Supported by: In cooperation with: The Latvian Foreign and Security Policy Yearbook 2018 aims to contribute to the understanding of Latvia’s foreign and security policy decisions and considerations in 2017, as well as assess the opportunities and concerns that await Latvia in 2018. During the past year Latvia saw considerable improvements in its security situation, while simultaneously met with new international and regional challenges. 2018 promises to be a similarly dynamic year full of opportunities and tests. Latvia will have to make brave and strong choices in its foreign and security policy. Supported by: the Parliament of the Republic of Latvia and the Ministry of Foreign Affairs of the Republic of Latvia In cooperation with: Friedrich-Ebert-Stiftung Editors: Andris Sprūds, Ilvija Bruģe Authors: Māris Andžāns, Kristiāns Andžāns, Aldis Austers, Reinis Āboltiņš, Una Aleksandra Bērziņa-Čerenkova, Sintija Broka, Ilvija Bruģe, Kārlis Bukovskis, Alina Clay, Lolita Čigāne, Mārtiņš Daugulis, Justīne Elferte, Ilze Garoza, Ojārs Ēriks Kalniņš, Andis Kudors, Imants Lieģis, Žaneta Ozoliņa, Gunta Pastore, Diāna Potjomkina, Edgars Rinkēvičs, Uģis Romanovs, Ojārs Skudra, Andris Sprūds Project coordinators: Ilvija Bruģe, Sintija Broka The opinions expressed here are those of the authors and do not necessarily reflect the positions of the Latvian Institute of International Affairs, Parliament of the Republic of Latvia, Ministry of Foreign Affairs of the Republic of Latvia or Friedrich-Ebert-Stiftung or represent the opinion of any government authority or ministry. Translation from Latvian: Ingmārs Bisenieks English language editor: Līvija Uskale Layout: Oskars Stalidzāns Cover design: Kristīne Plūksna-Zvagule This book is published in collaboration with the Publishers Zinātne © Authors of the articles, 2018 © Translation: Ingmārs Bisenieks, 2018 ISBN 978-9934-567-18-6 © Layout: Oskars Stalidzāns, 2018 UDK 327(474.3)”20”(058) © Cover design: Kristīne Plūksna-Zvagule, 2018 Sp950 © Latvian Institute of International Affairs, 2018 TABLE OF CONTENTS FOREWORD Andris Sprūds . 5 ADDRESS BY THE MINISTER OF FOREIGN AFFAIRS Edgars Rinkēvičs ............................................................. 7 LATVIA – KEEPING THE FAITH WHILE STAYING THE COURSE Ojārs Ēriks Kalniņš ........................................................... 10 LATVIA IN THE EUROPEAN UNION: FROM AN EXISTENTIAL CRISIS TO FRESH WIND IN ITS SAILS Lolita Čigāne ................................................................ 19 LATVIA’S “DUNKIRK” YEAR Imants Lieģis ................................................................ 29 LANDMARKS OF LATVIA’S FOREIGN POLICY IN THE CONTEXT OF DISARRAY OF POST-LIBERAL WORLD Ojārs Skudra ................................................................ 36 THE BALTIC SEA REGION – A WIDENING OR SHRINKING OF COOPERATION? Žaneta Ozoliņa .............................................................. 53 NATO ENHANCED FORWARD PRESENCE IN LATVIA – A HISTORIC CONFIRMATION OF THE RELIABILITY OF ARTICLE 5 OF THE NORTH ATLANTIC TREATY Māris Andžāns and Uģis Romanovs ............................................ 66 LATVIA AND THE UNITED STATES: THE MORE THINGS CHANGE, THE MORE THEY STAY THE SAME Diāna Potjomkina and Alina Clay .............................................. 78 STRATEGIC COMMUNICATION IN LATVIA: WRITING A NEW PAGE IN A WESTERN SENSE OF SECURITY AND FOREIGN POLICY Mārtiņš Daugulis . 95 FROM CONCERNS TO AMBITIONS: LATVIA’S EU POLICIES FOR 2018 Kārlis Bukovskis and Justīne Elferte ........................................... 106 REFORMS OF THE EUROZONE – VISIONS, CHANCES AND RISKS Aldis Austers ............................................................... 117 LATVIA-RUSSIA RELATIONS Andis Kudors ............................................................... 133 THE EASTERN PARTNERSHIP – STILL A PRIORITY FOR LATVIA Ilvija Bruģe ................................................................. 148 COOPERATION BETWEEN CHINA AND CENTRAL AND EASTERN EUROPEAN COUNTRIES (“16+1”): NEW TRENDS, FUTURE DEVELOPMENTS AND IMPLICATIONS FOR LATVIA Una Aleksandra Bērziņa-Čerenkova ........................................... 163 LATVIA AND CENTRAL ASIA: AMID INTERESTS, CHANCES AND RISKS Gunta Pastore .............................................................. 171 DIFFERENTIATED APPROACH OR IMITATION OF AN APPROACH TO THE MIDDLE EAST REGION Sintija Broka ............................................................... 186 EXTERNAL VECTORS OF THE LATVIAN TRANSPORT SECTOR Māris Andžāns and Kristiāns Andžāns . 198 THE REGIONAL AND GLOBAL CHARACTER OF ENERGY SECURITY Reinis Āboltiņš .............................................................213 THE ROLE OF DIASPORA IN THE FRAMEWORK OF LATVIAN FOREIGN AND SECURITY POLICY Ilze Garoza ................................................................. 