Area: 64,589 sq km, slightly larger than West Virginia
Population: 2,306,306 (July 2004 est.)
Annual Inflation: 2.9% (2004 est.)
Population Growth Rate: -0.71% (2004 est.)
Gross Domestic Product (GDP): $23.9 billion (purchasing power parity, 2004 est.)
Life Expectancy: Male: 65.91 years; Female: 76.09 years; (2004 est.)
GDP Per Capita: $10,200 (purchasing power parity, 2004 est.)
Infant Mortality: 9.67 deaths/1,000 live births (2004 est.)
Real Annual GDP Growth: 7.4% (2004 est.)
U.S. STRATEGIC INTERESTS
Latvia's full integration into the Euro-Atlantic community, evidenced by membership in NATO and the European Union, testifies to its demonstrated 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 the expansion of economic growth. Yet, acknowledged achievements in each of these areas cast in sharper relief Latvia's most important remaining challenge: strengthening the rule of law. While corruption there is less pervasive than in many other transition economies, the USG's top SEED priority in Latvia is to ensure that it continues to improve the capabilities of its law enforcement and judicial institutions in order to consolidate the gains of more than a decade of transition. As it becomes a full-fledged member of Western security and economic institutions, SEED monies that have been invested in Latvia 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 2004, the U.S. Government (USG) provided an estimated $11.65 million in assistance to Latvia:
Although no new SEED funds were provided in FY 2004, implementers continued using SEED funding remaining from previous fiscal years, as described below.
In FY 2004, a total of nine Latvians traveled to the United States on USG-funded exchange programs.
U.S. ASSISTANCE PRIORITIES
Security, Regional Stability, and Law Enforcement Programs
Strengthening the rule of law in Latvia remained the USG's top priority for SEED spending in FY 2004. Rule-of-law priorities included: training for law enforcement officers, prosecutors, and judges; technical assistance to Latvia's Anti-Corruption Bureau (ACB); and outreach to Latvian authorities involved in the fight against trafficking in persons and financial crime. U.S security-related assistance continued to promote regional stability by helping Latvia to enhance its interoperability with NATO forces through Foreign Military Financing (FMF), International Military Education and Training (IMET), and Enhanced International Peacekeeping Capabilities programs. In addition, the U.S. provided $2.05 million in training and equipment through the Export Control and Related Border Security (EXBS) Assistance Program, aimed at helping Latvian border guards and customs officials bolster export controls. The U.S. also provided assistance to the Government of Latvia (GOL) for enhancing regional stability through support for the democratic opposition in Belarus.
Democratic Reform Programs
In FY 2004, the U.S. provided SEED-sponsored support for democratic reform through the Embassy's Democracy Commission, which extends grants to the non-governmental organization (NGO) sector to support an array of USG policy goals, including: support for GOL programs aimed at integrating the large Russian-speaking non-citizen population; assistance to the Ministry of Education for the creation of a formal Holocaust curriculum; and the Embassy-administered travel grant program designed 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 Latvian participants to attend regional seminars and conferences.
Economic Reform Programs
Latvia's strong economic performance has allowed the USG to focus its efforts in this area predominantly on social-sector spending. Where the U.S. Embassy applied SEED funds to economic reform programs, it focused on efforts to strengthen institutional awareness of intellectual property rights and methods for alternative dispute resolution. The USG also committed FY 2003 SEED resources to support the 2004 Riga Women Business Leaders' Summit, the follow-on to the successful 2002 Helsinki Women Business Leaders Summit.
