Wednesday, January 28, 2009

RECESSION - THE PACE GATHERS!

After a week of looking for my own evidence of what is happening in the Latvian recession, the Internet portal Delphi said this evening that 14% are now unemployed.

But before I comment on what is happening, thank you to everyone who expressed worry about my fall on the ice last week. I still have the last bits of the bruise on my hip but I feel fine now and am back running. Not a nice happening though. Its lucky I am a young thing!

OK back to the recession - well one clear change has been the improved traffic flow as the number of cars in Riga has dropped. The notoriously narrow WEF bridge (VEF to you foreigners - it was next to a huge Soviet electronics factory (Fabrika) in Soviet Times) where we have a daily bottleneck has become no more than a blip on the regular journey. The buses are more full too. The shops are still reducing prices in the sale although a couple of days ago I walked along one of the mains streets at lunch time and over 50% of the shops had no shoppers in at all. Chilli Pizza was full mind. There are still some shops trying to sell goods at hugely unrealistic prices but they are now always empty. I give them two months at most. The number of empty shops is increasing slowly. And to cap it all, yesterday we seem to have had a bank raid in the middle of town. Crime is probably coming back.

But on the good side, a couple of new white goods shops have opened and people are still using expensive Stockmans store, and going to the cinema. A major out of town shopping mall is set to open in July on the main Tallinn road. One friend on Saturday was looking for a summer house to buy. Those who have, clearly still shop!!

Apparently in the Russian press yesterday one commentator said that Latvia would be bankrupt in 2 years. I think that any country that has to borrow seven and half Billion from its friends is pretty much there already. But I am told by my political friends that the Prime Minister thinks the real truth of the situation is too awful to tell the public. I have mixed feelings on this. I think the days of treating the people as serfs has gone, except in Russia that is. Latvians have been free of the Soviet yoke for 17 years so it is time they had a real democracy, not a joke one like now.

The President has also apparently bottled on his promise to get rid of the government if they fail by March 1st. He has realised that a new Team would get rid of him pretty sharpish too. His standing this week has not been helped by the fact that people have found out that he has been supporting his household to the tune of a BMW and a few other extras from the (obtuse) Defence Budget.

The big questions now are what will be cut to cope with the national deficit, how will the government afford the extra and unplanned for unemployment that only they have failed to see coming, and will crime rise to mid 90s proportions? And the real biggie of course is, what can possibly get us out of this ever deepening hole?

Hopefully investors will see the benefits of buying up every bit Latvia they can and making it work to their and our advantage. There are many benefits. The population is highly educated, the countryside and the ladies beautiful and the beer is excellent. Thankfully there is some small evidence that they might, as even today I have had a phone call from a Barcelona firm wanting to put me in touch with European hedge fund investors who deal in distressed properties. We do have some of these unfinished projects on view. There is a fast spreading joke that the national sport is now building a fence and then digging deep holes inside for people to look at.

I have yet to identify what my role is going to be in all this mess. I have no desire to join the unemployed so I need to persuade firms that my excellent advice is what they need. One of my consulting colleagues got a lovely reply from a large Latvian firm to his business offer. It said, sorry we cannot afford to hire consultants to get us out of trouble as we are in a financial mess!

Monday, January 19, 2009

FALLING OVER

yesterday we had some slippery snow falling on the ice patch that is our road - and as I left the house I fell over. Well to be precise, one minute I was standing up and the next I was crashing to the ground banging my hip and jarring my arm badly. I was totally winded and felt completely drained for about 20 minutes afterwards. I now have a super bruise and a graze on my right hip. I have been trying hard for the last weeks for this not to happen and have slipped badly several times but have always stayed on my feet. This time I really went over hard.

It set me thinking what an awful thing it must be for elderly people to fall over in the same circumstances. I am fit and fairly hardy but it still gave me a real shock. A more frail person would not have had any chance at all to react and protect themselves. I was also in the street alone with noone near. If I had been older I could have been lying there in the below freezing cold and growing darkness for ages. It does not bear thinking about.