224 CONCLUSIONS Ilvija Bruģe ................................................................. 239 ABOUT THE AUTHORS . 242 FOREWORD Andris Sprūds, Director of the Latvian Institute of International Affairs; Professor at Rīga Stradiņš University The Latvian Foreign and Security Policy Yearbook is an annual publication in which the Latvian Institute of International Affairs continues to evaluate Latvia’s international challenges and choices, to inform the public and to make recommendations to foreign policy makers and decision-makers. The year 2017 has been dynamic and challenging. Latvia has strengthened its security within the Euro-Atlantic community. In accordance with the decisions of the Warsaw Summit, NATO’s multinational forces were deployed in Latvia and the other Baltic States. Latvia has fostered regional cooperation with its neighbouring countries within the framework of the EU and NATO. At the same time, pro-active policies have included support for the Eastern Partnership countries and cooperation with the Central Asian countries. The identification and development of opportunities in the general direction of Asia has continued. However, the transformative global and regional environment is a clear challenge for Latvia’s foreign policy. The last year has displayed the international and regional challenges Latvia will have to face in 2018. The Euro-Atlantic community has generally overcome the acute phase of the crisis. The wave of political populism has been slowed down through very significant elections in France and Germany. Despite Donald Trump’s pre-election criticism of NATO, the United States has been sticking to its commitment to strengthen security on the Alliance’s eastern flank. At the same time, Euro-Atlantic solidarity is no longer self-evident or carved in stone. Countries often have different positions regarding external threats, security promotion measures, relations with neighbouring countries, migration problems and large infrastructure projects. Europe continues to face the geopolitical ambitions of the great powers, in the first instance those of Russia. Latvia has tried to demonstrate its willingness to engage in dialogue with its largest neighbour, but relations with Russia have remained complicated. Disinformation campaigns have become an integral part of international relations. 5 We continue to believe and emphasise that the external and security policy begins with organising one’s own home. The Euro-Atlantic area is a community of like- minded people, but the different approaches and challenges within it require a forward-thinking, smart and also rather flexible strategy. The most important thing for Latvia is to ensure its political, economic and social stability. The Saeima elections in 2018 will be an important benchmark for further successful development of the nation, especially in the context of the centenary celebrations of Latvia. Integrating society and building intrinsic trust is a continuous goal. Strategic communication is becoming increasingly important both externally and internally. Only a confident, secure and integrated country will be able to take advantage of full participation in Euro-Atlantic structures and implement a proactive foreign policy. The Latvian Foreign and Security Policy Yearbook 2018 aims to provide an assessment and explanation of the challenges for Latvia’s foreign and security policy in 2018. The publication analyses the events and decisions of 2017 and seeks to highlight Latvia’s foreign and security policy scenarios and recommendations for 2018. Partnership and cooperation are essential to achieve a successful outcome. The Yearbook 2018 reflects the importance of cooperation – it has gained a lot due to the enthusiasm of our Latvian experts to share their views and suggestions. We are grateful for the support of the Saeima and the Foreign Affairs Committee and the European Affairs Committee in particular, which have made significant contributions and rendered support to the foreign policy research and public information. Their support has enabled us to publish this in two languages, as well as organise several regional debates with representatives of the Saeima with the aim of informing the public about different points of view and positions on important foreign policy issues. We have productive and mutually beneficial cooperation with the Ministry of Foreign Affairs, which enables a bridge to be built between policy-makers and stakeholders. The sustained and generous support provided by the Friedrich Ebert Foundation has also been irreplaceable. The Foundation has repeatedly demonstrated its commitment to promoting intellectual debate and exchange of views at national and international