Latvia | Freedom House

Nations in Transit

Latvia

Latvia

Nations in Transit 2003

2003 Scores

Democracy Score
(1 = best, 7 = worst)

2.25

Electoral Process
(1 = best, 7 = worst)

1.75

Civil Society
(1 = best, 7 = worst)

2.00

Independent Media
(1 = best, 7 = worst)

1.75

Judicial Framework and Independence
(1 = best, 7 = worst)

2.25

Corruption
(1 = best, 7 = worst)

3.50

Governance
(1 = best, 7 = worst)

2.25

The year 2002 proved to be historic in Latvia. Since the collapse of communism and the restoration of independence, Latvia has implemented comprehensive political, judicial, and economic reforms with an eye to rejoining the Western community of democracies. It aimed specifically at securing membership in NATO and the European Union. Latvia's cooperation with NATO began in December 1991, when it joined the North Atlantic Cooperation Council, the aim of which was to promote mutual understanding and confidence between NATO and its former adversaries in the Warsaw Pact. For Latvia, it provided a forum for urging NATO countries to support the withdrawal of foreign troops from its territory. In November 2002, at a summit in Prague, Latvia joined six other countries in receiving a formal invitation to join. Latvia officially applied for membership in the European Union (EU) in 1995 and began active accession negotiations in 2000. By the close of 2002, it had completed all 31 chapters on accession and had received the official nod from Brussels on membership.

Since Latvia gained independence, the country's political elites have supported a Western orientation in its foreign policy. They have done so with the blessing of the Latvian public, which for more than 50 years held fast to memories of independence prior to the country's incorporation into the Soviet Union. In turn, Western and other international donors and institutions have facilitated reform by establishing clear political, economic, and human rights criteria. By following these criteria, Latvia has avoided internal clashes between social and ethnic groups as well as potential conflicts with Russia.

In its 2002 report on EU accession, the European Commission noted that "Latvia's political institutions function properly and in conditions of stability." Since the restoration of independence, the country has held national elections four times, and all were deemed free and fair. Changes of government have occurred smoothly and without conflict, but it is important to note that center-right political parties have consistently received the majority of votes in parliamentary elections. Although this has contributed to stability in Latvian politics, it suggests some internal weakness in the center-left parties and highlights the absence of a strong opposition. In 2002, for example, New Era, the new center-right party led by former Central Bank head Einars Repse, proved victorious in parliamentary elections and formed a new coalition government with three other center-right parties. Although the center-left party For Human Rights in a United Latvia received only one vote less than New Era, its Russian orientation prevented it from garnering sufficient support from other parties to form a new government.

In comparison with the legislative and executive branches of government, Latvia's judicial system is quite undeveloped. In particular, it lacks sufficient independence and institutional capacity to carry out its duties and functions properly. The judiciary struggles to staff courts with competent judges and to support them with meaningful performance evaluations and training. Though a requirement for EU membership, comprehensive reform of the judicial branch has not yet been undertaken.

A key issue in Latvian politics since the restoration of independence has been the status of national minorities, especially Russians. Despite some fears in the early 1990s, the country's sizable ethnic Russian population has not posed a threat to political stability. The government has promoted social integration and has granted naturalized citizenship to ethnic Russians and other residents. However, the pace of naturalization has been rather slow, with only 60,000 out of an eligible 500,000 people being naturalized since 1995. The main obstacle to citizenship for more applicants has been a Latvian language requirement.

Corruption also remains a serious problem. The European Commission has noted, for example, that corruption in Latvia is "exacerbated by low salaries in the public sector and extensive use of bureaucratic controls in the economy." The World Bank has concluded that the Latvian economy is "highly concentrated, political parties are closely aligned with economic interests, and the country's position on east-west trade and energy transit routes exposes it to strong corruption pressures." In particular, the World Bank has pointed to the prevalence of what it calls "state capture," or the practice by companies and individuals of making illegal payments to influence government policies or to circumvent laws and official decrees. Despite the passage of several anticorruption laws and the creation of a Bureau of Anticorruption in 2002, implementation has been ineffective and the results limited so far.

