Monday, April 28, 2008

Stagnation of the ruling political class continues

Last events in the Latvian political theatre do not provide much optimism. Yesterday Mr Joaquin Almunia, EU Commissioner responsible for economic and monetary affairs came out with his bureau's forecast for the bloc of 27. New and adjusted basic economic indices for Latvia are bleak enough. While GDP forecast for 2008 is adjusted to 3,8% its the inflation that is predicted still to be the highest in the EU at the end of the 2008 - 15,8%.

Today's Diena published latest poll of the Latvijas Fakti.



Photo: www.diena.lv

The negative trend started already in March 2007 when those supporting present political class and alienating from democratic regime split after omenous announcement of the former president Vaira Vīķe Freiberga, and detention of the Maire of Ventspils that preceded the latter announcement. During Summer of 2007 the support for the governing quadrumvirate started to dip below the support for the opposition parties. The peak of the distrust against the ruling coalition reached at the end of October 2007. I already wrote about the reasons for such an absolute slump of trust in legitimacy before and here I would like to give a short comment on latest polling data.

The most negative trend is the high number of undecided voters and continuous increase (+ 2,5% in April) of the number of alienated voters (the lowest quintile of the graph=21,3%), or those who would definitely not go to elections. It means that today every voter out of five electors would definitely not go to elections. Thus, the rough estimate from the Central Election Bureau data about the total No. of voters in 2007 (1 495 199) would make it 291 800 alienated electors today.

The number of undecided or swing voters have dipped only slightly and as already said it is still 25.7% high. It is the opposition Reconciliation Centre (RC) party gained +1,3% and RC is a stable leader in the polls for quite some time allready. The newly founded Civic Union party has lost about 2,1% of its support in comparison with March data. Also Messrs Pabriks & Štokenbergs newly founded "Another Politics" has lost its support (by 0,8% points) due to the questionably received and ongoing signature collection campaign.

Only two parties from the ruling quadrumvirate - Union of Greens and Farmers and People's Party - have enough support to pass into parliament if elections would be tomorrow. However, the support of subseqently 7,7 and 6,6 percent of the electorate is too little in order to take a decisive action and lead the Latvia Inc. out of the economic malaise. Especially so, when the Prime Minister's party has scanty 3,8 % support of the electorate.


There is another option actually! To disregard the public opinion at all and make painful and thus needed structural reforms (cutting red tape and jump starting Latvian economy with overhaul of taxation system), because the support for the existing political class is irrevocably lost. Do they have guts for that, I doubt. Instincts to stay at power are stronger than abstract interests of the Latvian public in the long run, unfortunately.

Friday, April 25, 2008

Cracks in governing quadrumvirate?

Since yesterday disagreements among different fractions, minigarchic families and simple political tricksters have intensified again. I very much hope that not only unexpectedly nice spring weather is the reason for such an active positioning in the public space.

First, the People's Party (TP) revived its onslaught against the head of the Anti Fraud Agency (KNAB). Immediately, Mr Loskutovs who is the head of the KNAB responded that neither TP nor prime minister's Union of First and Latvian Way parties have paid circa EUR 2,1mlj. into state treasury. The hefty sum is to be paid due to the misspent funds during illegal election campaign in September 2006. PM's party continues its prime example of legal nihilism and wrote about it already before.

Also, the new political party is founded this weekend under aegis of Ms Kalniete and Mr Kristovskis - The Civic Union. Lets hope that this civic action would be lengthy enough to sustain its life after more and more revelations from the General Prosecutor's office come out.

Present accusations remind me simply mud slinging that I have seen before, and lets see how will it end now:).

Tuesday, April 22, 2008

Change the structure or die!

While thinking how to name this piece I was inspired by my colleague's article. Jānis Bērziņš reference about economic ills in Brazil in the late 1980's, and the famous phrase "export or die" actually was first used by Nazi Germany policy makers. Knowing the past of Latin American juntas it becomes understandable now through where did Brazilians learn the strategy first proposed by Friedrich List from. Brazilians were not the only ones actually, because Friedrich List inspired almost all countries in South East Asia, and his National System of Political Economy served literally as a bible for the architects of Asian economic boom from Japan in the 19th to Deng's China in the 20th century.

Japanese and the rest of Asia after the World War 2 totally changed structure of their economic system, thus affecting also subsequent political and social transformations. Results of "Asian Miracle" are widely known and the world's economic powerhouse has gradually moved in the late 20th century from the Transatlantic area to the Pacific.

