Aspects of Economic Transformation in Latvia

In the essay the economic performance is examined in the one of the three Baltic States – Latvia during the transition period. The three Baltic States gained their independence at the end of the WWI, lost it at the start of the Second and regained it at the beginning of the 1990s, but the cost of Soviet rule was a loss of the economic dynamism they had shown in the inter-war years.1 First, the short profile of country and then Latvia’s history from very beginning of its existence is presented for better understanding the events during transition period in 1990s and situation now.

As Hedegaard and Lindström observe, although the Soviet regime prioritised economic growth (often with environmentally ruinous results), the paranoia of the Stalinist years created a climate in which “...the political leaderships, the local bureaucracies, the intellectual elites and the industrial cadres ... showing the slightest sign of any capacity for independent action were purged and purged again – to secure the kind of docility deemed desirable.”2 The Baltic States suffered particularly badly in this process. "The estimated number of deportees in 1944-52 is 124000 for Estonia, 136000 for Latvia and 245000 for Lithuania. The deportees were allowed to return after 1956 but many had not survived their stay in Siberia … did not return, having been executed or simply dying of cold or starvation.”…