I might move back to Latvia later this year or in 2008 and I just started researching the real estate market, over Internet and by consulting friends in Latvia.
It's quite expensive. 1 bedroom apartments in Soviet era buildings (built 20-40 years ago) cost from 70,000 to 110,000 Euros (100,000 to 150,000 US dollars). Bigger apartments or ones in newly built buildings are even more. Houses start at 200,000 Euros (260,000 US dollars) and can cost much more if they are in a good location. (I'm not even trying to figure out how much more. I wouldn't be able to afford that on a Latvian salary anyway.)
It's not quite London or New York prices but, according to newspapers, real estate in Riga is already more expensive than in Vienna or Frankfurt. And I've heard stories of people who have sold a run-down house in Latvia and discovered that they could buy a house at a much better condition on the Mediterranean coast of France for the same amount. At the same time, the average income in Latvia is still 4-5 times less than in US or France or Germany. As a result, most of population is completely priced out of the housing market.
It wasn't always this way. In mid-1990s, one could buy an apartment in Riga for 20,000 dollars. The only similarity with today is that it was unaffordable for most people. The incomes were much lower than now and bank credit was almost unavailable. Now, 40-year loans are common, the interest rates are almost as low as in Western Europe. The incomes have increased substantially, except that...
The increase in real estate prices has outpaced that all! Economists are talking of global housing bubble and Latvia seems to be at the forefront of it. The home prices in Latvia have grown by 61.2% in 2006, more than in the any other country in the world. And that comes after a similar more than 60% increase in 2005.
I'll post some more thoughts on the Latvian real estate bubble in the next few days...
Wednesday, June 27, 2007
Sunday, June 24, 2007
Return to normalcy
Edward Lucas has an interesting column in the Economist. I think the facts are spot-on but I would like to argue about the conclusions.
Lucas starts by contrasting our president-elect Valdis Zatlers with our outgoing president, Vaira Vike-Freiberga:
Great leaders often emerge as a response to great challenges. When Vaira Vike-Freiberga came to power in 1999, Latvia had to convince the Western world that our country is a part of it. During her presidency, Latvia succeeded in that. Latvia became a member of the European Union and NATO.
The same thing happened in other Central European countries. Lech Walesa and Vaclav Havel were symbols of Poland and Czech Republic rejecting Communism and aspiring towards the same values as Western Europe. Now, the values that Walesa and Havel fought for are universally accepted in their countries. And, once something is universally accepted, there is no need for a visionary leader articulating that.
Today, the main challenge for the countries that joined European Union in 2004 is ensuring competent day-to-day management. We are not making a fundamental choice between democracy and totalitarianism, or free-market and centralized economy any more. Those choices have been made long ago.
As a result, there is not much space for visionary leaders any more. Businessmen and managers are taking their place. The main issues in the past Latvian election were: "Who is the most competent?" and "Who is the least corrupt?".
I hope this trend towards normalcy continues. I prefer to live in a world where proper enviromental standards for new housing developments are the most burning political issue, rather than in a world were Latvia has to worry about Russian military buildups. Of course, that depends on whether Russia is heading towards normalcy as well, and I am not sure of that at all...
Lucas starts by contrasting our president-elect Valdis Zatlers with our outgoing president, Vaira Vike-Freiberga:
Optimists hope that Valdis Zatlers, an orthopaedic surgeon, will grow into his new job as Latvia's president. But even his doughtiest supporters doubt that he will fill the exquisite shoes of his predecessor, Vaire Vike-Freiberga, a steely-minded émigré polyglot who ushered her small Baltic country into both the European Union and NATO.Then, he observes that this is a part of a bigger trend. The previous generation of Eastern European leaders had many big figures:
Lech Walesa of Poland and the Czech Republic's Vaclav Havel remain world famous. Poland's Aleksander Kwasniewski was widely admired abroad for his diplomatic skills. Reformist politicians such as Estonia's Mart Laar, Russia's Yegor Gaidar and Slovakia's Mikulas Dzurinda wowed the policy wonks with their zealous embrace of flat taxes and free-marketry.Now, it's different. Only Russia's Vladimir Putin and Estonia's Toomas Hedrik Ilves qualify as "big figures", according to Lucas. As for the rest:
A lot more typical are such political leaders as Slovakia's prime minister, Robert Fico, or Hungary's Ferenc Gyurcsany: wily political operators with good business ties and a populist touch.I think this trend is a part of Eastern Europe returning to normalcy, after the Soviet oppression and the chaos of first post-Soviet years.
Great leaders often emerge as a response to great challenges. When Vaira Vike-Freiberga came to power in 1999, Latvia had to convince the Western world that our country is a part of it. During her presidency, Latvia succeeded in that. Latvia became a member of the European Union and NATO.
The same thing happened in other Central European countries. Lech Walesa and Vaclav Havel were symbols of Poland and Czech Republic rejecting Communism and aspiring towards the same values as Western Europe. Now, the values that Walesa and Havel fought for are universally accepted in their countries. And, once something is universally accepted, there is no need for a visionary leader articulating that.
