Thursday, June 05, 2008

Europe View column no 84: The Latvian Puzzle


The Latvian puzzle

Jun 5th 2008

Strong institutions and weak politics make a rum mixture

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LOOK just at the politics, and it is easy to be concerned about Latvia. Under the previous prime minister, Aigars Kalvitis, the government seemed particularly set on cosying up to Russia and castrating troublesome public bodies. “Government depends on business and business depends on Russia” seemed to be Latvia's philosophy in a nutshell. That worried its neighbours.

Yet there is a paradox: Latvia's strong public institutions proved able to defend themselves, thanks also to a vocal bunch of do-gooding bodies, and a citizenry that protests in the streets when politicians get out of line. Although a government propagandist refers to them as the “axis of evil”, organisations such as the KNAB anti-corruption bureau, the SAB intelligence and security service, the central bank, the prosecutors' office, the supreme court, and the bodies dealing with competition and public auditing all function commendably well by the standards of the region.

Even the departure from office of the steely Vaira Vike-Freiberga, who as president helped quash some of Mr Kalvitis's plans, has not tipped the balance much. True, the new president, Valdis Zatlers, was manoeuvred into office in a startlingly crude political fix by the party barons from the ruling coalition.

But since then the “dodgy doctor” (as his detractors dubbed him) has confounded those who said he was too personally naïve and politically weak to be an effective president. At the NATO summit in Bucharest, almost alone among east European leaders, he publicly rebuked the Russian president, Vladimir Putin, for threatening to dismember Ukraine.

The same may be true of Ivars Godmanis, who took over from Mr Kalvitis in December. As the leader of the government during Latvia’s struggle to regain independence, Mr Godmanis has the personal standing to face down the country's Berlusconi-like powerbrokers if they demand something too outrageous.

Yet avoiding disaster is nothing to cheer about. Drift is quite bad enough. The central bank alone cannot steer Latvia's economy through the coming downturn: that will need a government firmly committed to fiscal restraint in next year’s budget.

While Estonia and Lithuania are trying hard to diversify energy supplies, Latvia seems intent on increasing its dependence on Russia by building a gas-fired power station. The integration ministry, which is supposed to help the non-citizen population become Latvian, has been hijacked by monomaniac gay-bashers. Naturalisation applications have dwindled. If Latvia's previously apathetic russophone population starts looking east for leadership, the social and political costs will be huge.

Latvia's politics looks like a kitchen where the cooking is guided by the smoke alarm. It prevents catastrophe—but is no guarantee of edible food. Two groups of new cooks are trying to get to the stove.

One, led by two ex-ministers, Aigars Stokenbergs and Artis Pabriks, is not yet a political party. The “Society for Different Politics” hopes to attract new faces from business and elsewhere who have been repelled by the seamy cronyism of politics in recent years. That's a good idea—it was the genesis of Civic Platform, which now runs Poland—but it sits oddly with the cynical populism of the leadership's policy on pensions.

The other is led by the heavyweight Sandra Kalniete. She was nominated as a European commissioner only to be recalled because of political feuding at home. Together with allies from the ultra-patriot wing of Latvian politics, her Civic Union so far has also failed to enthuse the voters.

Meanwhile, Mr Kalvitis is setting up a new ice-hockey club in Riga, with some eyebrow-raising shareholders from the energy business. It will play in the Russian league. That would have seemed scandalous until recently. Now, apparently, it is acceptable.

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