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).
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. Latvian President Andris Berzins, a member of the ruling coalition 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 Zatlers' Reform Party (22), Unity (20), National Alliance (14), and Greens and Farmers Union (ZZS)(13). The next parliamentary elections will be held in September 2015. Mr Valdis Dombrovskis has been Latvia's Prime Minister since 12 March 2009.
Latvia joined the World Trade Organization in February 2009. In 2002, Latvia was invited to join the EU and NATO and underwent reforms necessary to comply with membership requirements. A referendum to join the EU was supported by 73 per cent of Latvian voters. Latvia subsequently joined NATO on 2 April 2004 and the EU on 1 May 2004. Latvia was invited at the May 2013 Ministerial Council meeting of the Organisation 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. In December 2008, the IMF approved a 27-month Stand-By Arrangement for Latvia to support the country's efforts to stabilise the economy. The IMF package was part of a coordinated international effort which loaned Latvia €7.5 billion (A$15.4 billion) — equivalent to almost one-third of Latvia's GDP. In November 2009, in consultation with the IMF and the European Union, the Dombrovskis Government tabled a budget in Parliament designed to cut the country's 2010 budget deficit and thereby meet the demands of foreign lenders. These measures proved effective and Latvia’s economy rebounded, growing by more than 5 per cent in both 2011 and 2012 and becoming the EU’s fastest growing economy. The IMF/EU Program successfully concluded in December 2011. The IMF predicts further, albeit slower, growth of around 4 per cent in 2013 and reports that Latvia remains on track to join the euro in 2014. 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. Unemployment has fallen gradually since, with 13.5 per cent recorded at the end of 2012.
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 the 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).
There have been high level visits in both directions. Latvia’s State Secretary for Foreign Affairs, Mr Andris Teikmanis, visited Australia for bilateral consultations in October 2012. The Prime Minister's Special Envoy, Dr Russell Trood, visited Riga in September 2011, during which he signed a bilateral Social Security Agreement. A Parliamentary delegation led by Senator Grant Chapman visited Latvia in September 2003. Then South Australian Governor Bruno Krumins visited Latvia in August 2001 for Riga's 800th anniversary commemorations and met with the President and Foreign Minister. Lt Governor Krumins visited Latvia again in 2003.
Bilateral economic and trade relationship
Two-way merchandise trade in 2011-12 between Australia and Latvia was A$13.65 million. Australia exported A$7.9 million worth of goods to Latvia during this period, primarily alcoholic beverages. Imports from Latvia in this period totalled A$5.6 million, primarily telecom equipment and parts, and furniture, mattresses and cushions.
Please contact Austrade for information on doing business in Latvia.
Last updated July 2013