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Danish
“A critical evaluation of
Latvian economic development;
past, present and future
by a foreign-born long-term resident”
Arrived in December 1993
Was meant to stay for one semester
Idea
It has been 25 years since independence
Can we be satisfied or should more have been done?
Time to take stock of what has happened
Mostly economic dataI am an economist after all……
A serious – but also light-hearted – look at
the data
GDP per capita, PPS, 2015, EU28 = 100Luxembourg excluded
EU28
Ireland
Netherlands
Austria
Germany
Denmark
Sweden
Belgium
United Kingdom
Finland
France Ita
lySp
ainMalta
Czech
Republic
Slove
nia
Cyprus
Portugal
Slova
kia
Estonia
Lithuan
ia
Greece
Poland
HungaryLat
via
Croatia
Romania
Bulgaria
0
20
40
60
80
100
120
140
160
GDP per capita, Nordics and Baltics, 2016
Norway Sweden Iceland Denmark Finland Estonia Latvia Lithuania0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
80,000.00
The Baltics still significantly behind.
Can we be satisfied with the partial catch-up that has taken place???
GDP per capita, PPS, 1992 – 2015Denmark – Estonia – Latvia – Lithuania
19921994
19961998
20002002
20042006
20082010
20122014
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
40,000.00
45,000.00
50,000.00
DenmarkEstoniaLatviaLithuania
Latvia’s GDP per capita as a share of Denmark’s
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
0
10
20
30
40
50
60
GDP per capita, USD, 2015, PPS, former USSR republics
Estonia
Lithuania
Russia
Latvia
Kazakh
stan
Azerbaija
n
Belarus
Turkm
enistan
Georgia
Armenia
Ukraine
Uzbekis
tan
Moldova
Kyrgyz R
epublic
Tajik
istan
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
GDP per capita, Baltics and Russia, 2016
Estonia Latvia Lithuania Russia0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00… but this is just not satisfactory!!!
USD
GDP per capita, Latvia and Ukraine, USD at PPS1992: Similar, 2014: 2.9 : 1
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20140.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
LatviaUkraine
LatviaEconomic growth 1991 – 2015
19911992
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
20132014
2015
-40
-30
-20
-10
0
10
20
Russian crisis
Transition
Banka Baltija
The ‘fat years’
Financial crisis
Recovery
Slowdown:• Russia• Eurozone• Banking
Economic growth, China and Latvia, 1993 – 2015
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
20132014
2015
-20
-15
-10
-5
0
5
10
15
20
ChinaLatvia
GDP per capita, USD, PPS, China and Latvia
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
ChinaLatvia
Relentless Western orientation“Western” organizations as anchors for development
• International Monetary Fund• World Bank• World Trade Organization
• European Union• Eurozone• OECD
Unemployment rates, 2014Latvia and its regions
Latvia Riga region
Pierīga region
Vidzeme region
Kurzeme region
Zemgale region
Latgale region
Urban Rural0
2
4
6
8
10
12
14
16
18 Too high, too much structural unemployment
Too uneven – and always has been
Latvia: Labour force and employment2002, Q1 – 2016 Q2, 1000s
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015600
700
800
900
1000
1100
1200
Labour forceEmployed persons
Today: Just 999,000 in the labour force
2007 Q4: 1,080,000 persons employed
Inequality:Gini coefficient, 2015 EU28 + Iceland and Norway
Iceland
Norway
Czech
Republic
Sweden
Netherlands
Denmark
Hungary
France
Croatia
Ireland
United Kingdom
Portugal
Spain
Latvia
Romania
20.0
22.0
24.0
26.0
28.0
30.0
32.0
34.0
36.0
38.0
40.0
Nordics
Baltics
Catching-up scenarios2015: Latvia at 64% of the EU average income per person
20142016
20182020
20222024
20262028
20302032
20342036
20382040
20422044
50
70
90
110
130
150
170
EU28LV 5.5%LV 7.5%LV 10%
Catching-up scenarios2015: Latvia at 64% of the EU average income per person
20142016
20182020
20222024
20262028
20302032
20342036
20382040
20422044
50
70
90
110
130
150
170
EU28LV 3%LV 5.5%LV 7.5%LV 10%
Personal reflection on Latvian politics- very much seen through the eyes of a foreigner….
…..thus perhaps finish like this????
Thank you for your attention!Questions and comments are welcome
Stockholm School of Economics in Riga
Founded 1994
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