the polarization between the majority Russophones, who were largely opposed to EU membership, and the Latvians, who were overwhelmingly in favor. The economy continued to develop at a dynamic pace, reaching a gross national product growth rate of 7.5 percent in 2003 and thus continuing the growth rate of previous years (6 percent between 1996 and 2003). Latvia's international credit ratings were raised to the "A" level for certain loan categories. By all standard economic measures, Latvia is a success story of post-Communist evolution.

Electoral Process. Latvia is a parliamentary democracy, with elections to the 100-member Parliament held every four years. The most recent parliamentary elections took place in October 2002 and were considered by the Organization for Security and Cooperation in Europe to have achieved a "clear entrenchment of the democratic election process." Two important votes took place in 2003. In June, 88 members of Parliament reelected President Vaira Vike-Freiberga, considered the most popular politician in Latvia, to a second four-year term. Only six members voted against, and six others did not vote. In a national referendum in September, 67 percent of Latvian voters indicated their support for the country's membership in the EU; overall voter turnout was 72.5 percent. Analysis of the voting patterns indicated a serious polarization between Latvian and non-Latvian ethnic groups, with ethnic Russians presenting the highest level of opposition to EU membership. The referendum vote was free and fair. However, Latvia's Anticorruption Bureau (KNAB) did raise concerns in 2003 about irregularities in party financing and media advertising associated with the 2002 parliamentary elections. Latvia's rating for electoral process remains 1.75.

Civil Society. The activity of NGOs is increasing with new direct access to government decision makers and state and court data via the Internet. However, tax laws proposed in 2003 restricting charitable deductions for businesses could potentially cause a loss in NGO funding. These laws aim to reduce tax-deductibility rates as high as 85 percent by almost half and to limit the number of eligible organizations for which deductions may apply. There is also the perception that international financing could decrease once Latvia joins the EU and is no longer seen as in need of assistance. Overall, the new opportunities for participation and input in state and municipal affairs have had little effect in the general population. Decision makers are willing to interact with NGOs, but few find their input useful. Latvia's rating for civil society remains unchanged at 2.00.

Independent Media. Latvian mass media are diverse and competitive. The balance between state and private broadcast media allows for a broad range of choices to suit various tastes. In 2003, the Constitutional Court's ruling to strike the 25 percent non-Latvian-language limit in broadcasting was a major victory for the general notion of free speech and especially for the Russophone minority. Also, the Court empowered investigative journalists and media by nullifying an article in the criminal code that set heavy penalties and even prison terms for conscious falsification of information against politicians. Newspaper ownership was balanced between foreign and domestic interests. The ownership of at least three national newspapers by the privately run Ventspils oil company could become a negative factor, but in 2003 these newspapers operated within appropriate professional standards. The appearance of a new, relatively objective, and technically innovative Russian newspaper, Telegraph, can be seen as a positive development. The rating for independent media improves from 1.75 to 1.50 owing to the buoyancy and competitiveness of the media, the continued absence of any direct state meddling, and the Constitutional Court's two major freedom-expanding decisions in 2003.

Governance. The business of government in Latvia generally runs smoothly but is interspersed with open squabbling among coalition parties. As in most parliamentary democracies, the executive in the Cabinet of Ministers initiates the preponderance of legislation (70 percent) and sets the agenda for voting. Parliament, however, can and does modify legislation and at times has taken independent action. Internet access to all meeting agendas and protocols--from cabinet-level elites to senior civil servants--makes Latvia an example of openness. The general public also has access to the spending details of individual ministries. The new Law on Civil Service passed in 2001 has resulted in better service and administration. Though party coalitions can have a negative impact, the current governing coalition appears stable. There is uncertainty among municipal governments about the execution of administrative territorial reforms planned by the national government. Meanwhile, there is a serious gap between the broad array of responsibilities of local governments and their limited financial resources. Great expectations have been raised for receiving substantial aid from the EU. The rating for governance remains 2.25.

Constitutional, Legislative, and Judicial Framework. The energetic commitment of the new minister of justice, Aivars Aksenoks, bodes well for improvements in the judicial framework. So far, positive changes include an increase in prestige and pay for judges, a growing number of courtrooms, the move toward total computerization and public access to cases, prison reforms, and the respected performance of the Constitutional Court. However, the high incidence of pretrial detention and the lack of access to legal aid by the poor for civil cases are ongoing problems. Overall, Latvia's rating in this category improves from 2.25 to 2.00 owing to the sustained level of judicial reforms undertaken in the country and the positive effects they are producing in practice.

Corruption. In spite of Transparency International's 2003 Corruption Perceptions Index ranking of Latvia as 57th out of 133 countries, the determination of the prime minister and his party to diminish corruption is laudable. The KNAB investigation into political party financing and other sensitive areas indicates a degree of daring as well as support from the prime minister. However, the KNAB's relative newness and poor organization, along with a seeming lack of institutional cooperation and coordination by the various state organizations involved in anticorruption efforts, indicate areas for improvement. In a World Bank-affiliated Foreign Investment Advisory Service report, foreign investors noted diminishing corruption in middle and lower levels of administration. However, there is a continuing perception of sophisticated, large-scale corruption involving tax evasion and collusion between certain businesses and the government bureaucracy. The rating for corruption stays the same at 3.50.

Outlook for 2004. In 2004 Latvia will join NATO and the European Union, and these two organizations will provide new pressures for improvements in governance. Latvia's coalition government, with four parties, will continue to be unstable. State institutions, however, will continue to function well, most likely with increased efficiency owing to new EU guidelines and funding. The backlog at local and regional courts will diminish, as many cases will be diverted to notaries and administrative courts. Corruption should come under greater pressure as the KNAB becomes more experienced and receives added EU support. NGO activity might suffer from decreased donations owing to new laws lowering tax deductions and to foreign donors who no longer see Latvia as a needy state. Ethnic relations will likely experience some buffeting as a result of the plan to increase the number of Latvian courses in all grade 10 minority schools in September.

