Nations in Transit - Latvia (2006)

Capital: Riga
Population: 2,300,000
Status: Free
PPP: $4,400
Private Sector as % of GNI: na
Life Expectancy: 72
Religious Groups: Lutheran, Roman Catholic, Russian Orthodox
Ethnic Groups: Latvian (57 percent), Russian (30 percent), (4 percent), Ukrainian (3 percent), Polish (3 percent), other (3 percent)

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 terminated abruptly 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 president Mikhail Gorbachev on August 21,1991.

The road to a fuller democracy, a functioning 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. Yet problems brought about by these revolutionary changes persist.

The pessimism of the immediate post-independence period in Latvia has waned, but a new polarization between the growing middle class and those who have not been able to partake in the economic upsweep has resulted in tensions and discontent. Riga and other larger urban areas have experienced a disproportional share of this new prosperity, leaving rural areas, particularly in southeast Latvia, in painful economic doldrums. The stresses and strains of an unaccustomed market economy and the burden of welfare now resting on individual shoulders have created widespread anxiety and wistful nostalgia for a past when life was less complicated. Only 60 percent of Latvia's inhabitants indicated in a fall 2005 Eurobarometer survey that they were satisfied with life, compared with an average of 80 percent for all European Union (EU) member states. In June 2004,63 percent claimed that 15 years earlier, when Latvia was ruled by the Communist Party, their "material situation" was better. At the same time, only a tiny fraction would want to return to a Communist regime.

Great expectations for economic growth and security have been raised by Latvia's entry into the EU on May 1,2004, and its membership in NATO in March. Latvia is slowly becoming accustomed to being part of a larger, more prosperous community and to being militarily secure. Over 50,000 people from Latvia have made use of the open borders to find work in other EU countries, and 26 percent of those polled are considering working abroad.

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 abuses of power, and Latvia's political system functions well despite a perpetual series of coalition governments. The continuity and regal character of the presidency have made this position one of the pillars of political stability.

The economy continued to develop at a dynamic pace, reaching a gross national product (GNP) growth rate of 10.2 percent in 2005 and thus continuing the growth rate of previous years. 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; nevertheless, some problems persist – chiefly corruption, poverty, and relations between citizens and noncitizens over language and other issues.

National Democratic Governance. On May 1,2004, Latvia became a member of the EU and can participate with other democratic regimes in setting common parameters and standards. The republic is receiving substantial aid from the EU, which is helping to raise the efficiency and public responsiveness of the state service. In contrast with the situation in 2004, in 2005 the four-party coalition government was relatively stable. There is a broad consensus on most areas of policy among the main governmental parties, which can best be categorized as center right. As in most parliamentary democracies, the Cabinet of Ministers initiates about 70 percent of all legislation and sets the agenda for voting. The Parliament, however, can and does modify legislation and at times has taken independent action. The public can access agendas and protocols of the meetings of the cabinet, the cabinet committees, and joint meetings of the state secretaries of ministries, who are the highest civil servants. 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. The national democratic governance rating improves from 2.25 to 2.00 owing to the government's stability.

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 (OSCE) to have achieved a "clear entrenchment of the democratic election process." In 2004, Latvia voted to elect 9 deputies to the 732-member European Parliament. Turnout was relatively low at 41.2 percent, which was somewhat better than the average of 26.4 percent for the new democracies that recently joined the EU. The elections were considered to be fair, and no irregularities were reported. Municipal elections in 530 constituencies in March 2005 went smoothly, but voter participation was down to 52.8 percent, a drop from 62 percent in 2001. Latvia's electoral process rating remains at 1.75.

Civil Society. The activity and visibility of NGOs in Latvia continued into 2005. In part, this has happened as a result of the growing democratic maturity of the society, but certain events and appointments have also acted as catalysts for NGO resurgence. Membership in the EU and the possibility of funding from this source has spurred many civil society groups to become more organized and cooperative with other groups and specialists. Latvia's civil society rating remains at 1.75.

Independent Media. Latvian mass media have remained diverse, competitive, and buoyant. The ownership of certain media, however, is still nontransparent, leading to allegations that these outlets are controlled by oligarchs. Although there are two distinct linguistic media communities, there is some overlap of audiences, especially in broadcasting. Many people also have access to television programs from other EU countries. Latvia's independent media rating remains at 1.50.

Local Democratic Governance. Latvia is in a quandary with respect to local governments. There are over 500 small units, but people are reluctant to amalgamate into larger, purportedly more efficient units proposed by the government and supported by many world organizations and thus lose the personal intimacy of established relationships. Local governments traditionally receive better ratings and higher trust than national structures, but there is a growing gap between the broad array of responsibilities of local governments and their limited financial and human resources. As well, there is a wide gulf between the wealthier and less endowed municipalities, leading to geographic inequity in service provision. Latvia's local democratic governance rating remains at 2.50.

