Saturday, May 31, 2008

Preparing for the "hot" political summer

I am back in Latvia now. I was silent for the last two weeks due to several reasons, and my marriage was the most important of them! Yesterday I returned back from conference in Zagreb and after finishing the article most of my devoted readers will be able to learn what we were talking there.

Latvian politics is still murky due to illegitimate parliamentary elections in 2006. Several politicians from the governing coalition already try to position themselves before the upcoming elections. Former rumours about the short lifespan of the incumbent government were approved by the Saeima Head of the Foreign Affairs Committee Mr Andris Bēržiņš (LPP). Being the member of the PM party he openly argued that there is alleged plot prepared to topple the existing PM from his office in October 2008. Actually it sounds like an announcement from a child trying to get attention from his peers. His announcement was discussed in the media for some time, but it rather expectedly calmed down.

Next Thursday the parliament must answer to the question - whether they will open the road to the referendum or they will accept the constitutional amendments proposed by the Union of Free Trade Unions? Next Wednesday the opposition New Era party want to know what is the government doing in order to reign in economic slowdown in Latvia. After those two questions answered the biggest question of contention will be on agenda - what to do with the proposed amendments in pension laws?

The Summer is going to be hot and I predict that it has all potential to lead to snap election in coming autumn. My reasoning for that I shall reveal in some forthcoming posts. In the meantime for those of you who read Latvian you may also read my thoughts about the ratification of the Lisbon Treaty and its consequences on Latvian business environment in Dienas Bizness.

Friday, May 16, 2008

Referendums and constitutional breaches

The final number of signatures for initiating the referendum for amendments in pension laws stands now at circa 170 000 signatures. It means that the existing Saeima session might either turn out to be the longest in Latvian history or simply lead to snap election this coming autumn. The reason behind my contemplations is the fact that both legal amendments, that were initiated by signature collection campaigns, will be given to parliament for scrutiny during the existing session. The Latvian constitution says that proposals by public motions turned into parliament should be processed within given session. The issues of the referendum campaign are serious enough to make the MP's to realize that they cannot agree on anything anymore or to put it differently that their Godfathers cannot juggle out from this issue without triggering popular referendum. Long standing head of the Saeima judicial commission Mr Kusiņš already warned in Diena abut some parliamentarians unrelenting wish to muddle the legislature away from popular referendum.

The total lack of trust of MP's and government among the electors is irrevocably lost and it can be regained only with painstaking work. Both government and MP's are not ready for that due to the row of scandals, and thus the only option left is snap elections.

The Saeima National Security Commission head Dzintars Jaundžeikars (this farmer got into parliament with a soft mandate) breech of constitution two days ago gave just another reason to call for early elections. Dzintars Jaundžeikars called the Head of Latvian public TV to closed and allegedly secretive meeting of the National Security Commission in the parliament. In the closed meeting he demanded Edgars Kots to answer questions about the contents of the Latvian TV evening news and explain why Latvian TV shows only negative news! While doing it Jaundžeikars breached Art. 100 of Satversme which clearly says that censorship is not allowed in Latvia! His colleague Gundars Daudze who happens to be the Speaker of the Saeima is as ignorant about the basic law of his represented country. After the previously mentioned scandal he suggested that the prevailing negativism should be stopped in the Latvian public TV evening news (Panorāma), and "that news could usually start with showing the good works of the government." Present Latvian nomenclature Mandarin class isn't even copying the Ukraine light model, but it is actually transplanting Mr Putin's governance style piece by piece...still sad

P.S. Rather ominously in ,, many commentators have vocally discussed latest constitutional breaches. Among the most often asked questions was - when Latvian folks would finally get out on the streets of Riga and start demonstrating against illegally elected MP's and their corrupt politics?

