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LATVIA HUMAN DEVELOPMENT REPORT 2000/2001 Rüjiena Baltic Sea Staicele AinaΩi Mazsalaca Estonia Salacgrîva Aloja Valka Strençi LimbaΩi Valmiera Ape Valdemårpils Smiltene Alüksne VENTSPILS Césis Piltene Talsi Vi¬aka Gulbene Stende Saulkrasti Lîgatne Sigulda Balvi Sabile Kandava RÈGA VangaΩi Russia Cesvaine Kuldîga Tukums JËRMALA Påvilosta Lubåna Ikß˚ile BaloΩi Salaspils Ogre Madona Aizpute Kårsava Olaine Baldone egums Brocéni Lielvårde LIEPÅJA Jaunjelgava P¬aviñas Varak¬åni Saldus Vi¬åni R‰ZEKNE Ludza Durbe Dobele Grobiña JELGAVA Aizkraukle Auce Bauska Jékabpils Priekule Zilupe Viesîte Lîvåni Prei¬i Aknîste Lithuania Dagda Subate Ilükste Kråslava DAUGAVPILS Basic facts about Latvia (2000) Belarus Population Health Number of inhabitants (millions) 2.4 Average life expectancy (years) 70.4 Natural increase (%) –0.8 Men 65 Population density (persons per sq. km.) 36.6 Women 76 Infant mortality (per 1000 births) 10.4 Population distribution (%) Number of physicians (per 10,000 inhabitants) 34.4 Rural 31 Urban 69 Economy Gross Domestic Product 4333 Gender distribution (%) (GDP - millions of lats) Males 46 GDP per capita (1995 average prices, in lats) 1243 Females 54 Actual GDP per capita (PPP$, 1998) 5802 Actual GDP growth (%) 6.6 Age distribution (%) Unemployment rate (%) 7.8 0–14 years 17.8 Of working age 59.9 Employment distribution by sector (%) (males 15–59 years, females 15–57 years) Agriculture 17 Of retirement age 22.3 Industry 24 Services 59 National composition (%) Latvians 57.7 Government expenditures (% of GDP) Russians 29.6 Total: 40.3 Belarussians 4.1 of which: Defence 1.0 Ukrainians 2.7 Education 6.8 Poles 2.5 Health 4.8 Lithuanians 1.4 Social security 14.3 Others 2.0 Average exchange rate of LVL per USD 0.606 Human Development Index rank 63/174 Area 64,600 sq. km. (Global Human Development Report 2000) Adult literacy rate (%) 99.8 10 INTRODUCTION Open and responsible policy-making as a condition for human development The principal theme of the publication Latvia growth and sectoral competitiveness with the aid of Human Development Report 2000/2001 is the con- goal-oriented political decisions and solutions. The nection between human development and policy- aim of policy as the cornerstone of any national making. This Report addresses policy analysis and development strategy is to achieve a competitive advances two main questions: is policy-making in national economy that is able to integrate into the Latvia sufficiently human development-oriented, world economy. and what policy improvements are required for the However, politicians must also devote their further advancement of human development? efforts to development issues in a broader sense. The focus on policy analysis in the sixth annual Economic decisions should not only conform to the Latvia Report on Human Development is not acci- present challenges of science and technology. They dental. Previous Reports have dealt with other should also be socially responsible and should not important issues. The theme of the 1995 Report was lead to unfavourable social consequences. social integration and human development, while Politicians in any democratic country must be the 1996 Report addressed the impact of economic loyal to all social strata and consider the interests of and social changes on human development. various social groups. A government must not pro- The 1997 Report dealt with inequality and mote the development of a specific sector, institu- human development, while the 1998 Report tion or social group at the expense of others. assessed the role of the individual, the State and Unequal internal growth creates complications, and the private sector in human development. The can even hinder cooperation between such social most recent 1999 Report dealt with the impact of groups as politicians, business people, and those globalization on human development in Latvia. involved in culture and education. Yet it is precisely These Reports have encouraged public debate such interaction that must form the basis upon which and have offered various recommendations to the successful development ideas can be realized. government and to the public at large. This Report • The current mechanisms of power and accountability is focusing on policy-making itself as an essential must be assessed. Policy decisions are affecting indi- means for achieving human development goals. viduals on an increasing basis, beginning with the There are a number of reasons for focusing on food that they eat and the medicines that they take, policy issues and policy analysis when considering and ending with the telecommunications that they the development of Latvia at the beginning of this use. It is therefore important for the public to raise new century. such questions as: “Who pulls the strings, on whose • Latvia’s democratic experience must be assessed. During behalf, and how is this leverage applied? How are the ten years since Latvia has regained its inde- decisions that affect my life made?” People wish to pendence, a successful transformation has taken be