Judicial Framework and Independence. The status, pay, and number of judges in Latvia continue to increase. In February 2004, Latvia initiated an administrative court system providing flexible oral or written adjudication of conflicts between the population and tax officials, police officers, welfare assessors, and, indeed, all government structures. This has diverted a significant number of cases from the main legal structures, thus shortening the pretrial waiting period and detention time. Other positive changes include a growing number of courtrooms, the move toward total computerization, public access to court cases, prison reforms, and the respected performance of the Constitutional Court. However, the high incidence of prolonged pretrial detention and partial access to legal aid by the poor for civil cases are ongoing problems. Latvia's rating for judicial framework and independence remains at 1.75.

Corruption. Latvia's Corruption Prevention and Combating Bureau has overcome most of its initial problems of leadership, funding, and cohesion, and its authority has improved noticeably in the population and among other state institutions. While allegations are relatively limited about corruption in the middle and lower levels of administration, there are unproved but continuous rumors of backroom deals made by Latvian and Russian oligarchs with top state administrators and politicians. The charges of "state capture" first formulated by the World Bank in 2000 remain unproven and unresolved. The rating for corruption improves from 3.50 to 3.25 owing to the Corruption Prevention and Combating Bureau's success in overcoming the initial problems of instability.

Outlook for 2006. In 2006, Latvia will continue to consolidate its position in the EU and NATO. There is a mood in the country for governmental continuity, and the new four-party coalition ratified on December 2,2004, could be pressured by public opinion to continue governing until the end of the current Parliament in October 2006. State institutions will continue to function with increased efficiency owing to new EU guidelines and funding. Russian-Latvian relations within the country will experience some buffeting, but there seems to be a will by both sides to lower tensions. Rapid economic growth in the heartland will create even more discontent in the hinterlands, where stagnation will deepen. More individuals are expected to leave Latvia to work abroad. Many of these, especially Russophones, will not return to Latvia.

Electoral Process (Score: 1.75)

Latvia is a parliamentary democracy, and elections to the 100-member Parliament are held every four years. Deputies are elected proportionally from party lists in five large electoral districts. Only party members determine the ranking of names on the electoral lists, but voters have the right to rearrange the ranking on their chosen party list 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 OSCE/Office for Democratic Institutions and Human Rights observed the elections to the eighth Parliament on October 5,2002, and two weeks later issued its 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." Voter participation rate was 72 percent of those eligible to vote, continuing a tradition of relatively high turnout observed in previous elections.

In March 2005, Latvia had 62 officially registered political parties. All Latvian political parties have a weak membership base, hence their almost total dependence on expensive media advertising. Indeed, only 0.9 percent of the voting population, or 15,000 people, are party members, giving Latvia one of the lowest participation rates in Europe.

During the 2002 elections, only six parties were able to exceed the 5 percent threshold for representation in the Parliament. However, the leading party, New Era, gained only 26 out of 100 seats. For Human Rights in a United Latvia received 24 seats, People's Party 21, Latvia's First Party 10, Green and Farmers' Union Party 12, and Fatherland and Freedom 7. The parties not able to surmount the 5 percent barrier gleaned 15.9 percent of the votes. The next national elections will take place in October 2006.

Latvian presidents are chosen for a term of four years by the 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 Vike-Freiberga. She was first elected by 53 Parliament deputies in June 1999 and in 2003 received 88 votes of support – 6 deputies opposed.

Latvia joined the EU on May 1,2004, and became a participant in the third supranational level of elections to choose 9 deputies out of a total of 732 for the European Parliament. Elections were held on June 12. Voter participation was relatively low at 41.23 percent, which, however, is close to the 45.3 percent average for the 25 EU states.

On March 12,2005, Latvian citizens were able to elect local government representatives in 530 constituencies. Turnout in these elections was 52.85 percent, much lower than the 62 percent rate in March 2001 but a comparatively high rate for local elections throughout the Western world. In many rural constituencies, there were only single slates without any competition. In Jurmala, however, 315 candidates ran to fill 15 seats, and in Riga there were 844 candidates for 60 seats. The executive heads of about a fifth of the local governments were replaced as a result of the new election.

Campaign spending during these elections was monitored by the NGO Providus, which found that three parties had overspent their allowable limit. It should be noted that in all constituencies of over 5,000 people, only registered political organizations may submit candidate lists. The Corruption Prevention and Combating Bureau (KNAB) reviews political party annual reports, which contain lists of financial donors and can fine parties for illegal donations, tardy submission of reports, and improper bookkeeping. They can also initiate deregistration of parties. In 2005, the KNAB fined 18 parties and started court proceedings against another 15 to terminate their activities as political parties. One of the key features of Latvian national elections is that all registered political parties have 20 minutes of free access to all state-operated television and radio outlets.

Civil Society (Score: 1.75)

NGOs are protected and regulated by the Latvian Constitution, the 1992 legislation "concerning public organizations and their associations," and two new laws on public organizations passed in 2003 and 2004. The new laws required NGOs to reregister by December 31,2005, in order to provide them with a formal status for state support and tax deductions. There are fears that many organizations will not fulfill the requirements of this new process and will lose their official recognition and accreditation.

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 establish and finance the NGO Center in Riga, which 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 the 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.