Wednesday, May 14, 2008

Another referendum to come

Yesterday LETA informed that 140 297 signatures are collected for initiation of changes in Latvian pension laws. It means that, if the number of about 150 000 signatures would be collected by May 15, 2008, and the Central Election Commission would approve it to the parliament, then the Latvian Constitution underlines that the two amendments presented - constitutional changes allowing qualified number of electors to initiate dissolution of the parliament & changes in pension laws - should be processed in the present session of the parliament. The speaker of the parliament Gundars Daudze already uttered his apprehensions about the fact that the present session of the Latvian parliament could turn out to be the longest in Latvian history.

In the meantime government behaves like headless chicken. The PM has come out with ludicrous announcements ranging from arrest of the cruise liner Ms Mona Lisa until it has not paid all the dues, questioning authenticity of the results of the State Audit office that found that seven Latvian ministries failed to comply with law, to planning to ban private money lenders because according to Ivars Godmanis they do not follow the anti-inflation measures of the government.

The fact that government behaves like headless chicken is another reason, why is there referendum coming about changes in pension laws. Latvian cabinet continues its path dependency and it simply follows mechanistic policies without really understanding how they will affect the populace. The fact that economy is almost stalled and about 20 000 Latvian pensioners have problems to make their ends meet should make the government accept expansionary monetary measures. Latter measures would help to reinvigorate stalled economy, and thus help the economy to get out from slump. Latvian budget is outdated and stagnant, and the fact that social payments financed government budget deficits all these years is simply ludicrous. While Estonian government seriously thinks about cutting government expenditures their Latvian counterparts are still trying to find excuses for not cutting red tape!

Four ministers, with their state secretaries, undersecretaries and the rest of the staff should be abolished immediately. The E-secretariat functions belong to the ministry of transportation, social integration secretariat performs tasks of the ministry of justice, the child care ministry is the task ministry of welfare should actually do, and finally the European funds secretariat is nonsense, because why is there Ministry of Finance after all?

These four appendixes should GO first, after that there are myriad of state agencies nobody is really accountable for. Perhaps I am too harsh here and they are keeping books after all, but why the State Audit office finds irregularities in most of them again and again, and again... ? Instead of reforming the looming red tape the government is spreading horror stories about a possibility that stipulations in pension laws would initiate a collapse of the entire pension system. Answer to such a warning of the present political clique is ambivalent. First, in order to keep the pension system intact, government can finance their cronies in warm government positions and finance them at will from ever-increasing Social Fund. Second, the government does not say that proposed changes in pension system would subsequently bring with them also cutting the size of burgeoning red tape, and remodelling the Latvian administration, that has stagnated from its inception in 1991.

The present political elite in Latvia is simply incompetent (one may not find a better symbol for such "an elite" than the present Prime Minister) and they are sitting like lame ducks and wondering where they have lost their legitimacy!!?? Remember Peoples Party (TP) and Latvian First Party (LPP/LC) fellas - it was in September 2006 when you stole elections, and remember the ominous Supreme Court Senate ruling as of 13 of November, 2006 stating that illegal election campaign of aforementioned parties broke the law! Now Godmanis, Kalvītis, Šlesers, Brigmanis, Daudze & the rest of buddies you pay for that with total lack of legitimacy in the eyes of Latvian electors.

There is no other way out of this mess - just snap elections!

Thursday, May 8, 2008

MP's and petit criminals

Just finished listening to radio broadcast, and as it could already be expected from the onset, the motion of the opposition parties to question the PM in the Saeima about his first hundred days in the office was voted down. PM did not even manage to arrive to the parliament and the motion was endorsed only by 33 MP, while 46 said NAY and one abstained. Thus, my assumption about the motion as a PR trick was right.

Also the voting machine almost unanimously ratified the new Constitutional Treaty for Europe, also known as Lisbon Treaty, with 70 AYE, 3 NAY, and 1 abstained vote. Unfortunately there were no discussions and the Lisbon treaty was rubber stamped through the parliament. In the similar manner the ruling coalition members did not start discussion about the proposed constitutional amendments, and swiftly delegated them to the judicial commission for scrutiny. The latter amendments were initiated by the Latvian Free Trade Union Association, and to endorse them they collected 217 567 signatures (the campaign that ended last month). The idea of the constitutional amendments is to give the right to dissolve the parliament also to the qualified number of citizens, because according to present constitution only president is endowed with such a right.