Today, the main challenge for the countries that joined European Union in 2004 is ensuring competent day-to-day management. We are not making a fundamental choice between democracy and totalitarianism, or free-market and centralized economy any more. Those choices have been made long ago.
As a result, there is not much space for visionary leaders any more. Businessmen and managers are taking their place. The main issues in the past Latvian election were: "Who is the most competent?" and "Who is the least corrupt?".
I hope this trend towards normalcy continues. I prefer to live in a world where proper enviromental standards for new housing developments are the most burning political issue, rather than in a world were Latvia has to worry about Russian military buildups. Of course, that depends on whether Russia is heading towards normalcy as well, and I am not sure of that at all...
Friday, June 22, 2007
An article on Livs/Livonians
In comments to my previous post, reader Ed points to an interesting Deutsche Welle article on Livs/Livonians, the nearly extinct indigenous ethnic group in Western Latvia.
The article says that the number of native speakers of Livonian is less than a dozen (even less than what I said in my previous post). But the younger people of Liv descent are trying to learn the language and keep it alive. I hope they succeed!
As a side note, I find it amusing that English uses the word "Livonian" for two entirely different things:
The article says that the number of native speakers of Livonian is less than a dozen (even less than what I said in my previous post). But the younger people of Liv descent are trying to learn the language and keep it alive. I hope they succeed!
As a side note, I find it amusing that English uses the word "Livonian" for two entirely different things:
- The indigenous ethnic group of Latvia;
- The German knights who conquered the land of Livs/Livonians in the 13th century.
Sunday, June 17, 2007
Blue cows!
A friend from London told me he had seen an ad by Latvia tourism agency:
Latvian blue cows are farm animals, a peculiar variety of regular cows.
Traditionally, blue cows were grown by Livs, an indigenous ethnic group of Latvia which spoke a language related to Estonian and Finnish. Livs lived along the Baltic sea in the Latvian regions of Vidzeme and Kurzeme (Courland). An old legend says that blue cows used to live in the sea and would come out briefly before the sunrise to graze on the seaside grass. Then, once upon a time, The Mother of the Sea (Juras Mate) gave some of them as gifts, to families of Liv fishermen who had died in a storm.
Both Livs and blue cows became nearly extinct during the Soviet period. In case of Liv people, the Baltic Sea became the border between the Soviet Union and the West. Livs were uprooted from their fishermen villages, to make space for military. At the end of Soviet period, there were less than 100 people speaking Liv language.
Blue cows were almost completely displaced by other breeds. Less than 100 of them survived the Soviet period, too. In 1990s, Latvia, together with UN Food and Agriculture Organization, started an effort to preserve this peculiar variety of cows. As a result, blue cows can be still seen along the coast of Kurzeme (Western Latvia).
Two million reasons to visit LatviaThat started an interesting conversation. I think I managed to convince everyone that Latvia indeed has blue cows.
Reason #653,432: blue cows.
Latvian blue cows are farm animals, a peculiar variety of regular cows.
Traditionally, blue cows were grown by Livs, an indigenous ethnic group of Latvia which spoke a language related to Estonian and Finnish. Livs lived along the Baltic sea in the Latvian regions of Vidzeme and Kurzeme (Courland). An old legend says that blue cows used to live in the sea and would come out briefly before the sunrise to graze on the seaside grass. Then, once upon a time, The Mother of the Sea (Juras Mate) gave some of them as gifts, to families of Liv fishermen who had died in a storm.
Both Livs and blue cows became nearly extinct during the Soviet period. In case of Liv people, the Baltic Sea became the border between the Soviet Union and the West. Livs were uprooted from their fishermen villages, to make space for military. At the end of Soviet period, there were less than 100 people speaking Liv language.
Blue cows were almost completely displaced by other breeds. Less than 100 of them survived the Soviet period, too. In 1990s, Latvia, together with UN Food and Agriculture Organization, started an effort to preserve this peculiar variety of cows. As a result, blue cows can be still seen along the coast of Kurzeme (Western Latvia).
Friday, June 15, 2007
Latvian presidential election, two weeks later
The two weeks since Valdis Zatlers became the next Latvian president have been quite predictable:
- Zatlers has visited State Revenue Service, to settle the taxes on cash gifts that he, as a doctor, received from his patients. State Revenue Service has also called other doctors to pay taxes on their gifts. So far, only three other doctors have responded. Meanwhile, the public debate on appropriateness of those gifts is continuing at full speed.
- Shortly before the election, our current president Vaira Vike-Freiberga accused the ethnically-Russian party Saskanas Centrs of being disloyal to Latvia (my guess: she meant they are being funded by Putin's administration). Saskanas Centrs threatened to sue her for libel. Vike-Freiberga claimed that she has a classified information that Saskanas Centrs is disloyal and refused to make it public. We have not heard about a possible Saskanas Centrs lawsuit since then.
- The Delna organization that organized the anti-Zatlers demonstration near the Latvian parliament during the presidential vote is looking for donations. The demonstration of 500-1000 people had cost 20,000 euros to organize! Those protests are expensive...