Thursday, January 15, 2009

RIOT UPDATE

Last night I had dinner with the owner of the restaurant that was spared in the riot. It was just 60m from the severely attacked Parex Bank branch - where my friend works by the way....

The owner said that the jewelers opposite Parex Bank had also been left untouched. She had seen that many of the rioters had bought cobblestones in their rucksacks so they were prepared in advance. But some of them were apparently too drunk to stand let alone throw stones. She also said that she heard both Russian and Latvian voices amongst the boys.

One of the commentators has said that the riot at the Saeima was the work of Russians and even blamed Russia itself. But on further investigation I found that the first group to leave the rally and head for the Saeima was the Russian party and after they had passed the military police put up the roadblock to stop more people getting into the immediate vicinity of the building. I am sure that this is total coincidence but it does explain why most of those defending the Saima thought it was Russian inspired and why all the people I saw at the barricade were speaking Latvian. It shows how easy it is to draw wrong conclusions. I also saw a lot of the videos on YOUTUBE. As expected they show a lot of noise and pushing and shoving but very little real violence. The main focus appears to have been on the Saeima itself which could have been expected and against the police who certainly suffered a lot. Apart from the Saeima and the Parex Bank area in Smilsu Iela the rest of town apparently went virtually unscathed. There was certainly no sign yesterday that there had been a problem at all.

Wednesday, January 14, 2009

A riot - but mind the town square cleaners!

Last night in Riga we had a riot. Well it was not exactly a real riot, I know because I have been on the wrong end of these in Northern Ireland when I served there. This was something else again.

The evening started with a standard political rally organised by Aigars Stokenbergs of the main opposition party, Sabiedriba Citai Politikai (SCP) to gather support to get the President to dismiss the Saeima (Paliament). Over 10,000 people turned up from all over the country to brave the sub zero temperatures and today a petition is on the Internet with double that number signed up already.

After the rally the nearest group to the Saeima headed off to protest pecefully in front of the building. The police had made no attempt to block off the road at all so the crowd of 400 or so just walked down there easily. There were no civil police around to stop them. The military police who guard the government buildings realised they were in deep trouble and cut this crowd off from the larger mass with a land rover barricade.

The mainly middle class crowd who got through were focused on their political aim of removing Prime Minister Godmanis. They were noisy and excited throwing eggs, oranges and empty drink cans and bottles at the building. This progressed to the odd firework and brick or two. Generally they were a model of restraint considering the dire financial situation of the country. If this had been all that happened it would have been worth only mild comment.

On the other side of the barricade the action started much the same. There were several groups of youths at the front and they were being aggressive, trying to overturn one of the land rovers and throwing empty beer cans. Most of this was watched by several hundred families and children who joined in by throwing the odd egg or two. But a more sinister element appeared and a team of very hyped up young men in their 20s (almost like on drugs) started with more aggressive action throwing bricks, shouting loudly and making very provocative gestures. One of them walked back out of the crowd 50m to smash the windows of an unatended police van totally innoring ignoring the private cars around it. These men were controlled, if this is the word, by a very well dressed man around 30 watching from the side. None of the youngsters realised they were being manipulated so they just followed these more aggressive leaders and became more daring and aggressive themselves, eventually starting to pull bits off the land rovers. But now spurred on by a cheering crowd the youths started to throw bottles at the nearby windows breaking them (to loud cheers) and then the odd bottle close to the military police as well.

I have to say that I was deeply proud of the young military police NCOs who stood tall and defiant throughout. They kept their heads even when there was a short spell of violence and the lone civil policeman on the barricades was forced to throw a smoke grenade and fire rubber bullets.

The amazing thing at this point was that there were no police evident on our side of the barriers at all. After the rubber bullet incident one of the SCP organisers went looking for the police. Less than 100m away and round the corner there were 6 of them chatting. On being confronted they said "we have no equipment and no leaders here so we cant do anything". They then went back to chatting.