informed about policy decisions and to feel con- place from authoritarian to democratic rule. This is a fident that their interests are being taken into con- major achievement for human development. Viable sideration. democratic institutions have been established and • The moral and civil foundations of policy must be exam- democratic experience has been accumulated. ined. In Latvia the public has been growing increas- However, shortcomings in policy-making have ingly vocal in demanding an honest, responsible emerged as well. In order to prevent future short- and transparent policy-making process that comings and to improve policy-making, it is neces- respects the interests of various groups and social sary to assess both the policy practised to date and strata. In other words, people want policy-making to the activities of policy institutions. be based on strong moral and civil foundations. • The technological and public accountability of policy-mak- This cannot happen on its own accord, as it ing must be co-ordinated. This is a period when politi- depends on the integrity and democratic principles cians in many countries are promoting economic of the participants in the policy-making process. 11 LATVIA HUMAN DEVELOPMENT REPORT 2000/2001 Relations between Latvia’s institutions of power community of policy makers shares not only a and the general public must be improved. They heightened interest in policy and a wish to partici- must be rendered less formal and distanced, and pate in its processes. In many instances actual par- the level of mutual trust and dialogue must be ticipation in political decision-making and imple- increased. mentation is gradually increasing. Thus, new • Individual interests must be co-ordinated with the com- networks of political activity are being formed, mon interests of society. Many societies have been involving a wide variety of interest groups in addi- experiencing a blossoming of individual identity tion to government institutions. and interests, and the placement of individual goals and personal fulfilment ahead of common goals. The merger of individual interests with those What is policy? of society as a whole is also becoming more difficult because adherence to such previously stable social The term “policy” is the central category of this entities as class, national, ethnic and religious Report, and it is therefore important to explain it. groups is weakening. This is best done by imagining policy to be an inter- Therefore, efforts at social integration in Latvia mediary between the private arena (or private must overcome those obstacles that are furthering space) – where the free market and individuals the separation and alienation of individuals and operate – and the public arena, which is the domain groups. Democracy recognizes freedom of the indi- of the State and civil society. These four elements – vidual and the right to a private life. It does not free individuals, the market, the State and civil attempt to enforce a collective will and is the most society – form society as a whole. Public policy suitable political form under which freedom of the manifests itself in society as the co-ordinator and individual can be realized. However, even in a promoter of interaction between the often variable democracy the freedom of the individual is possi- and conflicting interests of these agents and insti- ble only as long as it does not infringe on the free- tutions. For example, labour laws regulate the rela- dom of others. Therefore, democratic procedures tions between employees and employers, thus remain the most suitable for co-ordinating individ- ensuring that free market organizations also ual interests, serving the common good and devel- observe principles of social responsibility. The oping a common space of solidarity. involvement of civil society organizations in policy- • The quality of policy-making must be raised. Never making is providing a counterbalance to the gov- before has the quality of policy-making been so ernment, which can no longer be used as a tool to important to human development in Latvia as at serve only the ruling class. present. It has become obvious that shortcomings Public policy manifests itself in the interaction in policy-making, rather than a lack of funding, often of individuals, groups and institutions, where differ- present the main obstacles to human develop- ent agents expressing varied wishes and aspira- ment. Besides wrong political decisions and inef- tions search for the best commonly acceptable fective solutions, several other factors are also hin- solutions. This is only possible if policy-making dering Latvia’s overall development. These include occurs in an open system, where the involvement of mutual political distrust, a tendency to decide all interested parties is possible. As far as human many public issues behind closed doors, a disre- development is concerned (in the sense of a gard for democratic norms and the inability of many broadening of opportunities), open policy-making to make their voices heard.

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