- Someone has created an unofficial Zatlers homepage at valdiszatlers.com and offers to sell the domain to the highest bidder. The website contains three paragraphs on Zatlers and his picture. Amusingly, half of the text has been copied word-by-word from this post on my weblog.
- Social Democratic party is gathering signatures in support of a referendum that would change the Latvian constitution and make the president elected directly by people, rather than by the parliament. But now, after our parliament voted for the less popular of the two candidates two weeks ago, its chances of passing are higher than ever!
Tuesday, June 12, 2007
In the news
Latvian historian Heinrihs Strods has been denied Russian visa. He intended to visit Moscow to explore documents in Russian archives and to give a talk at a conference. Strods applied for visa several times, with support letters from the Latvian embassador to Russia and from a history institute of Russian Academy of Sciences and was repeatedly denied visa. This is a second instance when a well-known Latvian historian has been denied Russian visa. The first was Aivars Stranga in 2005.
This is quite outrageous. Apparently, in Putin's Russia, foreign historians are not allowed to do archive research unless Putin's government is sure that they'll interpret archive documents in desired way!
This is quite outrageous. Apparently, in Putin's Russia, foreign historians are not allowed to do archive research unless Putin's government is sure that they'll interpret archive documents in desired way!
Sunday, June 10, 2007
Friday, June 08, 2007
Oil and the collapse of Soviet Empire
The fall of the Soviet Union in 1991 was preceded by a deep economic crisis during its last years. Until a few days ago, I wasn't sure why this crisis started in late 1980s and not earlier or later. The former Russian prime minister Yegor Gaidar says there was a good reason for that. The reason was oil.
During late 1970s and early 1980s, the oil prices were high and Soviet Union was making a lot of money by selling oil to Western nations. That allowed to buy food and other goods that the dysfunctional socialist economy of USSR could not produce in sufficient amounts. Then, in 1985, the oil prices plummeted. In half a year, they fall more than twice. And so did the oil revenues of the Soviet Union.
Soviet leader Mikhail Gorbachev desperately tried to reform the Soviet economy. But no reform, even the most perfect one, could compensate for sudden disappearance of most of oil revenues. Soviet Union had to borrow money to pay for food imports. By 1989, Western banks stopped lending money to Soviet Union, because they did not believe the country would be able to pay it back. At that point, the only loans that Soviets could get came from Western governments directly and those loans came with strings attached.
In 1990, Baltics declared independence. In January 1991, Soviet tanks attacked the TV tower in Vilnius, Lithuania. For next two weeks, Baltic states were tense. Will Soviets follow through and remove the pro-independence leadership of Baltics with military force? Nothing happened. According to Gaidar, Soviet Union had gotten the following message about Baltics:
Here is the full transcript of Gaidar's speech on this topic. He has also published a book, Gibel' Imperii: Uroki dlya sovremennoi Rossii [The Collapse of an Empire: Lessons for Modern Russia, with English translation available in two months] which I plan to read, once I get hold of it.
Oil prices are now high again and Russia is swimming in oil money, with $400 billion reserves for the case if the prices fall. Preventing Russia from using military power by threatening to withhold credits wouldn't work these days.
During late 1970s and early 1980s, the oil prices were high and Soviet Union was making a lot of money by selling oil to Western nations. That allowed to buy food and other goods that the dysfunctional socialist economy of USSR could not produce in sufficient amounts. Then, in 1985, the oil prices plummeted. In half a year, they fall more than twice. And so did the oil revenues of the Soviet Union.
Soviet leader Mikhail Gorbachev desperately tried to reform the Soviet economy. But no reform, even the most perfect one, could compensate for sudden disappearance of most of oil revenues. Soviet Union had to borrow money to pay for food imports. By 1989, Western banks stopped lending money to Soviet Union, because they did not believe the country would be able to pay it back. At that point, the only loans that Soviets could get came from Western governments directly and those loans came with strings attached.
In 1990, Baltics declared independence. In January 1991, Soviet tanks attacked the TV tower in Vilnius, Lithuania. For next two weeks, Baltic states were tense. Will Soviets follow through and remove the pro-independence leadership of Baltics with military force? Nothing happened. According to Gaidar, Soviet Union had gotten the following message about Baltics:
Do as you wish, this is your country. You can choose any solution, but please forget about the $100 billion credit.The goodwill of Mikhail Gorbachev may have played some role in Soviet Union not using military force, but the fear of not getting $100 billion credit sealed the deal.
Here is the full transcript of Gaidar's speech on this topic. He has also published a book, Gibel' Imperii: Uroki dlya sovremennoi Rossii [The Collapse of an Empire: Lessons for Modern Russia, with English translation available in two months] which I plan to read, once I get hold of it.
Oil prices are now high again and Russia is swimming in oil money, with $400 billion reserves for the case if the prices fall. Preventing Russia from using military power by threatening to withhold credits wouldn't work these days.
Tuesday, June 05, 2007
Posts on Latvian presidential election
This is the list of my posts on the recent presidential election in Latvia, for an easy access to them:
- Valdis Zatlers: facts, my opinion.
- Aivars Endzins: facts.