After about an hour of this and some politically targeted window breaking in side streets, the public order police appeared in riot gear and pushed the 100 or so aggressive youngsters back into the square. Now the really bizarre part of this riot took place. The police were making small charges into the crowd of youths who ran away each time and then came back to taunt them. About 2-300 people stood back and watched the action like they were at an ice hockey game. But at the same time and right next to the action, the fencing around the square was being dismantled, the band stand and sound equipment was being taken down, and - wait for it - the lady cleaners in their yellow and orange fluorescent jackets were sweeping up the square in and around the riot as it was happening. Only in Latvia are cleaners treated with so much respect!

Then to add to the nonsense, two blue light flashing police vans drove through the crowd, going where we know not, and the crowd parted in good nature, and let them through. Minutes later, the municipal sweeping van also parted the crowd doing a couple of back and forth runs across the square. Unarmed and equipped municipal police then came to block off the square and the riot police eventually chased about 50 youths, with few aggressive but still fairly gentlemanly thumpings, out of the exit roads and into the old town. The chase continued sporadically for the rest of the evening.

As I walked through the square on my way home just before midnight, the cleaners were still there and amazingly the bandstand equipment, now packed up, was waiting there neatly for the lorry to take it away.

At the main entrance to the old town I saw two lines of riot police waiting, but clearly relaxed and virtually off duty. Another line just 40m away was facing the freedom monument (defending McDonalds I thought) against 20-30 youngsters still bent on their sport of police baiting. The general public just walked through the whole thing as though it was a normal evening. I walked past lots of municipal police and standing groups of youngsters, both Russian and Latvian speakers and most of them clearly very very poor. Bad teeth were visible in many mouths.

This morning on the way into the office I walked past the key area of damage. There was virtually nothing beyond a dozen or so large broken windows. The main Parex Bank office had been attacked and damaged. The two liquor stores opposite it and the Tax office over the road had had their main windows smashed. I saw one car with a broken window. But this damage was all too politically neat for a riot. The windows were all smashed exactly in the middle, The nearby restaurant, expensive women's dress shop, other major banks and expensive cars, including those within 20m of the barricade were all left totally untouched. Apparently over 100 youths were arrested and several people were hurt, at least one badly. A miltary spokesman said that outside the Saeima the trouble was caused by Russian speakers. But from where I was standing, the three trouble making groups of youths including those trying to make a serious riot were all Latvian speakers so I hesitate to draw a nationalist conclusion from this.

So what conclusions have I drawn from it all? Firstly the strength of opinion against this government from the general public is high and that came across clearly from the diversity of people at the rally and the petition. Secondly there are a lot of disaffected people, especially youngsters, of both Latvian and Russian background who showed their unhappiness last night. We were lucky, the Latvian character stopped them behaving really badly and they demonstrated more to vent their own frustrations than against the country in general. This was no Paris. We may not be so lucky with them again though. The country has been warned.

The police come out of this with both roses and brickbats. The normal Riga police mainly operated with restraint and common sense and did much to keep the general situation from getting worse. Many of them however were clearly out of their depth with the whole thing, and the mainly academic police training needs a serious rethink. The public order police could have been much harder with those they faced and there are some very lucky young men today. But they almost certainly made the evening worse by being aggressive too late rather than being visible and active before the rioting youngsters became confident. The Interior Minister also needs to go. The Saeima should have been properly protected and cordoned off even before the rally and the police were just not ready for trouble even though the Internet had been full of warnings for days. Overall the police management was found to be completely out of its depth. A major shake up is required.

But what is the worst thing is that there is a politically inspired minority in the country who were ready and willing to deliberately risk peoples lives by inciting riot just to further their own political aims. They failed because they tried to be too clever and their nasty actions were made to stand out by the sheer goodness of the general population.

So God bless Latvia - and God bless our wonderful little cleaning ladies too - they should give the country great hope.

Friday, January 9, 2009

Jan 9 THE MINISTERS DRIVERS SON

Dear Sandra

I promised to write good things if I could. I also promised to write things as they are. Today it was announced in Diena newspaper that our transport minister had appointed his drivers son onto the board of the national railway company. They even made an extra place for him. Now before I was judgemental, I did ask some obvious questions like, was he a railway engineer of 20 years standing, a senior consultant, a financier etc etc? In fact he was none of these and there was really no rational explanation except perhaps general political stupidity or nepotism.

