Public Finance Perspective - Latvia

Essay by dbodrovUniversity, Bachelor'sA, April 2004

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Dmitri Bodrov

The Latvian people have lived in the Baltic-shore territory for more than 4,000 years, with the Latvian language being one of the oldest living languages of Europe. "Latvia's location at an East-West crossroads, and her ice-free ports on the Baltic Sea, have made her an inviting target for expansional powers.".(EIU, 1995). Over the centuries, Latvia has been occupied by the Teotonic knights of Germany, the knights of Sweden and Poland, and the tsars of Russia. World War I and the fall of the Russian tsars provided an opportunity for numerous Russian colonies to break away. Only Latvia, Lithuania, and Estonia gained and maintained independence on November 18, 1918, by signing a treaty with the new Soviet Russian government. Latvia quickly began to develop a successful economy and joined the League of Nations in 1922.

In 1940, Stalin presented Latvia with an ultimatum, admit Soviet troops or face annihilation.

During the next fifty years, the Soviet Union ruled over Latvia. Freedom of speech and press were abolished. Access to western printed materials, radio broadcasts, and other communications were strictly forbidden, and religious activities were destroyed. In 1987 large human rights demonstrations began to take place, with the most notable being the 1989 joining of hands in the unforgettable Baltic Way from Tallinn through Riga to Vilnius.

On May 4, 1990, the Supreme Council of the Republic adopted the Declaration on the Renewal of the Independence of the Republic of Latvia. In a referendum held in March of 1991, the people of Latvia voted overwhelmingly in favor of democratic and independent statehood for the Republic of Latvia. "Latvia's declaration of the restoration of independence in August of 1991 resolved many of the issues prominent during the transitionary period between occupation by Russian troops and Latvian...