LATVIA - UPTURN OR FALSE DAWN

Last week I saw my first Porche driving through Riga for at least a year. It was as remarkable for being alone as was the tens of them that drove the roads 3 years ago.

I haven't written anything for months but quite simply, there has been so little change to report that it has simply not been worthwhile. But the signs of change are here now. The deep winter snow has disappeared leaving masses of litter, dog pooh and cigarette ends and spring has brought out the first short skirts. Riga transport is trying hard to repair the trams lines distorted by the winter snow and ice. People are eating ice creams already.

The real change is that new shops are opening up all over Riga. The price of renting property has dropped dramatically and it is now worth the gamble. The banks are also more willing to lend. The tourists and businessmen are still here and VAT is being cut for the tourist industry. The Nasty Party has left Government in a gamble to win popularity. We shall see in the October elections if they succeeded.

But not everything is going well. There are still nearly 30% unemployed, people are leaving the country in droves (or trying to), there are more beggars than ever - back to 2000 levels, and there are more flats than ever for sale and rent - at increasing cheap prices. But we have more severe cuts to come in national finances. Add to this the fact that the money from the EU and IMF has to be paid back sooner or later so we have to get more tax back to do this. But where will this money come from? Many companies I know are hurting because serious money for expansion and change is not forthcoming. Several commentators recently have highlighted the fact that there is no stimulus thinking at all in the government policies to get business moving. That is not to say they want lots of free money but just some sensible reforms to make life easier. I have been trying to open another company doing Health Tourism (www.baltichealthtourism.co.uk )and it still took 8 weeks to manage. The bureaucracy is mind numbing. Process still takes precedence over result.

The really good news is that prices have finally reached realistic levels and most of the stupid shops have gone bankrupt. But the national money is still at the wrong value, perhaps as much by 40%. I realise this completely after trips to Bulgaria and Ukraine in recent weeks. Their currency value is much more realistic than here.

We now have a long summer before the elections. I suspect a summer of nonsense. But there is no assurance that the Latvian public will vote for an honest future. Corruption is still endemic here and many people simply don't care. We shall just have to wait and see what sort of future the silent majority wants - but I will not hold my breath for a better future.