Latvia, one of the three Baltic States, covers an area of 64,589 square kilometres. Latvia's population was estimated to be 2.013 million in 2014, indicating a continued fall from the 2000 figure of 2.38 million. This demographic shift reflects factors such as emigration, an ageing population and a falling birth rate. The capital of Latvia is Riga. Latvia celebrates its national day on 18 November (Independence Day).
System of Government
Latvia regained its independence from the Soviet Union in August 1991. Under the Constitution, the President is elected by members of the unicameral Parliament (Saeima) for a four-year term and has limited powers. The President appoints the Prime Minister, approves the Cabinet and may return legislation to the Saeima. The Saeima has 100 members, who are elected. National elections for the Saeima are held on the first Saturday in October every four years.
Latvia’s President Andris Berzins (Greens/Farmers Union Party) was elected on 2 June 2011 for a four-year term, commencing 8 July 2011.
Elections for the Saeima were last held on 4 October 2014. Latvia’s ruling centre-right coalition was returned with a clear majority. The three coalition partners, Unity, National Alliance and the Union of Greens and Farmers parties, received approximately 58 percent of the vote. Support for the main opposition party, Harmony Center, fell by approximately 5 per cent. Voter turnout for the election was a record low of 58.8 per cent. Mrs Laimdota Straujuma (Unity), sworn in as Latvia’s first female Prime Minister on 22 January 2014, retained her position in the new coalition government created after the October elections.
Latvia joined NATO on 2 April 2004 and acceded to the EU on 1 May 2004. It was accepted into the Eurozone on 1 January 2014. Latvia joined the World Trade Organization in 2009 and was invited at the May 2013 Ministerial Council meeting of the Organization for Economic Co-operation and Development (OECD) to begin the OECD accession process.
The global financial and economic crisis of 2008-09 hit the Latvian economy extremely hard. After years of double-digit growth, mainly funded by external borrowing by the country's banks, the lack of further readily-available credit brought the economy to a halt. Latvia's GDP contracted by 24 per cent in 2009. In March 2015, the IMF stated that Latvia has made remarkable economic progress since the global financial crisis. Since 2010, Latvia’s economy has rebounded, although structural unemployment remains high. Unemployment in Latvia rose dramatically during the financial crisis, from around 7 per cent in 2008 to a peak of over 20 per cent in the last quarter of 2009. It has since fallen gradually, with 9.8 per cent recorded in 2014.
Latvia’s recovery has recently slowed, with GDP growth decelerated to 2.4 percent in 2014, reflecting the prolonged closure of steel manufacturer Liepajas Metalurgs, weak economic performance in the euro area and Russia amid rising geopolitical tensions. The IMF predicts that the anemic external environment will continue to weigh on Latvia’s exports and investment in 2015.
Australia recognised Latvia's regaining of independence on 27 August 1991. Latvia and Australia enjoy friendly, co-operative relations with strong people to people links flowing from large numbers of Latvians who migrated to Australia in the twentieth century, primarily at the end of World War II. At the time of the 2011 Census, there were 20,124 people in Australia of Latvian ancestry.
The Australian Ambassador in Stockholm is accredited to Latvia. The Latvian Ambassador based in London has non-resident accreditation to Australia. Latvia is represented in Australia by Honorary Consuls in New South Wales, Victoria, Queensland, South Australia and Western Australia.
The relationship between Australia and Latvia is underpinned by bilateral agreements covering Trade and Economic Cooperation (1993), Extradition (2005) and Social Security (2011).
Latvia's then-State Secretary for Foreign Affairs, and now current Ambassador to Australia, Mr Andris Teikmanis, visited Australia for bilateral consultations most recently in March 2015. The Australian Prime Minister's Special Envoy, Dr Russell Trood, visited Riga in September 2011, during which he signed a bilateral Social Security Agreement.
Bilateral economic and trade relationship
Two-way merchandise trade in 2014 between Australia and Latvia was A$25.5 million. Australia exported A$8.2 million worth of goods to Latvia during this period, primarily alcoholic beverages and inorganic chemical materials. Imports from Latvia in this period totaled A$17.2 million, primarily mechanical handling equipment and parts, telecom equipment and parts and alcoholic beverages.
Please contact Austrade for information on doing business in Latvia.
Last updated: June 2015