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Latvia

Yearbook 1997

Latvia. According to Countryaah, Latvia was characterized by a clearer economic upturn during the year and by domestic political turbulence. expressed itself in two government crises. Already in 1996, the Latvian economy turned upward, with growth of 2.8%. In 1997, growth was estimated at 6%, inflation was reduced to 9% and the state budget showed a surplus. Investments increased sharply and during the year L. Estonia took over the saturation of foreign investment per capita in the Baltic States. Towards the end of the year, unemployment tended to decline. Exports increased strongly during the year, but imports increased even more strongly and the deficit in Latvia's current account balance remained alarmingly large.

The government fell in January after Andris Skele failed to get his finance ministerial candidate approved. After a month's government crisis, however, Skele returned as prime minister at the head of an almost unchanged government.

In the spring and summer, however, the government gradually fell apart. The DPS (Democratic Party of Saimnieks), from whose direction the failed prime ministerial candidate was retrieved, sought to avenge by distributing compromising material with the implication that Finance Minister Guntars Krasts would have violated the Anti-Corruption Act. However, some unsustainable evidence against Krasts never emerged, but the mass media now began to more systematically examine the actions of other ministers. As a result of this review, three of them resigned on their own, while one was dismissed by the Prime Minister. A couple of other ministers were allowed to resign for some other reasons during the spring and summer.

The crisis culminated in the summer when the prime minister came on an increasingly clear collision course with the three largest parties in the government coalition: DPS, Apvieniba Tevzemei un brivibai/LNNK (For the Fatherland and Freedom/Latvia's National Independence Movement) and Latvia's Cels (Latvia). Skele was forced to resign, and the parties agreed that Finance Minister Guntars Krasts would become the new prime minister at the head of a largely unchanged government.

In November, former Communist leader Alfreds Rubiks was released from prison after serving six of the eight years he was sentenced. The border negotiations with the Russian Federation were completed in October.

1997 Latvia

In June 1993, a new parliament was elected to appoint Guntis Ulmanis as president. The beginning liberalization of the economy immediately led to widespread unemployment. In 1994, foreign investment increased, but the economy continued to depend on Russia, which was the main supplier of oil and natural gas as well as the country's main export market. Despite the massive privatization of state-owned enterprises, the government continued to deficit the state budget and trade balance.

In 1995, the bankruptcy control of the commercial banks led to several of them going bankrupt. The September parliamentary elections gave no clear victory, as the nine participating parties each received between 5 and 16% of the vote. An agreement between the Conservative National Bloc and two left-wing parties in December allowed Andris Skele to be appointed prime minister.

In June 1996, Parliament re-elected with 53 votes out of 100 Guntis Ulmanis for the presidential post. In the same year, relations with Russia improved significantly. Nevertheless, Latvia continued to make demands for the signing of a border agreement between the two countries.

In July 1997, Guntars Krast took over the post of prime minister from Andris Skele, who resigned after being accused of corruption. In November, Russia reiterated its criticism of a possible Latvian accession to NATO. Although Riga did not appear on the list of candidates for inclusion in the Atlantic pact, the government had on several occasions expressed its desire to be admitted.

In February 1998, Latvia passed a law allowing the issuance of passports to foreigners who had remained in the country since 1991. This was a new attempt to reduce tensions with the country's Russian minority.

Commander-in-Chief of the Latvian Armed Forces, Juris Dalbinsh was dismissed from his post in April 1998 after attending an event for former Latvian members of the German SS who, together with Germany during World War II, had fought against the Soviet Union. The same week, the director of police in Riga was dismissed for failing to provide adequate protection for a city synagogue subject to a bomb attack. The same month, Italy declared that the treatment to be subjected to the Russian minority in Latvia is inconsistent with the requirements of countries wishing to join the EU.

 

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