So no matter how beautiful Latvia is, it is spoilt by nonsenses like these. On the 13th January there will be a peaceful political march to the parliament buildings by at least 20 public groups to demand that the current corrupt and inefficient government resigns. In opposition to this and to try to spoil it, some government supporting groups have already created Internet web pages talking about how to make explosives and about bombing the Parliament as a way to cast doubts about the honesty and motives of those marching. This sort of sickness does nothing to help anyone. There are wonderful people in Latvia and they deserve much much better.

Thursday, January 8, 2009

SOMETHING POSITIVE

I have been taken to task by Sandra for not writing something positive about Latvia. There is of course lots to write about that is truly wonderful here (sport, choirs, dancing, Brainstorm, public transport, the countryside, Mazsalaca, countryfolk and Laima chocolate) but I set myself the task in this Blog of reflecting what I saw on a daily basis as this recession unfolds and trying to reflect it as accurately as I can. It is not my job to motivate the country to succeed, nor to be the one to sell it as a good place to live. The Government has that task and the Latvian Investment Agency has to get to grips with getting investors to come and stay, and tourists to flock to the shores.

But to suggest that all is rosy would be to bear false witness. Latvia has inherited a wealth of systematic faults that bubble under the surface and break out in nasty forms like corruption, nasty bureaucracy and illegal wage packets and these must be tackled sooner or later. They are the boils on society that stop Latvia being the country it should be and those who live in Latvia enjoying the life they deserve.

The Latvian tourist agency once considered advertising Latvia as "Land as God intended". The country is truly beautiful and that is one of the reasons I am here. And I promise faithfully to reflect in my blogs the good things I see with as equal force as the bad things. And I am sure that when the Latvin Investment Agency read this they will soon be inviting you to visit!

Tuesday, January 6, 2009

TERMINATOR 2

Before leaving Finland on saturday I watched Terminator 2 for about the 10th time. I never cease to be amazed by the quality of ideas and delivery. It sets the standard for any business in this difficult time. Latvian businesses need to find that level of innovation, excitement and fun if they are to break out of this spiral of dispair they are getting into. I shall try to do my bit too. Watch this space!!!!!!

Sunday, January 4, 2009

THE QUEEN'S SPEECH

Every Christmas I try to watch the Queens Speech on BBC television in UK. This year in Finland I watched the Queens speech given by President Halonen. I asked my philosopher friend if he always watched it and he said she was too boring!

But the interesting point was that she gave the speech in two languages, Finnish first and then Swedish. I wondered aloud to my friends if that would happen in Latvia in the forseeable future for Russian speakers with as much grace and enthusiasm. Apparently though it has not always been so easy in Finland either. After the Swedish occupation ended in 1809 and Russia took over, Swedish remained the official language of the country (not Russian). By the end of the century there was a backlash and even many Swedish speakers said that this was not right. Finnish gradually took hold but the pendulum swung too far the other way and the Swedish speakers then felt discriminated against. Now the country has a good balance. No-one would even think about questioning the loyalty or "Finnishness" of any Swedish speaker. Swedish speakers have their own language, clture, media, universities, schools, clubs and sports teams and businesses. The two language groups coexist in harmony and the country is much stronger and more fun to be in for it.

The gradual process of language integration within the three Baltic states is full of good and bad stories. The only problem is that all three states need to take the Russian Government warnings seriously about their right to meddle in the affairs of those sovereign states that contain Russian speakers. But one thing that should be clear to all politicians from their own history and that of the Finnish nation is that a prosecuted language does not die. You cannot force a new language upon someone who does not want it, by any threats or persuasions. The Russian language must be accommodated by the three Baltic States because it is simply not going to go away. The challenge is to do this with inclusion, love, empathy and humour - and before Russia decides to find an unwanted solution of its own.

But one thing does puzzle me. I sat opposite Mrs Halonen at dinner many years ago and heard her speak strongly about the importance and value of the two language solution. Despite her outspokenness on many difficult EU subjects I have not heard her speak out in support of the Russian language in the Baltic Countries the same way. I would love to hear a reason.