- Notes on the election campaign: March 27, March 29, opinion poll.
- Post-election thoughts: part 1, part 2, part 3.
- Estonian humour about the Latvian election.
Latvian presidential election, post scriptum
Some final thoughts on the presidential election:
- Most intense election, ever. This was the most heated presidential election, since Latvia regained independence in 1991. The Latvian president is chosen by the parliament and, in previous 4 elections, people did not even try to influence the parliament. As a result, we got two presidents: Guntis Ulmanis (in 1993) and Vaira Vike-Freiberga (in 1999) who would not have won a popular vote at the time when they were first elected. (Vike-Freiberga eventually became very popular. But, when she was first elected, most Latvians only vaguely knew who she was.) And hardly anyone was objecting to that.
This time was different. We had, for the first time, TV debates between the candidates. Numerous organizations expressed their opinions on candidates. Everyone had an opinion. And a lot of people were very disappointed, when the parliament chose a less popular coalition candidate (Valdis Zatlers) over a more popular opposition candidate (Aivars Endzins). - Zatlers is a puzzle. Our new president, Valdis Zatlers, was a complete unknown 9 days before the election. We still don't know his positions on many issues nor how independent he would be as the president. On the positive side, people who know him as a doctor say good things about Zatlers and it seems that our outgoing president Vaira Vike-Freiberga (whose judgement I trust) preferred him over the other candidate. On the negative side, a lot of people are very concerned by the way how Zatlers became coalition's candidate and whether he was chosen for loyalty more than for competence. (And this is a very soft way to word their concerns.)
I hope Zatlers turns out fine! But depending on which article I read, my expectations about Zatlers go from cautiously optimistic to extremely worried and back. - Zatlers is a puzzle, even to those who selected him. If someone in the ruling 4-party coalition selected Zatlers in hope they could easily manipulate him, they have made a risky choice. With non-politician candidates like him, it's difficult to predict how they will behave after becoming the president. Recent Latvian history has previous examples of non-politicians ascending to top government positions in a lightning speed, like Zatlers. More than once, these people turned out to be much more independent and strong-willed than expected.
The second way how this choice could backfire on the coalition is if Zatlers turns into a PR disaster that keeps saying the wrong things. In this case, they'll be stuck with him for the next 4 years and that will certainly affect the next parliamentary election. Again, if they had chosen someone who was a public figure before, it would be predictable how he will behave in the spotlight of the media. With Zatlers, it's not.
Saturday, June 02, 2007
And the winner of Latvian presidential election is?
On his blog, Marko Mihkelson, an Estonian politician, says that the true winner is... Toomas Hendrik Ilves, the president of Estonia. Quote:
Mikhelson's remarks were quoted by several Latvian news websites and had an interesting effect on the readers (judging by the comments sections there). Valdis Zatlers was getting a lot of criticism. But, once the people read what Mikhelson said... they started to rally behind Zatlers. Nothing brings Latvians together as well as criticism from Estonia...
Now we can safely say that, after Vīķe-Freiberga leaving [the post of the Latvian president], Toomas Hendrik Ilves will become the most knowledgable leader in Baltics and, more broadly in Central and Eastern Europe. And maybe even in Scandinavia.I essentially agree with that. I still hope our new president Zatlers turns out well. But he might not be a match for Ilves.
Mikhelson's remarks were quoted by several Latvian news websites and had an interesting effect on the readers (judging by the comments sections there). Valdis Zatlers was getting a lot of criticism. But, once the people read what Mikhelson said... they started to rally behind Zatlers. Nothing brings Latvians together as well as criticism from Estonia...
Thursday, May 31, 2007
Latvia has a new president
Today, the Latvian parliament elected Valdis Zatlers as the next Latvian president. 9 days ago, Zatlers was a respected medical doctor and a complete political unknown. Then, he emerged as the compromise candidate of the four-party coalition government and, in July, he will take office as the next Latvian president.
Here are some of my past posts on Zatlers: The basic facts about him, and about the supposed scandal with Zatlers receiving undeclared payments from his patients. And, now, some quotes from people who know Zatlers (my translation from this Latvian-language source):
Bertrams Zarins, clinical professor, Harvard Medical School:
And, as a sign of Zatlers' victory, I'm changing the background colour of this blog to orange for the next 4 years... OK, this part is a joke.
Here are some of my past posts on Zatlers: The basic facts about him, and about the supposed scandal with Zatlers receiving undeclared payments from his patients. And, now, some quotes from people who know Zatlers (my translation from this Latvian-language source):
Bertrams Zarins, clinical professor, Harvard Medical School:
I have very positive opinion of Valdis Zatlers being the candidate for presidency. I have known him very well and for a very long time. Among others, he stands out as very capable, very well regarded and always patriotic. [...] I don't know about his knowledge of politics but I am sure he will learn everything quickly.Nora Ikstena, Latvian writer:
Valdis Zatlers is a men with wonderful work experience who has saved many lives. From how he communicates, it is clear that he is ready to serve Latvia. [...] I have a gut feeling that, after going through all these political battles, Valdis Zatlers may develop into much more modern, democratic and charismatic president that Aivars Endzins [the other candidate] would be.I hope they are right!
