• Latvia began the year 2019 by forming a coalition government after more than three months of interparty negotiations following the elections of October 2018. Although these were the lengthiest such negotiations the country had experienced since the 1990s, the process—which led to the formation of a four-and-a-half party governing coalition—was democratic, transparent, and widely covered in the public media. The new government’s clearly stated priorities were actively undertaken throughout the remainder of the year.
• The Saeima’s 100 parliamentary seats were divided among seven parties: Harmony (centrist party representing the largest share of Russian-speaking voters with 23 seats), KPV LV (populist party positioned as “anti-establishment” with 16 seats), New Conservative (new party positioned as fighting corruption and the political status quo with 16 seats), Development/For! (new party positioned as liberal/progressive with 13 seats), National Alliance (right-wing nationalist populist party with 13 seats), Union of Greens and Farmers (established right-wing conservative party with 11 seats), and New Unity (reformed Unity party with 8 seats).16
• After two earlier failed attempts, the coalition was successfully formed by Prime Minister Krišjānis Kariņš, whose New Unity party had the fewest seats in the newly elected parliament.17 Kariņš, an experienced, U.S.-born politician with a PhD in linguistics from the University of Pennsylvania, managed to win the support of the New Conservative Party, Development/For!, National Alliance, and 11 of the 16 members of KPV LV—altogether, 61 members of parliament (MPs)—leaving Union of Greens and Farmers and Harmony, yet again, in the opposition.
• During 2019, the government actively pursued its declared policy priorities, namely, reducing money laundering and implementing administrative-territorial reform.18 Yet, by year’s end, the governing coalition had failed to make progress towards its other policy promises, such as healthcare and education reform, improving economic competitiveness, or addressing demographic challenges like outmigration and the country’s aging population.19
• Disappointment with the government’s shortcomings manifested in November as hundreds of healthcare workers protested a new budget that failed to deliver a promised increase in salaries.20 Shortly afterwards, the union of medical professionals and other public organizations began collecting signatures to initiate a referendum on dissolving the parliament; by year’s end, almost 25 percent of the required 155,000 signatures had been collected.21
• On May 29, the parliament elected Egils Levits as President of Latvia, succeeding Raimonds Vējonis. Although lauded as a lawyer and judge at the ECtHR and European Court of Justice, Levits also authored the controversial Preamble to the Constitution of Latvia, which declares Latvia’s national identity as defined by ethnic Latvian and Liv traditions, the Latvian language, and Christian values.22

• In 2019, Latvia enacted minor changes to the country’s electoral procedures. Via a constitutional amendment that came into force on January 1, the parliament’s election of the president, which previously had been conducted by secret ballot, was to be conducted by an open, transparent vote. The amendment initiative had been put forward by a petition signed by 11,442 citizens and subsequently approved by the parliament with the stated intent of increasing public trust in Latvia’s political institutions.23 On May 29, Egils Levits became the first Latvian president elected using this new transparent procedure, and he was supported by all 61 MPs of the governing coalition.24
• The European Parliament (EP) elections in May passed without major incident and demonstrated that the country’s electoral system continued to function well. The turnout was 33.5 percent, a slightly higher proportion than in the 2014 EP elections (30.24 percent).25 The EP polls were remarkable in two ways: First, a number of unexpected candidates participated, including the respected political scientist and commentator Ivars Ījabs, who ran as a candidate for the new political movement Development/For! Additionally, ex-mayor of Riga Nils Ušakovs and former vice-mayor Andris Ameriks, both of whom had recently stepped down due to possible involvement in a corruption scandal, ran for EP seats.26 All three were elected. The second notable issue was an administrative mishap in which almost half of Latvia’s 1.3 million eligible voters failed to receive instructions specifying their assigned voting location.27
• In November, the government approved a new party financing model aimed at strengthening the independence of political parties from private donors. The new model sets limits on private funding and increases the total state subsidy for political parties from €600,000 to €4.5 million per year. In the new model, every party that receives 2 percent or more of the vote gets an annual subsidy for the subsequent year in the amount of 4.5 euros per vote, while any party that surpasses the 5 percent electoral threshold (and thus secures seats in the Saeima) is entitled to receive a flat subsidy of €100,000 per year in addition to 4.5 euros per vote.28