According to the NGO Center, which does not generally service church or sports organizations and unions, about 70 percent of civil society 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, according to the newspaper Diena. The NGO Center claims to interact with about 1,000 different NGOs. There are, however, new centers in other cities such as Aluksne, Talsi, and Ventspils. A new NGO center designed to service about 250 minority ethnic organizations was opened on March 26,2004, in Riga. Another ethnic organization center was opened in Daugavpils in 2005, a project funded by the European Union's Phare program.

The September 2004 polling survey for the How Democratic Is Latvia: Audit of Democracy indicated that 61.9 percent of the population was not involved in any NGO activities. The participation rate in the various types of organizations did not differ much among ethnic groups. At a time of apparent ethnic turbulence concerning education reform in Russophone schools in 2004 and 2005, participation in ethnic minority organizations was relatively low among Russians (1.9 percent) and others (3.4 percent). Women's groups accounted for 1.5 percent of NGO members among Latvians, 1.6 percent among Russians, and no rating among others. Much inspiration for women's groups has come from international sources, where women's issues are far more prominent and more actively articulated.

Nevertheless, according to How Democratic Is Latvia, there is a significant increase in the number and cooperation of women's groups in Latvia. The Coalition of Gender Equality was formed in 2000, and in 2003 the Women's Network of Latvia was founded by 33 groups, which increased to 40 by 2004. It is noteworthy that this coalition is a member of the European Women's Lobby, which claims a membership of over 4,000 organizations throughout the EU. A reflection of the growing presence of women's NGOs can be gauged by the September 2004 adoption of the Program for Implementation of Gender Equality (2005-2006) by the government.

One of the major changes for NGOs in 2005 was the much more active and committed involvement of the Latvian government in supporting the expansion of NGO activities. In February 2005, the government proposed detailed, long-range and middle-term national programs: Basic Outlines Strengthening Civil Society 2005-2014 and Strengthening Civil Society 2005-2009. These programs of group education, motivation, inclusion in decision making, and sustainability have now become the key policy priority of the Ministry of Special Issues and Social Integration. For the first time as well, the ministry has planned to fund NGO activity in 2006. Part of the reason for this funding is the need to facilitate NGO access to EU matching funds programs and grants. The ministry has also engaged a dozen representatives of NGOs as a consultative work group to participate in its regular meetings discussing EU structural funds.

In June 2005, the Latvian government signed a memorandum of cooperation with 50 NGOs, providing the option for other groups to sign and join in this venture. Coordination of this project has been left in the hands of the State Chancellery.

Group activities are becoming increasingly more visible and, with new support from the state, are also becoming more accepted by the general population. Many professions, such as education, medicine, and the police force, have mobilized their members to further their professional interests and increase their salary levels. In spite of existing problems, the depth and breadth of civil society is increasing. Indeed, Latvia has sent its NGO representatives to Georgia, Moldova, and other states of the former Soviet Union to share its experiences in successful NGO and goal attainment.

Financing of civil society activities is still the greatest problem, because private philanthropy has not yet become a tradition. Local communities such as Talsi have been able to mobilize citizens to participate in group activities. In 2005, the Talsi district had recorded 181 NGOs with a membership of 2,392 and had published a catalog of all volunteer groups.

Traditional Christian groups of Lutheran, Catholic, and Orthodox members 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 of the population) have limited the scope of their initiatives. 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. 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 2005, no group seriously threatened political or social stability in Latvia. However, several incidents created major polarizations in society. The Latvian Legion war veterans who had fought in the German armed forces in World War II were given permission to hold a parade on March 16. Many people, especially Russophones, saw this march as a nostalgic reinforcement of Fascism.

Greater controversy was created in July in Riga by the Gay Pride parade, which was originally allowed and then vetoed by the Riga City Council but on appeal was allowed by the courts. Gays and their supporters were frequently booed and even pelted by bystanders. Most religious leaders and many politicians expressed their opposition to this parade in the media. The Gay Pride procession assembled in the Riga Anglican Church, where a religious service was conducted by Juris Calitis, dean of the Faculty of Theology of the University of Latvia. This sparked acrimonious debates within the Latvian Lutheran Church, where homosexuality has been proclaimed a sin. Consequently, Calitis was expelled from the Latvian synod in November 2005. Some politicians reacted by beginning procedures to enshrine in the Constitution the definition of marriage as between a man and a woman and are planning to use this issue in the October 2006 elections.

Civil society does not mean the absence of conflict or the resolution of all disagreements but, rather, stresses the peaceful resolution of such disagreements. There are broad differences of opinion between Latvians and Russophones. The vast majority of Latvians are opposed to Russian as a second state language (77 percent) and in favor of the educational reforms in Russian schools (76 percent). Among Russophones, 84 percent are in favor of the first item and 68 percent are opposed to the second. In spite of such diametrically opposite positions, there appears to be a certain reserve of goodwill within both groups in the almost unanimous support by Latvians (93 percent) and Russophones (97 percent) of the idea that "we must respect the national culture, religion, and traditions of all groups in Latvia even if these are very different from ours." Two-thirds of Latvians were even willing to allow state support for the protection of different ethnic cultures and traditions.