And, as a sign of Zatlers' victory, I'm changing the background colour of this blog to orange for the next 4 years... OK, this part is a joke.
Wednesday, May 30, 2007
Latvian presidential election: campaign notes
In 29 hours, the Latvian parliament will gather to vote on the next president of Latvia. There are two candidates: Valdis Zatlers and Aivars Endzins. The latest news from the election campaign:
UPDATE (30/05/07): Endzins is trying to justify his past writings and comes off quite pathetically. The fellow historians are quite skeptical and say that one could work as an academic historian in Soviet Union without writing what Endzins wrote. Our current president, Vaira Vike-Freiberga also came down on Endzins quite hard, for both writing Soviet propoganda in 1970s and 1980s and for awarding bonuses to himself as the Chairman of the Constitutional Court. She was even harsher about the "Saskanas Centrs" (Harmony Centre) party which nominated Endzins:
- The mudslinging continues! Instead of having a substantive debate on the issues, both campaigns are trying to find ethics flaws with the other candidate. People's Party (which supports Zatlers) has re-published fragments from a book that Aivars Endzins wrote 30 years ago, during the Soviet period. In this book, Endzins denies that Soviet Union ever occupied Latvia by military force and claims that Latvia had joined Soviet Union voluntarily. And there is more of Soviet propaganda in his book.
My opinion of Endzins just took a big, big hit. I know that joining Communist Party was a pre-requisite for many careers in Soviet Union (particularly, careers that invoved managing other people). But, there is a difference between
(a) joining Communist Party and doing the minimum required amount (e.g., paying some amount in membership fees and attending meetings once in a while) and
(b) actively producing propaganda nonsense on behalf of the Communist regime.
I can fully understand the first but I have much less understanding for the second. If a person in Soviet Union wanted to pursue a career that did not involve writing propaganda books, there were certainly options for that! - There might be yet another candidate! Egils Levits, a Latvian judge on the Court of Justice of European Communities, says that he has been informally contacted by politicians. It's possible that parties behind Zatlers and Endzins reach a deal on Levits as a compromise candidate before tomorrow's vote.
UPDATE (30/05/07): Endzins is trying to justify his past writings and comes off quite pathetically. The fellow historians are quite skeptical and say that one could work as an academic historian in Soviet Union without writing what Endzins wrote. Our current president, Vaira Vike-Freiberga also came down on Endzins quite hard, for both writing Soviet propoganda in 1970s and 1980s and for awarding bonuses to himself as the Chairman of the Constitutional Court. She was even harsher about the "Saskanas Centrs" (Harmony Centre) party which nominated Endzins:
About their funding, I, as a president, have certain confidential information that makes me worried about their loyalty to Latvia.I read this as a hint that Harmony Centre is getting money from Russian government, through some secret channels. Vaira Vike-Freiberga did not endorse any of the candidates but she was much softer about Zatlers' supposed ethics lapses and characterized them as understandable.
Sunday, May 27, 2007
Opinion poll
The Latvian president is elected by the parliament, but the public opinion can have an effect on how the parliament votes. Latvijas Fakti asked 500 Latvians, whom do they support for president?
54.3% Aivars Endzins
28.6% Valdis Zatlers
Among Latvian webloggers, it's even much more skewed towards Endzins. Peteris, Aleks and a lot of Latvian language webloggers support Endzins and I have difficulty finding any pro-Zatlers voices.
54.3% Aivars Endzins
28.6% Valdis Zatlers
Among Latvian webloggers, it's even much more skewed towards Endzins. Peteris, Aleks and a lot of Latvian language webloggers support Endzins and I have difficulty finding any pro-Zatlers voices.
Zatlers vs. Endzins: issues and non-issues
With 4 days left until the Latvian presidential election, the candidates are finally known! It's Zatlers (nominated by governing coalition 9 days before the election) vs. Endzins (nominated by opposition 7 days before the election).
Now, Latvia is having a short but heated debate on the two candidates. In case of Zatlers, the debate has concentrated on cash "gifts" that he, as a doctor, has received from pacients (whether those gifts have been legal and whether the taxes on them have been paid). In my opinion, this issue is getting too much attention. The "gifts" from patients are common in Latvia. (They should not be but, in practice, they are...) If we disqualify candidates who have received them, we might have to disqualify every surgeon and specialty doctor in Latvia! (State revenue service, when asked to comment on Zatlers: "We are trying to check if there is any doctor in Latvia who has declared any of his gifts to the tax service...")
The coalition parties are trying to spark an equally meaningless debate on Endzins' past membership in Communist Party. Again, if the same standard is applied to every candidate for every government position, it would disqualify a large fraction of politically active people who were old enough to be admitted to Communist Party in Soviet period.
The main problem with Zatlers is not any of his gifts. The problem with him is that Zatlers was nominated by People's Party-lead coalition, which viewed as somewhat corrupt. The gifts are just an excuse to bring his candidacy down. If there was another People's Party-related candidate, the opposition would find a different excuse!
