Latvia country brief
Latvia, one of the three Baltic States, covers an area of 64,589 square kilometres. At the time of the 2011 Census, Latvia's population was 2.07million, a fall of 13 per cent on the 2000 figure of 2.38 million. This demographic shift reflects factors such as emigration, an ageing population and a falling birth rate. The capital of Latvia is Riga. Latvia celebrates its national day on 18 November (Independence Day).
System of Government
Latvia regained its independence from the Soviet Union in August 1991. Under the Constitution, the President is elected by members of the unicameral Parliament (Saeima) for a four-year term and has limited powers. The President appoints the Prime Minister, approves the Cabinet and may return legislation to the Saeima. The Saeima has 100 members, who are elected. Elections are held on the first Saturday in October every four years.
Latvian President Andris Berzins (Greens/Farmers Union Party), was elected on 2 June 2011 for a four-year term, commencing 8 July 2011.
Elections for the Saeima were last held on 17 September 2011. Harmony Center (SC) won 31 seats, followed by the Reform Party (22), Unity (20), National Alliance (14), and Greens and Farmers Union (ZZS)(13). The next parliamentary elections are due in October 2014.
Mrs Laimdota Straujuma (Unity) was sworn in as Latvia’s first female Prime Minister on 22 January 2014. This followed the 27 November 2013 resignation of former Prime Minister Dombrovskis and his cabinet to take political responsibility for a supermarket collapse in Riga on 21 November 2013, which killed 54 people. Prime Minister Straujuma leads a coalition government comprising the Unity Party, Reform Party, National Alliance, nine independent MPs and the Union of Greens and Farmers.
Latvia joined NATO on 2 April 2004 and acceded to the EU on 1 May 2004. It was accepted into the eurozone on 1 January 2014. Latvia joined the World Trade Organization in 2009 and was invited at the May 2013 Ministerial Council meeting of the Organization for Economic Co-operation and Development (OECD) to begin the OECD accession process.
The global financial and economic crisis of 2008-09 hit the Latvian economy extremely hard. After years of double-digit growth, mainly funded by external borrowing by the country's banks, the lack of further readily-available credit brought the economy to a halt. Latvia's GDP contracted by 24 per cent in 2009. With the assistance of an IMF and EU-approved bailout package, the Dombrovskis Government turned the economy around through a program of deep public spending cuts. Latvia's economy rebounded, growing by around 5 per cent per year from 2011-13 and becoming the EU's fastest growing economy. The IMF/EU Program concluded in December 2011, with Latvia repaying its loan ahead of schedule. The IMF predicts further growth of just over 4 per cent in 2014, which places it as the fastest growing economy in central and eastern Europe. Despite this, unemployment remains an issue. Unemployment in Latvia rose dramatically during the financial crisis, from around 7 per cent in 2008 to a peak of over 20 per cent in the last quarter of 2009. It has since fallen gradually, with 9.8 per cent recorded in March 2014.
Australia recognised Latvia's regaining of independence on 27 August 1991. Latvia and Australia enjoy friendly, co-operative relations with strong people to people links flowing from large numbers of Latvians who migrated to Australia in the twentieth century, primarily at the end of World War II. At the time of the 2011 Census, there were 20,124 people in Australia of Latvian ancestry.
The Australian Ambassador in Stockholm is accredited to Latvia. The Latvian Ambassador based in London has non-resident accreditation to Australia. Latvia is represented in Australia by Honorary Consuls in New South Wales, Victoria, Queensland, South Australia and Western Australia.
The relationship between Australia and Latvia is underpinned by bilateral agreements covering Trade and Economic Cooperation (1993), Extradition (2005) and Social Security (2011).
Latvia's then-State Secretary for Foreign Affairs, and now current Ambassador to Australia, Mr Andris Teikmanis, visited Australia for bilateral consultations in October 2012. The Australian Prime Minister's Special Envoy, Dr Russell Trood, visited Riga in September 2011, during which he signed a bilateral Social Security Agreement.
Bilateral economic and trade relationship
Two-way merchandise trade in 2012-13 between Australia and Latvia was A$17.99 million. Australia exported A$8.9 million worth of goods to Latvia during this period, primarily alcoholic beverages. Imports from Latvia in this period totaled A$9.07 million, primarily telecom equipment and parts and alcoholic beverages.
Please contact Austrade for information on doing business in Latvia.
Last updated April 2014