Electoral Process: 

Latvia is a parliamentary democracy, and elections to the 100-member Parliament are held every 4 years. Deputies are elected proportionally from party lists in five large electoral districts. Party members determine the ranking of names on the lists, but electors have the right to rearrange the sequence by adding a plus or minus sign next to the candidates' names. The governing cabinet is made up of individual parliamentary deputies whose seats are filled by the next candidate in line on their respective party list. The president is elected by an absolute majority of parliamentary deputies rather than by the general population.

The Organization for Security and Cooperation in Europe/Office for Democratic Institutions and Human Rights (OSCE/ODIHR) observed the elections to the eighth Parliament on October 5, 2002, and two weeks later issued their assessment and recommendations. According to the report, the election marked "a clear entrenchment of the democratic election process." It was also seen as "well administered and overall conducted in accordance with OSCE commitments and international standards for democratic elections." This was the fourth general parliamentary election following Latvia's renewed independence in 1991.

Although the OSCE highlighted numerous positive signs, it also made recommendations for improvements to the Latvian electoral process and laws. The most significant was the recommendation to abandon lustration laws, which denied candidacy rights to individuals who were members of the Soviet Communist Party after January 13, 1991, or had been employed in the security service of any foreign state. Those who were acknowledged "collaborators" with Soviet security services could stand for office but were identified as such on the official voting lists.

Tatyana Zhdanoka, the well-known leader of the Equal Rights Party, was denied permission to run in the 2002 elections because her Communist Party membership extended beyond the cutoff date. She has brought her case before the European Court of Human Rights. Likewise, Janis Adamsons--a deputy in the seventh Parliament--was barred from running because of his previous employment in the Soviet Coast Guard.

The OSCE report raised another issue noted by many world organizations, including the Council of Europe and the Council of Baltic Sea States. Twenty-two percent of Latvia's residents do not have Latvian citizenship and hence cannot participate in either national- or municipal-level elections. The OSCE called for a "full and public discussion on the issue of voting rights for noncitizens in municipal elections" but did not indicate its own preferences in the matter.

Latvia stands in marked contrast with Lithuania, where citizenship was given to almost all permanent residents, and with Estonia, where noncitizens are allowed to vote in municipal elections. Indeed, the demographic contrasts among the three Baltic republics after independence help explain the different approaches. Lithuania had an ethnic Lithuanian majority of over 80 percent. Estonians accounted for 62 percent in their republic but were a majority in most major cities. In Latvia, however, Latvians accounted for only 52 percent of the total population and were a minority ethnic group in the seven largest cities of the republic. Currently, though ethnic Latvians have increased to 58.5 percent of the population as a result of non-Latvian emigration and lower birth rates, the cities are still dominated by non-Latvians.

Citizenship is open to all permanent residents (with a few exceptions, such as KGB agents) who have lived in Latvia for five years and can pass a simple language and history test and swear allegiance to the state of Latvia. According to Naturalization Board data, in the period between February 1, 1995, and April 30, 2003, 61,273 people became naturalized citizens. Of these, 69.3 percent were women, 66.9 percent Russians, 10.3 percent Belarusians, 8.4 percent Ukrainians, and 5.2 percent other Balts, reported Radio Free Europe/Radio Liberty.

The need for higher controls, greater disclosure, and transparency in campaign finances and spending was also noted by the OSCE. The Anticorruption Bureau (KNAB) is responsible in these areas but was legally established only on May 1, 2002, and was not fully prepared to play an effective role in the last parliamentary elections. However, in 2003 it expanded its review of campaign finances. The Green and Farmers' Union Party was accused of receiving donations from secondhand sources and was eventually forced to repay 55,950 lats (US$107,000). The New Era Party suffered a similar problem.

Furthermore, the KNAB has declared that about 65 percent of all donations from individuals were suspect. As reported by Diena, these individuals did not appear to be financially capable of donating but were thought, instead, to be "fronting" for others. During the last parliamentary elections, political parties spent more per capita than most other countries in the world. This weakness in the Latvian democratic process has encouraged debate about ways to avoid the influence of private interests, such as conducting state-subsidized elections and curbing donations from corporations.

All Latvian political parties have a weak membership base, hence the almost total dependence on expensive media advertising. This was particularly true for three of the four parties that are part of the current governing coalition and were newly formed only months before the elections. These new parties required vast amounts of publicity and recognition for their groups to succeed, yet the party platforms in this election were not significantly different from one another. All promised to fight corruption, lower taxes, decrease poverty, reduce economic disparities among regions and people, and continue Latvia's pursuit of membership in the European Union (EU) and NATO.

One issue that was not raised in the OSCE report was the low representation of non-Latvian candidates on the electoral lists of most major parties. Only the party alliance For Human Rights in a United Latvia has strong Russian membership. It placed second in the number of votes received in 2002--claiming 24 seats in Parliament--but its relatively leftist and pro-Russia orientation prevented it from being considered a serious partner in any government coalition. Moreover, this party alliance suffered a major rupture on February 15, 2003, when the National Harmony Party, under the leadership of Janis Jurkans, decided to withdraw and create its own faction in the Parliament with 21 deputies.

During the 2002 elections, only six parties were able to exceed the 5 percent threshold for representation in the Parliament. The leading party, however, gained only 26 out of 100 seats. A coalition of four parties was created to form a majority government. The People's Party--the leading party in the previous Parliament with 21 seats--has remained in opposition and could provide an alternative for new coalition building.


