Latvia in the Early 21st Century

Northern European state. During the first years of the 21st century. the demographic trend was characterized by a progressive decrease in the population (2,375,339 residents at the 2000 census, 2,307,000 at a 2005 estimate), determined by two negative balances, the natural one (- 4.66 ‰) and the migratory one (- 2.24 ‰).

The accession to NATO (March 2004) and to the European Union (May 2004) positively closed a period of economic, political and social transition that lasted fifteen years, and the country continues on its path of transformation. In 2003 and 2004, GDP recorded strong growth (+ 7.5 % in both years), confirmed in 2005, supported by domestic consumption; although trade has increased, imports remain higher than exports and the trade balance is highly passive. The imbalance has taken on structural contours: the process of modernization of the infrastructures, in fact, in which the Latvia is engaged, determines a strong demand for equipment and plants, mainly from abroad, while the country exports mostly goods with low added value.

The Latvian economy has good development prospects, but the country remains the poorest among the 10 that joined the European Union in 2004, with a low per capita GDP equivalent to 35 % of the average for EU countries. Freight transport and sorting services in the port of Ventspils are growing, although the opening of a port for cargo ships in Primorsk, in the Russian section of the Baltic coast, has brought to a halt and made evident the need for better relations between Latvia and Russian state fuel companies. The service sector has undergone significant development (in 2005 it contributed to the composition of GDP by over 70%), in particular tourism, thanks to a significant expansion in air connections between Riga and the major cities of central and western Europe.


Latvia continued to be characterized in the early 21st century. by an accentuated instability, albeit in the context of a constant moderate political orientation, prevalent since the independence from the Soviet Union (1991). The shattering of the nationalist alignment had in fact generated the birth of numerous parties, often in conflict for occasional rather than ideological reasons, whose government alliances were unstable and required frequent alternations.

Within three years (1999-2001) four center-right coalition governments followed one another, all revolving around the three main parties (the People’s Party, the Conservative Union, the Latvian Way), and too short-lived to give the country an effective policy of reform . The structural problems linked to the widespread corruption of the state apparatus, the weakness of the financial system and the poor competitiveness of the labor market, burdened among other things by high unemployment rates, thus struggled to find adequate solutions, even if a general improvement in public finance. This objective was constantly pursued by the executive (regardless of who its prime minister was), in view of the entry of the Latvia into the European Union, considered a priority by all parties.2002 the requirement for candidates in elections to have a thorough knowledge of the Latvian language was abolished; the latter, however, was recognized at the same time as the official language of the public administration.

The legislative elections, held in October 2002, sanctioned the victory of the new center-right party, New Era (26 seats), and the collapse of the traditional governing parties. A significant victory was won by the left coalition For Human Rights in a united Latvia, supported above all by the Russian minority, which won 25 seats and established itself as the country’s second political force. Behind it the Popular Party (20 seats), the Union of Greens and Peasants (12 seats), the First Latvian Party (10 seats), of Catholic inspiration, founded in May 2002, and the Conservative Union (7 seats).

In the following years the weakness of the institutional context was not overcome and we returned to witness repeated government crises and consequent reshuffles; despite this, the country achieved two important successes in 2004: it became an effective member of NATO (March) and joined the European Union (May).

The political elections of October 2006 rewarded the parties of the ruling coalition, formed in April 2006 and led by A. Kalvitis (the People’s Party, the Union of Greens and Peasants and the First Latvian Party), to which it is the majority of the consents went.

Latvia in the Early 21st Century

About the author