Similarly, the problem that the coalition has with Endzins is that he is too close to the opposition and too far from the coalition. So, the coalition would like to bring him down and they haven't found any other issue except for Communist Party membership.
I am a bit disappointed those "excuses" getting so much attention. Can we start talking about the real issues? When it comes to corruption, possible influence of personal business interests of Andris Skele on Latvian government decisions is a major issue. Zatlers' cash gifts are non-issue.
Now, Latvia is having a short but heated debate on the two candidates. In case of Zatlers, the debate has concentrated on cash "gifts" that he, as a doctor, has received from pacients (whether those gifts have been legal and whether the taxes on them have been paid). In my opinion, this issue is getting too much attention. The "gifts" from patients are common in Latvia. (They should not be but, in practice, they are...) If we disqualify candidates who have received them, we might have to disqualify every surgeon and specialty doctor in Latvia! (State revenue service, when asked to comment on Zatlers: "We are trying to check if there is any doctor in Latvia who has declared any of his gifts to the tax service...")
The coalition parties are trying to spark an equally meaningless debate on Endzins' past membership in Communist Party. Again, if the same standard is applied to every candidate for every government position, it would disqualify a large fraction of politically active people who were old enough to be admitted to Communist Party in Soviet period.
The main problem with Zatlers is not any of his gifts. The problem with him is that Zatlers was nominated by People's Party-lead coalition, which viewed as somewhat corrupt. The gifts are just an excuse to bring his candidacy down. If there was another People's Party-related candidate, the opposition would find a different excuse!
Similarly, the problem that the coalition has with Endzins is that he is too close to the opposition and too far from the coalition. So, the coalition would like to bring him down and they haven't found any other issue except for Communist Party membership.
I am a bit disappointed those "excuses" getting so much attention. Can we start talking about the real issues? When it comes to corruption, possible influence of personal business interests of Andris Skele on Latvian government decisions is a major issue. Zatlers' cash gifts are non-issue.
My previous posts on presidential election:
Saturday, May 26, 2007
Latvian presidential election: the stage is set!
Yesterday was the deadline for nominating candidates for the Latvian presidential election on May 31. And on the last day, we got another candidate!
Harmony Centre, a left-of-center party consisting mostly of ethnic-Russians, made a surprise move by nominating Aivars Endzins, the former Chairman of Constitutional Court of Latvia. On the evening of the same day, New Era Party's candidate Sandra Kalniete withdraw her candidacy in favour of Endzins, during the TV debate between the candidates. According to Kalniete, she made her decision during the debate, seeing that Endzins was the best candidate.
The cynic in me says that Kalniete's withdrawal was planned in advance and carried out in a way that would get the maximum positive publicity for Endzins. If so, New Era Party has proven that they are much better in staging events of this type than the coalition parties.
Who is Aivars Endzins? We know much more about him than Zatlers. Born in 1940, taught law at the University of Latvia for most of the Soviet period. Joined pro-independence Popular Front of Latvia in 1988. Unlike Kalniete, he was not among the top leaders of Popular Fronte, but he was quite active and was elected to the Latvian parliament in 1990 and re-elected in 1993 and 1995. In December 1996, he was appointed to lead the newly created Constitutional Court of Latvia. At this time, he resigned from both parliament and Latvian Way party to which he belonged at this point, so that he could become a politically neutral judge.
In last years, Endzins has spoken out against the top members of Latvian political elite on several occasions. Probably, the most prominent occasion was the Motte apartment case, in which a government real-estate management agency lead by Janis Motte handed out 183 government apartments in very good locations to members of political elite and their friends. The Constitutional Court reviewed the case and decided that the rules according to which the agency was run were illegal. According to Endzins, they were pressured not to consider the case by a number of politicians, including two prime ministers: Andris Skele and Vilis Kristopans.
On another occasion, Endzins spoke out against Imants Freibergs, the husband of our current president Vaira Vike-Freiberga. Freibergs family has acquired a long-term lease for land in a highly lucrative location in the resort town of Jurmala and wanted to build a house there. The problem was that the land was classified as a nature reserve and housing construction on it was prohibited! Imants Freibergs started working with Jurmala city council to remove his lot from the list of nature reserve so that he could build there. (They don't normally do that but if the lot belongs to a highly influential politician or businessman... the rules can change.) Endzins criticized that and suggested that Freibergs gives up the lease to the land.
So, if Endzins sees something wrong, he'll say that, even if the wrongdoers are high up in the government! His foreign policy abilities are unknown... but he has certainly communicated with foreign politicians and judges while being in the parliament (1990-1996) and Constitutional Court (1996-2006). So, he should be fine in that aspect. (If you think that's a a bit mellow endorsement of Endzins... yes, it is! I still wish Kalniete was a candidate.)
Harmony Centre, a left-of-center party consisting mostly of ethnic-Russians, made a surprise move by nominating Aivars Endzins, the former Chairman of Constitutional Court of Latvia. On the evening of the same day, New Era Party's candidate Sandra Kalniete withdraw her candidacy in favour of Endzins, during the TV debate between the candidates. According to Kalniete, she made her decision during the debate, seeing that Endzins was the best candidate.