Results of the October 2002 Parliamentary Elections

Party Percentage of Votes No. of Seats
New Era Party 23.93 26
For Human Rights in a United Latvia 18.94 24
People's Party 16.71 21
Latvia's First Party 9.58 10
Green and Farmers' Union Party 9.46 12
Fatherland and Freedom 5.39 7
Unsuccessful parties receiving less than 5 percent of votes 15.9 -


Among the major surprises in this election was the low support for two long-standing parties active in the previous Parliament, Latvia's Way and the Social Democratic Workers' Party; neither party won a seat. Indeed, the Latvian political scene is relatively fickle, reflecting a malleable system where leading personalities and novelty are determining factors in electoral success.

The New Era Party was created by Einars Repse, former president of the Bank of Latvia. Repse had also been one of the founders of the activist Latvian People's Front, which helped achieve Latvian independence. Also prior to the elections, Andris Skele--founder of the People'sParty and former prime minister--stepped down from the leadership of the party owing to various controversies associated with his name.

Latvian political parties are widely distrusted, with only about 7 percent of the general public expressing confidence in the party system. Parties have a relatively narrow popular base, such that a scant 3 percent of the population claims to have participated in party activities. Only 0.9 percent, or about 15,000 people, are actual party members. The average rate in Europe is 5 percent. Estonia, with a much smaller population, has about 35,000 political party members, reports In most cases, parties do not conduct membership recruitment drives.

Most parties require new recruits to be sponsored by several existing members. Since internal voting determines the sequence of names on party ballots, the goal of new members wishing to run for deputy is to cultivate the support of existing members rather than interact with the population at large.

In spite of low party membership and shallow party loyalty, turnout in national elections has consistently been over 70 percent. In October 2002, 72 percent of eligible voters cast a ballot, apparently owing to the wide choice of parties, saturation advertising, general population discontent, and a sense of patriotic duty.

Latvian presidents are chosen for a term of four years by the 100-member Parliament and require 51 votes to be elected. In the presidential elections held on June 20, 2003, only one candidate was on the ballot--incumbent president Vaira Vike-Freiberga. She was first elected by Parliament deputies in June 1999. In that earlier election, Vike-Freiberga was nominated in the second round among a group of weak first-round candidates. She was elected with the support of 53 deputies, in spite of being a professor of psychology educated in Canada with no party affiliation and no visible profile in Latvia.

After an initial year of perceived gaffes, President Vike-Freiberga consolidated her position and became more comfortable with her role and duties. Subsequently rated the most popular politician in Latvia, Vike-Freiberga has been described as erudite, patriotic, hardworking, flexible, and regal. In 2003, she was supported by all of the parliamentary parties except the Socialist Party. As a result, no other candidates registered to run against her, and she was elected by 88 votes in favor and 6 opposed; another 6 did not vote. Initially, the Parliament had decided to hold the presidential elections in March 2003, just before the U.S. invasion of Iraq. This move was deemed unconstitutional and abandoned.

The vote with the greatest impact on Latvia's future occurred on September 20, 2003, when Latvian citizens indicated their preference regarding membership in the EU. Polling surveys reported that for certain periods there was less than majority support for the EU. The possibility of failure mobilized most of Latvia's elites, including all parliamentary parties, to convince voters about the intrinsic benefits of EU membership. Those opposed noted that Latvia should not move "from one union to another." Opposition came from many sectors of society, but the advocates clearly dominated the debate with their spending, advertising, and political arguments. The positive vote in Lithuania, and especially in Estonia, convinced many Latvians to vote in favor: 67 percent indicated their support for the EU, and 72.5 percent of eligible voters cast their ballots.

Analysis of the voting patterns, however, has indicated a serious polarization between the Latvian and non-Latvian ethnic groups. The areas with the greatest Russophone presence also had the highest vote against joining the EU. Thus, in Latvia's second-largest city, Daugavpils, where Latvians form less than one-eighth of the population, 67.3 percent voted against membership. Similarly, in the Russophone-dominant city of Rezekne, 55.7 percent were opposed. Indeed, in the easternmost province of Latgale--which has a 42 percent Latvian presence--the majority voted against joining the EU. Districts with a Latvian majority voted 75-83 percent in favor of the EU, reported Latvijas Vestnesis. According to analysis by the cartography firm Jana Seta, 16 percent of Latvians and 80 percent of non-Latvians were opposed to joining the EU.

Civil Society: 

The Latvian state protects nongovernmental organizations (NGOs) and encourages their activities. The number of NGOs registered with the Ministry of Justice is over 7,000 and rising. Riga accounts for two-thirds of all registrations--about twice its proportion of the population--but more groups are beginning to form outside the capital city. All NGOs are expected to supply the government with annual reports of their activities in order to receive tax-deductible status, but only about 55-60 percent comply.

According to the NGO Center, approximately 10 percent of all registeredgroups are fully active. A 1999 poll by Baltic Data House found that 14 percent of Latvians surveyed claimed to be active members of NGOs. One-third of these were members of labor unions, 21 percent belonged to sports organizations, and 15 percent were members of cultural societies. Increased rates of participation were found among youth, the better educated, those working in the public sector, and women. Indeed, 70 percent of activists are women. About 70 percent of NGOs have no permanent staff, and over half have a membership under 30 people. Only 4 percent of groups have more than 500 members, reports Diena.

As in all post-Soviet societies, philanthropy and volunteerism are not widespread. But newly created community volunteer groups, like those in the city of Talsi, have been held up as models. A resource center for women was recently created. In 2003, 5 of the 22 national cultural societies created an association, Sadraudziba ("Friendship"), to increase the protection of their national identity, improve interethnic relations within Latvia, and protect members against discrimination.

Traditional religious groups of Lutheran, Catholic, and Orthodox membership are slowly beginning to conduct charitable activities, but the lack of funding and basic infrastructure and the low percentage of actual congregants (5-6 percent) have limited the scope of their initiatives. Approximately 85 nontraditional faith-based organizations have been helped by significant external financing and organizational support. Included are the Jehovah's Witnesses, Mormons, Glad Tidings, New Age, and Hare Krishnas. The activism and Western-supported charity work of these groups have attracted many new members. In Riga, there are 13 to 15 Jewish organizations and institutions, including a school, hospital, museum, veterans organization, social aid organization, youth center, and library. All of these are part of the larger Riga Jewish Association.

