Economy (Latvia)
================


     Overview:
       Latvia is in the process of reforming the centrally planned economy
       inherited from the former USSR into a market economy. Prices have been
       freed, and privatization of shops and farms has begun. Latvia lacks natural
       resources, aside from its arable land and small forests. Its most valuable
       economic asset is its work force, which is better educated and disciplined
       than in most of the former Soviet republics. Industrial production is highly
       diversified, with products ranging from agricultural machinery to consumer
       electronics. One conspicuous vulnerability: Latvia produces only 10% of its
       electric power needs. Latvia in the near term must retain key commercial
       ties to Russia, Belarus, and Ukraine while moving in the long run toward
       joint ventures with technological support from, and trade ties to the West.
       Because of the efficiency of its mostly individual farms, Latvians enjoy a
       diet that is higher in meat, vegetables, and dairy products and lower in
       grain and potatoes than diets in the 12 non-Baltic republics of the former
       USSR. Good relations with Russia are threatened by animosity between ethnic
       Russians (34% of the population) and native Latvians. The cumulative
       difficulties in replacing old sources of supply and old markets, together
       with the phasing out of the Russian ruble as the medium of exchange, help
       account for the sharp 30% drop in GDP in 1992.
     National product:
       GDP $NA
     National product real growth rate:
       -30% (1992)
     National product per capita:
       $NA
     Inflation rate (consumer prices):
       2% per month (first quarter 1993)
     Unemployment rate:
       3.6% (March 1993); but large numbers of underemployed workers
     Budget:
       revenues $NA; expenditures $NA, including capital expenditures of $NA
     Exports:
       $NA
      commodities:
       NA
      partners:
       NA
     Imports:
       $NA
      commodities:
       NA
      partners:
       NA
     External debt:
       $650 million (1991 est.)
     Industrial production:
       growth rate -35% (1992 est.)
     Electricity:
       2,140,000 kW capacity; 5,800 million kWh produced, 2,125 kWh per capita
       (1992)
     Industries:
       employs 33% of labor force; highly diversified; dependent on imports for
       energy, raw materials, and intermediate products; produces buses, vans,
       street and railroad cars, synthetic fibers, agricultural machinery,
       fertilizers, washing machines, radios, electronics, pharmaceuticals,
       processed foods, textiles