Independent Media (Score: 1.50)

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 to be in the Latvian language in any 24-hour period. This repeal means that the language of broadcasting will be determined solely by market considerations. New controversy was raised when legislation was introduced in the Parliament that would have given supervision rights over the media to the Ministry of Culture.

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 Internet. According to Latvian sources from April 2005,34 percent of the population accesses the Internet. A significant development has been the virtual explosion of Internet use by young people spurred by the "friends network" (draugi.lv), which allows people to place recent photos in a "show and tell" fashion to contact old classmates and correspond with friends of friends. For a relatively taciturn culture, this program has now assembled a surprising 10 percent of the entire Latvian population, or 230,000 participants.

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 21.2 percent of viewers, followed by TV3 with 16.3 percent. The state-owned LTV1 has a 11.6 percent share, and LTV7 has a 6.4 percent share. The state TV has regained its audience share after expanding its viewing hours. The viewer share of other stations is as follows: PBK 8.7 percent, TV5 Riga 3.4 percent, and other stations 32.5 percent.

Radio is dominated by state ownership. Latvijas Radio, with its four different services, claimed 48 percent of the total audience in the spring of 2005. Latvijas Radio 2 holds a solid 27 percent; it broadcasts mostly Latvian music, with a sprinkling of English-language country and western. Latvijas Radio 4 broadcasts in Russian and claims 8 percent of the total audience. Software House, with a 16 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 2005 were Diena, Latvijas Avize, Vesti Segodna and Chas (both Russian), Neatkariga Rita Avize, and Vakara Zinas, according to TNS Latvia, a subsidiary of one of the world's largest market research companies. 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. In 2004, its printed pages diminished from 24 to 16; and in 2005, its share of Russian readership was only 7 percent.

Indeed, both major linguistic groups live in their own media space, and few read or view the other's publications and broadcast media. 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. A 2005 study by the Baltic Institute of Social Sciences, Ethnopolitical Tension in Latvia: Looking for the Conflict Solution (available in English on the Internet), analyzed the response to educational reforms by both the Latvian- and Russian-language media. This study concluded that "press publications in Latvian and Russian offer different information, different interpretations of events, and different views. What is more, they are often tendentiously negative vis-à-vis one or the other sociolinguistic group." The study points out that the mass media serve as "organizers and disseminators of ethnopolitical discourse in society."

According to this study, there is not much overlap in media readership between the two linguistic groups. This is especially true with regard to newspapers. Thus, the Latvian newspaper Diena, which is read regularly by 35 percent of Latvians, is read by only 7 percent of Russians and 8 percent of others. The leading Russian-language newspaper, Vesti Segodnya, is read by 24 percent of Russians but by only 3 percent of Latvians. A somewhat less polarized pattern can be seen in broadcasting. Among Latvians, 59 percent listen to radio mostly or only in Latvian, 25 percent listen more frequently in Latvian than Russian, and 10 percent prefer the Russian stations. Among Russians, the equivalent pattern was 53 percent, 25 percent, and 10 percent. In television, there appears to be even more overlap. Among Latvians, the equivalent rates were 43 percent, 42 percent, and 13 percent, and among Russians 49 percent, 35 percent, and 13 percent. In other words, over one-half of each group watches the "other's" programs.

Both local and foreign firms and individuals own a share in the Latvian mass media, but exact ownership patterns are not always transparent. The largest shareholder in Diena is the Bonnier Group of Sweden. The privately controlled oil corporation Ventspils Nafta owns three and possibly four of Latvia's daily newspapers. The chief representative of this corporation is Aivars Lembergs, mayor of the city of Ventspils and one of the leading oligarchs of Latvia. Yet who exactly controls Ventspils Nafta is publicly unknown. In the Russian media, Vesti Segodnya and Komersant Baltic are owned by Andrey Kozolv and his mother; however, their assets are mortgaged at the Parex Bank, leading to speculation as to the real influence on these papers. Another publisher of the Russian press is Aleksey Sheinin.

The Bonnier Group, besides controlling Diena, has interests in one-third of Latvian regional newspapers as well as the only business daily in Latvian, Dienas Bizness, and in the Baltic News Service. It also controls one of the largest media distribution and subscription companies and large printing facilities. Narvessen, a Scandinavian company, controls 60 percent of Latvia's retail publication outlets, having bought out hundreds of independent booths, whereas 80 percent of the press wholesale market is controlled by Preses Tirgus. It is noteworthy that the national Broadcasting Council of Latvia has called for a law that would register the real physical owners of the media.

The distribution of mass media advertising expenditures in the first half of 2005 was predominantly focused, not surprisingly, on television (38 percent) and newspapers (28 percent). The other media share was 14 percent in journals, 11 percent in radio, 6 percent in outdoor advertising, 3 percent on the Internet, and 1 percent in film. The 17 percent increase in total ads over the same period in 2004 reflects the rapid growth of the economy and consumerism. A new twist in advertising was introduced in 2005. Cigarette ads in media and sponsorship programs by tobacco companies were disallowed.