Currently, one of the greatest areas of conflict among religious NGOs is the requirement that only one association can be registered to represent a particular faith, thus prohibiting, for example, two official centers of Old Believers or Orthodox Church adherents. Disagreements often begin over issues of property, land, personalities, international affiliations, and style. One breakaway group, the Latvian Autonomous Orthodox Church, has tried unsuccessfully over the past nine years to gain registration for its 10,000 followers and 10 congregations. Registration offers certain advantages, such as the right to have a church school or to construct a prayer house. Additionally, there are tax benefits for donors and the right to own property as a legal entity.

In 2003, almost no groups seriously threatened political or social stability in Latvia. This reflects the relatively peaceful relations among the various ethnic groups. One of the annual points of friction, however, concerns the attempt by Latvian World War II Legion veterans organizations to commemorate their fallen comrades each March 16 with a procession and the laying of flowers at the Freedom Monument. The Legionnaires operated under Nazi command; hence Russia and Israel have expressed their concerns about the event. Riga city administrators denied permission to the Latvietis Public Foundation and Club 415 to hold an official march on this day.

In 2003, many of the laws affecting NGO activities were in the process of being changed or amended to collect more taxes and eliminate perceived abuses. One of the key proposals aims to significantly reduce the tax advantages for donors from 85 percent of the value of donations to approximately half that amount. As well, only donations to socially benevolent groups will be considered for tax purposes, excluding athletic or narrow-interest groups. Most NGOs are concerned that this will seriously limit local donations and consequently the flow of matching funds and other grants from international donors. It is estimated that foreign donations account for 80 percent of all monies collected by NGOs, reports Another threat for NGO financing was noted by Integration Minister Nils Muiznieks, who pointed out that following Latvia's entry into the EU and its subsequent perception within the international community as a developed state, most foreign donors would likely withdraw their financial support. There has been little public information or discussion about funding NGOs from EU coffers.

At the fall of Communism, Latvia had no experience maintaining independent, self-sustaining organizations. Since 1996, the Danish government, the United Nations Development Program, and the Soros Fund have helped to finance and establish the NGO Center in Riga that has become an extremely useful resource for legal support, management and leadership training, and networking. Today, the latter two organizations are considered the "owners" of this center, which publishes numerous handbooks, offers courses, and invites experts to address various aspects of group sustainability. Assistance is offered in Latvian, Russian, and English.

Environmental groups have been particularly visible and active in Latvia. In 2003, they opposed the construction of a pulp mill by a Finnish company. The mill was to be located near Krustpils on an island in the Daugava River, which flows directly through Riga. Other groups protested the construction of an oil terminal in Daugavgriva near Riga.

Among the most consistently active and better-organized groups are Delna (a branch of Transparency International) and the Latvian Intelligentsia Association. The latter organizes regular conferences on societal issues, with the proceedings usually broadcast on national radio and also published.

On June 1, 2002, the Latvian government officially allowed NGO representatives to participate in the preparation of state policies by attending meetings of the state secretaries in the Chancellery. However, at the first meeting on June 6, 2002--where seven important projects were to be discussed--government representatives were astonished that not a single one of the 54 NGOs that had expressed interest actually showed up. This could reflect the poor organization of groups, a dearth of permanent staff and paid leaders, or preliminary glitches in communicating this new opportunity. Nevertheless, many groups are consulted by various ministries and parliamentary committees.

The NGO Center has claimed that over 80 percent of Riga-based groups have been engaged in some form of interaction with the national and local governments and that about one-third of these have included government representatives in their leadership structures. The Riga city government invited NGOs and various individuals to discuss the city's development plan, including issues of zoning, transportation, building construction, and nature conservation.

However, public participation in the civic life of the country in general is not popular in Latvia, as noted by many decision makers, including Minister Muiznieks. Still, participation does not necessarily increase influence. About 60 percent of parliamentary deputies and government department directors have claimed that professional associations had little or no impact on decision making. An overwhelming 90 percent have said the same about other types of NGOs. Most deputies do not believe that cooperation with NGOs is a useful means of improving the quality of decisions, according to reports in Diena.

The Latvian media have been very cooperative with NGOs and open to their views. Issues of public interest receive fair coverage from state and private broadcast and print media. The interactive news site Delfi, available in Latvian and Russian, provides a forum for discussions and controversial viewpoints.

Latvian labor unions are not very powerful or effective and include only 187,000 workers, according to Latvijas Vestnesis. A poll reported by Diena revealed that 75 percent of parliamentary deputies rarely or never consult unions, in contrast with 70 percent of deputies who claim to frequently consult relevant groups and NGOs involved in an issue.

The educational system has traditionally been free of political influence and propaganda. However, the planned conversion of Russian-language school classes (10th grade in particular) into bilingual classes with 60 percent of all courses taught in Latvian has generated widespread discontent and even agitation in some of the Russian schools. The conversion is scheduled for September 2004, and it is expected that these reforms will continue for other grades as well. The expansion of Latvian-language teaching has been adopted by Parliament purportedly to improve Russophone integration into Latvian society and to provide equal access to state and other employment for all ethnic groups.

This change will require some Russian-language teachers to learn Latvian or retire from teaching. Opposition to this move also reflects a reluctance to lose the influence of the Russian language in Latvia, further proof of the postindependence shift of power from Russian to Latvian. These school reforms, although opposed by Russia, have received the blessing of many EU and OSCE officials. For example, the OSCE High Commissioner on National Minorities, Rolf Ekeus, considers the minority education reforms a necessity.

