Area: 64,589 sq km, slightly larger than W. Virginia
Population: 2,348,784 (July 2003 est.)
Annual Inflation: 2% (2002 est.)
Population Growth Rate: -0.73% (2002 est.)
Gross Domestic Product (GDP): $20.99 billion (purchasing power parity, 2002 est.)
Life Expectancy: male - 63.46 years; female - 75.45 years (2003 est.)
GDP Per Capita: $8,900 (purchasing power parity, 2002 est.)
Infant Mortality: 14.59 deaths/1,000 live births (2003 est.)
Real Annual GDP Growth: 6.1% (2002 est.)
U.S. STRATEGIC INTERESTS
Latvia's full integration into the Euro-Atlantic community, evidenced by imminent membership in the North Atlantic Treaty Organization (NATO) and the European Union (EU), is a testament to its commitment to democracy and free-market economics. SEED funding has enabled the U.S. to assist in Latvia's successful transition and advance key U.S. foreign policy goals - regional stability, the spread of democracy and American values, and expanded economic growth. Yet, acknowledged achievements in these areas cast in sharper relief Latvia's most important remaining challenge - strengthening the rule of law. While corruption remains less pervasive than in many other transition economies, the USG's top SEED priority in Latvia is to ensure that it continues to improve its law enforcement and judicial institutions in order to consolidate the gains of more than a decade of transition. As Latvia becomes a full-fledged member of Western security and economic institutions, SEED monies invested here will show that it is not just a recipient but can also be a provider of political and economic security by sharing its expertise with other transition countries still in the throes of difficult reforms.
OVERVIEW OF U.S. GOVERNMENT ASSISTANCE
In FY 2003, the U.S. Government (USG) provided an estimated $13.9 million in assistance to Latvia:
U.S. ASSISTANCE PRIORITIES
Security, Regional Stability, and Law Enforcement Programs: Strengthening the rule of law in Latvia remained the top USG priority for SEED spending in FY 2003. Rule of law priorities included training for law enforcement officers, prosecutors, and judges; technical assistance to the Anti-Corruption Bureau (ACB); and outreach to Government of Latvia (GOL) authorities involved in the fight trafficking in persons and financial crime. Security-related assistance continued to promote regional stability by helping Latvia to enhance its interoperability with NATO forces through Foreign Military Financing (FMF) and International Military Education and Training (IMET) programs. The U.S. also provided $1.4 million in training and equipment through the Export and Border Security Program (EXBS), aimed at helping Latvian border guards and customs officials bolster export controls.
Democratic Reform Programs: In FY 2003, the U.S. provided SEED-sponsored support for democratic reform through the U.S. Embassy's Democracy Commission, which makes small grants to the NGO sector to support an array of USG policy goals; support for GOL programs aimed at integrating the large Russian-speaking non-citizen population; assistance to the Ministry of Education in creating a formal Holocaust curriculum; and the provision of not only formal educational exchanges, but also U.S. Embassy-issued travel grants to familiarize current and future Latvian leaders with U.S. policies and institutions, and to promote mutual understanding among Baltic and Russian officials by facilitating travel for Latvians to regional seminars and conferences.
Social Sector and Economic Reform Programs: Latvia's strong economic performance has allowed the USG to focus its efforts in this area predominantly on social-sector spending. In FY 2003, SEED regional funds supported important public health initiatives in Latvia, including the successful Multi Drug Resistant Tuberculosis (MDRTB) Center of Excellence in Riga. The USG also pooled money with other donor countries to provide bloc grants to UNDP that will help combat the spread of HIV/AIDS. While the U.S. Environmental Protection Agency (EPA) closed out its presence in Latvia in FY 2003, environmental programming continues through the Regional Environmental Office (REO) in Copenhagen. Finally, the USG did direct SEED resources into economic reform programs, most notably through a commitment of FY 2003 funds to hold in Latvia a 2004 follow-on to the successful 2002 Helsinki Women Business Leaders Summit.
SECTORAL ASSESSMENTS
Security, Regional Stability, and Law Enforcement
Latvia has been a willing, supportive partner in pursuing important U.S. foreign policy goals of peace and stability, both within Europe and beyond. Since 1996, Latvia has participated in every NATO-led peace keeping deployment in the Balkans, last year dispatching two medical teams to Afghanistan, and Latvian soldiers are currently on the ground in Iraq. Latvia's strong, principled stand on the need to bring freedom to Iraq and maintain a robust trans-Atlantic relationship springs from its history as a victim of both Nazi and Soviet oppression -- Latvia understands that free peoples have a moral obligation to confront dictatorships before the costs become too great to bear. The USG works with Latvia in conjunction with other NATO allies and friends in the region to contribute security in its neighborhood through healthy relationships with Russia, Ukraine, Belarus, and other former Soviet states.
