Election Special: Latvia

On September 17 Latvians elect a new parliament. Will ex-president Valdis Zatlers' centre-right Reform Party achieve a majority?

The buzz in the Latvian capital of Riga is all about Zatlers.  Riding high in opinion polls, the newly formed Zatlers' Reform Party is building on the momentum started during a recent parliamentary dissolution referendum campaign - initiated by Zatlers when still head of state.  A presidential election was held on the same date as the referendum, June 23.  And although Zatlers' resolution was carried in the plebiscite, he lost the presidency to a green centrist ex-banker, Andris Bērziņš.

According to Delfi, polls suggest the Reform Party will garner up to a third of the vote.  Its formation by Zatlers has already impacted politically, with the demise in July of the conservative People's Party - one of three supposed oligarch groups Zatlers said his new force would refuse to co-operate with in the next elected parliament.

Elections were last held in October 2010 for Latvia's 100-seat unicameral parliament, the Saeima, when the chamber looked like this:
  • Unity 33 seats (a coalition of two conservative parties New Era and Civic Union, and the social liberal Society for Other Politics)
  • Harmony Centre 29 seats (a coalition of the Social Democratic Party "Harmony", the Socialist Party of Latvia and the regionalist Daugavpils City Party - which recently disbanded to integrate with Harmony)
  • The Union of Greens of Farmers - endorsers of President Bērziņš - 22 seats (a coalition of the Latvian Farmers' Union and the Green Party of Latvia)
  • The National Alliance 8 seats (far-right nationalists of For Fatherland and Freedom/LNNK and All For Latvia!)
  • For a Good Latvia 8 seats (a centre-right grouping consisting of the People's Party and Latvia's First Party/Latvian Way)
Eight other parties contesting the 2010 elections under proportional representation failed to break the threshold and enter the Saeima.

Aside the People's Party, the other oligarch groups to which Zatlers referred were the Union of Greens and Farmers and Latvia's First Party/Latvian Way.

In typical fashion, PR has thrown up a hotch-potch of movements voicing the narrow opinions of vested interests.  Despite a threshold in place to prevent too many splinters creating factions, complex coalitions have resulted, with the effect that decisive government is made more difficult. Valdis Dombrovskis of New Era is the current prime minister, in office since 2009 when nominated by Zatlers, then President.    

But that's the status quo.  The Baltic Times reported in July 2011 that Latvian politics was undergoing a "major upheaval "resulting in party mergers, liquidations and foundations."  It can't seem to get much more complex than it already was.

With newly-elected President Bērziņš in effect representing one of the parties blacklisted by Zatlers, it would appear that post-election communication between these two groups would be difficult if not impossible - should support for Reform propel Zatlers into government.

Export-dependent Latvia is a Baltic ex-Soviet republic within the EU.  Its population of 2.25 million equates to that of Nambia, i.e less than Jamaica or Nevada.  Just under 60% are ethnically Latvian, but it has a huge ethnic Russian minority which accounts for 27.4% of the total.  Russianisation of the Baltic states during Soviet times created this situation, and it has been all that Latvians can do to maintain national integrity.  Hence the high level of support amongst voters for Latvian nationalism, I suspect.

It's small, with an area of only 64,600 sq km or about the size of Sri Lanka or West Virginia.  Heavily dependant on trade, it relies on producing food, wood, metals and machinery which it sells to sister Baltic states of Lithuania and Estonia, as well as to Russia, Germany and Sweden.

A rapid resurgence in exports has enabled the country to revert to trade surplus which has helped to drag it out of recession.  Fiscally, Latvia has instituted a harsh austerity programme to meet donor targets set by the IMF and EU.  With competitor, fellow-Balt and friend Estonia performing so well of late, the incentive for Latvia to catch up is massive.

Most of the productive economy has now been privatised, providing a platform for growth.  Yet a stable political arena is vital to take advantage of this.  And the election outcome will determine if this is possible or not.  Luckily, Latvia isn't too dependant on trade with Germany, its fourth biggest market which accounts for 8.2% of exports.  As Germany's growth stalls (as indicated by the last quarter's figures), so Latvia must look east to Russia to fuel growth.  

Yet, dependence of any kind on the Russians will irk cautious Latvians, many of whom will recall pre- and immediate post-independence rows in the early 1990s.  Other markets should be canvassed perhaps?  With so many ex-patriate Latvians now UK-based, maybe Britain will experience a marketing flurry from corporations in the capital Riga or the eastern industrial city of Daugavpils.  However, there are more Latvians in the US or Ireland, but both of those countries are working through troubles of their own right now.

The Telegraph-Argus reported in June that "Ryanair has added routes to Lithuania and Latvia to its flights from Leeds-Bradford International Airport."  Perhaps tourists from Yorkshire will come to Latvia's aid?  

Or will Zatlers?

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