Independent Media: 

The Latvian Constitution (Article 100) guarantees freedom of speech, freedom to obtain, keep, and disseminate information, and freedom to proclaim one's opinions. Censorship is forbidden. Sections 91 and 127 of the Latvian criminal code (adopted in 1999)--which carried prison time and severe fines for spreading false information about deputy candidates or defaming state representatives--were challenged successfully in the Constitutional Court in October 2003 by the newspaper Diena. With the concurrence of the Parliament in January 2004, criminal liability for the defamation of state officials has now been effectively removed. In June 2003, the Constitutional Court also repealed a law that required 75 percent of broadcasting in any 24-hour period to be in the Latvian language. This repeal means that the language of broadcasting will be determined solely by market considerations.

The Latvian media are free to disseminate information and views, limited only by libel considerations and the pressures of the market. Investigative journalists are free to pursue various sensitive topics, including government waste and corruption. The mass media generally enjoy editorial independence, although certain news items may be difficult to obtain from government sources. The leading newspapers readily publish a broad range of opinions from specialists and NGOs. Many newspapers are available free of charge on the World Wide Web. About 30 percent of the total population accesses the Internet, and this figure is increasing rapidly.

Viewers in Latvia can choose between state-subsidized and privately owned television and radio. In television, the private Latvijas Neatkariga Televizija is the most popular station, with 26 percent of viewers as of August 2003, followed by the Russia-based, private PBK at 10 percent. The viewer share held by state-owned LTV1 decreased dramatically from 15 percent to 10 percent between June and August 2003 because serious cutbacks in subsidies shortened the station's hours of broadcast. The viewer share at other stations is as follows: TV3 16 percent, LTV7 6 percent, TV5Riga 3 percent, and other channels 27 percent.

Radio is dominated by state ownership. Latvijas Radio, with its four different services, claimed 48 percent of the total audience in the summer of 2003. Latvijas Radio 2 holds a solid 25 percent. It broadcasts mostly Latvian music, with a sprinkling of English-language country and western. Latvijas Radio 4 broadcasts in Russian and claims 7 percent of the total audience. Software House, with a 17 percent share, is the largest private station. Next in popularity are Star FM and European Hit Radio with 5 percent each.

The most popular daily newspapers as of summer 2003 were Lauku Avize (now called Latvijas Avize), Diena, Vesti Segodna (Russian), Neatkariga Rita Avize, and Chas (Russian), according to Baltic Data House & BMF. A Russophone businessman, Valeri Belokon, started a relatively upscale and technically innovative Russian-language daily, Telegraph, to provide a more "constructive tone in the Russian press," but the venture has not been lucrative. A similar objective prompted Radio Free Europe/Radio Liberty to launch a Russian-language radio program in Latvia that was publicized as "a mission of social integration." The message concluded with the observation that "to help the dialogue between the two communities in Latvia, RFE/RL had to address both parties involved." However, all Radio Free Europe/Radio Liberty broadcasts were terminated by the U.S. Congress at the end of 2003.

Indeed, both major linguistic groups live in their own media space, and very few read or view the other's media contributions. Diena did publish in both languages until 1999 but shut down its Russian-language edition because of a lack of readership. Other newspapers have experienced a similar problem. The evening paper Rigas Balss until recently was published in both languages with broadly similar content, but the Russian language paper became more independent and was renamed Vechernaia Riga. There are many Latvian- and Russian-language periodicals, among which monthly women's magazines such as Santa, Cosmopolitan, and Lilit (Russian) are the most popular. The state publishes the near daily newspaper of record, Latvijas Vestnesis.

Both local and foreign firms and individuals enjoy a share in the Latvian mass media, but exact ownership patterns are not always transparent. The largest shareholder in Diena is the Bonnier family of Sweden. The privately controlled oil corporation Ventspils Nafta (VN) owns three and possibly four of Latvia's daily newspapers. The chief representative of this corporation has been Aivars Lembergs, mayor of the city of Ventspils. Yet who exactly controls VN is publicly unknown. As a whole, these newspapers, however, do not appear to be visibly affected by their owners.

The Latvian Journalists Union is a relatively low-key association of about 500 members. The Latvian Press Publishers Association is also active. Reporters Without Borders has ranked Latvia 11th out of 166 countries with regard to its press freedom. In Freedom House's 2003 Survey of Press Freedom, Latvia was ranked in the second-highest group of "Free" media together with 32 other countries, including Canada, Germany, the United States, and Denmark.

Judicial Framework and Independence: 

Latvia uses a modified parliamentary system where executive and legislative powers are tied closely together. Deputies have the power to initiate legislation, and their votes determine whether a bill will become law or not. The real center of power, however, lies with the cabinet and the ministers representing the parties of the coalition government, as is the case in most parliamentary democracies. Support for legislation is most often orchestrated before a bill reaches Parliament. However, some surprises do emerge when deputies are allowed the use of a secret ballot.

The judiciary is independent of direct government pressure once Parliament ratifies a judge's candidacy. However, judges are dependent on the Ministry of Justice for their wages, administrative support, offices, and instructions on new laws and procedures. The Court Department of the Ministry of Justice, responsible for most courts, is expected to become much more independent in May 2004, when it will be guided by a 12-person Judicial Affairs Council rather than the ministry. The Judicial Affairs Council will also take over the administration of the Supreme Court. It will comprise legal scholars, top judges, the minister of justice, and some parliamentary representatives. Its duties will be to screen candidates for the bench and to oversee judicial promotions and budgetary issues.

In the Latvian political system, the president functions as head of state and has the power to appoint the prime minister and veto legislation. Vetoed legislation, however, can be signed after a repeat majority vote in the Parliament. As for President Vike-Freiberga, her major contributions lie in her continuity, political neutrality, and high popular rating. That said, her criticisms of political and judicial matters are taken seriously.

