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Meet the Fighter for the Little Guy

2010
07.28

RIGA – The Harmony Centre, a collective of political parties, continues to be the most popular political bloc in the Latvia. According to the most recent polls, almost 20 percent of Latvia’s citizens support the Harmony Center (SC). The crew includes the former communist leader – who sought to overthrow the new-born independent Latvian government 20 years ago (now a member of the European Parliament) – people (the very last paragraph of the link) who call the 1940 Stalin’s electoral farce “free and fair” elections, which then led to the surrender of Latvia’s independence to Moscow. This crew naturally enjoys support among mostly Russian-speaking population. And it is within reach of power come the october contest.

It just needs a gentle push to reach into the despair of ethnic Latvians, who naturally are more on the left side of the political spectrum (after all, the Social Democrats were the dominant party of the interwar democratic republic – up until the 1934 coup).

Maybe gambling on that, the SC had declared itself the New Left. It has dubbed itself a political movement that stands on the economic platform, pushing Latvia towards an egalitarian society, a society where the wealth is more or less equally spread among different layers of society. It aims to be the party of the little guy. A Little. Latvian. Guy.

Funded by the SC is a think-tank group called Reform Task Force Latvia. It hired Western economists, like Michael Hudson, to speak about the evils of the international lenders – who currently pay for Latvia’s budget deficit – and the philosophy of “neoliberalism” that has been poisoning this country for the last 20 years. “Economic policy deployed since independence has failed to implement policies guided by the classical economic tradition that created prosperity in the Transatlantic region and East Asia,” its Web site hails. “Instead, Latvia’s independence coincided with the ascendency of the now proven failure of neoliberal economic policy that accelerated its underdevelopment.”

What looks great on paper doesn’t transform well into reality. The SC supported amendments to the banking regulations, which would have slowed down the splitting up of the Parex bank, a requirement from the European Commission. According to the CEO of Parex, Nils Melngailis, it would have left the taxpayers, including the little guys, on the hook. They would have to pay the Parex owners an interest, which amounts to as much as 4.6 million lats ($9 million) a year.

The bill died. The SC turned to the Constitutional Court yesterday to see if the financial regulation is constitutional, in an attempt to fight for the guys who pay their bills.

Fighter for the little guy, they’re not.

Category Politics |

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2010
07.27


RIGA – I have wondered who was behind the new eased restrictions on residence permits to Latvia. Apparently, it’s Rietumu Banka.

Category Beyond Latvia, Wacky Neighbor to the East |

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Ansip finishes Baltic tour

2010
07.13

Ansip’s meeting was part of a short tour through Latvia and Estonia in which he met with his government counterparts as well as prominent businessmen.

via Ansip finishes Baltic tour.

Hadn’t realized the Prime Minister of Estonia toured through, ahem, Estonia.

Category Doesn't Fit Anywhere Else |

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We could learn from our neighbors

2010
07.12

RIGA – A teacher visits her students’ parents, who are behind on the utility bills. Her job is to urge the parents to pay on their debts and help the state to balance its budget.

Tax collectors, auditors, police officers’ salaries depend on how many fines they issue during their shift.

The once-or-twice-a-year audit of a business now becomes a monthly affair.

Someone stole a t-shirt from a supermarket. Someone else called the police. The authorities sealed the premises, conducted an audit of required documents for the goods at the store. The audit revealed some goods lacked proper documentation, which resulted in the confiscation of the goods. The goods were later resold at a state-owned second-hand store. Luckily, the supermarket’s owner knew when and where those goods would be delivered, so he bought them back at a cheap price, adding his two cents to the state treasury.

Journalists are required to subscribe to the state-owned newspapers where they work. They are also required to force their friends and relatives to subscribe to the newspapers.

Belarus, where this is a common place, is in need of hard cold cash to balance its budget. Minsk is running out of options as its relationship with Moscow has recently soured. And Minsk is not keen on adhering to the EU’s democratic principles, especially ahead of the 2011 presidential elections.

