People are politically moving from the free market to social security. Photo: Arne Bengtsson

Features In crisis Riga turns left

Latvia’s deep economic down-turn has brought about a historical political change. A left-wing party has won an election and come to power in Riga. The local party is dominated by ethnic Russian politicians.

Published in the printed edition of Baltic Worlds page 4-7, Vol II:II, 2009
Published on balticworlds.com on February 19, 2010

“The crisis broke the barrier”, says Nil Ushakov, 33, who leads Harmony Center and now holds the title of Mayor of Riga.

Ushakov’s social democratic party alliance received over a third of the popular vote in the local elections in the Latvian capital this summer. Many ethnic Latvians were stunned, but as Ushakov sees it, the election outcome was logical.

“Social democratic values are in great demand in the crisis.”

Latvia has been facing an economic ordeal. The state has been saved from bankruptcy by a 7.5 billion euro international loan package. But the loans come with tough conditions from the International Monetary Fund (IMF), EU, Sweden, and others. An exploding budget deficit is kept in check by dramatic cuts that take work away from tens of thousands, lower the public sector wages by over 30 percent, reduce pensions, double the cost of health care and close hospitals and schools.

The way would seem to be clear for a party that upholds social values and that, having always been the opposition party, cannot be blamed for the crisis.

But ever since independence the political left has been viewed with suspicion among ethnic Latvians.

“‘Escape Communism’ is their motto. They are afraid of everything that leans to the left. This is a deep reaction going back generations”, says Aigars Freimanis, director of the public opinion research institute Latvijas Fakti.

The left is perceived as closer to the past, to the Soviet Union, to all the terrible things that have occured.

“But that is, in a way, a schizophrenic reaction. We have seen in the research that many who vote for center or right-wing parties have social democratic leanings, but they do not want to identify themselves with social democracy.”

So the Latvians vote Latvian, and the right comes into power as a result. However, the crisis changed this. In Riga this year, many crossed national and political barriers.

Nil Ushakov:

“About 70 percent of our voters were ethnic Russians and about 30 percent were ethnic Latvians. Ethnic voting is disappearing.”

Aigars Freimanis does not agree fully.

“At least 90 percent of Harmony Center’s votes in Riga came from Russian language voters or from mixed family voters. But some Latvians voted for Harmony Center as a protest (in the crisis) against the right-wing parties, which ‘have given us so much misery’.”

In the 1990s, Latvia traded the Soviet planned economy for extreme liberal market values. This was due both to the Soviet nomenclature’s seeking a way to accumulate wealth through privatization, and to the acceptance by Latvian politicians of advice from international market prophets. Had Latvia chosen a less extreme economic model, it would have been possible to avoid the enormous depth of the present economic crisis, contends Anders Alexanderson, who is Vice President of Public Affairs at Stockholm School of Economics in Riga, and works as a consultant in several EU countries.

According to Alexanderson, Finland would have been a good role model. Its history is not the same as Latvia’s, but there are many similarities.

“In the beginning of the ’90s, Finland succeeded in turning back the worst crisis in Europe since the ’30s. One reason was of course the devaluation, but another one was its strong welfare state combined with a good educational system and basic social security. That made a fast restructuring of industry possible.”

Finland is and was an inclusive society, whereas Latvian society, according to Alexanderson, is exclusive.

“The inclusiveness of Finnish society made structural changes possible, because people had unemployment benefits and other social welfare protection. Society took care of people during the transition process.”

Alexanderson points out that Latvia lacked the political strength for necessary reforms during the growth years, reforms such as reducing the number of public sector employees. Had these reforms been implemented, he argues, the labor market would have cooled down and the high wage increase that fueled today’s crisis would not have occurred.

Now, the Latvian government is being forced by the IMF and the EU to reform in haste.

“The social consequences will be severe since it is being done without proper planning and analysis. The existence of a kind of welfare state in Latvia would have guaranteed some income which generates consumption and in turn dampens the fall in GDP.”

Alexanderson thinks that Latvia chose the wrong role model, Ireland instead of Finland.

“It was stupid. Ireland’s rapid economic growth was built on a number of factors not applicable to Latvia. And although the growth in GDP has been remarkably high in Ireland, the benefits have not been fairly distributed.”

The crisis broke the barrier, Nil Ushakov believes. The rest will depend on the deeds of the rulers in Riga. The left-wing mayor has lofty ambitions.