The Latvian Constitution received a major addition in October 1998 when the Parliament added an extensive body of rules protecting human rights. Moreover, for several years citizens have been allowed to bring their complaints to the European Court of Human Rights. Of the several hundred cases submitted, only a few have been deemed substantial enough for deliberation. The few cases that have won, however, have helped to sensitize Latvian legislators, government executives, and the judiciary to the issue of human rights.

The creation of a separate Constitutional Court in Latvia in 1996 focused the best legal minds on the defense of constitutional rights. Their judgments have been wide-ranging but have garnered a high level of trust from officials and from the entire population. According to polls, the Constitutional Court is considered one of the most trustworthy institutions in Latvia and, indeed, has helped diminish popular cynicism about the Latvian system of power. The Court's chair is Aivars Endzins, a former parliamentary deputy and seasoned political leader.

There is equality before the law, but unfortunately, not all Latvians have equal access to justice in practice. Over 80 percent of litigants in civil cases participate without the help of lawyers. This inevitably skews the results of judgments in favor of wealthier citizens who are able to afford legal counsel. There is now a project to introduce a legal aid system for impoverished litigants. Some legal help is provided by the Latvian Human Rights Bureau. Currently, state legal aid is made available only in criminal cases.

Reform of Latvia's laws is a continuous process, which began after the regaining of independence in 1991. However, pressure to reform has been hastened by Latvia's desire to join the EU. Various EU organizations have offered expertise and funding to help Latvia achieve an effective legal structure. A major step away from Soviet traditions came with the introduction of the new criminal code, adopted by Parliament in May 1998. Another major step will come when the administrative code is introduced in February 2004.

Prosecutors are independent but have criticized politicians and ministers for pressuring them to investigate particular issues. Indeed, the chief prosecutor, Janis Maizitis, is considered to be very independent. The idea of jury trials has been debated, but as yet no concrete steps have been taken. After great hesitation, a new probation system was introduced in October 2003 in six districts and will eventually be extended to all of Latvia.

A new 2003 Law on Court Executors (bailiffs) is expected to resolve one of the most controversial areas of the justice system. Formerly, about 70 percent of court decisions in civil cases were not implemented, and there was great potential for arbitrary actions and corruption. Now, new cadres of about 100 executors have been trained for this purpose and have been subordinated directly to the courts. Minimum educational requirements for new recruits have also been raised.

One of the long-standing criticisms of Latvia has been the huge proportion of prison inmates awaiting trial or not yet sentenced. In 2002, 44.6 percent of the country's 8,358 inmates were being held in pretrial detention, according to Diena. This situation is the product of Latvia's seriously overburdened and underfunded court system. An average judge annually disposes 33 criminal cases but has an accumulated backlog of 66 cases. The worst bottleneck is in Riga courts.

In 2003, several measures were taken to alleviate the situation. For example, a new Riga courthouse with 20 court halls was completed. Two other courthouses are being built in the city and are expected to be in service by the end of 2005 and the end of 2006, respectively. Another new building is under construction in Jurmala.

Other changes are also affecting court loads. Public notaries now have the authority to adjudicate conflicts over inheritance and wills, decreasing the number of court cases by several thousand a year. The Ministry of Justice has also added 15 new judges to the Riga regional courts. Before these additions, there were 423 judges in Latvia. Of these, 7 sat on the Constitutional Court, 39 on the Supreme Court, 96 on regional courts, 220 on district courts, and the rest on land courts.

Of all criminal cases in 2002, 53 percent received a suspended sentence and 28 percent were sent to prison. The most common suspended sentences in 2002 involved drunk driving, bribe taking, hooliganism, theft, robbery, and rape. The media and general population have criticized such perceived leniency. Even the head of Latvia's Supreme Court, Andris Gulans, has publicly expressed his dissatisfaction with this trend.

Latvian prisons are overcrowded and in poor condition. Aivars Aksenoks, the new minister of justice, has made the upgrading of prisons one of his key areas of reform. Indeed, in 2003, 48 specially trained and older professional guards replaced 18-year-old army recruits guarding Skirotava, the largest Latvian prison. On January 1, 2003, a new law created a prison board whose purpose is to guarantee lawfulness and human rights for individuals in the prison system.

The quality of Latvian court judgments was analyzed in 2003 by legal specialist Vineta Skujeniece. Her conclusion was that court judgments tend to be difficult for the reader to understand and lack complete information and argumentation. In her opinion, the blame rests on the quality of a judge's legal education and the procedure for choosing judges. Over time, this procedure has become more stringent. A candidate for the bench must first pass an examination before being allowed to work as a two-year apprentice judge.

If in the past there were many vacancies, currently there is competition for judicial appointments. The prestige of judges has risen, and so has their remuneration. The minister of justice has instituted a new schedule of gradual pay raises, which will double salaries by 2006. Beginning in 2004, the selection and promotion of judges will be carried out by the Judicial Affairs Council.

Courts are also being slowly modernized, and computerization is almost complete. Regional court decisions are now being entered into a centralized computer system that is accessible to the public. All courts are expected to participate. If successful, this should have a tremendous impact on the quality of judgments and legal education for the population.


The extent of corruption in Latvia has been criticized by many international organizations, foreign investors, and local inhabitants. Transparency International's 2003 Corruption Perceptions Index ranked Latvia 57th out of 133 countries (compared with 52nd in 2002); Estonia is ranked 33rd and Lithuania 41st.

A 2002 study by the World Bank-affiliated Foreign Investment Advisory Service claimed Latvian businessmen acknowledged relatively little corruption in the middle and lower levels of public administration. In effect, the attempts to limit such corruption have been successful, but sophisticated wrongdoing such as massive tax avoidance at the highest levels is still problematic. Corruption is most prevalent in applications for construction permits, customs, municipal police inspections, and the rezoning of property.