Journalists and media outlets are able to form their own viable professional associations, such as the Latvian Journalists Union and the Latvian Press Publishers Association. In Freedom House's 2005 Freedom of the Press survey, Latvia was ranked in the second highest group of "Free" media. The mass media still obtain the highest levels of trust of any Latvian institution. Thus, TV is trusted by 66.7 percent and newspapers by 59.9 percent of the population. Only the church and president come close, with 59 percent and 59.4 percent, respectively.

Judicial Framework and Independence (Score: 1.75)

Latvia's Constitution provides protection for fundamental political, civil, and human rights, and on the whole these are respected by authorities and the general population. Latvians are guaranteed equality before the law, but in practice not all Latvians have equal access to justice. Over 80 percent of litigants in civil cases act without the help of lawyers. This inevitably skews the results of judgments in favor of wealthier citizens who are able to afford legal counsel. Some legal help is provided by the Latvian Human Rights Bureau. Currently, state legal aid is made available in all criminal cases but only a small proportion of civil cases. Such aid for civil cases was budgeted for 2005 to cover about 25 percent of all litigants who fell below a given poverty line.

Prosecutors are independent but have been criticized by politicians and ministers, subjecting them to pressure to investigate particular issues. 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.

The 2003 Law on Court Executors (bailiffs) was 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 are subordinated directly to the courts. Nevertheless, new cases of corruption and bad judgments by leading court executors in 2005 have precipitated calls for further changes and a stricter overview of their activities.

One of the long-standing criticisms of Latvia has been the large number of prison inmates who are awaiting trial or have not yet been sentenced. In January 2005,33 percent of the country's inmates were being held in pretrial detention, according to University of London data.

Latvia has a relatively high rate of incarceration – 337 prisoners per every 100,000 persons. In January 2005, there were 7,796 prisoners in 15 institutions. Among inmates, only 5.3 percent are women and 2.9 percent juveniles under the age of 18. The 2004 incarceration rate per 100,000 persons was 339 for Estonia, 234 for Lithuania, 726 for the United States, 564 for Russia, and only 66 for Finland. Rates in Western Europe are much lower than in Latvia, averaging about 100 per 100,000 persons. Most of Latvia's prisons are about a century old and require major improvements. The Ministry of Justice has planned to rebuild and modernize all prisons between 2006 and 2014, a task that will cost 52 million lats (US$91 million USD). Furthermore, the ministry plans to create a special college for prison workers to raise their qualifications. About 60 percent of inmates in the Baltic republics suffer from health problems and depression, and most inmates have trouble finding jobs after release.

One of the major justice problems in Latvia is the long waiting list for trials. Much has been done to alleviate this situation, but the problem persists. In 2003, a new Riga courthouse with 20 courtrooms was completed. Two other court buildings 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. On February 1,2004, the new administrative court system began operations in Riga with 28 judges. Its major responsibilities include the adjudication of disputes and conflicts between the population and national or local public servants, including police officers. Formerly, such cases were handled by regular courts. Other regional administrative courts are scheduled to open in 2006. Until then, litigants must travel to the capital city or move and engage their case by correspondence, one of the innovative advantages of this type of court system.

Other changes are also affecting court loads and improving the quality of judgments. 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 minister of justice has also added 15 new judges to the Riga regional courts. In September 2005, there were 436 judges in Latvia; 75 percent are women. The various changes in the court system have had a positive impact on the disposition rate of criminal cases. The procedure for selecting judges 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 a 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. The pensions of judges were also raised in 2005, allowing for the payment of 80 percent of individual average wages while on the bench, providing more peace of mind and lessening the allure of bribes.

Latvian courts have often been accused of corruption, but only a few individual judges have ever been convicted or admonished about corrupt actions or perceptions. The minister of justice, Solvita Aboltina, pointed out in April 2005 that one of the key sources of such complaints was the Riga regional court, which darkened the reputation of all courts, even though no worries about dishonesty existed outside of Riga. This general observation led to the resignation of the Riga court chairperson, Janis Muiznieks, and to the boycott of the annual justice conference by the court's 46 judges, who felt that they had been unjustly stigmatized. In turn, Prime Minister Kalvitis sent an official note of reprimand to the minister of justice for having made such pronouncements without any concrete proof.

The whole issue was a catalyst for debate on the Web site www.politika.lvabout the honesty of the courts. Almost all interviewed judges indicated that there were only a few "bad apples" and that their reputation of widespread corruption was unwarranted. In part, they blamed the media for not fully assessing all aspects of a case and noted that the tremendous caseload of the Riga court did not allow for more extensive elucidations on decisions. Mild sentences for attempted bribery, narcotics offenses, and prominent individuals feeds the popular perception of collusion and secret payments. Nevertheless, Ivars Bickovics, president of the Association of Judges and head of the Supreme Court's criminal section, pointed out that it would be impossible to bribe all three levels of judges and that no judges appear to be living beyond their means.

