Sunday, April 26, 2009

Latvia transforming

I have kept quiet for the most of April due to couple of projects to be finished, work at the university and forthcoming European Parliament elections. In the meantime Latvian government is trying to transform sectors of education and health care now. Last Thursday president Zatlers convened a closed government meeting and inquired about the pace of structural reforms. Presentations of the Ministers Koķe and Eglītis convinced the president Zatlers that the structural reforms have taken off from the absolute zero. By May 15 the comprehensive system of civil service remuneration system should be finally introduced in Latvia after eighteen long years.

It is hard to follow all the events because the whole state governance system is forced to transform now. In meantime there are many unknowns due to expected massive layoffs. By the end of the years there is a plan to lay off about 4000 teachers and cut the number of hospitals by half (from 56 to about 23). The reality is harsh and long postponed reforms have to be managed all at once in Latvia now. Scenarios about the future range from apocalyptic visions of Ivars Ījabs to moderate assessments of Latvia coping with the existing crisis for the next twenty years. Latvia is transforming and to paraphrase young people of the late 1980's from the Juris Podnieks movie "Is it easy to be a young person?" ("Vai viegli būt jaunam") one may conclude that it is not easy to be a Latvian citizen in 2009.

Tuesday, April 7, 2009

Eighteen years...(updated)

The life in Latvia slowly wakes up from its "winter slumber". There should not have been time for a cozy sleep, but the previous governments lulled the state administrators and civil society into the artificial dream balloon. Now the newly formed Valdis Dombrovskis government must puncture that balloon in order to replace the engine on Latvia Inc. As a good friend after my presentation about the Latvian political and economic situation in Tallinn quite ominously uttered: "it does not really pay to replace broken parts of Latvian combustion engine anymore, it must be simply replaced with a brand new diesel..."
Latvian new engine must be created or to put it differently, Latvian education, police and health care sectors must be utterly transformed in order the Latvian State Treasury would be eligible to receive the next tranche from the IMF [in medium term it inevitably would require constitutional overhaul]. It is rather late already, and I will update this blog entry tomorrow morning. Until then enjoy another Gatis Šļūka excellent view on [Eighteen years of the Latvian economy]. For those of you not familiar with Latvian traffic signs it is a stylised version of the dead end.


It is Wednesday morning and today Saeima must pass constitutional amendments in Art. 78 and 79 in final third reading, thus giving 1/10 of the electorate a right to initiate early elections. Latvian PM Dombrovskis just gave a very concise interview on Latvian radio, where he explained that the government simply cannot afford to back off from plans to overhaul the economy. The strategy for the budget making, that should be accepted somewhere in the early June, is to bring the government expenses down to the 2006 level, good. Valdis Dombrovskis must clean up the mess of previous and very complacent "apparatchiks", and while there is some whining here and there the overall comprehension among the majority in society hopefully is - you reform or you die!

Reforms are piecemeal so far and communication between the government and IMF is secretive. While the Minister of Health Mr Eglītis (People's Party) announced that he disagrees with the proposed budget cuts in health care system PM disagreed with him, thus Mr Eglītis must figure out how to overhaul the system of health care after all. The same is expected from the Minister of Education and Science Mrs Koķe (Union of Greens & Farmers). Sending her own employees from the ministry to participate in the Teachers Trade Union organized march was not the most brilliant idea. New ideas for overhauling the relic of Soviet past, stagnant and ineffective system of education are required from Madam Koķe, does she & her party have them, if they do not even have a real candidacy for Maire's post for the upcoming municipal elections?

Required administrative reforms are very well showing other bottlenecks in Latvian governance system. Hopefully the early spring endogenous reforms will brake a way in for a new generation coming into the Latvian political field. The spring weather is promising so far.

P.S. And while Latvian government has to overhaul their economy with the means possible Estonians are recalling the role of Finnish YLE to provide the cultured elites of Estonia during the Soviet occupation. There is documentary released about the same phenomenon that is so often brought up in discussions, when Latvian and Estonian economies & societies are compared these days.

P.P.S. Those of you reading Latvian here is my piece I wrote for Diena on April 2, 2009