Social Sector Reform Programs
In FY 2004, SEED regional funds administered by the Centers for Disease Control and Prevention (CDC) supported the successful Multi-Drug-Resistant Tuberculosis (MDR-TB) Center of Excellence in Riga. This long-term assistance project has helped Latvia create one of the most advanced MDR-TB treatment and research centers in the world. The center now conducts training programs for regional countries and competes for USAID and other contracts. In FY 2003, the USG also pooled money with other donor countries to provide bloc grants to the United Nations Development Program (UNDP) that will help combat the spread of HIV/AIDS. This project continued with strong results in FY 2004, and there is evidence that young people in Latvia are acquiring greater knowledge of how to avoid contracting HIV/AIDS. While the U.S. Environmental Protection Agency (EPA) closed out its presence in Latvia in FY 2003, environmental programming continued in FY 2004 through the Regional Environmental Office (REO) in Copenhagen.
SECTORAL ASSESSMENTS
Democratic Reform
The USG has helped Latvia bolster its democratic reforms through a variety of SEED-sponsored programs, the two most prominent of which are the U.S. Embassy's Democracy Commission and support for Latvian efforts to integrate its large Russian-speaking non-citizen populace.
The Democracy Commission provides small grants to NGOs and academic institutions to further the development of civil society, as Latvia continues to build and consolidate its democracy. In particular, the Embassy looks for projects promoting integration of the non-citizen, mainly Russian-speaking minority; the research and discussion of historical issues, including 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 include the following: a grant to the NGO Delna, the local chapter of Transparency International, to create and sustain an online journal that will offer independent information and provide professional and critical analysis of the courts' activities in Latvia, in conjunction with the University of Latvia (LU) School of Law; .a grant to the Baltic Institute of Social Sciences for an analysis of the process of ethnic integration in Latvian society, within the context of Latvia's controversial education reforms; a grant for a project focused on preventing child abuse and juvenile sexual exploitation; and a grant to the NGO "Children of Siberia" to support the production of the film "Children of Siberia."
Incorporating the large non-citizen, Russian-speaking population into Latvian society is a top political and social concern of the Latvian and U.S. Governments. Building on earlier work in this area, the U.S. Embassy set aside $50,000 in FY 2003 SEED funds for social integration projects to be implemented during FY 2004 - these contributed to, among other projects, a Ministry of Social Integration public information campaign targeting non-citizen, Russian-speaking parents on their children's rights to automatic citizenship upon application. This project paid immediate dividends with a sudden, marked increase in naturalization projects. Other projects included a research program that, for the first time, collects systematic data illuminating socio-economic differences between Latvians and ethnic Russians, and a project to merge the Russian-language and Latvian-language information spaces by supporting a new website that publishes translated editorial essays, making it easier for each language group to understand issues that concern the other.
Fulbright 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. During FY 2004, the Embassy administered three Fulbright programs that sent Latvians to the United States: the Scholars Program, the Students Program, and the Teacher Exchange Program. The USG committed $231,110 for these three programs, and a total of nine Latvians participated -- four scholars, three students, and two teachers. The USG also used $15,000 of FY 2003 SEED funds to support activities for alumni of USG-funded exchange programs in Latvia and the U.S. Educational Advising Center in Riga. These two programs provide information about educational opportunities in the United States and are important resources for attracting qualified Latvian students to U.S. universities and colleges.
In addition to exchange programs, the U.S. Embassy's Public Affairs Section maintained an active program of university partnerships between American and Latvian educational institutions. The Lewis & Clark Law School University Partnership, under which the Lewis & Clark Law School cooperates with the LU Law School, expands judicial access through research and professional collaboration. The Dean of LU's law school taught at Lewis & Clark during the spring 2003 semester and implemented a required ethics course for all law students at LU, beginning in the spring 2004. Lewis & Clark formed its partnership with LU in FY 2002, and the State Department extended it in FY 2003-04 with a $40,000 grant that runs through FY 2005. An alternative dispute resolution (ADR) course was added to the LU curriculum for the spring 2004, with two LU faculty members traveling to Lewis & Clark next fall to prepare the course. Lewis & Clark is spearheading an initiative, in cooperation with Democracy Commission grantee Delna (see above), that will create a judicial watchdog organization modeled on an American law review. This new publication will be housed at the LU Law School.