It does not imply now that if Latvian or any other Central European policy makers would copy Japanese or Chinese model they would automatically start prospering, however. The point is somewhere else, and that is the compatibility of the foreign economic models with the existing social and material infrastructure. The key for the ability to make comprehensive and sustainable transition from one economic system into another is hidden in using the best brains in a given country possible. In order to nurture the best brains there is a need for cohesive tertiary education system which is based on principles of meritocracy. Meritocracy is the last thing cherished in Latvia however.

Just listen to PM Godmanis, Transport Supremo, Education Minister and other members of the present political "elite". All previously mentioned persons in their public utterances constantly ask the question - why does young generation not want to join party politics, become teachers or academics, and work in Latvia at all? The answer is simple ladies and gentlemen, that in order to work somewhere it isn't your merits what counts but your social networks, with all the consequences to bear! Such social networking system starts from high school where students with extremely bad grades are still promoted through the schooling system. Then they squeeze into university, and they continue their squeezing through the system in labour market in the manner of George W. Bush.

The difference between the US and Latvia is the sheer size of people and lack of totalitarian experience in the United States. The US system is far from perfect, and quality of its public schools directly depend on the ability to collect property tax from affluent folks (that explains bad schools in run down areas in Harlem, Bronx etc.), but at least the US has the best university system. It means that Universities can attract the best students from all over the world and thus balance off relative shortcomings of its public education system.

Latvian university lecturers and professors, instead of devoting their time for research and working with best students, most of their time must work with students of questionable quality. University attendance has exponentially increased, but it has happened due to the exponential decline of vocational and technical school attendance. With few exceptions there is no real campus traditions, that would make Latvian students socially active. Students attend not different lectures at universitas but are pushed through the system like in the vocational school. The bottom line is that students work in order to pay for their studies and in their free time they also study, and such "system" or vicious circle stands rock solid now.

If one looks on the OECD Pisa results then one may notice the trend in East Asian economies, their schoolchildren are getting better and better. Also the number of Asian students in the best US, European and Australian universities keeps increasing.

Results of Latvian schoolchildren, however, have declined in most areas of evaluation. As a university lecturer I see that preparedness of Latvian students is declining from year to year. And it is no surprise, because selfish and often poorly educated Latvian government administrators provide teachers only with promises and salaries that would not allow them to starve. Such issues as comprehensive evaluation system with courses for their professional upgrade or foreign visits are on paper only. In order to keep both ends meet in the situation where teachers hemorrhage out to the Western part of Europe those who stay at home work at least two shifts and they are simply overworked (in September 2007 there were 475 official teacher's posts in Latvia that were officially unfulfilled).

Such things as comprehensive and structural reform of the Latvian education system should go hand in hand with reforming the structure of the national budget priorities and the way taxes are determined and collected. Latvian politicians are afraid to reform, however, and there is up to now no one to reign in the ballooning red tape. Thus apathy prevails now also among the guild of dedicated enthusiasts - teachers, lecturers and professors.

I don't even want to speak about the language policy in universities. Latvian language should be promoted, aye. But there should be a balance found between preservation of the Latvian language culture and supplying the most essential spheres of Latvian economy and social infrastructure with best professionals possible, even if they are educated in English, German, French or Russian.

Constantly dragged and half-cooked reforms only increased prejudices among different groups in Latvian society. It means that it puts supporters of purity of Latvian language on defensive and only gives rise to intolerance in Latvia. Latvian society is literally caught today between financially not so promising West and the Eastern "candy man". Selfish benefits are at stake for the minigarchic families and their underlings. Long term goals of the state, which still is the primary agent in the international system, have been forgotten and it was very vividly exemplified by couple of high ranking civil servants in private conversation with me. I asked, "why Latvian political government dares to employ such reckless and outright corrupt policies"? An answer was - "because we are in the EU and they cannot afford to let us down". If such "slave" mentality prevails among political elite, then it only underlines my previous assumption, that the present elite is uneducated and foolishly naive.

Latvian present economic structure cannot sustain its exponential increase of burgeoning red tape without structural reforms in most of the interconnected sectors of its national economy. Thus, the slogan during this year of global economic downturn in Latvia should be simple - change the structure or die!

Monday, April 21, 2008

It was not just a birthday "seminar"

I shall be very short this time. Yesterday I wrote about the facts TV3 was reporting, and derided the sickly Latvian governance system. Earlier Pēteris shortly described formal story behind the former E-Minister "birthday seminar". And today also the Latvian Intelligence Agency (SAB) approved yesterday's news as correct. Simply the press officer of the SAB Ms Iveta Maura differed in her statement from the TV3 journalist's version in certain details.