Prime Minister Repse created the New Era Party largely because of his desire to minimize corruption in Latvia. This stated campaign promise was also a major reason his party received the most votes in the October 2002 parliamentary elections. For almost a decade, Repse had been head of the state-owned Bank of Latvia and had made it one of the most trusted institutions in Latvia. This success and the absence of any subsequent corruption charges made him a leading public figure, and his popularity allowed him to launch a successful political party.

Despite Repse's desire to deal with high-level corruption, much work remains to be done to accomplish the goal. It is widely hoped that Latvia's entry into the EU will help eliminate some of the worst aspects of this scourge. Others believe that the EU's greater scope will only increase the potential for bribery among politicians and civil servants.

Nevertheless, there is a new tone and direction in governmental attitudes toward corruption, exemplified by the November 2003 freezing of several million dollars of state funds diverted by alleged swindlers to a bank in Malta. One of the participants in this operation was arrested as he boarded a plane leaving Riga. This expeditious action contrasts sharply with many previous cases in which funds were not discovered and perpetrators not arrested.

Great hopes have been placed by Repse on the potential of the KNAB. It has 110 workers, a budget of 1.6 million lats (US$2.88 million), and plush headquarters in the center of Riga. However, its annual tally of corruption cases uncovered as of October 2003 was 38, even less than in the previous year, when the KNAB had less financing, was understaffed, and was housed in a two-room office. Part of the problem today is that there is little competition in the hiring of KNAB employees. Most have no experience in the anticorruption field. Others have criticized the institution for lacking clear organizational priorities.

Despite these criticisms, the KNAB has enjoyed many successes. In 2003, for example, it unseated the powerful New Era Party's minister of health, Aris Auders, for extensive double billing in his previous job as a surgeon. The KNAB also tackled the financing of political parties in 2003, forcing two of the coalition parties (New Era Party and Latvia's First Party) to repay large sums donated illegally by individuals. The KNAB also charged several high-ranking officials with bribery. A leading procurator in Riga was arrested in April for demanding a US$50,000 bribe. Another was arrested in Jurmala for taking a US$2,000 bribe.

There are other organizations responsible for fighting corruption in Latvia, in spite of the original plan to concentrate these forces into the KNAB. Institutional rivalry and low levels of cooperation currently exist among half a dozen such organizations. As a result, their efforts have not been inspiring or tremendously successful, according to some critics. The U.S. ambassador to Latvia, Brian Carlson, gave a public speech in October 2003 pointing out that not enough was being done to punish those guilty of corruption, leading to the conclusion that "Latvia tolerates corruption and bribery, money laundering and organized crime." Aivars Latkovskis, head of the newly formed parliamentary Committee for the Prevention of Corruption, Contraband, and Organized Crime, agreed with Carlson's criticism. The European Commission has disapproved of Latvia's slow pace in adapting its anticorruption legislation to EU standards.

In spite of the apparently mediocre progress, some changes have been made to Latvian policies and legislation. Police officers can no longer require traffic violators to sit in the police car, where bribes can be solicited. Police wages have been significantly increased as well. Many safeguards, including cameras, have been installed at customs points. Greater transparency has been achieved in courts, and judges are receiving significantly higher pay. The head of Statoil, Baiba Rubesa, has pointed to some progress in diminishing the flow of contraband gasoline. She claims that contraband supplied 25-30 percent of the Latvian market in 2003, in contrast with 40 percent in the previous year.

In conclusion, it appears that Prime Minister Repse is determined to tackle corruption, but the accumulated bad habits from the Soviet period (where exchange of favors, or blat, was pervasive) and the semilawless period following independence have presented formidable challenges. In effect, individuals who want to speed up or improve their own projects, welfare, and goals are willing to indulge in corruption to save time, energy, and resources. Nevertheless, there has been a perceptible change of mood in the country that corrupt practices will no longer be ignored or tolerated, and the increased activity of the KNAB should provide a major lead in this direction in the future.


The Latvian governmental system is stable. About 70 percent of legislation is initiated by the cabinet, about 15 percent by parliamentary committees, and 15 percent by deputies, including groups or individuals. The president rarely introduces legislation. All bills require the majority approval of Parliament and the signature of the president. When Parliament is not in session, the cabinet can issue regulations under Section 81 of the Constitution, which then carry the force of law until Parliament reconvenes and either ratifies or vetoes the interim regulations. The president can also return legislation to Parliament for reconsideration or amendments, but a repeated affirmative majority vote overrides the objection.

In contrast with the broader political system, Latvian cabinets (executive branch) traditionally have been unstable, with frequent changes of ministers and relatively brief tenures for prime ministers. This instability is directly related to the absence of a dominant party in Parliament. The current Parliament has eight party factions. This is greater than the number elected in October 2002 because the leftist alliance For Human Rights in a United Latvia has since split into three separate factions. Moreover, four deputies have abandoned party affiliations and remain in Parliament as independents.

In Latvia, governments are relatively unstable and often rupture over matters of policy, budgeting, personalities, or appointments or for strategic electoral reasons. The damage to the continuity of policy is minimized by the fact that most changes involve internal shuffling of posts and the elevation of new prime ministers rather than new parties forming new coalitions. Long-range planning, however, is negatively affected by this frequent circulation of cabinet positions, and there has been growing debate about modifying the electoral system to balance proportionally elected and directly elected deputies.

After the October 2002 elections, a coalition of four parties was formed under the initiative of the New Era Party and its leader, Einars Repse, who became prime minister. The other participating parties were Latvia's First Party, the Green and Farmers' Union Party, and Fatherland and Freedom. Two of these, the New Era Party and Latvia's First Party, were created just before the elections; the other two were coalitions or parties that blended several previous political organizations. After the elections, it took an unusually long time to form a cabinet and divide ministerial responsibilities to the satisfaction of all participants. Within one year after the election, on June 12, 2003, the opposition People's Party tried to break the coalition by initiating a vote of no confidence in Prime Minister Repse. It failed.