“Most important is that everyone feel that we care, regardless of ethnicity.”

Riga is divided. Walking from west to east in the center of this city of nearly one million is like traveling back in time from the European Union to the Soviet Union. You leave Elizabetes and Alberta streets, where international tourists gaze at beautiful art nouveau decorations on buildings inhabited mostly by Latvians, and new four-wheel drive vehicles are packed along the sidewalk. “What crisis?” you wonder, spotting the Swedbank skyscraper beaming in the sun on the other side of Daugava River, before you pass through the city’s mixed zone, where Latvians and Russians work together from eight o’clock to four o’clock. Behind the railway and bus stations and the open market you end up in Maskavas Forstate (“Moscow Suburb”), where few Latvians dare or care to set foot. In Moscow Suburb the crisis is ever present in houses that are in a state of near collapse. Russian is the language spoken here, although it is not permitted on the street signs. So someone deleted the Russian text on a dilapidated wooden building on Jersikas iela (Jersikas Street).

The former mayor of Riga was a member of the nationalistic party Fatherland and Freedom. Protecting the Latvian language was one of his main objectives. But on his watch corruption flourished in City Hall, while social decay continued in the quarters along Maskavas iela (Moscow Street). Fatherland and Freedom was vanquished in the elections.

In Riga, more than half of the population is non-Latvian, and not all of those have voting rights. Of Latvia’s almost 2.3 million inhabitants, about 800,000 are categorized as Russian speakers, and around half of those are still not citizens of the country. They cannot vote in national or local elections. They, or their forefathers, were not citizens of the first Latvian republic, which existed from 1918 to 1940, but arrived in the country during the Soviet era. Therefore they were not automatically given citizenship after the second independence in 1991, but first have to prove their know-ledge of the Latvian language.

Vyacheslav Dombrovsky is very critical of the way the Latvian authorities handled the issue.

“Either they should have taken away the voting rights of the Russians altogether, or they should have granting  voting rights without restrictions. But they have chosen a middle road, and then you get ethnic voting.”

As a professor of economics, Dombrovsky emphasizes that ethnic division has long been a negative factor in economic development. He refers among other things to research done by William Easterly and Ross Levine, where it is shown how ethnic fragmentation explains much of the social and economic problems in Sub-Saharan African nations.

This is relevant also in the case of Latvia, according to Dombrovsky.

“Ethnic fractioning results in bad government and bad economic outcomes. It stands in the way of economic growth. The other bad thing for Latvia is the government’s connections with special interests. Corruption hinders growth. You get incompetence in the public sector and ineffectiveness in the political system.”

Dombrovsky speaks of “expressive voting”. The Russians are angry because they are not given full rights and so they vote Russian. The Latvians are angry because many Russians have lived in the country so long and have not learned Latvian, and so they vote Latvian.

“Fear and hatred bring out the worst in people. ‘They don’t speak the language. They cannot be trusted. They could reoccupy Latvia.’ So when people vote they define themselves as Latvian or Russian. That, more than schools and kindergartens, is what voting is about.”

This is the price a nation pays for not giving voting rights to everyone, Vyacheslav Dombrovsky believes.

“And at the very heart of ethnic voting is a deep division over history.”

That can be seen in today’s Riga. Not on the surface, where daily life runs smoothly between Latvians and Russians, but in the historical wounds that lie below the surface.

On the left bank of Daugava River stands a huge victory monument with three bronze soldiers carrying automatic weapons. It is a memorial to the Soviet soldiers who lost their lives when Stalin’s Red Army drove Hitler’s Nazi troops out of Riga in 1944. There is an even huger Mother Russia stretching her hand towards the heavens beside a very tall concrete obelisk, so tall that it seems to top the Latvian Statue of Liberty in the center of the city. To many Russians, the victory monument is about liberation, while most Latvians see it as a symbol of occupation.

A few hundred meters from the Uzvaras (Victories) monument lies the old Tornakalns railway station. Here, thousands of people were gathered together in June of 1941 and deported to Siberia. Behind a memorial with the inscription 1941 stands an old boxcar, six meters in length, the kind that carried people into years of exile, cruel captivity, and often death. In June of 1941 over 15,000 people were deported from Latvia, and in March of 1949 over 42,000 were taken away. Tornakalns is the symbol of these detested deportations.