The three Baltic states stand as bastions of freedom and democracy, eager and willing to share their somewhat awkward transformation experience with their neighbors. The three small countries transformed from the Soviet-era command economy into the market paradise pretty quickly. They left the Soviet Union and join NATO and EU. Often, politicians and human rights from the Baltic countries travel to georgias and ukraines of the former Soviet Union to share the experience. Other times, politicians from over there come here to learn – or just drink beer at the Dome Square, or sunbathe at the Jurmala beach.

Maybe now, it’s time for Latvia to learn to balance its budget by means other than budget cuts and tax hikes?

P.S. According to Belarus’ own statistics, 77 percent of the state-owned enterprises are unable to compete on the global market. So, relying on the economy to bring much needed revenues to the state coffers is a waste.

Category Beyond Latvia, Economy |

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2010
06.02

RIGA –  Every once in a while, it’s good to return from hiatus to point out the stupidities of the pre-election life in Latvia. Things in Latvia are so bad that even a fake letter from the head of the IMF Dominique Strauss-Kahn appears as a result of the work of some amateur and incompetent goon, who perhaps serves the people interested in instability head of the elections.  It was reported that the head of the IMF allegedly urged Latvian authorities to move towards “the mini-devaluation” in the letter that appears to be an answer to someone in “the Republic of Latvia.” The letter, which you can see here, had no proper letterhead and subtle grammatical errors.

“We are confident,” the letter said, “that in the long run a[sic] timely decision on this matter will certainly be satisfying to all sides. I would appreciate an [sic] immediate information about progress in your discussions about the widening of the fluctuation band of the Latvian currency against EUR. It will improve the basis for our following in-depth negotiations.”

The letter’s concluding paragraph says, “I am certain that only working in the spirit of mutual understanding and cooperation we can fasten[sic] the overcoming of the crisis in your country.”

Articles, such as a and the, have never been popular among non-native speakers from Latvia. Just read this blog.

Coincidentally, the People’s Party re-discovered the former guarantor of stability and former prime minister Aigars Kalvītis, who was probably stuck in the closet somewhere until the better times would come. He admitted some of mistakes while he was in the office. Kalvītis said the government should have devalued the currency, widened the  corridor to plus/minus 15 percent to help the country get out of the crisis. I can’t say whether it was right or wrong to keep the currency peg, but it appears to be rather interesting that he came out with it at the same time as the letter began circulating suggesting the very same thing.

Category Economy, Politics, The Dombrovskis government |

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2010
04.23

RIGA – Fearing their impotence after the October elections, two political heavyweights have announced this week they were consolidating forces. The former Prime Minsiter, Andris Šķēle and the Prime Minister Wanna-Be Ainārs Šlesers are going to be on a single ticket. The new bloc, temporary nicknamed (A+Š)2 will counterweight the Dombrovskis’ Unity movement.

To me, it is clearly a marriage of convenience. Šlesers needs a rural vote to gain seats in the 100-member unicameral parliament. He did fairly well in Rīga last year in the municipal elections, but his party – which attracts both Latvian and Russian votes – has no network outside large cities. Šķēle needs to keep his political project, known as the People’s Party, afloat in spite of the abysmal ratings.

I couldn’t help but compare this duo to the Putin-Medvedev tandem. The two leaders could hand-pick one to be the prime minister after the election, and next year – when President Zatlers comes up for a vote in parliament – vote into the Rīga Castle another leader. Their supporters often say publicly that Latvia is in need of a strong leader; it is in need of a Great Leader. Latvia needs its own Putin, they say.

“Latvia’s most significant problem until now was a lack of personalities,” Ēriks Stendenieks was quoted by Diena. “Andris Šķēle and Ainārs Šlesers – however controversial they would not be – in synergy can give more than lukewarm people. Those who can predict the future events further than two weeks ahead are either fools or charlatans.