• The viability of Latvia’s civic sector, including its readiness to engage in public debate on issues and formulating solutions to common problems, is improving overall—and the sector’s institutional and legal framework remained stable in 2019.29 However, Latvian civil society continues to suffer from a low level of openness to ethnic, linguistic, and sexual diversity.
• Several heated debates during the year showed that Latvia’s political culture and readiness to debate matters in the public sphere continued to mature. Discussions from around kitchen and conference tables moved to both mass and social media. For example, journalists from Latvian Radio and Television spoke out in 2019 about structural problems that had plagued the public broadcasting sector for decades.
• Several professors publicly expressed criticisms of the education sector, and the University of Latvia in particular,30 after the government failed to endorse the university’s newly elected rector due to alleged irregularities in the election process.31 Similarly, the issue of judicial independence and competence was discussed in the country’s top legal journal, Jurista Vārds. All of these debates focused on specific issues but also expanded the society’s conversation about what should be a matter of public discussion, thereby enriching the public understanding of what democracy means in practice and in strengthening political culture.
• ManaBalss.lv (translated as MyVoice.lv)—Latvia’s online civic platform for submitting petitions and collecting signatures to send to the parliament—continued to be a success. Since 2011, the service has submitted 38 citizen petitions, of which 26 have compelled actual legislative changes.32
• In October, the parliament passed a law granting automatic citizenship to children born to Latvian “noncitizens,” an issue of political debate for many years.33 Meanwhile, the governing coalition also took steps to introduce harsher measures against the use of the Russian language in preschools, following up on the education reform of 2018. The reform requires that, upon parental request, municipalities must ensure the use of Latvian as the primary instructional language in any preschool, including even in minority Russian-language preschools.34 This measure has sparked protests among the country’s Russian-speaking population, and surveys show that the society is divided in its views of the amendments: 69 percent of Latvian-speakers supported the amendments, whereas 64 percent of Russian-speakers opposed them.35 Following a petition by Harmony MPs, the amendments were reviewed by the Constitutional Court, which ultimately found them not to be discriminatory. The court ruled that fluency in the Latvian language was a prerequisite for full participation in the country’s democratic society, and that while the state should support the “preservation and development of the individuality of ethnic minorities,” those efforts should not supersede “the development of the identity of a common democratic society.”36
• Latvia remained the lowest-ranked EU state on LGBT+ rights and freedoms (scoring only 17 percent in ILGA-Europe’s May 2019 “Rainbow Index”).37 According to Eurobarometer, 76 percent of Latvians report not having any LGBT+ friends or acquaintances, which necessarily indicates that many LGBT+ people do not publicly divulge their sexual orientation.38 As reported, 68 percent of Latvians believe there is something wrong with sexual relations between same-sex partners,39 and 43 percent believe that homosexual couples should not have the same rights as heterosexual couples.40 On the other hand, social acceptance of LGBT+ people has increased over time in Latvia, but at an extremely slow pace.

• In 2019, the Latvian media sphere maintained its diversity, both in content and format. The country’s media consisted of three public outlets (Latvian Radio, Latvian Television, and the website LSM.lv), multiple national commercial media organizations, and regional media. The sector’s key weaknesses were the low proportion of high-quality analytical content, the blurred boundary between independent journalism and public relations, and insufficiently transparent media ownership, especially among commercial print media. There were no significant changes in the long-standing political cleavages between Latvian-language and Russian-language media, with the former leaning towards national conservativism and elitism, while the latter propagated Russian geopolitical interests and criticism of the local ruling elite.41 However, there were no attacks on journalists or any other apparent limits on freedom of speech during the year.
• In October, an initiative to restrain municipalities from owning mass media made an important step towards strengthening the independence of local media from politics. Municipalities in Latvia own the majority of local, publicly funded media, and thus monopolize earnings from commercial advertising; since the advertising market is rather small in most regions, this system has made it difficult for independent media outlets to enter the market.42 The parliament approved the bill to address this issue in the second reading.
• One of the year’s top stories was the growing conflict between employees of the two public broadcasters and their supervising agency, the National Council of Public Electronic Broadcasting (NEPL).43 This conflict brought to light decades-old structural problems, including the public media’s financial insecurity and vulnerability to political and economic influence. The new Law on Public Broadcasting, currently under discussion in the parliament, is envisioned to address some of these issues.44
• In October 2018, the State Audit Office issued a report criticizing the NEPL for its lack of long-term vision, insufficient investment in technology and development, and its excessive financial dependence on benevolent politicians.45 These criticisms were echoed by employees of Latvian Radio (LR) and Latvian Television (LTV), as well as the Association of Journalists, who added their issues to the debate, including dissatisfaction with low wages, deteriorating technical equipment, and distrust in the integrity and competence of council members. In late 2019, two of the five council members stepped down as a result of the growing antagonism.46
•  

Latvia’s public broadcasters rely on two sources of funding, direct government subsidies and income from advertising. Government investment in public media amounts to barely 0.1 percent of GDP, whereas the EU average is around 0.17 percent; in any event, this amount is regularly too little to cover operational costs. As a result, public broadcasters rely on emergency funds allocated by request and dependent on the goodwill of the current political power.47 Financial shortfalls and instability not only affect the independence of the public media but limit their investment in more advanced technology, leading to increasingly outdated equipment at both public broadcasters.48

