Latvian Political Economy

Latvia stands out as the East European country hardest hit by the global financial crisis; it lost approximately 25 percent of its GDP between 2008 and 2010. It was also the most overheated economy before the crisis. But in the second half of 2010, Latvia returned to economic growth. How did this happen so quickly? Current Latvian Prime Minister Valdis Dombrovskis, who shepherded Latvia through the crisis, and renowned author Anders slund discuss why the Latvian economy became so overheated; why an IMF and European Union stabilization program was needed; what the Latvian government did to resolve the financial crisis and why it made these choices; and what the outcome has been. This book offers a rare insider's look at how a national government responded to a global financial crisis, made tough choices, and led the country back to economic growth.

The postcommunist transitions to a market economy raised doubts about the political sustainability of an economic reform under democracy. At the same time, they turned the attention to the centrality of political factors in economic policy-making. Latvia has succeeded in proceeding into the consolidation phase of its market reforms while remaining committed to both political pluralism and macroeconomic austerity. Even if politics were not treated as a mere constraint, the basic question is still: how are the government's adjustment choices modified in the political process?

The past one hundred years have been a very trying time for Latvia, complete with success, tragedy, and still unrealized promise. Within the course of a generation, the country experienced revolutions, wars and independent statehood, and then the slide into authoritarianism. World War II brought new occupations. The tragedies were staggering: holocaust, executions, and an exodus of refugees. Soviet consolidation bred deportations, forced collectivization and partisan warfare. Almost fifty years later, Latvia regained its independence and emerged from decades of disastrous Soviet rule. This book comprehensively surveys Latvia's recent past and prospects for the new millennium, placing contemporary events in historical perspective. The authors address the evolution of the country from the movement against Soviet rule to the dilemmas of contemporary politics: party formation, the problem of corruption, the quest for the future and a regional and international role, the struggle to develop a civil society, the issue of ethnic relations and the recurring tendency towards statist solutions. Proper attention is also given to economic developments.

Seminar paper from the year 2000 in the subject Politics - International Politics - Region: Eastern Europe, grade: 1,5 (A), Free University of Berlin (Otto Suhr Institute), 13 entries in the bibliography, language: English, abstract: After a short period of being a liberal democracy in the 1920 ́s, Latvia was ruled by totalitarian regimes, beginning with the dictatorship of Ulmanis and the following German occupation of the country to almost fifty years of Soviet rule which ended officially on September 6th, 1991 when the Soviet Union recognized all three Baltic states as independent. In the aftermath, Latvia found itself in a process of transition which lasts for one decade now.When the people of Latvia were able to participate in the first partly free elections in 1989 they chose almost exclusively candidates of their main opposition movement Popular Front (LTF) to represent Latvia ́s interests within Moscow ́s Congress of the People ́s Deputies. Just one year later, the last elections under Soviet rule took place on the national level in Latvia. The Popular Front finished first and governed Latvia on it ́s way towards independence. As soon as the LTF was freed from the big pressure under which it had fought for democracy against the powerful Kremlin it became obvious that the Popular Front consisted of very different political groups ranging from former communist party members to Latvian nationalists. Some parties were very popular during one election, but in the next one they could not collect enough votes to get into parliament. Some parties collapsed after a short period of time, others split into new movements or merged with other parties. No coalition-government lasted for the whole parliamentary term and in each of the three elections during the nineties more than one half of the participating parties took part for the first time. On the other hand, especially during the last two years some small parties merged into larger ones or at least formed joined factions

During its post-Soviet reconstruction Latvia has become a role model in macroeconomic stabilization and democratization. Latvia in Transition provides the material necessary to understand present-day Latvia. The author examines the main events, processes and problems of this country during the period of transition from a dependent and Moscow-dominated Soviet Republic to an independent and also interdependent state. The book presents the most relevant and essential aspects of Latvia's history, politics, economics and society.