RIGA — In a move likely to rile the country’s nationalists, Latvia’s newly-appointed foreign minister Aivis Ronis told a radio show Tuesday that he wouldn’t be averse to heavy Russian investment in the Baltic states’ economies, particularly in transportation.
Russian ships have utilized the ports of the Baltic states for centuries and currently much of their port traffic comes from their eastern neighbor, but in September Deputy Prime Minister Sergei Ivanov said Russia plans to upgrade its freight capabilities in its own Baltic seaports to reduce reliance on the Baltic states for cargo.
However, according to a recent report in the Russian-language edition of Newsweek, the Russian foreign ministry is preparing a policy agenda (initially drafted in February with the approval of President Dmitry Medvedev) that would advocate Russian companies invest in the Baltic states’ transport sectors to facilitate increased trade with the European Union, the energy market and other sectors given the drop in asset value in those countries, alleging a decreasing attractiveness for Western investors.
Medvedev has stated that Russia is seeking to modernize its economy, still largely state-run and driven by energy resources, and may be mulling a more friendly foreign policy to encourage Western investment in the country that is still very much a developing economy. Russia’s invitation of Western leaders to its May 9 WWII victory celebrations was seen as an example of this, and Russia’s construction of a nuclear power plant in Kaliningrad with more than enough capacity to sell electricity to the Baltic states represents a major energy investment in the region.
Rovis did not comment directly on the Russian policy draft, pointing out that it is still unclear whether the document is legitimate or not. He did say that increased Russian investment in Latvia would not necessarily run counter to the national interest.
“I do not think it would be entirely viewed negatively,” Ronis told Latvijas Radio.
A greater Russian economic presence would run counter to long-standing policy goals of the Baltic states toward further integration away from Moscow toward the West — staying out of the Commonwealth of Independent States, joining the EU, NATO and adopting the euro currency.
However, Ronis said regardless of whether the source of the investment is Russian or not the Baltic states must focus on consolidating and strengthening their hard-hit economies, which will buffer them better from the booms and busts of the regional economy.
A measure to encourage foreign investment by easing residency permit requirements angered Latvian nationalists, who protested outside the parliament building holding signs saying “Selling Latvia is no way to rescue the economy!” and “Those who support the amendment have sold their souls!”
In a statement, protest organizers said, “We are convinced that the amendments essentially amount to intentional sale of Latvian properties to foreigners, creating a new immigration wave of mostly Russian speakers.”
— Baltic Reports reporter James Dahl contributed to this article.
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