• The population in almost half of Latvia’s 119 municipalities has dropped significantly as a result of continuous migration by young people to larger cities or abroad in search of better job opportunities. The youth exodus has negatively influenced these municipalities through decreased tax revenues as well as their capacity to retain trained professionals to provide basic services like utilities, education, healthcare, and social services. In 2019, the new national government sought to push forward a major reform aimed at restructuring and uniting municipalities into larger units.
• While local government reform has been on the political agenda since 1998, the most recent significant progress was made in 2009 when the number of municipalities was reduced from 522 to 119.49 The current regional development minister has been pushing a plan to reduce this number further to 36. In September, the plan was approved by the government and sent to the parliament.
• In the past few decades, many municipalities have lost a major portion of their population due to aging and migration, yet local governments are still required to ensure basic-level public services. The same regulatory framework is applied to municipalities whether they have a population size of 1,000 or over 30,000, hence leading to significant quality discrepancies in the provision of public services.50 Despite wide acknowledgment of the need for reform, the actual redrawing of municipal borders is highly contested. The new administrative-territorial divisions proposed by the national government often do not match the preferences of municipal leaders. On the other hand, it is clear that without pressure from above, many municipalities would not merge with their neighbors.51
• One major shortcoming of the current plan for regional reform is its failure to address the role of the largest municipal player, the capital Riga, which is home to about one-third of the national population52 and the source of 67.5 percent of GDP.53 The relationship between Riga municipality and the national government has been rather chilly for almost a decade, during which time the party Harmony has held the majority of municipal government seats yet is systematically excluded from the national governing coalition. This blockade has been an obstacle to finding solutions to many growing social problems, such as delivering an integrated public transportation system for the thousands who live in municipalities near Riga and commute to the capital for work.54
• The conflict between Riga municipality and the national government escalated during the year and will likely lead to the dismissal of the Riga City Council in early 2020.55 The weakening of Riga’s current leadership began in May, when mayor Nils Ušakovs and vice-mayor Andris Ameriks resigned after a corruption scandal involving the municipal transportation company, Rīgas Satiksme (RS).56 Their resignations were followed by a fragmentation of the municipal ruling coalition, which manifested in a series of chaotic decisions and internal conflicts.57 In early December, the national government used this opportunity to propose the dismissal of the Riga City Council. The formal pretext for this political move was the claim that the current council was unable to provide basic public services, namely, proper trash removal in the city.58

• Despite Latvia’s relatively independent and well-functioning court system, deep-rooted weaknesses in the judiciary became more apparent in 2019. These deficiencies manifested in complex and contradictory legislation, poor decisions taken in the lower courts, and disproportionately long procedures, especially in corruption cases against high-ranking officials and foreign bribery. The last is best illustrated by the 2018 money-laundering scandal involving the former head of Latvia’s Central Bank, Ilmārs Rimšēvics.
• Overall trust in Latvia’s justice system is low: only 45 percent of the general public perceives courts and judges as being independent. More than 30 percent of Latvians believe that judges are not independent from pressure from economic interests, government, and politicians, and there is an overall perception that court proceedings take an unreasonably long time, especially for financial crimes.59
• As reported by the European Justice Scoreboard, Latvia falls behind its neighbors in resolving administrative and civil cases in a timely manner. According to the latest data, administrative cases in Latvia take, on average, 248 days to resolve in a court of first instance, while the same type of proceeding takes only 119 days in Estonia, 129 days in Lithuania, and 146 days in Sweden.60 In October, the OECD issued a harsh report remarking that Latvia had demonstrated both a lack of detection of foreign bribery cases and the inability to bring these cases to the prosecutorial stage.61
• Furthermore, a relatively high number of lower-instance court decisions have been reversed in higher-instance courts. In 2018, 54 percent of first-instance court decisions in administrative cases were reversed on appeal,62 and the Supreme Court reversed about one-third of the second-instance court rulings.63 The low quality of first- and second-instance court decisions prolongs court procedures overall. More importantly, this allows for unrealistic demands to be pushed through first-instance proceedings in order to pressure opposing counsel to settle outside of court or to simply complicate and obstruct the processes of justice.64
• Particularly damaging to the public’s trust in the justice system is the slow pace in cases of large-scale corruption and money laundering involving high-profile figures, such as the case related to Latvia’s introduction of digital television (in courts since 2007),65 the case against the state electric company Latvenergo and its former head, Kārlis Miķelsons (investigation started in 2010),66 and the corruption case against the former head of Latvian Railways, Uģis Magone (investigation started in 2015).67
• The most notorious case of the year, however, is Aivars Lembergs, businessman and ex-mayor of Ventspils (of the conservative Union of Greens and Farmers), who has preserved his significant political influence while his case has been in court for over a decade. Thus far, the case comprises over 200 volumes of materials and includes 11 criminal charges. For the past decade, the defense has used legal loopholes to obstruct court proceedings to such an extent that the case is widely perceived as a farce.68 In December, the U.S. Treasury added Aivars Lembergs to its so-called Magnitsky list, imposing sanctions on him, his immediate family, and his businesses.69
• The recent case against Ilmārs Rimšēvics did nothing to help the overall mistrust in Latvia’s justice system. The public was assured that his arrest and suspension in February 2018 would be followed by immediate charges and a trial. Instead, after a yearlong delay by the Prosecutor General’s Office to press charges, in February 2019, the Court of Justice of the EU (CJEU) annulled the ruling and reinstated Rimšēvics as governor of Latvia’s Central Bank. For many, this illuminated the shortcomings of Latvian institutions, especially the Corruption Prevention and Combating Bureau (KNAB), to effectively investigate and prosecute high-level crime.70 In July, the prosecutor general charged Rimšēvics with accepting a €500,000 bribe from Trasta Komercbanka, a private bank based in Latvia, that included several money transfers and a paid holiday in Russia.71 Rimšēvics ultimately resigned from office in December at the end of his term.