According to the chair of the Latvian Supreme Court, Andris Gulans, there has not been any political pressure on courts. In his view, normal criticism of courts is an integral part of democracy. At the same time, great political pressure was generated to replace Latvia's chief procurator, Janis Maizitis, whose term of office was to end May 15. This campaign not to reappoint him was led by the newspaper Neatkariga Rita Avize, purportedly controlled by Latvian oligarch Aivars Lembergs. Many people, including Latvia's president, the head of Latvia's Association of Jurists, and prominent members of the media and society came to his defense, and the Parliament voted 74 to 17 to renew his five-year mandate.

The Latvian Constitutional Court is trusted more than other courts. In 2005, it made several important decisions. One concerned the financing of non-Latvian private schools. The Court concluded in September that if Latvian private schools received state financing, the principle of equality should apply to all. The Court made another controversial decision in education. In May, it found the language reforms for Russophone schools to be constitutional.

Corruption (Score: 3.25)

Although corruption in Latvia is still a major concern, there are indications that the country has moved significantly in the right direction, including increased intervention from Latvia's KNAB and pressure from international organizations and the EU. Transparency International's 2005 Corruption Perceptions Index has improved Latvia's score from 3.8 in 2003 to 4.0 in 2004 and 4.2 in 2005.

A 2002 study by the externally based World Bank-affiliated Foreign Investment Advisory Service claimed Latvian businesspeople 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. A 2005 study of 27 countries by the World Bank and the European Bank for Reconstruction and Development has found a much more benign situation in Latvia than in most new EU states with respect to corruption, as seen by polled Latvian businesspeople (BEEPS-Business Environment and Enterprise Performance Survey). In Latvia, a smaller number indicated corruption as a problem than did those polled in most of the other states studied. More important, a comparison to a similar study in 2002 points to a significant decrease in corruption perceptions in Latvia.

The KNAB, which began operations in October 2002, inspired great hope for an improvement in the fight against corruption. In June 2005, this organization employed 116 people in 15 separate sections. Its financing has also increased. In 2005, it received 2.24 million lats from the state budget and 957,582 lats (US$5.44 million) from PHARE. . In contrast with previous years, the KNAB has overcome internal problems of leadership, cohesion, financing, and its controversial low profile. Its increasing visibility and success at diminishing corruption has given it much greater public support. One of its most successful ventures has been monitoring political party financing and spending. The new semiannual publication on corruption, Korupcija oC, financed by the Soros-related organization Providus and the U.S. government, has praised the work done by the KNAB and lauded its increased authority not only in the general population, but among other state institutions.

Sometimes justice takes a while, as in the case of the Latvian Green and Farmers' Union Party, which refused to surrender illegally obtained funds discovered by the KNAB in 2002. The party appealed to the administrative court of first instance, where it won its case. However, after review by several appeals courts, the party was forced to pay in 2005. In June 2005, the president asked the KNAB to prepare a new draft law that would incorporate the concept of "reverse onus," requiring those state workers with suspiciously large assets to prove the origin of their acquired wealth.

The mild court sentences meted out to those involved in corruption are central to the problem. One particularly surprising case was the conditional or suspended two-year sentence given to a pharmacy chain operator, Vladimirs Labaznikovs, who had attempted to bribe a KNAB worker with 50,000 lats (US$ 87,500 USD) in order to stop that institution from inspecting his firm's activities. The refusal to accept such a large bribe reflects highly on the integrity of the organization.

Those engaged in corruption would be less likely to persist in their activities if the courts established more aggressive sentences. However, an even more significant advance worldwide would result if countries used their power to shut down or regulate all the money havens that are increasingly being used to hide ill-gotten gains.

In spite of the many sources of real and perceived corruption, moderate progress is being made. The KNAB's increased activity in limiting party finance abuses and the threat of discovery is putting many political corruption participants on the defensive. The Parliament's Anticorruption Commission has also become energized. Over 200 individual state organs and institutions have submitted their anticorruption plans to the KNAB for evaluation in line with the demands of the long-range program initiated by the government in 2004 called the National Program for Corruption Prevention and Combating 2004-2008. In similar fashion, most state ministries have drafted codes of ethics and created ethics commissions. They have also included ethical norms in their employment contracts. A new draft Law on Procurement, announced May 5,2005, has the potential to clean up one of the most corruption-prone areas of public life.

Author

Juris Dreifelds teaches political science at Brock University in Ontario, Canada. He is the author of chapters and articles on the Baltic area. His book Latvia in Transition was published by Cambridge University Press in 1996.

Local Governance (Score: 2.50)

In contrast with Estonia and Lithuania, Latvia ratified a Constitution that does not include the rights and principles of local governments. Rectifying this omission has been one of the constant demands of the Union of Local and Regional Governments of Latvia. Nevertheless, Latvia has several laws that apply to municipalities, the chief being the Law on Local Governments passed on May 19,1994, and amended over 10 times. The 530 local governments in Latvia are responsible for a broad array of functions and services. They are responsible for primary and secondary education, most social assistance (except pensions and family care benefits), health care, water supply and sewage works, county roads, solid waste collection and disposal, and about one-fifth of all housing in Latvia, to which they have legal title.

