Latvia in 2006 was an independent nation located in Northern Europe, bordered by Estonia, Lithuania, Belarus and Russia. The population of Latvia was estimated to be around 2.3 million people with the majority of the population consisting of Latvian and other ethnic minorities. The capital city of Latvia was Riga, located in the northern part of the country.
Latvia in 2006 had a GDP of approximately $20 billion USD and per capita GDP of around $9000 USD making it one of the wealthiest countries in Northern Europe during that period. The economy of Latvia relied heavily on industry which accounted for around 40% of GDP in 2006 while agriculture accounted for around 10%. Other important industries included services, manufacturing and mining.
According to constructmaterials, Latvia had made significant progress in terms of human development since its transition from Soviet rule to an independent state in 1991 when its Human Development Index (HDI) score improved from 0.717in 1990 to 0.845in 2006 – making it one of the most developed countries among Northern European nations during that period. Poverty remained an issue with almost 20% living below national poverty line in 2006 although access to basic services such as education, healthcare and clean water were considered world-class at that time.
Latvia. According to CountryAAH, major public holidays in Latvia include Independence Day (May 4) and New Year (January 1). The year began with a couple of the government crises that have become an almost chronic phenomenon in the independent Latvia. The background was political scandals, also constantly recurring. A power struggle between Christian Democratic Latvia’s first party and liberal New Times ended with New Times leaving the government. But despite a minority position, Prime Minister Aigars Kalvitis managed to keep the government in power until the autumn elections.
When Parliament in the spring criminalized discrimination in working life on the basis of, among other things, race and religion, sexual orientation was removed from the text. President Vaira Vīke-Freiberga again sent the law to Parliament, which in protest extended the legislative text.
This summer’s planned Pridefestival in Riga did not receive municipal permission on the grounds that safety could not be guaranteed. Instead of the festival a worship service was held, and when the participants after the worship service were attacked by protesters, the police were accused of not intervening sufficiently.
At the October parliamentary elections, Aigar’s Kalvitis government became the first since independence to be re-elected. Kalviti’s Conservative People’s Party got close to 20%, the League of Green and Agrarian got close to 17%, and the Alliance of Christian Democratic Latvia’s first party and the middle party of Latvia got about 8.5%. It gave the tripartite coalition 51 of Parliament’s 100 seats. In order to strengthen the scarce majority, nationalist Fosterland and freedom, with their eight mandates, were incorporated as the fourth coalition party. The Left Opposition got just over 20% of the vote in the election. The Left is mainly supported by Russian-speaking voters, but the newly formed party alliance Harmonic Center turned to both Russians and Latvians.
During the year Latvia competed with Estonia for the EU’s highest economic growth, over 10%, but Latvia still had the Union’s second lowest GDP per inhabitant.
In November, Parliament stopped a proposal for damages to the country’s Jews for losses during the Holocaust and during the Soviet occupation. President Vīke-Freiberga described Parliament’s decision as a lack of political courage.
At the end of November, the NATO military alliance held its summit in Riga, which was the first time on former Soviet soil.
2008 The Latvian miracle is drowned in crisis
The global economic crisis hit Latvia hard. In 2008 alone, GDP fell by 10.5%, followed by a further decline of 17.8% in 2009. Unemployment rose from 7% in December 2008 to 14.3% in March 2009 and further to 22.3% in March 2010, and youth unemployment nearly doubled to 44.9%. The highest unemployment rate in the EU.
The fact that this could go wrong was because after the 2004 accession to the EU, the government had implemented an expansionary economic policy, but based on borrowing. Growth was not concentrated in production and export, but in construction, housing and luxury consumption. This bubble was at least twice the size of the Danish housing bubble, and when the bubble burst, the damage became so much greater, as the underlying production was limited and the savings of Latvian households low.
On January 13, 2009, the opposition and trade union movement called for a demonstration against the economic crisis and the government’s hardening of it. Demonstrations gained 10-20,000 participants, but from being peaceful, it developed violently as protesters went on attacks on shops and police cars. 50 were injured and over 100 arrested. The protesters tried to storm Parliament but were beaten back. The protests against the government continued, its popularity plummeted and it was unable to deal with the economic crisis. In February, the government asked for a loan of DKK 7½ billion. € from the IMF and the EU and at the same time nationalized the country’s second largest bank, Parex, which was bankrupt. The problems escalated and at the end of the month the government resigned, and the president appointed Valdis Dombrovskis as new prime minister for a new center-right government.
In February, over 1,000 farmers demonstrated with their tractors against the government’s unwillingness to protect them from the import of cheap foreign food.
Homophobia is increasing in Latvia as in the other Baltic states. In May, Riga authorized a march in the city for gays, lesbians, bisexuals and transsexuals, but five days later a majority in the city council overturned this decision, arguing that the march was against public veneration and a threat to public safety. The Riga district court overturned this decision the following day, and the following day the march was conducted under police protection from a homophobe, who overwhelmed the march participants with disgust.