Electoral Process: 

During the parliamentary election campaign of 2002, candidates and parties focused on economic issues, especially welfare and social policies. The main political parties generated debate with their proposals for various social reforms and improvements. There was considerably less discussion of integration into the EU and NATO, which is supported largely by Latvian voters. On October 22, the Central Election Commission approved the final election results, which indicated that six parties and coalitions met the 5 percent threshold for gaining seats in the Saeima (Parliament). Among the center-right parties, New Era received 26 seats; the People's Party, 20 seats; the Union of Greens and Farmers (ZZS), 12 seats; Latvia's First Party (LPP), 10 seats; and For Fatherland and Freedom/LNNK (TB/LNNK), 7 seats. The center-left party For Human Rights in a United Latvia took 25 seats. The observer mission from the Office for Democratic Institutions and Human Rights, sponsored by the Organization for Security and Cooperation in Europe (OSCE), noted that the election was characterized by transparency and healthy political pluralism.

Following the election, New Era formed a government with the support of the LPP, the ZZS, and the TB/LNNK--all representing different business interests and views on privatization. However, the new government did agree on a number of policy priorities. These include establishing an efficient system of public administration, securing full participation in decision making at the EU and NATO, creating a strong and independent court system, combating corruption and criminality, building an information-based economy, fostering an integrated society and cohesive national identity, balancing development among Latvia's regions, and tackling the country's high unemployment rate.

Elections to Latvia's 100-seat Parliament take place every four years under a system of proportional voting by secret ballot. Only parties receiving at least 5 percent of the votes cast in all five election constituencies win seats. In May 2002, Parliament amended the Law on Elections by removing the provision that required candidates in national and local elections to be proficient in the Latvian language. Since ethnic minorities account for nearly all of the quarter of Latvia's population that does not possess Latvian citizenship, their involvement in politics is somewhat limited. However, ethnic minorities who possess Latvian citizenship enjoy the same political rights as majority ethnic Latvians.

Latvia's electoral system is multiparty based at all levels. In the March 2001 local elections, a total of 13 parties won seats on the Riga City Council. In the October 2002 national elections, 20 parties participated, but only 6 gained representation in Parliament. The diversity of parties represented at different levels of government often makes it difficult to reach consensus on a range of issues. Members of the new coalition government, for example, hold differing views from those of Western European countries on privatization, social integration, and the alignment of Latvian laws. Disagreements of this kind have in some cases prevented important decisions from being made or delayed the adoption of legislation, most notably in the area of privatization.

As of December 2002, 39 political parties were registered in Latvia. The Law on Registering Public Organizations was amended in late 1993 to bar Communist, Nazi, or other organizations that would act in violation of the Constitution. However, extremist forces like these wield very little influence in Latvian politics. Although Latvia experiences frequent changes of government, political parties are reasonably well established and transitions of power are smooth. Most major parties have social bases that are fairly well defined.

According to a survey conducted by the Baltic Data House, approximately 3 percent of Latvian residents belonged to a political party or movement in 2002. Most parties are active only for brief periods during electoral campaigns. Noncitizens are prohibited from forming political organizations but are allowed to join existing parties. According to the Latvian National Bureau of Human Rights, women made up 5 percent of party leaders and accounted for 25 percent of all parliamentary election candidates in 2002. Women now hold 18 percent of the seats in Parliament.

At the national level, voter turnout increased between the late 1980s and early 1990s, then decreased in the mid-1990s. Electoral participation reached its highest level with elections to the fifth Parliament in 1993, when 90 percent of eligible voters cast ballots. It decreased to 72 percent in both the sixth and seventh parliamentary elections. In the 2002 national elections, voter turnout increased to 72.5 percent. Participation in local government elections has declined from 78 percent in 1989 to 63 percent in 1994 and 57 percent in 1997.

There is growing concern that the budgets and financing of political parties lack sufficient transparency. As reliance on television advertising campaigns has increased, for example, so too have the demands on parties to raise money to cover such expenses. Donations from big business account for the majority of party funding in Latvia and potentially make political groups vulnerable to undue pressures, particularly with regard to decisions on privatization.