Non-SEED security assistance thus plays a vital role in promoting U.S. regional stability goals in and with Latvia. From 1995 through 2003, Latvia received over $39 million in Foreign Military Financing (FMF) and has made steady use of available funding. FY 2004 allocations show another but very modest increase. The majority of FMF is used for improving individual soldier defense capabilities, communications equipment, a regional airspace initiative, and a long-term contractor technical assistance team to provide direct support to the Ministry of Defense in the areas of personnel, C4, force structure, logistics management, and defense procurement. The USG also provided $1.1 million in International Military Education and Training (IMET) to Latvia in FY 2003. The near-term focus for IMET remains professional and technical training for junior members of the defense establishment and leadership and management courses for mid-level and senior personnel. Many senior personnel, including the Minister of Defense, Land Forces Commander, and Navy Commander, have attended U.S. training through IMET. Latvia's emphasis on indigenous English language training (ELT) has virtually eliminated the need to use IMET funds for ELT. Overall, Latvia sends about 55 students per year to the U.S. for training and receives, on average, two Mobile Education Teams from the Defense Institute of Internal Legal Studies (DILLS). These seminars on various topics relating to military justice have been well received.
Latvia is also eligible to purchase lethal and non-lethal Excess Defense Articles (EDA) (at 5-50 percent of acquisition value, based on condition) and to receive lethal and non-lethal EDA on a grant basis, under section 516 of the Foreign Assistance Act. From 1993 through 2003, Latvia received EDA with an original acquisition value of about $13 million (current value of over roughly $6 million), with about $800,000 acquired in FY 2003. Recent authorized transfers include additional M-14 rifles and ammunition, as well as excess light anti-tank weapons (LAW) and commercial utility cargo vehicles. Latvia has also requested information on which to base a possible request for excess navy and coast guard vessels.
Another important non-SEED regional security activity is the successful Export and Border Security (EXBS) program that has trained dozens of Latvian security police and border guards in interdicting shipments of dual use goods and weapons of mass destruction. That success was again underlined in July when Latvian officials intercepted a shipment of military hardware (labelled as "agricultural goods") bound for Iran. The experience the Latvians have gained in searching for such items has also paid off in the more prosaic, but still important, fight against contraband. Once Latvia forms part of the EU's border with Russia, the professionalism of its border control authorities will become even more visible and significant.
Most USG law enforcement assistance in Latvia takes place under the broader rubric of rule-of-law or anti-corruption programming, most of which is funded through regional SEED-sponsored programs. SEED funds also support regional initiatives designed to combat trafficking in persons. While Latvia is considered primarily a source country for such trafficking, it was designated Tier II in the Department of State's most recent annual report on trafficking. In 2003, there were 14 new criminal cases against traffickers and 23 convictions in outstanding cases. The Embassy thus chose to commit an additional $100,000 of FY 2003 post-level funds, beyond the $300,000 already set aside for FY 2003 regional programs, as a way to strengthen Latvia's efforts to train border guards, police, and judicial officials in anti-trafficking techniques and prosecutorial methods.
Basic to any concept of national security are the laws and mechanisms that underpin it, and the USG's top SEED priority in Latvia remains strengthening the rule of law. This is done predominantly through regional anti-corruption and rule-of-law programs, which, in Latvia's case, have focused on training for law enforcement officials, prosecutors, and judges. These SEED monies are co-mingled with funds from the State Department's Bureau for International Narcotics and law Enforcement Affairs (INL), which also bring significant Department of Justice (DOJ) resources, in the form of both financial and technical assistance, to bear on the fight against corruption. In early 2003, Latvia formally launched its Anti-Corruption Bureau (ACB) with a specific charter to combat corruption. The center-right government of Prime Minister Einars Repse continues to make headway in its efforts to dismiss officials tied to previous conflict-of-interest and corruption scandals. Regional rule-of-law and anti-corruption initiatives and training are predominantly coordinated though INL, with the help of other offices like DOJ's Office of Prosecutorial Development, Assistance and Training (OPDAT) and regional USG law enforcement personnel. Latvia was allotted about $150,000 of these regional funds in FY 2003. These monies will help fund initiatives such as ongoing judicial, legal, and police and ethics training; technical assistance; and training to the ACB (including an IV program for five persons from the ACB). The USG will also use FY 2003 regional rule-of-law SEED funds to pursue expansion of an existing Letter of Agreement between the U.S. and Latvia on judicial assistance, to include broader U.S.-Latvian cooperation in the fight against Russian organized crime. Other anti-corruption and rule-of-law assistance projects included travel and program funding for five participants from the Ministry of Justice (two judges), Ministry of Interior (State Police) and Office of the Prosecutor General (two prosecutors) to the U.S. for three weeks to learn how corruption is handled there.
