Latvia In Review

Bloomberg revisited Latvia last week. As I was just there, I was very interested in what they had to say a year now after the financial meltdown.

Latvians, who had been on a spending spree in the boom time, experienced the biggest bust in Europe. Their economy contracted by 18%. Unemployment is now 15%, having peaked at 17%.

Construction projects are still at a stand still. A construction worker interviewed stated that he used to work for LVL 5 - 8 per hour and considers himself lucky if he can earn LVL 2 per hour.

Education was hardest hit by the government's cutbacks. Many small schools have been closed and teachers felt a 30% - 50% wage reduction.

In hard times like these prudent savers hope to pick up bargains. This is not the case here. The banks have shipped out repossessed cars to more affluent regions and purchase properties on their books at public auctions.

Elections are coming up soon. The Prime Minister in his interview stated that the IMF was the cheapest source of funds so whoever wins will have to carry on the austerity programmes.