Under the Constitution, the president is elected for a four-year term by a majority vote in Parliament held under a secret ballot. Any person who enjoys full citizenship rights and is at least 40 years old may be elected president. In the most recent presidential elections, on June 17, 1999, Vaira Vike-Freiberga received 53 out of 100 votes in Parliament to become Latvia's first female president. Vike-Freiberga, a scientist, had spent most of her life in Canada before returning to Latvia in 1998. She is a member of the Canadian Academy of Science. Her election was greeted with broad popular support, and her activities in office have earned her international praise. President Vike-Freiberga has vigorously supported Latvia's accession to the European Union and NATO. Public opinion surveys show Vike-Freiberga to be the most popular politician in Latvia. Nevertheless, the president's formal powers are limited.

Civil Society: 

Civil society in Latvia has developed considerably since the collapse of communism. The number of nongovernmental organizations (NGOs) registered with the Ministry of Justice, for example, rose from 1,676 in 1995 to more than 5,000 in 2002, with groups engaging in cultural, professional, business, social, charitable, and women's-related activities. However, according to the NGO Center of Latvia, only about 650 organizations are truly active. The NGO Center also reports that only between 0.5 and 3 percent of Latvians were active in private voluntary efforts in 2002. Seventy percent of NGO activists are women, and approximately 30 minority culture societies play an active role in the country's social and political processes.

The three largest religious faiths in Latvia are Catholicism, Lutheranism, and Orthodoxy. Sizable religious minorities include Baptists and various Evangelical Protestant groups. The country's once sizable Jewish community was largely decimated during the Holocaust and now totals only 6,000 people. As of August 2002, the Ministry of Justice had registered more than 1,000 religious congregations. This total includes Lutheran, 302; Roman Catholic, 243; Orthodox, 112; and Baptist, 85. Popular interest in religion has increased in recent years, and churches have provided the following estimates of their membership to the Ministry of Justice: Lutheran, 400,000; Roman Catholic, 500,000; and Orthodox, 190,000. The Orthodox are mainly Russian speakers scattered among major cities such as the capital, Riga, while the majority of Catholics are concentrated in the eastern part of the country.

The government does not require religious groups to register. However, the Law on Religious Organizations accords certain rights and privileges to those that do register, such as status as a separate legal entity for owning property as well as tax benefits for donors. Religious groups play a significant role in charitable activity. They also lead the Religions Consultative Council, which meets on an ad hoc basis and serves as a forum for discussing matters of common concern to religious groups and the state.

Although Latvia does not have influential anti-liberal NGOs, some groups do exist. Russian and Latvian extremists, for example, operate organizations and try, with minimal success, to attract media attention and sway public opinion. In the 2002 parliamentary elections, the extreme right-wing Latvian Party received just 0.3 percent of the vote. Russian extremists advocate Latvia's dependency on Russia, while the goal of Latvian extremists is to establish an ethnic Latvian state without any minorities.

The primary laws regulating the work of NGOs in Latvia are the Law on Nonprofit Organizations, the Law on Social Organizations and their Associations, and the Law on the Income of Enterprises. The Law on Social Organizations and their Associations addresses general conditions for the establishment and operation of all social organizations. Under the law, groups of 10 or more people who have united to pursue nonprofit goals may establish social organizations. Such groups may engage in fund-raising activities, establish entrepreneurial companies and enterprises, and obtain stocks or shares in these companies in pursuit of their goals. Profits gained from such business activities must be put toward the organization's statutory goals and may not be distributed among its members. To sign up with the Register of Companies, an NGO must present a charter, bylaws, verification of legal address, and a state registration application and fee.

According to a report by the Soros Foundation Latvia, one of the leading obstacles to the development of NGOs in the Baltic states is their lack of management and organizational skills. However, many NGOs are financially viable. According to a report by the NGO Center of Latvia, the main sources of income for NGOs are membership fees, donations from businesses and individuals, foreign donors, local government funds, fees for services, income from an organization's activities, and state budget funds. Businesses may deduct up to 85 percent of the value of their donations to certain foundations and associations, provided the deduction does not exceed 20 percent of their total taxable income. There is generally no difference in the tax policies applied to social organizations and those required of for-profit enterprises. Social organizations pay income and social taxes, although there are some exceptions for charities. NGOs receive funding from both domestic and foreign sources; however, most active organizations are financed by foreign or international sources. Latvian NGOs receive financial support by participating in various tenders and competitions. One of the most active NGOs in 2002 was Delna, Transparency International's regional branch in Latvia.