The processes of governance vary according to the size of the municipality, but all are based on fundamental democratic foundations, including open council and committee meetings and their minutes, access to deputies and the executive by local residents, procedures for review of complaints and suggestions, and public discussions and audited annual reports or reviews of budgets. Citizens also have recourse to municipal elections every four years.

Elections are free and democratic, with a turnout of 52.85 percent on March 12,2005. In those elections, 4,179 deputies out of over 15,000 candidates were elected for 530 local governments. The majority, or 57.7 percent, were men; 41.9 percent had a higher education; 82.6 percent were Latvians, 4.3 percent Russians, and 2.2 percent of other ethnic origins, but 10.7 percent of deputies did not indicate their ethnicity.

The Law on Administrative Procedure, in force since February 1,2004, provides another element of security against arbitrary government actions. Most important, people can now dispute government actions that affect them personally by using the administrative court system for redress. Local media, mostly weeklies, serve as another system of input and reflection regarding municipal activities.

Current local governments have received a high level of approbation in many surveys. How Democratic Is Latvia: Audit of Democracy found that local self-governments were trusted by 48.1 percent of the people, compared with 22 percent for the Parliament and 25 percent for the national government. This probably reflects the higher level of personal contact with government in small communities.

Many attempts have been made at the national level to redraw municipal boundaries, but there have been only minimal voluntary changes. The hope is that the Parliament elected in October 2006 will be able to deal with it and that reforms to decrease the numbers will be in place for the 2009 municipal elections.

Financing of so many municipalities of such variable size is also a major problem. Municipalities are dependent on personal income taxes for over half their income. In 2005, municipalities were allowed to keep 73 percent of personal income tax but have been promised 75 percent in 2006. There is a provision for a certain degree of equalization between the more prosperous and poorer districts, but the richer municipalities have become increasingly opposed to subsidizing poorer municipalities. They would rather use their money for new developments and let the national budget provide the required subsidies. As well, the central government provides "earmarked grants" that account for about a quarter of all municipal revenues.

Smaller municipalities have problems recruiting hardworking and honest candidates for local councils and the executive, and there have been patterns of nepotism. Controlling corruption and ensuring transparency are often difficult, especially when handing out contracts and ordering supplies. Municipalities have created an association to lobby for their interests.

A major problem faced by many municipalities is the widening economic gap between Riga and the regional areas. Riga accounts for about a third of Latvia's population but two-thirds of its GNP. The other four regions generate relatively little economic value: Kurzeme 11 percent, Vidzeme 10 percent, Zemgale 8 percent, and Latgale 4 percent. Latgale is the region with the greatest poverty and highest rates of unemployment. In Riga, unemployment is around 4 percent, but it is 25 to 30 percent in the Latgale districts. Latvians are a minority in the Latgale area.

Overall, the quality of local governments is quite variable, as is their capacity and ability to fulfill all required jurisdictional duties. However, elections appear to be fair, with a satisfactory voter turnout. In some municipalities, special deals with real estate developers, especially near the coast, have created perceptions of corruption.

National Governance (Score: 2.00)

The overall success of Latvia's democratic system can be gauged by its inclusion as a full member of the EU and NATO in the spring of 2004. Today, there is no disagreement that Latvia is a democracy. There is, however, disagreement on the quality and comprehensiveness of this democracy. In 2004-2005, a detailed "democratic audit" of Latvia was undertaken by social science and public policy specialists, focusing on multiple facets of democratic governance. Under the initiative of Latvia's president, Vaira Vike-Freiberga, two dozen specialists provided detailed descriptions and assessments of the achievements and weaknesses of the state system in 14 general areas with 75 separate subheadings. Each one of these subheadings was assigned scores based on the previous five years, from "very good" to "very bad."

As part of this study, in October 2004 a leading Latvian polling organization conducted a special survey, which comprised over 70 questions with answers subdivided by ethnicity, gender, age, locality, occupation, and income and was used extensively by the research specialists to arrive at their final scores. Latvia received a designation of "satisfactory" in 35 cases, "very good" in 2 areas, "good" in 18, "bad" in 16, and "very bad" in 5. The 2 worst areas concerned the ineffectiveness and irresponsibility of the civil service and corruption. The "very good" areas included high voting rates and competitive elections. The report, entitled How Democratic Is Latvia: Audit of Democracy, together with polling tables, is available in English at www.policy.lv.

In spite of the historical tradition of mild dictatorship between 1934 and 1940, and Soviet one-party rule, the vast majority of individuals in Latvia are strongly supportive of the present Constitution, which incorporates the basic requirements of democracy, popular elections, and citizenship and human rights. However, many people are not fully satisfied with the way actual democracy functions in Latvia. There is a significant and disturbing divergence between the Latvian and Russian populations in this regard, with other nationalities generally positioned between the two. According to the democratic audit poll, 68.4 percent of Latvians, but only 32.4 percent of Russians and 40.4 percent of others, agreed that the last parliamentary elections in October 2002 were free. Similar ethnic divisions can be seen in the trust accorded by Latvians, Russians, and others to various institutions.