Most of the ruling coalition MP's vocally resented amendments in media, but today none of them took a word from the pulpit. Usually parliament is there for having a debate, but it seems that incumbent MP's still have problems understanding that the primary task of their talking shop (parliament/parler - to talk in French) is actually to discuss matters, and not to make decisions in close circle of acquaintances and just present the verdict for rubber stamping it, huh, uhh.

It means that the Saeima judicial commission has about a month to mull those amendments through parliamentary juggernaut. If the parliament rejects them, then proposed changes of constitution should be put on referendum for citizens to decide. There is an option for president to intervene in case parliament rejects those amendments, but it is too much to expect it from the "incumbent appendix" to the ruling coalition.

Finally, funny news appeared today in Db about the odious head of the Latvian Customs Bureau Criminal Investigation unit Vladimiris Vaškevics. Someone allegedly tried to assassinate him last year, and after that attempt (police investigation has not found anything so far) both PM Kalvītis and Interior Minister Godmanis came out with a strong announcement, that this assassination attempt was "an affront against the Latvian state".

Today the same Vaškevics, also in some Latvian circles known as "footballer" or "legal snatcher" (direct translation from the slang of Russian criminals - "vor v zakone"), is afraid that someone is trying to assassinate him again.

Wednesday, May 7, 2008

Wobbling government chair

While six Latvian MP's from ruling coalition parties left for China there is an interesting situation in the Saeima. Speculations about possibility of falling the existing cabinet were spread for weeks. Right at this moment (it is Thursday morning now) the number of ruling coalition MP's is 46 while reconfigured opposition has 45 MP's. After opposition party members request the Prime Minister Ivars Godmanis has to answer to the parliament about his hundred days in the office. Diena reports that the opposition Reconciliation Centre (SC) party might bring MP with a broken leg into the parliament hall in order to increase the relative strength of the opposition. Also SC fraction head Jānis Urbanovičs does not exclude the motion of no confidence.

Such announcement sounds more like a public relations trick however. One may wonder why? Because in order to fall the wobbling chair of Ivars Godmanis there is not so much need for a MP on crutches as for someone among ruling coalition MP's to vote NAY against their own coalition representing PM. The fact is that People's Party (TP) was showing their somewhat concealed dissatisfaction with the Godmanis government since inception of the present government in last December. All the speculations about replacing coalition partners (Union of Greens & Farmers with New Era for example) only underline the latter argument. The ruling coalition MP's knew that if "their"six members of the parliament left for China their position would become fragile in the Saeima. On top of that, sociological polls show that support for the ruling coalition is irrevocably lost. Thus, if the wobbling government chair would fall today it would be the least surprising news from Latvia.

It would look like rather irresponsible act from MP's on the first instance. But the leader of the SC fraction Urbanovičs explained the need after fall of the government rather correctly- 93% of the ministers in the present cabinet are the same as in the one that fell last December. I still continue to underline my point that there is a need for snap elections in Latvia, because the existing political class has lost its legitimacy in toto.

Southern bridge - follow up coming already!

I was glad to discover that there are other persons who are interested and vigilant enough about absurdly high costs of the new Southern bridge (DT) in Riga. Yesterday there was a website created, and even though those who do not speak Latvian may find tables, photos, and numbers enlightening enough.