Speaking to journalists in the parliament, Šlesers was as verbose as usual, chiding journalists for asking difficult questions. Often seemingly contradicting himself.

“You don’t have to talk about the past,” he said. “You have to talk about the future.” At the same time, he pointed to experience of his party members, like Andris Bērziņš, who had served as the prime minister in the 2000s.

Surely, Šlesers wouldn’t want to talk about the past. The man penned the now infamous editorial in Diena back in 2004, urging to push the pedal to the metal. The pro-Šlesers movement with the cynical name “For a Better Latvia” recently pledged to raise an average salary in the country to € 3,000, which some economists called it practically impossible (the text is behind registration). It would lead the country to the worse overheating as the so-called “fat years” of boom. It would mean that “the economy should grow equally fast and the annual growth rate of GDP would thus have to be 16.3%”

“As I understand the organization would like to see Latvia develop into the best small economy in Europe. It is a laudable goal but rings very hollow with these ‘pie in the sky’ “projections”. Getting the numbers right would be a good start. “

As the fruits of their past labor have now become a reality, the newly formed union faces a tough sell to the undecided voters. So, instead, they’re offering pie in the sky, feeding the electorate with empty promises.

The election season is upon us.

Category Parliament, Politics |

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Anniversary Crashed Down

2010
04.21

RIGA – Most things in Latvia seem to occur randomly and often unexpectedly. Take, for example, last week’s failed re-election of the prosecutor general Jānis Maizītis, whose term in office expires on May 11. The political establishment had said they pulled their support behind the only candidate for the prosecutor general. On TV hours before the vote, political leaders one by one said they would vote to re-elect Maizītis, who has been serving his two five-year terms as the prosecutor general since 2000.

Instead, they pulled “Et, tu, Brute?”

It came as a surprise to Maizītis himself, who, following the vote, issued a thinly-veiled threat to make reveal dirt on a few members of parliament. It could serve as a ticking time bomb ahead of the October election.

So, in Latvia, one can never be sure of a political game’s outcome. Words often don’t mean anything. In spite of the progress made so far, risks to the IMF-led three-year loan program remain very much real. Even though one opposition party offered its support to the government, the risks to the stability of the minority government of Valdis Dombrovskis remain high.

It would take a fortune-teller to predict how it will ends. But in case of Latvia, even if you thought one can make a reasonable expectation that a certain event may occur, it still comes as a surprise, forcing Latvia to perpetually react to events rather than prepare for them.

For example, in 13 days, Latvia will be celebrating the 20th anniversary of the restoration of its independence from the Soviet Union. The government plans a series of events celebrating the event as the democracy in today’s Latvia has surpassed our first democratic experiment before the Second World War.

The anniversary of the restoration of independence came as surprise to two young Latvian girls on the street. Seeing streets adorned with national colors, the girls became confused.

“What’s the date today?”

“April 21″

“What are we celebrating?”

I helped them out.

“Ah, sorry. We live in ignorance,” they said.

Apparently, so did the government. The anniversary came as a surprise to the cash-strapped Latvia plans to spend (the link is in Latvian) almost 240,000 lats (US$480,000) on the festivities from the fund for “the unforeseen events” in the state budget. Or a rainy day fund. Any one with a calendar could point to May 4 and tell you that it is the anniversary of the restoration of Latvia’s independence (This video of the Singing Revolution is here). But apparently, the public officials couldn’t account for it in within their existing budgets.

Better yet, the fund has become the cash cow for ministries. Last year, the government even paid out salaries from the fund. Out of original 16.4 million lats earmarked for the fund this year, the government has already spent 9.95 million lats. And it’s only April.

Category History, The Dombrovskis government |

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Good versus Evil in Kyrgyzstan

2010
04.08

RIGA – “Which ones are ours?” asked a friend of a friend in an online chat yesterday. “For whom should we root?”