The government has demonstrated a willingness to engage in dialogue with NGOs. According to the NGO Center of Latvia, 82 percent of NGOs in Riga enjoy some form of cooperation with national and local governments; 31 percent include representatives of national and local governments in their management structures. The main topics of discussion with government representatives involve local policy agendas, social activities, and NGO participation in the political process. Ultimately, interest groups have played a minor role in preelection campaigns and the drafting of legislation. The media regularly interview NGO activists, often presenting their views as counterweights to official positions. NGO activities as such are also common topics in the media.

The Constitution guarantees the right to strike, and the Law on Trade Unions mandates that workers, other than uniformed soldiers, have the right to form and join labor unions of their own choosing. The law bans the dismissal of workers who stage strikes, but the government has not effectively enforced the law. Labor unions have the right to bargain collectively and are largely free of government interference in their negotiations with employers. Although the law prohibits discrimination against union members and organizers, some emerging private sector businesses have threatened to fire union members. In general, the trade union movement is undeveloped and remains in transition from a socialist to a free-market model. The lack of a comprehensive union register makes it difficult to estimate what proportion of the workforce is unionized.

The Constitution guarantees the right of citizens to establish political parties. The government may not legally prohibit public gatherings. Public meetings and political demonstrations routinely take place without government interference.

According to the Soros Foundation Latvia, public policy research institutes have a relatively limited effect on the political process in the country. This is true in part because of weaknesses in both the capacity of local research institutions and their networking efforts. In order to promote public policy research, the Soros Foundation in 2002 provided special grants to develop research institutes and build their capacity.

By law and generally in practice, the education system in Latvia is free of political influence and propaganda. Soon after the restoration of independence, Latvia developed a broad system of state-funded minority-language education, retaining Soviet-era schools with Russian-language instruction. However, according to the 1998 Law on Education, after 2004 all classes in public secondary and vocational schools must be in Latvian only. Information gathered by the Baltic Data House indicates that 16 percent of secondary schools are fairly well prepared for the transition to teaching in Latvian, 40 percent have an average level of readiness, 44 percent are not ready, and 6 percent are facing a particularly critical situation. Russian-speaking residents interpret the Latvian-only policy as a form of political pressure. Approximately 20 percent of universities are private, and this proportion has been increasing.

Independent Media: 

The Constitution prohibits censorship and guarantees each person the rights to freely acquire and disseminate information and express his or her views. Although there are no legal punishments for "irresponsible" journalism, there are penalties for libeling public and private individuals. In general, the government respects freedom of speech and the press. Newspapers published in both Latvian and Russian feature criticism of the government and a wide range of political viewpoints. The news coverage of some private media outlets reflects the political and economic interests of their owners.

Latvia has two state-owned television networks, LTV-1 and LTV-2, and nine major privately owned television stations. The private Latvian Independent Television has almost twice as many viewers as LTV-1, its nearest competitor. Satellite television has about a 10 percent share of the viewing market. There are also numerous independently owned cable channels.

Latvia has a large number of independent radio outlets, which broadcast in both Russian and Latvian. Approximately 10 privately owned radio stations operate in Riga. The major public radio stations are Latvijas Radio 1--which has the greatest number of listeners each week--Latvijas Radio 2, and Latvijas Radio 3.

Most newspapers and magazines are privately owned. The most popular daily papers are Diena (circulation 70,000) and Lauku Avize (65,000), both of which are published in Latvian, and Panorama Latvii (15,000), which is published in Russian. The state publishes the weekly Likuma Varda, as well as Latvijas Vestnesis, which appears four times each week. All major cities have their own private newspapers.

In 2002, television accounted for 45 percent of media advertising, followed by newspapers at 33 percent, outdoor and other at 10 percent, radio at 6 percent, and magazines at 4 percent. Private companies such as Latvijas Preses Apvieniba, Narvesen, and Diena control the distribution system for newspapers. The postal service represents the only state-owned media distribution network.

The sole journalists association is the Latvian Journalists Union, whose activities and impact are limited. The union has 500 registered members, 350 of whom are considered active. Women make up approximately 50 percent of the union's membership.

According to the RIPE Network Coordination Center, which serves as an Internet registry for Europe, approximately 20 percent of the total population used the Internet on a regular basis in 2002. Major television and radio stations and newspapers maintain their own Web sites. With the exception of financial constraints, there are no restrictions on Internet access for private citizens.