The cynic in me says that Kalniete's withdrawal was planned in advance and carried out in a way that would get the maximum positive publicity for Endzins. If so, New Era Party has proven that they are much better in staging events of this type than the coalition parties.
Who is Aivars Endzins? We know much more about him than Zatlers. Born in 1940, taught law at the University of Latvia for most of the Soviet period. Joined pro-independence Popular Front of Latvia in 1988. Unlike Kalniete, he was not among the top leaders of Popular Fronte, but he was quite active and was elected to the Latvian parliament in 1990 and re-elected in 1993 and 1995. In December 1996, he was appointed to lead the newly created Constitutional Court of Latvia. At this time, he resigned from both parliament and Latvian Way party to which he belonged at this point, so that he could become a politically neutral judge.
In last years, Endzins has spoken out against the top members of Latvian political elite on several occasions. Probably, the most prominent occasion was the Motte apartment case, in which a government real-estate management agency lead by Janis Motte handed out 183 government apartments in very good locations to members of political elite and their friends. The Constitutional Court reviewed the case and decided that the rules according to which the agency was run were illegal. According to Endzins, they were pressured not to consider the case by a number of politicians, including two prime ministers: Andris Skele and Vilis Kristopans.
On another occasion, Endzins spoke out against Imants Freibergs, the husband of our current president Vaira Vike-Freiberga. Freibergs family has acquired a long-term lease for land in a highly lucrative location in the resort town of Jurmala and wanted to build a house there. The problem was that the land was classified as a nature reserve and housing construction on it was prohibited! Imants Freibergs started working with Jurmala city council to remove his lot from the list of nature reserve so that he could build there. (They don't normally do that but if the lot belongs to a highly influential politician or businessman... the rules can change.) Endzins criticized that and suggested that Freibergs gives up the lease to the land.
So, if Endzins sees something wrong, he'll say that, even if the wrongdoers are high up in the government! His foreign policy abilities are unknown... but he has certainly communicated with foreign politicians and judges while being in the parliament (1990-1996) and Constitutional Court (1996-2006). So, he should be fine in that aspect. (If you think that's a a bit mellow endorsement of Endzins... yes, it is! I still wish Kalniete was a candidate.)
he led the Latvian delegation to the OSCE Parliamentary Assembly, was a member of the Latvian delegation to PACE, and has worked on the Venice Commission (the European Commission for Democracy through Law) and in the Baltic Assembly.My previous posts on other presidential candidates:
Wednesday, May 23, 2007
One last note on Zatlers
I'm amazed how quickly Google indexes the web! Another Latvian weblogger wrote a post on Zatlers today and, just a few hours later, when I was googling for information, that post was already among the search results! Shouldn't be too long until my posts on Zatlers start showing up on Google...
Dark horses in Latvian politics
Valdis Zatlers is not the first surprise candidate for a top political position in Latvia. Vaira Vike-Freiberga was only vaguely known for most Latvians, before she became the president in 1999. And I didn't know who Andris Skele was when he was chosen as the prime minister in 1995, after a deadlock in two-month long negotiations.
In both of those cases, the Latvian politicians chose a barely known person who did not belong to any political party. And in both cases, that person turned out to be more strong-willed than most of Latvian career politicians. Both Vike-Freiberga and Skele had a profound impact on Latvian politics, much more than it was expected when they were nominated.
I wonder if there is something deeper behind that. A weak person is less likely to become known outside of his/her own field. This may be why outsiders who ascend to top government positions in Latvia turn out to be stronger and more independent than the career politicians.
Curiously, people who know Zatlers describe him as a person of strong character. Will the parties who nominate him now be happy with him four years later? Or will they see him going in a direction that they didn't expect? As we see from the past, being dark horse does not imply being push-over.
In both of those cases, the Latvian politicians chose a barely known person who did not belong to any political party. And in both cases, that person turned out to be more strong-willed than most of Latvian career politicians. Both Vike-Freiberga and Skele had a profound impact on Latvian politics, much more than it was expected when they were nominated.
I wonder if there is something deeper behind that. A weak person is less likely to become known outside of his/her own field. This may be why outsiders who ascend to top government positions in Latvia turn out to be stronger and more independent than the career politicians.
Curiously, people who know Zatlers describe him as a person of strong character. Will the parties who nominate him now be happy with him four years later? Or will they see him going in a direction that they didn't expect? As we see from the past, being dark horse does not imply being push-over.
Dark horse presidential candidate has emerged!
Earlier today, the four parties of the Latvian coalition government agreed on the doctor Valdis Zatlers as their presidential candidate. Since the four-party coalition has 58 of 100 seats in the parliament, Zatlers will become the president, unless one of parties changes their mind between now and May 31 (the election day).
My reaction, six hours ago... They nominated whom? I've heard that name but when and in that context? Let's look him up on the google. 8 pages of hits, mostly medical webpages, one newspaper interview. Hmmm, not much information...