Also, it did not take a long time to receive an official response from the Southern bridge builders. Today's Delfi and Dienas Bizness published the DT builders official response , where they customarily tried to assure readers that the bridge itself costs just 35,4mlj LVL (!!!). Also the DT Representatives assured that the Southern bridge should be the cheapest in Europe (!!!)...if to compare with other bridges in Greece (!) and Croatia. If the DT public relations experts wanted to compare building costs of the DT with their homologue's in Greece, so be it. But I really do not understand the point of saying that independent experts calculations are wrong, due to the fact that the same experts mix costs of the 800m bridge itself (35.4mlj) together with adjacent viaducts, ramps and additional roads totalling 8km in length. But show me the country where they do not count adjacent roads, ramps and viaducts into total costs ledger??? Even the simplest logic says that there is no need for a bridge without ramps and viaducts leading off from it:)

It is rather suspicious that the DT public relations people found it important enough to respond to the information published in anonymous website thus swiftly (just a day after anonymous report was published). There is a local proverb, however, about "a dog who knows what he was eating", and to paraphrase the ominous proverb I am wondering, whether the DT builders are not nervous "about the political promises they had to digest"?

P.S. The DT interim report one may find here.

Tuesday, May 6, 2008

Latvian population declines

According to Delfi Latvian population is shrinking. While keeping in mind ceteris paribus negative demographic situation, there were 3541 people who settled and 4183 who permanently left Latvia in 2007. Thus, the total population declined overall by 10 400 people and stands now at 2 271 000.

Also, during last three years out of the 2 271 000 people 27 805 thousand live and work officially in Ireland reports Diena. According to official census in Ireland in 2006 there were 13 999 official persons who named their place of descent Latvija. At this very moment it is too early to say whether those 27 805 people could be automatically subtracted from 2 million and something Latvian citizens. Also, Irish Latvian community is the most advertised one, at least in the Latvian media. But there are plenty of Latvian citizens who work officially also in the UK, Belgium, Spain, Sweden, Russia, the US and other places. And never mind the number of unofficially working ones about whom nobody really knows exact data. Some folks reckon that up to 72 000 now work semi-officially in the UK and Ireland together.

Monday, May 5, 2008

Riga City Council into Guiness book of records?

I am happily back in Istanbul and we just had a very good time with Hannes who is actually better known as the chief of the Uhuduur group. En route to Istanbul Hannes&Co stayed at my place in Salaspils, and we discussed peculiarities of politics while the downturn of the global economy is forcefully passing its threshold in the Baltic States. Similar discussions were continued in Beyoglu cafe's, and I brought out the fact of the Southern bridge in Riga again, because ESTonians arrived to Istanbul prior me and they did not know about Chinese builders opening the new Runyan bridge.

So, whilst trying to dissect raison d'etre of the City of Riga councilors I remembered an old anecdote from the Soviet times that was accommodated to the present situation. The story is about the City of Riga announcing international tender for building the new Southern bridge across the "rio grande":-) Daugava.

"Three contenders showed up to the session of the City Council - Chinese, Germans and consortium of Latvian entrepreneurs. Councillors asked contenders to reveal approximate costs of their blueprints. Chinese said that they would easily build it for 1 billion euros. Germans said that they would use the best technologies in the world and they would build the safest bridge for 2 billion euros. Finally, the local consortium said that they are the only "local experts" and said that it is not possible to build that bridge cheaper than for 3 billion euros.

So, councillors convened for a whole month and made the decision to support the local consortium. Thus the local consortium "paid" one billion to the "city fathers", took one billion for themselves and finally asked the Chinese to build the bridge for the sum Chinese pledged they are ready to build it."

This anecdote very vividly describes, how the present government chose contenders for building the new National library in Latvia, because Estonian construction company "Merks" was disqualified under rather questionable circumstances.

Nevertheless, forget about shady circumstances and the fact that Riga citizens children in three generations shall pay for their "golden bridge", as it is euphemistically called in Latvian already, because there is something positive in this story as well. The positive news is that whilst building the Southern bridge Latvia could finally get into the Guinness book of records. After several attempts of all kind of persons cooking longest apple pie, brewing strongest beer or doing many other outstanding deeds, actually Latvia could get into the Guinness book of records due to the biggest amount of money spent for building 1oom of concrete bridge. It means that City of Riga Councillors could already advertise the unfinished bridge as the national landmark and bring foreign tourists to see, how well Riga city councillors have learned to "spend" millions of euros? Thus, the property prices would only rise near the viaduct, and they could actually build the "Golden Bridge of Daugava" museum right in the centre of it.