In Freedom House's annual Survey of Press Freedom, Latvia was rated "Free" in 1991, "Partly Free" in 1992 and 1993, and "Free" from 1994 to 2002.

Judicial Framework and Independence: 

Latvia's Constitution was adopted on February 15, 1922, and fully reinstituted on July 6, 1993, when the fifth Parliament was elected. Prior to the adoption in 1996 of the Law on the Constitutional Court, Parliament had approved laws that ran counter to both the Constitution and the country's international obligations. For example, Parliament violated the Constitution by terminating the mandates of several deputies who allegedly had collaborated with the Soviet KGB. Later, the Constitutional Court ruled that such collaboration had not been proven, and the mandates were renewed.

Since its establishment, the Constitutional Court has handed down several important decisions. For example, the Court cojoined separate petitions disputing the 5 percent threshold required to gain seats in Parliament. A related petition disputing a constitutional provision allowing only political parties or their unions to nominate candidates was also added. The Court ultimately rejected the petitions and deemed the provisions constitutional. Its judgment states that setting a 5 percent threshold is justified on the grounds that it seeks to prevent divisiveness within Parliament and guarantee the body's stable, continued functioning.

In May 1998, Parliament adopted a new criminal code, replacing the Latvian Soviet Socialist Republic's criminal code that had been in effect since 1961 and had undergone basic revisions in 1993. In 1994, the responsibility for issuing arrest warrants was transferred from prosecutors to the courts. There have been no reports of imprisonment on political grounds, politically motivated disappearances, or forced exile. There have been credible reports, however, that police and prison personnel beat prison inmates, asylum seekers, and other detainees. Although the government has made reform of the penal system a priority, prison conditions remain poor.

Latvia's judiciary does not always administer justice in a fair and timely manner. As a result, 40 percent of all prison inmates are either awaiting trial or have not yet been sentenced. By law, the Office of the Prosecutor must decide within 72 hours of making an arrest whether to charge or release a detainee. The actual charges must be filed within 10 days of arrest.

Authorities may not hold a detainee for more than 18 months without a prosecutor presenting the case to a court. A defendant has the right to have his attorney present at any time during the process. There are credible reports that police, especially outside Riga, do not always respect these rights in practice. During the period covered by this report, though, there were no known instances of arbitrary arrest. In October 1998, Parliament added to the Constitution a chapter on human rights. The amendments guarantee fundamental rights, including freedoms of speech, religion, association, and the press, as well as protection from discrimination based on race, gender, religion, or language. Article 105 guarantees the right to own property. Article 106 protects Latvians' right to choose their occupations freely.

Following independence in 1991, citizenship was accorded only to those persons who were citizens of the independent Latvian Republic in 1940 and their descendants. As a result, approximately 700,000 people who had been citizens of the Soviet Union became "noncitizen residents." Under the provisions of the 1994 Law on Citizenship, various categories of noncitizens became eligible to apply for naturalization. The naturalization regulations include Latvian language and residency requirements, as well as restrictions on naturalization for several groups, including former Soviet intelligence and military officers. The law also requires applicants to possess satisfactory knowledge of the Latvian Constitution and history and to take an oath of loyalty to the Latvian state. International observers, including the resident OSCE Mission to Latvia, credit the government with establishing a competent and professional naturalization board with offices throughout the country to implement the 1994 law. Although the process has been simplified several times, the pace of naturalization remains slow. (See table for current statistics on the ethnic breakdown of citizens and noncitizens in the country.)


Residents of Latvia by Ethnic Group
 

ETHNIC GROUPS CITIZENS NON-CITIZENS ALIENS TOTAL PERCENT
Latvians 1,358,721 2,941 804 1,362,466 58.3
Lithuanians 16,507 14,742 1,200 32,449 1.4
Estonians 1,466 856 280 2,602 0.1
Belorussians 24,722 66,144 1,700 92,566 4.0
Russians 317,542 343,710 18,962 680,214 29.1
Ukrainians 9,347 48,218 3,488 61,053 2.6
Poles 39,959 17,789 417 58,165 2.5
Jews 6,442 3,457 292 10,191 0.4
Other 16,630 16,441 4,059 37,130 1.6
Total 1,791,336 514,298 31,202 2,336,818 100.0

Source: Board for Citizenship and Migration Affairs, July 1, 2002


There are several reasons many Russian-speaking residents have chosen not to apply for Latvian citizenship. These include limited knowledge of the Latvian language, apathy, lack of information about the naturalization process, and mistrust of the government. Thus far, international organizations and foreign governments, but not the Latvian government itself, have supported language training and public information programs for minorities.

