Jan

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Latvia, from Jan-Peter Janssen

January 7, 2013 |

When I grew up, I dreamed of emigrating to the US. As the world has changed more rapidly than one could imagine, I altered my plans. Some 16 months ago I relocated to the ex-Soviet Baltic state of Latvia. Now I am happy to see NY Times write about its economic recovery.

"Used to Hardship, Latvia accepts Austerity and its Pain Eases"

"Hardship has long been common here — and still is. But in just four years, the country has gone from the European Union's worst economic disaster zone to a model of what the International Monetary Fund hails as the healing properties of deep budget cuts. Latvia's economy, after shriveling by more than 20 percent from its peak, grew by about 5 percent last year, making it the best performer in the 27-nation European Union"

"Britain, Portugal, Italy and also Latvia's neighbor Lithuania, meanwhile, have bubbled with discontent over austerity. But in Latvia, where the government laid off a third of its civil servants, slashed wages for the rest and sharply reduced support for hospitals, people mostly accepted the bitter medicine. Prime Minister Valdis Dombrovskis, who presided over the austerity, was re-elected, not thrown out of office, as many of his counterparts elsewhere have been."

"Also largely absent are the leftist political forces that have opposed austerity elsewhere in Europe, or the rigid labor laws that protect job security and wage levels. In the second half of 2010, after less than 18 months of painful austerity, Latvia's economy began to grow again."

Also worth mentioning is that in one year builders' salaries have increased by 17%, though from a low initial level.

The state runs with a healthy surplus.

The government is cutting the tax rates.


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