Another area worthy of close scrutiny is Latvia's progress in fighting financial crime, specifically money laundering. Latvia has a tough and respected banking regulator, and its Financial Intelligence Unit (FIU) has shown increasing interest in utilizing U.S.- and EU-proffered training. Latvia's 22 commercial banks, partly as a result of SEED-funded programs (offered primarily through USAID's Partners for Financial Stability program) that emphasize know-your-customer rules and stress the importance of the U.S. PATRIOT Act, have shown increasing readiness to report and freeze questionable accounts. The FIU recorded a dramatic increase in the number of suspicious transaction reports filed in 2003 by Latvian banks, and this is clearly partly attributable to training provided by the USG. The FIU is also excellent at updating and passing along to Latvian financial institutions all new additions to the U.S. Office of Foreign Assets Control (OFAC) terrorist finance list.
Democratic Reform
The USG has helped Latvia bolster its democratic reforms through a variety of SEED-sponsored means, the two most prominent of which are the Embassy Democracy Commission and support for Latvian efforts to integrate its large Russian-speaking non-citizen populace.
The Embassy Democracy Commission, funded at $250,000 for FY 2003, welcomes proposals from NGOs and academic institutions to further the development of civil society as the country continues to build and consolidate its democracy. In particular, the Embassy looks for projects promoting integration of Latvia's non-citizen, mainly Russian-speaking minority; the research and discussion of historical issues, including Latvia's role in World War II and the Holocaust; rule of law and transparency in business and government; and public health and environmental protection. Examples of specific projects included:
The project reinforced the importance of the rule of law by increasing knowledge of the Latvian judicial system and procedures, and was aimed at a wide audience -- high school students and teachers, public officials, and judges, as well as the general public. Project activities were mainly focused in larger cities across Latvia, instead of just Riga, so that people with less access to information and education about judicial issues could take part. The project received extensive press coverage.
The project published a book on 100 distinguished Jewish citizens of Latvia. The book will be available at schools and libraries and will help coming generations to learn about the contribution of outstanding Jewish artists, scientists, and others to Latvia's cultural development.
The project provided public information on the rights of individuals with disabilities and promoted the active involvement of local communities in improving the lives of people with special needs.
The goal of the project was to reach both ethnic Latvian and Russian audiences in Latvia to promote dialogue on social integration. The documentary encompasses well-known figures and regular residents of Latvia, from various cultural and ethnic backgrounds, discussing integration-related topics.
Latvia's large non-citizen Russian-speaking population and its incorporation into Latvian society is a highly important political and social concern for the GOL and USG. In FY 2002 and FY 2003, the Embassy pooled funds with other donors through the UNDP to support two major projects: the first to enhance the work of the Naturalization Board, providing information to non-citizens on how to become naturalized, and the second to support the Latvian National Language Training Program, which develops programs and materials for teaching Latvian to non-speakers. SEED funds (FY 2002) to be committed in FY 2003 total $250,000. The Embassy has also set aside an addition $50,000 for social integration projects yet to be determined -- these funds will contribute to, among other projects, a public information campaign organized by the GOL's Naturalization Board and targeted at non-citizen Russian-speaking parents on the benefits of naturalization to their children.
Educational exchange programs remain an important tool in reaching out to Latvian policy makers and publics in ways that reinforce key U.S. policy goals and messages. The USG committed $205,000 to exchange programs in FY 2003, including $140,000 for university affiliations and student advising. One such university affiliation is the Lewis & Clark College University Partnership, under which that college cooperates with the University of Latvia's (UL) Law School to expand judicial access through research and professional collaboration. After teaching at Lewis & Clark during the spring 2003 semester, the Dean of UL's law school and has now committed to a required ethics course for all law students at UL, beginning in the spring of 2004. An Alternative Dispute Resolution (ADR) course has also been added to the UL curriculum for the spring of 2004, with two UL faculty members traveling to Lewis & Clark next fall to prepare the course. It is hoped that increased use of ADR will relieve pressure on Latvia's overcrowded courts by reducing caseloads. The Embassy has also set aside $50,000 for an ADR program at the Riga Graduate School of Law, which will be made available as a continuing education module for lawyers and judges.