• Corruption and money laundering were hot topics in Latvia throughout 2019, culminating in the U.S. Treasury’s Office of Foreign Assets Control (OFAC) adding the oligarch Aivars Lembergs to its “Magnitsky list” of corrupt officials on December 9.72 Apart from this international incident, several major corruption cases that had been smoldering for years were finally brought to public attention by the Corruption Prevention and Combating Bureau (KNAB). On one hand, this was a red flag about the level of corruption in the country; on the other, it could be viewed as an indicator of the improving effectiveness of Latvia’s anticorruption institutions. Unfortunately, the latest OECD report points to serious deficiencies in Latvia’s capacity to turn allegations of bribery into actual convictions.73
• The largest corruption scandal, both financially and politically, was the investigation into the capital city’s municipal transportation company, Rīgas Satiksme (RS). The incident began with the arrest of six people in December 2018 and involves a potential bribery scheme; the Polish company Solaris and the Czech company Skoda are suspected of paying €13–20 million in bribes over several years to secure favorable outcomes in three tenders for the purchase of trams, buses, and trolleys.74
• This case is in line with other incidents involving RS officials and the Riga municipality in rigged tenders over the past ten years. One other incident, the so-called Nano water affair in 2013, involved the delivery of plain water misrepresented as a €480,000 procurement of nanotechnologies for cleaning public transportation vehicles.75 The trial of four individuals accused in this scheme began in May.76 Another financially significant case was the rigged procurement of buses from the German manufacturer Daimler. Bribes totaling €5 million were received from 2002 to 2006 by several Riga municipal officials.77 Six people, including three former mayor’s advisers, are currently on trial in this case.
• Another investigation in September was initiated by a KNAB search of the headquarters of the country’s largest construction companies, which are suspected of forming a cartel to increase profits and fix prices in more than 100 public procurement contracts, including those funded by the EU. Currently, at least six individuals (five entrepreneurs and one politician) are potential suspects, but there is still little other publicly available information about this case.78
• In May, a new law on whistleblowing came into force, which seeks to encourage and provide protections for citizens who report such criminal activities as corruption, tax evasion, food safety infringement, work safety issues, and so forth.79
• Overall, corruption, along with patronage and nepotism, are perceived as the largest problems that individuals and companies face when doing business in Latvia. In the December 2019 Eurobarometer, about 80 percent of respondents identified these as problems, and 77 percent believed that corruption is a widespread issue in Latvia. The survey shows pervasive mistrust in the way that corruption cases are handled: about 41 percent of Latvians believe that people caught for petty corruption are appropriately punished, but only 17 percent believe that senior officials are held accountable for taking bribes.80

Author: Maija Spurina is Sociologist and a Postdoctoral Research Fellow at the Latvian Academy of Culture, a former Research Fellow at the Whitney and Betty MacMillan Center for international and Area Studies at Yale University.

Note

The ratings reflect the consensus of Freedom House, its academic advisers, and the author(s) of this report. The opinions expressed in this report are those of the author(s). The ratings are based on a scale of 1 to 7, with 7 representing the highest level of democratic progress and 1 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year. The Democracy Percentage, introduced in 2020, is a translation of the Democracy Score to the 0–100 scale, where 0 equals least democratic and 100 equals most democratic.