University partnerships also exist between Dominican and Monmouth Universities and the Attistiba School of Social Work, and between the University of Illinois at Urbana and Jelgava Agricultural University. The Domican-Monmouth-Attistiba partnership expands the ability of Latvian social workers to assist victims of trafficking in persons (TIP), supporting training for Attistiba faculty and students and offering seminars for local legal institutions to learn more about TIP. The Illinois-Jelgava partnership, supported with $100,000 in FY 2003 SEED funding, is utilizing U.S, expertise to create a biotechnology curriculum at Jelgava. This program is essential in helping to open a European market for U.S. agricultural products, including genetically modified seeds and crops.
In addition to the 13 Latvians the USG sponsored for travel to the U.S. in FY 2004 through International Visitor programs (an additional 15 participants took part in Voluntary Visitor programs), the U.S. Embassy also made $40,000 available in travel grants designed to help Latvians attend regional conferences and meetings where they would interact with Baltic and Russian counterparts. The program proved extremely popular and helped sponsor the travel of 57 Latvians through 13 grants.
The U.S. Embassy continued to use SEED funds to help Latvians study and teach their World War II history, including the Holocaust. In FY 2003-04, the USG provided $152,533 to supplement $60,000 in SEED funds from FY 2002 for a project to help the Ministry of Education develop its first comprehensive Holocaust curriculum for Latvian students.
Economic Reform
Latvia's strong economic growth has provided ample resources for its sustained macroeconomic development. Latvia's EU accession took place on May 1, 2004, and will only accelerate this trend. Latvia has low taxes, low wages, and an underdeveloped capital market. Over the last five years, Latvia's small, relatively open and agile economy has largely reoriented its trade away from Russia and the other Eurasian states and toward the EU. Sweden is Latvia's most important trade and investment partner, with Germany and the other Nordic countries close behind. However, legal sector reform remains an important prerequisite to Latvia's continued economic growth. To this end, the U.S. Embassy used FY 2003 SEED funds in FY 2004 for projects supporting alternative dispute resolution (ADR) and the protection of intellectual property rights (IPR). It is hoped that increased use of ADR will relieve pressure on Latvia's overcrowded courts by reducing caseloads and transaction costs for businesses embroiled in legal disputes. In FY 2004 the USG provided $50,000 to support the creation of an ADR program at the Riga Graduate School of Law, which will be made available as a continuing education module for lawyers and judges. With bootleg music, movies, and computer software still readily available on the Latvian retail market, IPR issues also remain an important economic concern. To this end, the U.S. Embassy provided a $33,000 grant to the Coalition for Intellectual Property Rights (CIPR) to develop a groundbreaking program to educate local government and business leaders about the importance of IPR.
The USG also used SEED funds to support entrepreneurial and business projects. The three U.S. embassies in the Baltic countries agreed to set aside $100,000 of FY 2003 SEED funds to hold a follow-on to the 2002 Helsinki Women Business Leaders Summit, which took place in September 2004 in Riga and December 2004 in Washington as a two-phased Riga Women Business Leaders Summit (RWBLS). RWBLS brought together American, Baltic, Finnish, Russian, Ukrainian and Belarusian women CEOs and business owners to exchange experiences as entrepreneurs and encourage the transfer of that knowledge to other women business owners and managers in local markets. The RWBLS also attracted an additional $60,000 in FREEDOM Support Act funding support for the participation of women entrepreneurs from the Eurasian countries.
Social Sector Reform
In FY 2004, the USG continued to provide SEED assistance in the social sector, specifically targeting public health programs aimed at combating multiple-drug-resistant tuberculosis (MDR-TB) and HIV/AIDS. The Latvian TB Center of Excellence, once a regionally funded SEED program, is now largely self-sustaining, thanks to fee-based training and an association concluded this past year with the World Health Organization (WHO). The Center has contributed directly to Latvia's success in stopping what was a growing MDR-TB crisis. The Center's work has led to a demonstrable drop in infection rates and is producing an ever more highly trained cadre of physicians capable of helping other countries tackle the MDR-TB challenge. The Center has a modern laboratory that the CDC view as on par with any available in the Nordic countries, and one that offers immediate clinical advantages for targeting and combating tuberculosis. The Center has already offered training to health care professionals from other Central and Eastern European states, and from as far away as the Philippines.