FY 2003 monies will extend the Lewis & Clark university partnership with the UL Law School, with the aim of establishing a "judicial watch" in Riga. Lewis & Clark is spearheading an initiative that will create a judicial watch modeled on an American law review, with the new publication to be housed at the UL Law School.
In addition to the eight Latvians the USG sponsored for travel to the U.S. in FY 2003 through International Visitor programs, the Embassy also made $40,000 available in Embassy-level travel grants to help Latvians attend regional conferences and meetings where they would interact with other Baltic and Russian counterparts. This extremely popular program helped sponsor the travel of 132 Latvians through 21 grants.
Finally, the U.S. remains committed to using SEED funds to help Latvians study and teach their World War II history, including Latvia's role in the Holocaust. The USG provided $110,000 ($50,000 in FY 2003 and $60,000 in FY 2002 funds) for a project to help the Ministry of Education develop its first comprehensive Holocaust curriculum for Latvian students.
Economic and Social Sector Reform
Latvia's strong economic growth (with annual GDP increasing by over 5 percent every year since 1999, and expected growth of nearly 7 percent in 2003) and approaching EU accession have provided it with ample resources for sustained macroeconomic development. Latvia has low taxes and wages and an underdeveloped capital market. Latvia's economy is small, relatively open and agile, and has largely reoriented its trade away from Russia and the Commonwealth of Independent States (CIS) and toward the EU over the last five years.
The USG has targeted SEED assistance in this area largely at the social sector, specifically at public health programs aimed at combating Multi Drug Resistant Tuberculosis (MDRTB) and HIV/AIDS. The Latvian TB Center of Excellence, a regionally funded SEED program based in Riga, received $440,000 in FY 2003. The Center has contributed directly to Latvia's success in stopping a serious and growing MDRTB crisis. Its work has led to a drop in infection rates and is producing an ever more highly trained cadre of physicians capable of helping other countries tackle the MDRTB challenge. The Center recently opened a new laboratory that the U.S. Centers for Disease Control (a TB Center of Excellence partner since its inception) view as being on par with any available in Scandinavia and as offering immediate clinical advantages for targeting and combating TB. The Center is competing for regional training grants to begin exporting its experience in treating MDRTB, in an effort to develop a sustainable, long-term business plan. The Center has already offered training to health care professionals from other Central and Eastern European states, and from states as far away as the Philippines.
The USG also provided $130,000 in FY 2003 SEED funds to combat the spread of HIV/AIDS in Latvia through a bloc grant to UNDP, which will be pooled with other donor contributions for use in sponsoring youth education and peer training campaigns.
One long-term area of SEED-funded assistance that came to an end in FY 2003 was environmental programming offered by the Environmental Protection Agency. While EPA is ending its presence in the Baltics, SEED monies will still be available for environmental projects undertaken and managed by the Regional Environmental Office in Embassy Copenhagen.
While most USG assistance to Latvia in the social and economic sectors went to public health programs, SEED monies were also designated for entrepreneurial and businesses projects. Entrepreneurial programs to be identified are receiving $75,000 regionally, and some of the regional SEED funds spent under USAID's Partners for Financial Stability (PFS) program went for programs other than those aimed at anti-money laundering efforts. Finally, the U.S. Embassies in the three Baltic States agreed to set aside $100,000 of SEED funds to hold a follow-on to the 2002 Helsinki Women Business Leaders Summit, to take place in 2004 in Riga. This Summit, like its predecessor, will bring together American, Baltic, Russian, and other women CEOs and business owners to exchange experiences as entrepreneurs and encourage transfer of that knowledge to other women business owners and managers in local markets.
Humanitarian Assistance
Humanitarian Assistance funding for Latvia from FY 1999 through FY 2003 was $3.2 million, with $320,000 contributed in FY 2003. Among the projects that have been completed or provided during this time period are:
COUNTRY PERFORMANCE MEASURES
Economic Policy Reforms and Democratic Freedoms in Latvia, 1991-2002
Ratings based on a 1 to 5 scale, with 5 representing the most advanced.
Sources: EBRD, Transition Report 2003 (November 2003); Freedom House, Freedom in the World 2003 (2003); and (various years).
