Setting the scene

The Baltic states (Latvia, Lithuania and Estonia) have launched liberal economic policies since independence from the former Soviet Union in 1991. The results have been mixed.

Estonia has led the way: a radical liberalisation programme freed prices overnight. A controversial privatisation programme has put over 70 per cent of large state enterprises into private hands; foreign investment accounted for seven per cent of GDP in 1995. After an initial GDP contraction of eight per cent, one of the largest falls in the region in the immediate post-Communist period, GDP growth is expected to reach six per cent in 1996.

Latvia and Lithuania have taken a more chequered path to growth. For Lithuania, an initial GDP contraction of five per cent ballooned to 38 per cent in 1992 before recovering; Latvia suffered a similar fate. Both countries have faced banking and political upsets. Lithuania's two largest banks collapsed in late 1995, forcing the resignation of the Prime Minister. In Latvia, the collapse of the country's largest institution, Baltija, in 1995 brought down 40 per cent of the sector. The country's reforming efforts are further hampered by a perceived lack of political will to push through necessarily painful measures.

Nevertheless, despite this mixed picture, all three countries have proved that small economies can survive and prosper in the new economic climate.

Key economic indicators
Capital	RIGA
Area (Sq km)	64,589
Population (m)	2.5
GDP/Capita (1995)	US$1, 954
President	Guntis Ulmanis
Currency	lats /: 1US$ 0.6 (FT 29/05/98)

Interview with President Guntis Ulmanis
Developments and future goals

Guntars Krasts, Prime Minister
Open for investment

Dr Roberts Zile, Minister of Finance
Investment climate in Latvia

Einars Repse, Governor, Bank of Latvia
The Latvian banking system: moving forward

Tatjana Shepel, in co-operation with Rigas Managers School
Baltic stock markets: reasons and possibilities for co-operation

Maris Elerts, Director-General, Latvian Development Agency
Investment opportunities in Latvia

Janis Naglis, General Director, Latvian Privatisation Agency
Privatisation and investment opportunities in Latvia

Civido Romeilko, Chair, Insurance Supervisory Inspectorate
Insurance in Latvia

Essential foreign policy events
Information Department, Republic of Latvia Ministry of Foreign Affairs

Investment opportunities in Latvia
Maris Elerts, Director-General, Latvian Development Agency

Foreign investment in Latvia
Dr Valdis Birkavs, Minister of Foreign Affairs

A market review of Latvia
K Gerhards, Adviser on Economic Affairs, The Chancery of the President