Latvia 2010

A general election to Latvia’s 100-seat Saeima was held on October 2. Latvia is one of the countries worst hit by the recession, seeing its GDP recede by a full 18% in 2009. Its government, has, as a result, implemented shock treatment including big cuts in public sector wages, cuts in spending; a fiscal adjustment equivalent to around 14% of the GDP. Some people had predicted that the government would suffer at the polls for this policy, and that the five-party government led by Valdis Dombrovskis would lose votes.

Valdis Dombrovskis, a keen 39-year technocrat, has managed his way well since he took office in 2009, replacing Ivars Godmanis, an older politician who was forced to resign amidst economic mismanagement and big protests in the country. Ivars Godmanis represented the interests of old oligarchs conglomerated within the People’s Party (TP), and, today, in the “For a Good Latvia” coalition. This election, “For a Good Latvia” showered money on the voters and bought the country’s biggest independent newspaper. TP had topped the poll in 2006, winning nearly 20% of the vote.

Valdis Dombrovskis is at the helm of a more modern centre-right coalition named “Unity”, the largest party of which is the New Era party but also includes the Civic Union, a new party which topped the poll in the 2009 European election in the country.

Latvia’s population is around 28% Russian, with most Russians living in Riga (which is around 43% Russian) and in areas in the southeast of the country. The status of the Russian language (which is officially a foreign language in Latvia) as well as Russian-language education is a major factor behind two ethnic Russian parties, the largest of which is the Harmony Centre, a vaguely centre-left and generally moderate party backed heavily by Russian voters. It won 19.6% of the votes in the 2009 European elections. A smaller parties, For Human Rights in a United Latvia (PCTVL), which is more left-wing, won 19% in the 2002 elections but fell to 6% in 2006. The Harmony Centre is already in power at the local level in Riga, but it remains excluded from national coalitions given the political risks of associating with an ethnic Russian party.

Valdis Dombrovskis’ coalition includes two smaller coalitions, the largest of which is the Union of Greens and Farmers, which won 16.7% of the vote in 2006. The party, composed of a larger centrist agrarian party and a much smaller green party, is much more of an “agrarian” party than a “green” party per se. Indeed, most of its votes come from rural areas of western Latvia. The second block in the coalition is the nationalist National Alliance, which includes the For Fatherland and Freedom/LNNK, which is nationalist and economically liberal. It has usually been strong in Riga, where the big Russian minority has likely caused polarization between Latvians and Russians, but its strength has fallen off a bit there.

Here are the results:

Unity 31.22% winning 33 seats (+8)
Harmony Centre 26.04% winning 29 seats (+11)
Union of Greens and Farmers 19.68% winning 22 seats (+4)
National Alliance 7.67% winning 8 seats (+3)
For a Good Latvia 7.65% winning 8 seats (-18)
PCTVL 1.43% winning 0 seats (-5)

The incumbent government won a strong majority of 63 out of 100 seats, and the senior coalition increased its seat share considerably. However, the big vote for the Harmony Centre has been a source of concern for some Latvian coalitions, given that the party seems to be able to attract votes from ethnic Latvians unhappy with largely centre-right “Latvian parties”. Harmony Centre could try to woo the Greens and Farmers into a coalition with them (it has a narrow majority of 51 seats). To prevent this, Dombrovskis could try to offer the Harmony Centre a deal himself, accepting them into his coalition while kicking out the slightly unpleasant right-wing National Alliance.  A government must be formed before November 2, and a continuation of the incumbent coalition government is most likely. Their next step will be to work on a budget, which will include more cuts and new tax hikes to meet a deficit target of 6% of GDP and later working to meet conditions to adopt the Euro by 2014.

Posted on October 9, 2010, in Latvia. Bookmark the permalink. 2 Comments.

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