The Public Awareness and Promotion Campaign for Latvian Citizenship was initiated and managed by the Board of Naturalization and the OSCE Mission to Latvia (until its closure in December 2001) in cooperation with the Ministry of Justice Integration Department and the United Nations Development Program, Latvia. Financing was provided by the United States, Canada, Germany, Great Britain, Sweden, and Norway. The campaign was implemented from November 2001 to mid-February 2002, and the main target audience was noncitizens aged 15 to 40.

Albeit with some regional variance, the campaign successfully reversed a downward trend in naturalization application that began in 2000. The rate of applications submitted during the first few months of 2002, for example, had increased by approximately 20 percent over the previous year. The campaign was also successful in better informing the public about the naturalization process and in conveying a positive signal, heretofore lacking, that noncitizens are welcome as official members of the Latvian state.

According to the European Commission, both the Law on Languages and its implementing regulations essentially conform to Latvia's international obligations. Moreover, neither the Law on Languages nor its implementing regulations contain provisions that are manifestly incompatible with the country's EU accession agreement. However, some of the law's provisions are worded in such a way that they could give rise to alternative interpretations.

A significant segment of Latvia's Russian-language media and organizations has expressed sharp criticism of Latvia's official language policy. Russian is still the prevailing language in industrial enterprises, and there have been no reports of widespread dismissals because workers lack Latvian language skills. Nevertheless, many ethnic minorities claim that the Law on Languages is discriminatory.

The causes of the lack of ethnic parity in Latvia are many. Foremost among them are the minimal involvement of ethnic minorities in the state's post-Communist renewal process and their consequent lack of representation in newly created institutions. Other leading causes include poor knowledge of the Latvian language among minorities, lack of motivation to acquire citizenship, and skepticism concerning the work of state institutions. Ethnic self-segregation by both ethnic Latvians and minorities, hiring processes that lack transparency, and the absence of public education on ethnic discrimination and human rights in society also affect the situation. These and other factors are consequences of the authoritarian Soviet system and the absence today of a deepening of democratic values in Latvian society.

To address these problems, the government has established a Social Integration Department within the Ministry of Justice to implement the government's Social Integration Program, announce tenders for projects in the field of social integration, and analyze project proposals. Parliament also has passed the Law on the Social Integration Fund, which provided for the creation of a nonprofit limited liability organization that will raise revenues from the state budget and donors and allocate resources to projects recommended by the Consultative Council. The Consultative Council is part of the Social Integration Fund and is made up of international experts and representatives from ministries, local governments, and NGOs. To date, these efforts have yielded few visible results.

The Constitution provides for freedom of religion, and the government generally respects this right in practice. However, some minority religious groups such as the Jehovah's Witnesses have faced problems with the State Military Conscription Center regarding their requests for exemption from military service on religious grounds.

Although there are legal protections for women, international observers and domestic human rights groups are increasingly concerned about problems facing Latvian women. No exact figures are available, but sources indicate that domestic violence against women, often connected with alcohol abuse, is a significant and under-reported problem. Women who are victims of abuse frequently are uninformed about their rights and reluctant to seek redress through the justice system. Human rights groups assert that the legal system, including the courts, tends to downplay the seriousness of domestic violence cases and that the police are sometimes reluctant to make arrests in such cases.

Latvia's Constitution provides for an independent judiciary, and the government generally respects this provision in practice. However, public opinion surveys suggest that most Latvians lack trust in courts and perceive the judiciary to be corrupt. Judges are appointed by Parliament upon the recommendation of a committee of judges. Courts rely on the Ministry of Justice for administrative support.

Latvia lacks a comprehensive approach to reform of the judicial branch, which struggles to staff its courts with competent judges and provide them with meaningful performance evaluations and adequate training. By March 2002, though, the number of vacancies to judicial posts had been reduced significantly to only 18. The system also lacks adequate professional and support staff and appropriate facilities to deal with endemic court delays. The problems that plague Latvia's judicial system are, in large part, a result of consistent underfunding.