So, the official statement of the SAB press officer to the Latvian Radio 1 was, that the former E-minister contacted SAB and asked them to consult her after she was approached by shady politicians. SAB simply continued their job guaranteeing security of the electronic data processing in this country. It seems that there are quite few people who do not like increased strength of the europeanization winds in this country...

Sunday, April 20, 2008

Unhealthy party political games

Those of you intimately following Latvian political developments I'd like to ask you to scroll down and read the update of this Wednesday's blog entry. It would save your time, and thus, would allow me to bring out another detail of the peculiar Latvian political culture - a scam.

About month ago the former PM visited the University of Latvia political science students and bragged in front of them about being the candidate for the post of the president, but not really willing to take such a responsibility. His speech to the students is not reproduced here due to the fact that it did not contain a single line of policy proposals or his ideological stance. However, his smug presentation style and openly hostile attitude about other members of the political theatre makes me to conclude, that the present Latvian political elite is disgustingly sick. Just to bring you an example, former PM marvel in his speech was his assumption that paramount task of policy making in parliamentary democracy is to trick political competitors, because policies are made by civil servants, anyway.

Another proof for sickness of the governing elite came out during the "strawberry cake affair" of the E-minister Ina Gudele. Last week in his interview to Latvijas Avīze Gundars Bērziņš was vicariously suggesting that there is Latvian Intelligence Agency (SAB) spook in the government. Today's TV3 "Nekā personīga" had made an investigation and considered this option seriously, thus coming to conclusion that Gudele was wasted for non-compliance to the governing coalition "unwritten rules". Gudele in her Latvian TV1 interview accepted last summer the fact that SAB was interested in her work. Thus, according to TV3 , there was probably an idea to force Gudele to publicly denounce the Kažociņš candidature for the SAB post, while his candidature was slowly dragged through the corridors of the Latvian government, and morally corrupt coalition members continued their smear campaign against him.

Ina Gudele apparently did not comply with "lettish omerta", and thus, according to TV3 her exit was quickly "organized" by finding that she organized her birthday party whilst using taxpayers monies. Government cannot hide the fact, however, that Olita Magone , who was the undersecretary of the E-secretariat at the the time, was also responsible for organizing the ominous "birthday party/seminar". Ina Gudele fired Olita Magone after Corruption Prevention Bureau (KNAB) found that she was the mastermind behind the scam selling Latvian passports to shady customers mostly from the Commonwealth of the Independent States.

The payback of Magone vs. Gudele sounds understandable now, but the fact that proxy fights are used for the AAA team bigwigs, also shows how sickly childish the Latvian governance system is. As an outcome Ms Gudele not only handed in the letter of resignation but also terminated her membership in the Union of Greens and Farmers party. Another person is being offered on the altar for whims of Latvian oligarchic clans. "Honorary head" of the AAA team, Andris Šķēle cowardly pulls strings while using his university buddy Gundars Bērziņš verbal diarrhea. Another member of the triple A team, Aivars Lembegs is simply let free by Latvian judiciary, even to openly meet his "stipendiaries" in Saeima. Minigarchs still rule this country and apparently about 90 % of eligible electors find it traditional enough to accept it as a fact of life... .

Wednesday, April 16, 2008

Free fall of the government continued (updated)

Because the Baltic States economies are interdependently connected it should be obvious that tremors in one economy is reverberated into another. The Bank of Estonia downgraded the 2008 Estonia's economic growth prognosis of the ministry of finance from 3,7 to 2%. In the meantime Latvian PM probably likes his media promoted "image of martyrdom", and still finds optimism saying that Latvia can manage soft landing. It does not help the government from its continued free fall after all. It is widely known that PM works hard (lights in his Brīvības St. cabinet are constantly on long after midnight), however, the ministers he works with are the same as in previous government.

Photo: www.delfi.lv

It is Thursday morning, and there is Saeima session today. The Lettish talking shop/parliament (parler - to talk in French) should approve Jānis Kāžociņš as the head of the Latvian Security Service (SAB) today, and the State Security Council already reached the consensus in his support. Actually there were quite many politicians (Jaundžeikars, Segliņš, Bērziņš Gundars) who openly continue to show their dissatisfaction with such a consensus agreement. Saeima would vote openly today (at least MP's said so), thus it would be interesting to see those ominous AYE's and NAY's.

Political system is still reconfigured in Latvia. Rumours whirl about all kind of constellations, possible JL+TP block, fall of government due to the inability to agree on the administrative reform, and myriad of other petit politique issues. President in the meantime openly scolded the E-minister for agreeing to celebrate her birthday in the ministry whilst using taxpayers monies. Both PM and president even think that such misshap is thus serious that she should consider stepping down from her post as the minister. Both gentlemen comfortably forget that Mr Goodman's paymaster Šlesers alias Transport Supremo should be literally sent to the moon for all his MISSHAPS as the minister. Also we have tax evading president, and neither Internal Revenue Service (VID) nor parliament considers it as a problem. But that is too much as to expect rational behaviour from Latvian ministers and incumbent president, however, still sad...

