So is there a way out of the present crisis in Latvia? The question came up at a reunion of sorts of the people who used to work for the Latvian Service of Radio Sweden. It has been 20 years since broadcasts in the Baltic languages were started, but they were discontinued a few years ago. The Baltic drama, as far as the Swedes were concerned, was over.
Actually, the seeds of another drama were being sowed in the 2004 to 2007 period -- a credit-fueled boom, the highest growth rate in the EU, salaries vastly outrunning productivity, astronomical real-estate prices. It was for my descriptions of the subsequent economic crisis in this blog that I got drawn into a rather intense discussion about why I was not “positive” about something.
Superficially, the discussion seemed to follow the same pattern as a panel discussion in Riga where I ended up against Eriks Stendzenieks, whose ad agency was hired to conduct a “positiveness” campaign ahead of the 2006 elections to the Saeima in Latvia and Viesturs Dule, an former TV entertainer turned media critic. However, my critic and opponent wasn’t a PR/media professional, but someone I have known in the Latvian community outside of Latvia for decades. She worked as a freelance contributor to the Latvian Service after I left in 1995 and moved (more or less) to Latvia.
As I said during the discussions in Latvia, the job of a journalist (and, by extension, of a blogger) is to present facts accurately. In blog it is not only permissible, but desirable to have a point of view, to exhibit attitude or opinion. But even that must be derived from the facts.
Anyway -- are there hard facts or statistics that indicate Latvia will avoid an economic collapse in a few months? Presently, not; things look pretty bad. Retail sales are seen plunging up to 30 %, foreign trade volume is down, unemployment rising rapidly and the number of job vacancies collapsing (this is not a creative destruction scenario where there is a lag between the “sunset” of one industrial sector and the creation of a new one).
OK, if I can’t be of a different mind based on present facts and figure, perhaps there are other ways to seek solace and to at least attempt to dodge the charges of doom-mongering that I heard the other night from my opponent in the informal discussion.
Perhaps one can turn to history. Hundreds of thousands of Latvians fled deep inside Russia during World War I, fearing the invading Germans. There was considerable war damage to Latvia’s infrastructiure and a large part of industry, linked to the Russian Empire, never recovered after the war. Nonetheless, the newly-founded country got back on its feet. Much of the recovery was driven by patriotism and the exhileration of building a new country.
Still further back in history, there were several times of devastating war and plague, all of which the Latvian nation somehow survived.
One could object that the period of post-1991 independence was followed by an incredible spectacle of corruption and incompetence, but certainly nothing that had not been seen and, in many cases, overcome in other times and places. So we can derive some hope or odds (in a probability sense) from this.
Another possibility is that predictions of a mass labor exodus as soon as Europe recovers could be exaggerated. A recent survey published in Diena, the Latvian national daily, found that 56.8 % of those questioned said they would not emigrate and 22.8 % said they had not thought of it, but might consider it. Only 3.9 % said they would definitely leave.
This poll addresses the issue raised by economist/blogger Edward Hugh, who foresees a worst-case scenario in which Europe recovers first and drains Latvia of skilled labor, leaving a nation of a shrinking second-rate workforce and a rising number of pensioners and other “consumers” of the social budget. That would leave Latvia as a stagnating backwater on the northeastern edge of Europe. Maybe it won’t happen.
It also cannot be excluded that another spontaneous mass movement, like the so-called Awakening of the late 1980s appears. There has been a false dawn in the so-called Umbrella Movement (after a antii-government rally in Riga in December, 2008 that took place in a rain and snow storm) and the so-called Penguin Movement is still to small to be considered a serious force. Nonetheless, nothing can be excluded, although future mass rallies are likely to be tainted with violence (after January 13). Still, the chance of a mass protest movement tinged with a threat of violence accomplishing some kind of political change can’t be excluded.
Yet another possibility is that the government of Valdis Dombrovskis regains the trust of the public and is able to enjoy genuine support. Certainly, Dombrovskis himself has a clean, if relatively short political record in Latvia. Maybe the population somehow suffers through the austerity without losing trust in the state. Sometimes miracles happen.