The basic facts. Born in 1955, received a medical degree in 1979, has worked as a doctor since then. Has been the director of Riga Hospital of Traumotology and Orthopaedics since 1994. Participiated in founding Latvian Popular Front, the pro-independence coalition, in 1988, but did not stay in politics. Founded several professional organizations of Latvian doctors around the same time.
After that, the only time when he came into news, was a scandal in early 2003. A doctor from his hospital, Aris Auders, had gone into politics with New Era Party and became the Minister of Healthcare. One of Auders' first decisions as the minister was starting a corruption investigation against his former boss Zatlers and suspending Zatlers for the duration of the investigation. That was the time when New Era Party had just entered the government after campaigning on anti-corruption theme and was starting investigations against many officials.
In this case, Zatlers was cleared of all charges one month later. And the investigation against him was overshadowed by a scandal involving Auders himself. Auders became the symbol of medical corruption in Latvia and the investigation against Zatlers was forgotten by the general public.
Will he be a good president? It's very hard to say. Zatlers is probably very respected as a doctor but has almost no political experience. One negative is that he might suffer from "foot-in-mouth" disease. Diena newspaper has dug up some past quotes from Zatlers' interviews and they are quite colourful. Like this one:
My other posts on Latvian presidential election:
My reaction, six hours ago... They nominated whom? I've heard that name but when and in that context? Let's look him up on the google. 8 pages of hits, mostly medical webpages, one newspaper interview. Hmmm, not much information...
The basic facts. Born in 1955, received a medical degree in 1979, has worked as a doctor since then. Has been the director of Riga Hospital of Traumotology and Orthopaedics since 1994. Participiated in founding Latvian Popular Front, the pro-independence coalition, in 1988, but did not stay in politics. Founded several professional organizations of Latvian doctors around the same time.
After that, the only time when he came into news, was a scandal in early 2003. A doctor from his hospital, Aris Auders, had gone into politics with New Era Party and became the Minister of Healthcare. One of Auders' first decisions as the minister was starting a corruption investigation against his former boss Zatlers and suspending Zatlers for the duration of the investigation. That was the time when New Era Party had just entered the government after campaigning on anti-corruption theme and was starting investigations against many officials.
In this case, Zatlers was cleared of all charges one month later. And the investigation against him was overshadowed by a scandal involving Auders himself. Auders became the symbol of medical corruption in Latvia and the investigation against Zatlers was forgotten by the general public.
Will he be a good president? It's very hard to say. Zatlers is probably very respected as a doctor but has almost no political experience. One negative is that he might suffer from "foot-in-mouth" disease. Diena newspaper has dug up some past quotes from Zatlers' interviews and they are quite colourful. Like this one:
People who published the anti-Mohammad cartoons had a complete freedom do to that. But they should have realized that those who pray to Mohammad, have a complete freedom to kill them for that.And it's not the only one. Zatlers will have to become more careful if he's elected.
My other posts on Latvian presidential election:
- On Aivars Endzins;
- Will Zatlers be anyone's puppet?Notes on election campaign: March 27, March 29, after-election.
Monday, May 21, 2007
Inflation in Latvia
Inflation has become one of main political issues in Latvia. Year-to-year increase of consumer price index is now at 8.8%, highest in the European Union. Introduction of euro has been postponed indefinitely. Bank of Latvia has raised its interest rates and the parliament has passed an anti-inflation package of tax changes and other measures.
I suspect the effect of those measures will be quite limited and not because the Latvian government does not want lower inflation. In 1960s, Canadian economist Robert Mundell came up with an economic model of small open economies, for which (together with other achievements) he would win Nobel Prize in Economics in 1999. A consequence of Mundell's work is that a country cannot simulteneously have the following three things (known as "Impossible trinity"):
I suspect the effect of those measures will be quite limited and not because the Latvian government does not want lower inflation. In 1960s, Canadian economist Robert Mundell came up with an economic model of small open economies, for which (together with other achievements) he would win Nobel Prize in Economics in 1999. A consequence of Mundell's work is that a country cannot simulteneously have the following three things (known as "Impossible trinity"):
- A fixed exchange rate;
- Free capital movement;
- An independent monetary policy.
Canada (Mundell's homeland) has capital moving freely between it and United States (in 1960s) and it and the rest of world (now) but the exchange rate between Canadian and US dollar is not fixed. It has fluctuated widely, from 65 Canadian cents for one US dollars to 90 Canadian cents for one US dollar, in just last 5 years. As a result, the Bank of Canada is able to set its monetary policy independently of United States.
Latvia has made a different choice. The money is moving freely between it and the rest of EU and beyond and the exchange rate between the Latvian lat and the euro is fixed. That's the first and the second of three conditions of Mundell's "impossible trinity". So, we can't have the third.
Latvia's monetary policy is effectively in hands of European Central Bank, instead of Latvian authorities. Bank of Latvia can change the interest rates for loans in lats, but if those get to high, everyone will start borrowing in euros. (That is, everyone who is not already borrowing in euros...) And if the current policies of European Central Bank result in high inflation in Latvia, there's not much Latvia can do... It's not a satisfying answer but I'm afraid it's true...
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