Latvia - Domestic policy

Debate over the citizenship issue has abated somewhat since the rules on naturalization were passed. Many non-Latvian residents eligible for citizenship, however, denounce the pace at which naturalization is proceeding. Conservative groups, on the other hand, have failed in their attempts to slow the process even more. The issue retains its resonance among a large segment of the population. The 1999 amendments to the language law stirred up the issue once again.

Latvia's economy had been growing steadily until Russia's economy collapsed in 1998. The decline in trade with Russia caused the economy to contract. In the long term, Latvia faces a problem in imports growing much more quickly than exports. The Russian crisis also scared away potential foreign investors. The unemployment rate grew to 10% by March 1999 as a result of privatization and the economic contraction, but had abated somewhat by 2001, when it was an estimated 7.6%. Inflation has also been tamed, falling to an estimated 2% in 2002.