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, in Europe and beyond. Since 1996, Latvia has participated in every NATO-led peace keeping deployment in the Balkans; in 2002, it dispatched two medical teams to Afghanistan, and 120 Latvian soldiers are currently in Iraq. Latvia's strong, principled stand on the need to bring freedom to Iraq and maintain a robust transatlantic relationship springs from its history as a victim of both Nazi and Soviet oppression - it 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 to security in its neighborhood through healthy relationships with Russia, Ukraine, Belarus, and other former Soviet states.
USG security assistance plays a vital role in promoting USG regional stability goals in and with Latvia. From 1995 through 2004, Latvia has received over $45 million in Foreign Military Financing and has made steady use of available FMF funding. FMF is largely directed toward improving individual soldier defense capabilities, providing night-vision devices, high-mobility multi-purpose wheeled vehicles (HMMWVs), 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 command and control, communications, computers and intelligence (C4I); brigade force structure development and logistics. The USG provided $490,000 in FY 2004 Enhanced International Peacekeeping Capabilities (EIPC) funds, which are largely being spent on training and education related to peacekeeping. The USG provided $1.34 million in International Military Education and Training (IMET) to Latvia in FY 2004, focusing on professional and technical training for junior members of the Latvian defense establishment and leadership and management courses for mid-level and senior personnel. Many senior personnel, including the Land Forces Commander and Navy Commander, and a former Minister of Defense, have received U.S. training through the IMET Program. Latvia's emphasis on indigenous English language training (ELT) has virtually eliminated the need to use IMET funds for ELT, setting it apart from many other countries. Overall, Latvia sends about 55 students per year to the United States for training and annually hosts annually an average of one Mobile Education Team from the Defense Institute of International Legal Studies (DILLS). These Baltic Region seminars in Latvia on various topics relating to military justice have been well received.
Latvia is eligible to purchase lethal and non-lethal Excess Defense Articles (EDA) at 5-50 percent of acquisition value, based on condition, and to receive such EDA on a grant basis under section 516 of the Foreign Assistance Act. From 1993 through 2004, Latvia received EDA with an original acquisition value of about $21 million, with none purchased in 2004. However, future EDA acquisitions remain possible.
Another important non-SEED regional security program is the successful Export Control and Related Border Security (EXBS) Assistance Program, which has trained hundreds of Latvian security police, border guards and customs officers, among others, in interdicting shipments of dual-use goods and weapons of mass destruction. Interdictions of Soviet-era military equipment, and some more modern avionics systems, bound for countries like Iran and China with misleading or fraudulent shipping manifests, underscore the success of this program. The experience the Latvians have gained in searching for these types of items has also paid off in the fight against more commonplace types of contraband. Now that Latvia forms part of the EU's eastern border with Russia, the professionalism of Latvia's border control authorities takes on even more visibility and significance. During FY 2004, the EXBS program made a significant contribution to Latvia's ability to police its borders: the USG provided a $1.8 million mobile, truck-based, non-invasive scanning system allowing border authorities to examine vehicles and container traffic crossing the Russian-Latvian border.
Most USG law enforcement assistance in Latvia takes place under the broader rubric of rule-of-law or anti-corruption programming, mostly through SEED-funded regional programs. SEED funds also support regional initiatives designed to combat trafficking in persons (TIP). While Latvia is considered primarily a TIP source country, as opposed to a TIP transit country, it was designated Tier II in the most recent State Department review of Latvia's anti-trafficking efforts. There were 21 new criminal cases against traffickers and 13 convictions in outstanding cases in 2004.
