Latvia's Tiger Economy Loses Its Bite | The Nation


Latvia's Tiger Economy Loses Its Bite

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Kristine Drevina, a 34-year-old member of a new Latvian left-opposition party called Jaunlatvija (New Latvia), sits in a cafe and talks about why she got involved in politics. For the past six years, Drevina worked at the European Central Bank in Frankfurt. But it dawned on her in early 2008 that "the country is going in the wrong direction, and I have no right to complain if I'm not doing something about it." Her party wants to reorient Latvia away from blindly following neoliberalism and focusing on ethnic tensions. "In the current situation, we have definitive proof that you can't let the markets run completely free. The state has to be involved to assure fair rules for everyone and provide safety nets for the most vulnerable."

Kristina Rizga reported from Latvia on a grant from the Pulitzer Center on Crisis Reporting. Gatis Visnevskis contributed research for this story.

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Kristina Rizga
Kristina Rizga is the executive editor of WireTap, a political youth magazine, project director of Future5000.com and a...

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Like Drevina, most members of the new party are in their 30s and have studied or worked abroad. "New Latvia will be a test for our democracy. Can we rise to power without a long [money] tail behind us?" Drevina says. The party was founded only two months before the municipal elections and has made minimal gains. But it is determined to boost its visibility and membership before the October 2010 parliamentary elections.

Another new entrant into politics is Laura Mikelsone, Delna's director, who stayed away from politics until last year. She worked in the Ministry of Economics and also as a human resources consultant helping colleagues start a business in China. Now, as part of a team of mostly young women who work at Delna, Mikelsone wants to see leadership that is capable of going beyond nationalism and embracing the full complexity of Latvia's history. "I want a Latvian Obama," she laughs.

As new leaders, activists and artists are charting a more sustainable political and economic agenda, a new generation of entrepreneurs is also emerging to seek ways of creating sustainable businesses. One such is the green cosmetics company Madara, founded by three women in their 30s, which makes its products using local resources, from plants to labor. The women launched the company in 2006, raising small amounts of capital through friends, and have opened a new store in the thick of an economic recession.

While these green shoots are springing up across Latvia, the austerity measures imposed by foreign lenders threaten to slowly burn them out, raising the specter of more social unrest this winter. A growing number of ordinary Latvians are criticizing the ways their government is handling the crisis. They point to the fact that while the United States and the European Union are growing their deficits to provide economic stimulus, Latvia is still pursuing the opposite strategy.

I called Valdis Novikovs in October, four months after I left Latvia, to see how his company that sells off the assets of bankrupt businesses was doing. "Our business is growing, and we recently started negotiating sales with Lithuanians and Belorussians," Novikovs says, catching his breath after a long day of work.

Will Latvia survive this crisis? "Latvians will be fine," Novikovs says with confidence. "The thing is, even when you ask a Latvian how he is doing in the best of times, they always say, just 'OK.' They don't shine with optimism like Americans, but that's deceiving," Novikovs explains. "We have seen worse things than this crisis, and we always survived."

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