The short walk between the Uzvaras monument and Tornakalns is the longest one can take in Latvia. The distance is almost endless, a distance between two worlds. Many Russians and Latvians will never cross it. They will live and die with different views of history.

Hope is pinned on coming generations.

This year’s mayoral election winner in Riga, Nil Ushakov, believes that “Latvian society is maturing”.

In Latvian politics, his party used to be isolated. It ranked high in opinion polls but had no coalition partner. The isolation was broken by an alliance with the center-right Latvia’s First Party/Latvia’s Way, led by the country’s most ambitious and self-confident politician, the so-called oligarch, Ainars Slesers. He is now the vice-mayor of Riga. Ushakov and Slesers and their parties have formed what they call a strategic partnership, which will take them into the parliamentary elections in 2010.

Their goal is to form a national government.

“Absolutely”, says Nil Ushakov without blinking at the historical thought of having an ethnic Russian governing nationalistic Latvia.

What are the chances?

“It will be easier to assess them after the winter”, he admits, pointing out that the new city council in Riga faces hard months of crisis ahead with the closing of schools and hospitals and fare increases for public transportation.

All the other parties lag behind Ushakov’s in the opinion polls. The figures are expected to level out though, and Harmony Center will certainly face a tough election campaign with accusations from right-wing Latvian politicians of a “Moscow affiliation”.

The party’s most experienced parliamentarian, Boris Cilevic, is ready for the fight.

“Our position is very clear. We are not a pro-Moscow party. We are an independent party of Latvia. We do not accept the ethnic approach, and we do not accept the manipulation of Latvia in a geopolitical game. But it is stupid, when we have such a huge neighbor (Russia), not to make use of this market. All large companies dream about the Russian market.”

Russia should be criticized but not because it is Russia, says Cilevic. He wants to see a constructive dialogue and points to Finland as a good example.

“We should have cooperation with Russia economically and culturally and in the political field, when we agree. We shall have a frank and open discussion, when we disagree. That is pro-Latvian, not pro-Russian. It is most effective for the development of Latvia”, says Boris Cilevic, who, as a member of the Parliamentary Assembly of the European Council, is experienced in European politics.

But he is aware of the difficulty of winning over the support of ethnic Latvians in the coming national elections.

“Ethnic voting has not ended. That is wishful thinking. It has been undermined, but it is still dominant.”

Cilevic is also aware that his party will not be able to liberalize the laws on citizenship and voting rights in a possible future coalition government.

“In the next few years, it is not a realistic goal.”

But if ethnic voting has been the strength of the right-wing parties, it might soon become their weakness. Everyone born in Latvia after independence in 1991 has the right to citizenship and the vote, regardless of the origin of their forefathers. Since the voting age is 18, the parliamentary election in 2010 will be the first with a new type of young Russian voter. With each election, their number will grow, and most of them are expected to vote left.

Latvia’s First Party has read the writing on the wall and formed its alliance with Harmony Center. Now the rest of the right realizes that everyone has to hold the door open to possible cooperation with Ushakov or risk being left out in the cold after next year’s election.
Regional Affairs Minister Edgars Zalans, from the conservative People’s Party, takes time out between two meetings to analyze the new political landscape. Formerly powerful, the People’s Party is now blamed for the crisis and could be wiped out in the coming elections.

“In normal times most people in my party would say no to Harmony Center. But times are not normal”, Zalans admits.

If Harmony Center does well in Riga and can help the country out of the crisis, the People’s Party might have to consider cooperation.

“We can never say never.”

When he formed his government last winter, Prime Minister Valdis Dombrovskis, from the liberal New Era, was ready to cooperate with Harmony Center. But New Era’s right-wing and fairly nationalistic partner Civic Union said no.

Since then, Harmony Center has won an election and now Civic Union leader Girts Valdis Kristovskis wants to keep the door open.

“We will see what lessons will be learned here in Riga during the coming year”, says Kristovskis, sipping a peach milk shake in the sun on Dome Square, where barriers were built against the Soviet military in January 1991.

Kristovskis has one strict condition for possible cooperation with Harmony Center. It is not about economic policy or social issues. It is about history.

“They have to show flexibility and move away from a platform of evaluating the occupation of Latvia in a positive way. For me this is essential. Half of my family was killed or deported during the first year of the Soviet occupation.”≈

Arne Bengtsson