Corruption: 

Corruption is widespread in Latvia. Its incidence ranges from the taking of small bribes by low-level civil servants in return for carrying out routine bureaucratic tasks to the wrongful award of government contracts by high-level officials. Conflicts of interest among government officials are common.

In 2001, the World Bank concluded that Latvia suffers from a relatively high level of so-called state capture. Specifically, many laws, rules, and decrees promulgated by state institutions benefit a narrow range of private sector groups and individuals who have provided illicit benefits to public officials in exchange for policies that favor their interests. While the full extent of state capture will probably never be known publicly, some specific cases have been openly discussed in the press. For example, the media have reported on cases of possible illicit influence by private groups in the transportation sector, particularly in the west coast port of Ventspils. The press has also raised questions about Parex Bank's financial support to various political parties.

Latvia's criminal code provides sanctions for blackmail, which includes extortion of property under the threat of violence. The sanctions are more severe for organized groups than for individual violators. In place since 1996, the Law on Corruption Prevention sets out restrictions on the activities of public officials and requires them to declare their assets. The law prohibits public officials from making decisions that benefit their private interests and accepting payments other than their official remuneration. It also bars the president, ministers, parliamentarians, and parliamentary secretaries from most employment other than the jobs to which they have been appointed or elected. They are, however, permitted to work in educational institutions or as artists.

In practice, the government has acknowledged several flaws in the Law on Corruption Prevention and its enforcement mechanisms. The asset declarations submitted by public officials, for example, do not eliminate their ability to earn undeclared income. Likewise, the State Revenue Service lacks sufficient financial, human, and legal resources to ensure that public officials are declaring their assets fully.

In 2002, Parliament adopted additional legislation intended to strengthen Latvia's efforts. The new Law on Corruption Prevention and Combating Bureau calls for a central institution responsible for anticorruption activities in the country. The bureau was operational by year's end. The Law on Prevention of Conflicts of Interest in Activities of Public Officials aims to improve transparency in the conduct of public officials. The Law on Financing of Political Parties provides for direct state funding of political parties and a mechanism for regulating party financing. Although these are positive measures, they fail to consolidate Latvia's fight against corruption with a single institution. Overlap in the competencies of institutions involved in anticorruption activities remains and ultimately weakens the effectiveness of any measures taken. International experts and independent observers have expressed doubts about Latvia's ability to implement the new laws effectively.

Latvian state institutions do not carry out internal audits on a regular basis. However, the state Audit Office conducts financial audits of all state and local government institutions under a long-term schedule. In 1999, a separate Department of Financial Analysis, Auditing, and Control was also created within the State Police of Latvia to reveal and deter corrupt practices.

The government has revised many Latvian regulations to make them compatible with EU standards. While the sheer number and complexity of existing bureaucratic regulations still actually encourages corruption, public opinion surveys suggest that these are not perceived as the most important factors leading to corruption in Latvia.

Civil servants are divided into three levels. The average gross monthly salary of employees at the highest level is 350 lats (US$595); the middle level, 170 lats (US$289); and the lowest level, 140 lats (US$238). Civil servants in the top two levels sometimes receive additional bonuses. These amounts are low compared to those in the rest of the country and do contribute to corruption.

During the past few years, several independent organizations have conducted public opinion surveys concerning perceptions of corruption in Latvia. A World Bank public opinion survey in 2001 revealed that 13 percent of households and 37 percent of company employees in Latvia had paid bribes. The survey also showed that employees in various state institutions demand unofficial payments or bribes in return for providing services. Customs service employees asked for bribes 48 percent of the time; prosecutors, 42 percent; the highway police, 39 percent; and courts, 38 percent. The reported level of corruption in other institutions was somewhat lower.

According to the World Bank survey, many Latvians believe that services such as housing and health care are not provided unless unofficial payments are made. Moreover, respondents suggested that private companies that pay bribes grow faster and can afford to invest at a higher rate than those companies that do not pay bribes. Other surveys indicate that corruption is most widespread in politics and public administration and least widespread in nongovernmental organizations and education. Over time, the number of people who think that the government of Latvia is unsuccessfully fighting corruption has also grown. Approximately a third of the respondents to a survey conducted in 2001 by the Marketing and Public Opinion Research Centre SKDS believed that the government not only fails to fight corruption, but actually encourages it. Regarding their personal involvement in the fight against corruption, 52 percent of respondents answered that they are unable to affect the situation.