After the successful referendum to join the EU, a much more serious challenge to the coalition came from within. Three of the partner parties demanded the replacement of Repse with someone else from the New Era Party. The charge was that Repse was too authoritarian and did not adequately accommodate the interests of other partners. Repse's supporters claimed that the prime minister's strong anticorruption measures had precipitated the demand for his resignation. Instant opposition from wide sectors of the population and Latvia's president helped defuse the crisis. The New Era Party emerged from the confrontation stronger than ever in public opinion polls. As a result, the four ruling parties signed a memorandum stressing the need for a regularized process of mutual consultation and cooperation. Nevertheless, mutual suspicions and strains remain within the coalition.

The Latvian government has made giant strides in providing public access to various state documents. These include Internet access to proposed legislation and to the agendas of Parliament, the cabinet, state secretaries, cabinet committees, and parliamentary committees. Likewise, anyone can access the financial data of all ministries. Transcripts of Parliament sessions as well as the protocols of cabinet and cabinet committee meetings are also available on-line. Because trade unions and other sources criticized the limited accessibility to the 2004 budget deliberations, the cabinet Web sites have become more open and are already soliciting input for the 2005 budget. NGOs now have formal access to all meetings of the civil service elite, including the state ministers in the Chancellery of the cabinet, where new legal initiatives and information about future proposals are discussed and sent to respective ministries for further input.

The Parliament has a vast support system of specialists and research librarians. Deputies also can hire helpers and have access to the state-financed offices of their respective political parties. Unfortunately, not all deputies have offices, and very few of them have the ability to contact their electorate within Latvia's five broad electoral districts. As a result, the Parliament-to-people linkage is as yet very weak, though people do send letters and electronic mail to state Chancellery officials. Prime Minister Repse has announced that current ministers receive four times more mail than previous governments; in one year they received 6,443 such letters. Investigations can be carried out by parliamentary committees, which are empowered to call ministers and others to testify. However, no such investigations occurred in 2003.

Latvia is saddled with over 540 local administrative units, with about 70 percent containing fewer than 2,000 inhabitants. Indeed, some municipalities have fewer than 500 people. The restructuring of these local administrative units into more manageable districts began in 1994 but has not progressed very far because of local opposition. Additionally, authorities have vacillated about the ideal number of new districts, with proposals fluctuating somewhere between 9 and 109.

In July 2003, Repse's party proposed a 33-district option, creating very strong opposition from municipalities. Responses from 500 local governments indicated that 29 percent supported the 102-district option, 26 percent wanted to retain the existing system, and 44 percent backed another variation. By the end of October, a consensus had developed for supporting a change to 102 districts. The EU has been a major critic of the old, unwieldy system of administrative territorial units and has provided financing for the study of optimal boundaries.

Local authorities have a broad mandate, including responsibility for territorial planning, regional and local roads, public transportation, housing and community subsidies, primary and secondary education, social services, and primary and secondary health care. Local governments spend about 20 percent of the total state budget, reports Diena. Municipalities are dependent for funding on local income taxes and government project grants. Poorer districts can receive support from an equalization fund maintained with contributions from wealthier municipalities such as Riga.

Local governments receive subsidies from the central government for specific purposes such as welfare payments but can choose to redirect these funds if deemed necessary. The administrative and political structures of most rural local governments are weak, and many pass regulations without legal advice because they cannot afford to hire a lawyer. As a result, many local bylaws are internally contradictory and in conflict with national laws. There are no consistent centralized mechanisms for dealing with such conflicts.

Municipal elections are free and democratic, with a turnout of 60 percent in the 2001 elections. In the larger cities people run as candidates of political parties, but in most rural areas personality politics dominate. Municipalities have created an association to lobby for their interests and to defend their rights against incursions from the central government. This association, the Union of Local and Regional Governments of Latvia, receives a fair amount of publicity in the local and national media. Recently, the association was successful in forcing the government to drop a clause in the proposed Law on Municipalities that would have allowed the minister of municipal affairs to discharge local councils.

The civil service in Latvia has experienced many attempts at reform. The most significant and comprehensive has been the Law on State Administration Structure, passed in 2001. The purpose of this law as stated in its preamble is "to secure a democratic, lawful, effective, open, and publicly accessible state administration." The law has tried to make the civil service more "people friendly." It requires state administrators to observe human rights, work in a fair and nonpartisan manner according to existing laws and rights, and observe the principles of "good administration." This concept includes the guarantee of openness, protection of data, fair implementation of procedures within a reasonable period of time, simplification and improvement of procedures, and disclosure to the public about its activities. Civil servants are expected to have completed higher education and are given a timetable for earning their degrees. The law also includes clauses on dismissal for cause, requirements for contracts, limitations of power, financing of subsidiary agencies, hierarchy of officials, delegation of tasks to private individuals or nonstate organizations, issues of liability, and auditing procedures.

Although the Law on State Administration Structure is seen as a major upgrade in the role of civil servants and their duties, it does not deal with municipal civil servants. Likewise, the mechanisms for addressing complaints are not strongly delineated. Because of low salaries, the turnover rate in civil service positions is high, and a number of able individuals have gone to work in more lucrative private institutions. Many people in public administration are students who work on limited contracts or on a part-time basis and usually do not remain after completing their degrees. The Ministry of Justice, for example, has an annual turnover rate of 30 percent. The Latvian civil service comprises about 10 percent Russophones, reflecting the strict Latvian-language requirements. There were 6,225 official civil servants in 2001, compared with 8,160 in 1998, reports Diena.

The President's Chancellery and the Repse government have initiated the creation of an ombudsman office. A draft law was created jointly, and the institution is expected to begin functioning in 2005. Citizens will then have a place to turn for help in their dealings with government bureaucracy. Currently, there is a quasi ombudsman complaint bureau with the cabinet Chancellery.

2004 Scores