Tuesday, August 7, 2007

Rationale for the government reshuffle in Latvia

Rumours are whirling daily in Latvia about the possible government reshuffle. In the meantime one must not be the expert to understand that amidst the continuously rising inflation, outpuring workforce the sense of reality will have to set in prior cold weather arrives. From history we can learn that all significant crisis arived rather unexpetedly. The same is going on in Latvia today when at the peak of the holiday season experts and policy makers understand that Latvian economy faces structural problems and macroeconomic disbalances, but there is nothing to do about it, because it is the summer time. And in addition those are not experts or policy makers who are going to fel the brunt of the consequences of political and economic mismanagement, but the majority of population instead. The experts task is to warn, while the task of policy makers is to lead such policies that they would be reelected according to the rules of the representative democracy, and the only option left for the majority of eligible voters is to think, listen and vote/abstain.

First of all the legitimate question is whether government reshuffle is needed? Aye is my answer and there are three major reasons for that! First, the popularity ratings of the Latvijas Fakti & SKDS pollsters show that there re only very few out of almost dozen ministers who's job performance is considered positive. Second, the lastest Eurobarometer survey (http://ec.europa.eu/public_opinion/archives/eb/eb67/eb67_lv_nat.pdf ) shows that the support of population for government, parliament and political parties is ever declining and is in the same league with Romania and Bulgaria and not with Estonia that is situated in a par with the Scandinavian average for example. Finally, the economy is still growing at double digit numbers but the low productivity and irresponsibly increasing salaries do not add to the real growth of the economy.

Therefore the government must keep these facts in mind if it wants to avoid eruption of angry crowds on streets, because the steadily raising prices for staple foodstuffs would become harsh in autumn, when the cold weather shall set in. Up to now postmen, doctors & nurses and teachers trade unions held negotiations with their partners, the state. All the trade unions have set goals on doubling their salaries, but in the meantime the Mr Kalvītis government has the task to forms the 2008 financial year deficit-less budget. Thus the task of the government amidst the trade union demands is titanic. Actually, it is possible to achieve the goal of deficite - less budget and to partially satisfy trade union demands only if the government overhauls its system of public administration. It would imply restructuring its public expences that would really need to start reform of education, welfare, police and medical care sectors. Here government shall most definitely face miriad of vested interests. Actually it is no wonder that among the most unpopular today in Latvia are ministers of Education and Welfare due to the very fact, that those sectors still represent the post Soviet heritage.

Therefore the decision of the Latvian Transport Minister to get access to the public funds in order to support fledling rural post offices is just a straw in the broader row of bargaining chips among the governing coalition. The coalition of TP, ZZS, TB/LNNK and LC/PP is cohesive, but the compromises that hold it together are becoming increasingly burdensome. Since sponsor of ZZS, Mr Aivrs Lembergs waits for his trial there are rumours about different reprimands of all coalition partners. How shall it all ends we shall see, and in the meantime the new president of Latvia shows signs of rapproachement with Russia while the Latvian constitutional court still has not convened and made decision about the constitutionality of the the Governments decision to sign the Latvian-Russian border treaty and parliament's decison to unilaterally ratify it.

2 comments:

Anonymous said...

Tere ja sveiki, Veiko. Huvitavalt kirjutad - hea ulevaade Latis toimuvast. Tervitades, Aare.

Baltic said...

Kursavend Aare, TERE!!

Eks ikka üritan tasapisi kiibitseda siin Lätimaal:) Oled Tallinnas?