They could display the story about how the bridge was built, make comparisons with Millau, Runyan or any other bridges around the world. Thus, they could put up a huge billboard showing which city councillor is being imprisoned already, and who's court case is still pending. Then they could establish also electronic billboard showing who's sentence is expiring and with how much money he/she is left after being released from the prison etc, etc... . So, dear readers, if you have some novel ideas about what could be on display in the museum of "Golden Bridge of Daugava" just let me know. And while readers and bystanders are contemplating about novel ideas, the Riga City councillors should be proud about establishing another historic landmark:)

Thursday, May 1, 2008

The May 1 surprise in Latvia...from just finished Chinese bridge (updated)

Today small number of Latvian leftists celebrated the International Worker's Day. The old guard communist and leader of the Latvian Socialist Party Alfrēds Rubiks called those couple of hundred elderly who gathered in Grīziņkalns to continue to fight ("šodiena ir cīņas diena, A. Rubiks) for their rights. It did not create any social reverberations in this sunny day, because most of folks travelled instead with budget airlines to European and Middle Eastern destinations. Also the group of about thirty Latvian Social Democrats gathered near the monument of the spiritual father of the Latvian Social Democracy Jānis Rainis today, and listened to their leader and former Popular Front star activist Mr Dainis Īvāns.

In his speech Dainis Īvāns reminded his listeners about the significance of the May 1 and called people to remember that Latvia is a country not only for the rich people, but also for the blue collar workers, teachers and pensioners. It sounded strange, however, from the man who supported ill famed "dumpster bill" of the odious member of the AAA team Mr Šķēle.

Also, while being member of the Riga City Council he never raised a voice about absurdly expensive Southern bridge. Because city councilors voted to keep the final costs of this lucrative project as secret it is impossible to know exact costs now. However rather many experts have mentioned the sum of 568 million lats (about 812million euros under current rate of exchange 1EUR=0.70Ls), as the final number for this hyper lucrative project.

I wrote about the absurdly high costs of the Southern bridge across the Daugava river already before. And today news came from Shanghai about finishing the longest suspension bridge in China - the New Runyan bridge. The latter bridge is 36 times (!) longer than the bridge built in Riga. Final costs of the Runyan bridge according to Delfi stand at 763 million lats (1,09 billion euros).

Workforce is definitely cheaper and also more effective in China (it took them 3 years to build that bridge, while Latvian counterparts are in their third year and not finished yet). Technology for building Runyan bridge was probably more sophisticated (more technological innovations used for suspension of such a long bridge) than for building its tiny (just 800m long) cousin in Riga. It is especially significant considering that technology to build the Southern bridge was brought not from the West but from Russia.

Technologies is not the most significant aspect here, however, but the total costs of the bridge. According to the official data from China (one should always be healthily suspicious about statistics from non-democracy as well:) and experts estimates about total costs of the Southern bridge, constructing 100m of the Southern bridge should cost about 1,015mlj euros, while building 100m of Runyan bridge cost 30 277 euros. Simple arithmetic's says that Riga taxpayers should pay for construction of 100m of concrete bridge 3252% (!) more than Shanghai taxpayers. Is it good news from China about "relative" ineffectiveness of Latvian builders only?


It is Friday morning and I passed by the Southern bridge whilst taking my car to garage. Because there is official holidays in Latvia (May 1-4) no one was working on it. And no one will be working on it till Monday, while in the meantime the Deutche Bank issued credit obligations are there, what a waste... . No wonder then that the 800 meters Southern bridge is considered as the "biggest" construction site in this land, and with the cost equivalent of nearly 10% of the current Latvian GDP. Sad... .