Strengthening the rule of law remains the USG's top SEED priority in Latvia. 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 provided by the Justice Department's Office of Overseas Prosecutorial Development, Assistance, and Training (OPDAT). In early 2003, Latvia formally launched its Anti-Corruption Bureau (ACB), whose charter is to combat corruption, and subsequent governments have made slow but steady headway in efforts to dismiss officials tied to previous conflict-of-interest and corruption scandals. During FY 2004, the ACB's developing role in local law enforcement became even more obvious, as it uncovered a long-standing procurement fraud scheme at the Ministry of Defense and sent 20 more criminal cases to the Prosecutor General's Office.
The U.S. Embassy coordinates its rule-of-law and anti-corruption initiatives and training through the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL), in cooperation with OPDAT, regional USG law enforcement personnel, and NGOs such as the American Bar Association's Central European and Eurasian Law Initiative (ABA/CEELI). In FY 2004, the USG signed a letter of agreement (LOA) with the Ministry of Interior to obligate $125,000 of regional SEED funds for law enforcement cooperation between the United States and Latvia. According to the LOA, the USG will provide assistance for four projects: $50,000 for the short-term placement of experienced U.S. law enforcement personnel to work alongside Latvian counterparts and provide advice and guidance; $25,000 to purchase surveillance equipment; $25,000 to equip a forensic interview room for use in Latvia's anti-TIP efforts; and $25,000 for a training course in detecting and preventing terrorist financing. The U.S. Embassy also administers a pre-existing LOA, modified in FY 2003, with the Ministry of Justice that provides U.S. assistance within the judicial sphere and offers guidance for drafting and implementing forthcoming new criminal procedure code.
Another area to which the U.S. Embassy has directed SEED resources, and considerable attention, is Latvia's efforts in fighting financial crime, specifically money laundering. Latvia's 22 commercial banks, partly as a result of earlier SEED-funded assistance provided primarily through USAID's Partners for Financial Stability (PFS) program emphasizing know-your-customer rules and highlighting the importance of the USA Patriot Act, have shown increasing readiness to report and freeze questionable accounts. The Latvian Financial Investigative Unit (FIU) recorded a dramatic increase in the number of suspicious transaction reports filed by Latvian banks in 2004, and local banking experts attribute this increase, in part, to USG-provided training in Latvia.
Humanitarian Assistance
From FY 1999 through FY 2004, Latvia has benefited from $3.4 million in U.S. Defense Department Humanitarian Assistance and Humanitarian Civic Assistance, with over $288,000 in assistance provided in FY 2004. Among the projects implemented in FY 2004 were a wheelchair-equipped bus for the Children's Rehabilitation Center in Riga, funding for a Crisis Management Center and disaster response/preparedness training, renovation of a refugee receiving station, a commercial utility cargo vehicle ambulance for the Riga Jewish Hospital, refurbishment of the medical academy of the Children's Hospital, renovation of an orphanage in Liepaja, the distribution of 256 wheelchairs to the disabled, replacement of the heating system in an orphanage in Rezekne, replacement of the roof and windows in a retirement home in Daugavpils, and replacement of windows and bathrooms in an elementary school in Aluksne.
COUNTRY PERFORMANCE MEASURES
ECONOMIC & DEMOCRATIC REFORMS, 1991-2004
Data are drawn from EBRD, Transition Report (November 2004) & Freedom House, Nations in Transit 2004 & Freedom in the World 2004. Ratings are based on a 1 to 5 scale with 5 representing the most advanced.
Latest year observation refers to 2004 economic reform data and 2003 democratic reform data; i.e., 2004 data for democratic reforms are not yet available.
ECONOMIC STRUCTURE AND HUMAN DEVELOPMENT, 1990-2004
World Bank, World Development Indicators 2004 (2004); UNICEF, Social Monitor 2004 (2004); EBRD, Transition Report (November 2004); and UNDP, Human Development Report (2004).
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