Kyrgyzstan’s Bishkek may be 3,850 km away from the capital of Latvia, but it doesn’t stop a group of us from following what can only be described as the civil war between the government and the opposition, the drunks and the sober, the looters and the angry shop owners. We have a mutual friend who is stuck in his fifth-floor Bishkek apartment, worrying about his Friday’s flight back to Riga.

Will the airport be open? Will they let flights out? Should he be calling the German consulate that would be responsible for getting EU citizens out in case of emergency? He is one of the 13 Latvian nationals in the Kyrgyz capital. And thirteen is not a lucky number.

The inaugural quote above reflects a firm belief that this world is divided between Good and Evil. It is as if the world is a black-and-white fairy tale, or a film featuring poorly-developed characters. We’re supposed to have the good guys, who would create the order in the country and the bad guys that only care for themselves. Once we figure out who is who, we can pull our wholehearted support behind them.

We saw that during the August 2008 “warette” between Georgia and Russia. We saw it during the Orange Revolution in Ukraine. Even the 2005 Revolution in that same Bishkek brought the current president Kurmanbek Bakiyev to power. The good guy turned sour.

Perhaps, this is why Russians espouse an interpretation of World War II that features Nazi Germany as pure inexcusable Evil, while the good side’s crimes, or mishaps, can be justified simply because they are the Good Guys. Perhaps, this is why Glenn Beck is so stinkin’ popular.

Once you figure out who is who, the news narrative is much easier to write if it’s a battle between democracy fighters vs. dictatorship terrorists. A people rising up against a government avoids any complexities of an explanation of the nuances. And it justifies the drive of the people to violence, even though some just want free booze, which is why they looted a liquor store.

So, it explains why Latvia took a conciliatory tone.

“I believe that violence is not justified in any situation,” Latvia’s foreign minister Maris Riekstins said in a released statement. “The potential for a dialogue between the government and the opposition is by no means exhausted, and I call upon both sides to make maximum use of that,” he said.

We come from a country that staged the Singing Revolution and that have held subdued protests against the government’s austerity measures. With the exception of the 2008 January riots in Riga and the Bronze Soldier in Tallinn, the Baltics have seen little public violence.

Category Beyond Latvia |

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Another challenge for Dombrovskis

2010
03.22

Prime Minister Valdis Dombrovskis speaks the media. Photo courtesy of Valsts Kanceleja.

RIGA – Speaking recently at a press conference on the eve of the first anniversary in office, Prime Minister Valdis Dombrovskis said the power “fell at his feet” after the political parties in the previous coalition avoided taking leadership of this country in the middle of the worst economic disaster of the last 20 years. He picked up the baton, doing what needed to be done – however unpopular it was – explaining to the public why his government has had to make tough choices that don’t win elections.

If one is to believe the polls, his tenure as the prime minister so far has been a successful one – people generally have the impression that Dombrovskis, 38, is trying to do the right thing for his country. According to a poll by GFK, 41 percent of the public support Dombrovskis, a high degree of popularity for the prime minister amidst lack of credibility to the government and the most severe economic crisis since Latvia broke free from the Soviet Union in 1991.

Today as four ministers from the leading and bleeding People’s Party submitted their letters of resignation, it created another golden opportunity for Dombrovskis to show his skills for compromise and creativity in search of a political consensus, ahead of the October election. A crisis fosters creativity. For the first time in Latvia’s modern history, political creativity and the government’s ability to negotiate with opposition and seek consensus will be important in the coming six months.

And it began at the end of last week, when Dombrovskis met with the motley crew, known as the Harmony Centre. The Dombrovskis’ coalition is planning a meet with Šleserites from Latvia’s First/Latvia’s Way this week. He’s also meeting with the pro-Russian PCTVL, trying to round up support for the government’s initiatives that would not jeopardize the 7.5 billion euro program. In one sense, the future of this country depends on him.

Category The Dombrovskis government |

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