Shock Therapy in Latvia, or State Without Priorities

Latvia is aiming at integration into the world community as soon as possible. Latvian President Vaira Vike-Freiberga knows the right moment when she can gain extra points. The other day she said in a live program of Latvia’s television: “Latvia supports the US-led war against Iraq, even if America fails to get a UN mandate.” At the time when such European countries as Germany and France are still hesitating, Latvia demonstrates its complete support to NATO intentions realized by the USA and Great Britain.

An international conference “Heading toward NATO: Prague – Next Prospects” was held last weekend in Estonia’s capital, Tallinn; well-known politicians and security experts came to the conference. Latvia’s delegation was headed by Latvian Foreign Minister Sandra Kalniete.

As it become known last week, the European Commission will appropriate 670 thousand euro to Latvia for “guarantee of nuclear security”. Latvian Minister of Finance Valdis Dombrovskis already signed a memorandum on Latvia’s receiving this financial aid. Head of the EU delegation in Latvia Andrew Rasbash is expected to sign the memorandum in the nearest time as well.

But as for the domestic political and economic situation, it is not as smooth and optimistic as Latvian officials often try to demonstrate. Latvia’s independent morning newspaper Neatkariga Rita Avize published an article under the headline “Repse’s Shock Therapy” in January. The Telegraph published translation of this article.

The publication says: “People are such that majority of us think inadmissible when elected or appointed officials, who must take care about our well-being, first of all focus on themselves. It concerns the Cabinet headed by Einars Repse, where the officials trebled their wages. Who will believe that ministers from the previous government actually lived on the sum of 65 lats that was officially claimed to be paid to each of them? At least, now the government is brave enough to give up concealing information about wages of officials: rather impressive sums of wages have been officially declared.

Is it good or not? Isn’t it better just to open the eyes and estimate the situation as it is? Wages of Latvian ministers and deputies have always been a painful problem for discussion which suggested an idea of bribe-taking. Majority of us think it is more acceptable to hear more lies about concerns of ministers as lying in the sphere of politics only. Some of the lies also say that wages of ministers are not so much higher than wages of highly qualified car mechanics or builders. At the same time, it seems to be excessive populism when at first, ministers vote for the decision to increase their wages, and then they immediately say that most part of the wages is donated on charity. To all appearances, these ministers decided to take care about earnings themselves. Indeed, it is rather easy when they have access to instruments of power and have control of millions! Certainly, it is a painful blow for Latvian pensioners paid 20 or 30 times less than high-ranking officials to hear about ministerial wages at the rate of 2200 lats (it is about 118.800 rubles, or about 3.8 thousand dollars). The sum is rather shocking for these people. This blow is especially severe against the background of the by-gone era of the communist regime where all people were said to be equal. At the same time, it is a right moment to be envious of the tax structures and social maintenance rates of richer Scandinavian countries. Latvia’s economy has nothing to do with the Scandinavian economies, it has much less money than is required to guarantee high living standards to those who deserve it. We should mention here that the new high wages declared by Latvian ministers are incomparable with wages of their western colleagues. Are the sums big or not? Everything is relative: they are big for some people, and not significant for others. Frankly speaking, everyone can ask oneself: are our ministers actually so helpless and uneducated that their lives must be worse than the lives of top managers of flourishing enterprises, not to mention directors, vice-presidents and presidents of companies whose wages are much higher? It is quite another matter that high wages of ministers must be confirmed with their effective work and must justify hopes and trust of the people.”

Another Latvian newspaper, Dienas Bizness published an article under the headline “State Without Priorities”: “Help yourself, and then God will help you. This is the phrase which could be used until recently to characterize the work of businessmen in Latvia. Indeed, governmental support to businessmen used to be chaotic and incomprehensible. It was quite logic, as so far none of the governments could explain which industries are supported in Latvia and what kind of support they must get. The whole situation in the country resembled lobbying of interest of some separate enterprises or a group of enterprises, this measure was resorted to when problems of some industries aggravated and posed serious threats to the industries themselves. Certainly it is much easier for the government to work under conditions when it is not clearly defined which industries do actually get support. In this situation, it is possible to say any moment that the industry that is complaining about its problems right now “is of now special importance” for the Latvian economy. For instance, it has been said for several years already that tourism is a nice potential for development of problem rural district. If some slight development is registered in this sphere, it is mostly due to the activity of enterprises of the tourism sphere than due to the policy developed by the state.”

Reference: a minimal wage in Latvia is 70 lats, this is the sum paid to majority of workers; majority of pensioners are paid about 65 lats which is hardly enough for payment of rent and public utilities bills in winter.

Sergey Yugov PRAVDA.Ru

Translated by Maria Gousseva

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