Anticorruption efforts focusing on public education remain somewhat limited. However, in 2002 the State Administration School (SAS) and other public institutions organized a number of conferences and seminars on corruption for civil servants and the broader public. The SAS also conducted several courses to educate civil servants about administrative processes. In 2002, Transparency International ranked Latvia 52nd out of 90 countries surveyed in its annual Corruption Perceptions Index.

Governance: 

The Latvian Constitution establishes a structural division and a system of checks and balances between legislative and executive branches. The Parliament adopts laws, but both the state president and the cabinet of ministers may submit bills. Although the president also enforces laws and may veto parliamentary legislation, Parliament can override a presidential veto by repeating its affirmative vote on a bill. In periods between parliamentary sessions, the cabinet of ministers may adopt regulations that have the force of law, but Parliament may cancel them when it begins its next session. Both constitutionally and in practice, Parliament is the effective rule-making institution in the country.

In 2002, the Latvian government continued to reform its system of public administration and approved an action plan for the implementation of the Public Administration Reform Strategy for the years 2001 to 2006. A corresponding coordination council was established to monitor the plan's implementation. These activities are basically in line with the EU's recommendations to increase Latvia's administrative capacity.

The executive and legislative bodies generally operate openly and with transparency. Since early 2000, all bills and draft regulations that are under consideration in Parliament and by the cabinet of ministers have been posted on the Internet. Parliament also has adopted a classified information law that is consistent with international standards and practices. Adopted in 1998, the Law on Information Openness states that all information in the possession of state and local government administrative institutions, including draft legislation, must be made available to the public, unless the law provides for an exception. Cases have been reported, however, in which institutions have refused to implement the law and denied access to requested information. All laws are published in the Official Gazette, a governmental newspaper that is available to the general public.

Power was quickly decentralized after Latvia declared independence in 1990. Latvia's system of local government includes 586 local units, which are divided into two levels. At the highest level are the 26 rajoni (districts) and the 7 largest cities (Riga, Daugavpils, Jelgava, Jurmala, Liepaja, Rezekne, and Ventspils). At the second level are 68 smaller towns, 481 pagasts (small rural districts), and 2 novadi (larger rural districts). In 1999, the government proposed administrative reforms that included the transformation of the districts into 9 larger units. There has been widespread public debate over the proposal, but no final decision has been made to date.

Local authorities are responsible for territorial planning, regional and local roads, public transport, housing and community subsidies, primary and secondary education, social services, and primary and secondary health care. Latvia has enacted laws giving local governments, particularly municipalities, substantial authority and allowing them to function independently. Local governments may pass their own legislation, provided it does not conflict with laws passed by Parliament. In general, local governments do not have sufficient financial resources to adequately carry out their duties. In recent years, various administrative reforms have sharply reduced the revenues of local governments, while at the same time allocating more functions to local authorities.

Subnational officials are chosen in free and fair elections. Latvian citizens residing outside the country have the right to vote in local elections. However, noncitizen residents of Latvia are barred from voting in local elections. The country's 600,000 noncitizen residents, most of whom are Russian speaking, are therefore effectively prevented from participating directly in local politics. Local assemblies elect the country's mayors. In Latvia's most recent local elections, on March 11, 2001, 12,000 candidates competed for 4,445 seats in 77 city and 489 district councils. The Social Democratic Party (LSDP) and For Human Rights in a United Latvia, both opposition parties in Parliament, won an upset victory over the country's ruling coalition. Voter turnout was 60 percent. Since May 2001, the mayor of Riga has been Gundars Bojars, who represents the LSDP.

The 2001 Law on State Civil Service increased the number of state employees who are considered civil servants. A provision aimed at improving the competence and professionalism of the civil service requires all civil servants to have completed higher education. The law also allows ministers to dismiss civil servants who violate laws and regulations or fail to fulfill their duties in a satisfactory manner. However, civil servants also have a duty to refuse to obey illegal orders from superiors. While the possibility of dismissal for cause may strengthen accountability among civil servants, it also increases the potential for excessive political interference in the bureaucracy. Because of Latvian language requirements, Russian speakers make up only around 10 percent of civil servants.