Updated

It is Saturday evening and after ominous birthday celebration the Prime Minister accepted resignation of the E-Minister Ina Gudele. She headed the E-secretariat as the Special Assignments Minister responsible for Electronic Governance. It means that on Monday the head of the government and his public relation people will have to think hard. Because the question now is about the face saving of the government, and stakes are high. How to simultaneously legitimize acceptance of E-Minister's resignation for entertaining civil servants at her birthday party for the scanty 1000EUR of taxpayers monies, and explain why he still intimately holds to Transport Supremo who allowed bankruptcy of the Latvian Post Plc. and overlooks one of the most expensive road building cartels in the world (proven by the State Audit Office!!!)?

Opposition party quite correctly pointed out to the coalition government the need to rethink the raison d'etre of the E-secretariat. The major reason for creating such an institution was to introduce the system of electronic signatures and to help to digitize the work of Latvian government. Electronic signature system is still miles away, and just compare official Estonian and Latvian e-governance webpages to understand the difference. In the meantime coalition government reiterates that the "good work" of the e-secretariat should be continued, brrrrr...

P.S. Actually there are three Special assignment ministries at the present moment in Latvia - secretariats of E-governance, social integration and EU funds governance - with special assignment ministers heading them. At the time when global economic downturn is just on the threshold, it would be efficient and also reasonable to integrate the e-secretariat into the ministry of transport and communications, EU funds governance into ministry of finance, and finally the social integration is the function also ministry of justice deals with. The BIGGEST problem in Latvia is the stagnant administrative structure however. Ministers, whilst following the path of totalitarian Soviet social structure, serve their mandate not as servants (ministere - to serve in Latin) but literally as masters to their flock of slaves...and the slave mentality is as prevalent among majority in this country as the master mentality among minuscule gang of questionably educated tricksters, unfortunately.

Friday, April 11, 2008

Second signature campaign is over

Less than a year later after the signature campaign against the virtual coup d'etat in Latvia (government changing security laws on the last day of 2006), there is almost as identical number of signatures collected as in April 2008. While in May 2007 there were 212 000 signatures, this year there are about 213 000 signatures collected in order to initiate constitutional amendments.

After a week another signature collection campaign would start and that one will be about amendments in pension laws. Initiators of this campaign wanted to hold the signature collection campaign simultaneously with the campaign that successfully ended yesterday. Nevertheless, Latvian political "elite" was scared to loose their perks. Therefore they thought that while keeping those two campaigns apart there would not be quorum for initiation of at least one referendum. Whilst doing it "our responsible" leaders made Latvian taxpayers to pay additional LVL 570 000 (its the sum one signature collection campaign costs). Democracy is expensive regime indeed, but its worth to pay such sums knowing that gradually it will allow us to get rid of inefficient "governors". Thus there would be no need for addition and symbolically annual 570 000Ls expenses. I hope that one day there would be a chance to have MP's who would legislate and not just continue their talking shop and travel to exotic countries without knowledge and understanding that they travel for the need of civitas and not just ego or oligarchia.

If one looks into Eurobarometer data then one may find reasons for Latvian public making referendum already second year in a row. I made a small research last year, and compared support for the government & parliament in Estonia, EU (an average), Latvia and Lithuania. I made the table only from YES answers. Undecided voters are fluctuating from 3-5%, thus the rest you may calculate yourself are representing NO's. Number 1 displays result of the spring poll and the second row (without a number) displays the autumn poll.

Q: Do you trust your government? YES answers

Q: Do you trust your parliament? YES answers

There are similarities between lack of trust for the government in Latvia and Lithuania. Both countries, however, are miles away from Estonia and the autumn Eurobarometer data clearly shows that lack of trust for the government in Latvia has stagnated below the legitimacy line of the democratic system (19% support for the government and only 16% for the parliament).

The number 213 000 is roughly 10% of the total number of inhabitants in Latvia and that is the most active one. However, I would argue that the first 5% are "true" activists (135000 signatures given until April 8), because another 5% of signatures were collected literally during last two days of the election campaign. It is a usual trend already, and it shows that majority of Latvians like to be led by collective action. What do I mean by this is the fact that instead of making up their mind on their own, and going and signing in relative calm about 100 000 citizens preferred to stay in long queues where they could chitchat and/or let the steam out. There are several reasons for such behaviour, and they would be discussed another time.