Expressed Trust in Latvia's Institutions in %, October 2004

Russians and others indicated a higher level of trust in the church and the Commonwealth of Independent States, an organization of which Latvia is not a member. This divergence has many possible causes. The main source of discontent concerns the lack of citizenship for 42 percent of Russians living in Latvia. The problem of citizenship is slowly moving in the right direction, however. Between 1995 and 2005, the proportion of non-citizens has decreased from 29 to 19 percent and over 105,000 people have received Latvian citizenship through naturalization.

Latvia's Parliament (Saeima) is not well structured for regularized dialogue with voters. Individual deputies are not responsible for a specific geographic area, as is the case in North America and many European states; hence people do not have a local representative office where they can air their problems and seek assistance. Indeed, this absence of parliamentary "mini-ombudsmen" is a problem in all countries entirely dependent on proportional elections. Another problem is the relatively underdeveloped lobbying structure in the country. Lobbying for one's own interests is still seen as selfish, unethical, and generally associated in the public's mind with corruption. Parliamentarians, however, are able to gauge the popular will through a very active media and through increasingly vocal professional and ethnic associations.

Moreover, new channels for participation in decision making have been created. Since June 2001, NGO representatives can officially attend meetings of the state secretaries in the Chancellery of the Cabinet, where new policy ideas, legal initiatives, and information about future proposals are discussed, vetted, and sent to respective ministries for further input. A memorandum on cooperation between NGOs and the cabinet was signed by Prime Minister Aigars Kalvitis on June 15,2005. The objective of the memorandum as stated in its preamble is to "ensure involvement of civil society in the decision-making process at all levels and stages in public administration, thus promoting development of the basic elements of a democratic country." NGOs are provided with contact persons and telephone numbers in all departments and can ask to participate at a cabinet session to discuss a particular issue.

The Latvian government has made significant strides in providing public access to various state documents. These include Internet access to proposed legislation and to the agendas of the Parliament, the cabinet, state secretaries, cabinet committees, and parliamentary committees. Likewise, anyone can access the financial data of all ministries. Transcripts of parliamentary sessions and protocols of the cabinet and cabinet committee meetings are also available online. The Parliament has a vast support system of specialists and research librarians. Deputies can hire helpers and have access to the state-financed offices of their respective political parties.

Unfortunately, not all deputies have offices, and few of them have the ability to contact their electorate within Latvia's five broad electoral districts. Investigations can be carried out by parliamentary committees, which are empowered to call ministers and others to testify. Deputies receive a basic salary calculated on the basis of 3.2 times the average salary in state institutions. Additional pay is received for attending parliamentary committees and for housing and transportation for those living outside Riga. Attendance at parliamentary sessions is helped by the deduction of 20 percent of one's monthly salary for any nonapproved absence.

Legislative initiative, however, appears to have increasingly become a prerogative of the cabinet and its ministries. In the sixth Parliament, this institution introduced 53 percent of all bills. In the seventh Parliament, the cabinet accounted for 65 percent. In the current eighth Parliament (until June 22,2005), the cabinet introduced 73 percent of all draft legislation. This reflects a growing centralization and heightened executive power.

The judiciary is independent of direct government pressure once the Parliament confirms 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.

In the Latvian political system, the president functions as head of state and has the power to appoint the prime minister and veto legislation. However, vetoed legislation 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 is a major check on governmental power, and the creation of a separate Constitutional Court in 1996 focused the best legal minds on the defense of constitutional rights. Their judgments have been wide-ranging and have garnered a high level of trust from officials and 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. A new law has allowed for the suing of state organs for compensation of losses incurred by their actions or inactions. The new system of administrative courts is focused on resolving clashes between inhabitants and various state bodies.

In general, Latvia's government does not interfere in the economy except to set the broad parameters of monetary and fiscal policy. There is as yet no consensus with respect to the privatization of certain large industries in which the government holds the majority or a large proportion of shares.

The political system in 2005 was surprisingly stable, without any changes of government and minimal shifts in the cabinet. This is in contrast with the situation in 2004, when three separate governments were formed, led by Einars Repse (until March 9), Indulis Emsis (until December 2), and Aigars Kalvitis (from December on). Indeed, since independence Latvia has had 12 different governments with 10 different prime ministers. The relative calm of the current coalition in large measure reflects pressure from the population and its disgust and weariness at the perceived gamesmanship of their elected representatives.

In addition, the current prime minister, Aigars Kalvitis, has with few exceptions had a calming effect on the cabinet because of his desire to maintain a stable coalition. Kalvitis is a relatively young individual, born in 1966, who has worked in Sweden and studied in Ireland and the United States (University of Wisconsin). He has an MA degree in agricultural economics and before becoming prime minister was minister of economics and minister of agriculture. He is a member of the People's Party. Prior to December 2,2004, the current four-party coalition worked hard to outline a common position on legislative goals and priorities, concluding with a 21-page detailed document. Indeed, all four parties are divided less by ideologies than by personalities, since all four are moderately right of center.

The civil service in Latvia has been subject to many attempts at reform. The most significant and comprehensive of these 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."

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 address 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 large number of able individuals have gone to work in more lucrative private institutions.