The Situation of Children and Young People at the Regional Level in Latvia

Prepared by Latvia Country Statistical Team Co-ordinator: Edmunds Vaskis Central Statistical Bureau, Riga

MONEE Country Analytical Report November 2004

The project to monitor the impact of economic and social change on children in Eastern and Central Europe and the Commonwealth of Independent States (MONEE) was initiated at the UNICEF Innocenti Research Centre in 1992. The project seeks to monitor, analyse and disseminate information on economic and social trends affecting children’s rights and wellbeing in countries in the region. A key feature of the Project is a network of correspondents in the 27 National Statistical Offices (NSOs). On an annual basis these correspondents complete an extensive data template which in turn is used for calculating indicators, supporting research of the project and, in due course, being made publicly available as the TransMonee database and in tables and graphs of the Innocenti Social Monitor.

For a number of years, each participating NSO prepared a Country Analytical Report based on extensive outline from UNICEF IRC on a different theme on the situation of children every year. These analytical reports have provided valuable input into the research at UNICEF IRC and, as significantly, have also served as important national documents on monitoring aspects of child wellbeing in the countries. Some of these Country Analytical Reports have been issued by the NSOs (in the national language) as part of their publication programme.

UNICEF IRC attaches great value to these national assessments of the situation of children and is committed to promote the efforts, including through translating the reports into English (where the submitted report has been in Russian) and offering its website to make them accessible to a wider research audience. The Country Analytical Reports are owned and authored by the National Statistical Offices and are not the intellectual property of UNICEF (see below).

The opinions expressed are those of the authors and do not necessarily reflect the policies or view of UNICEF. The text has not been edited for official publication standards and UNICEF accepts no responsibility for errors. The designations in this publication do not imply an opinion on legal status of any country or territory, or of its authorities, or the delimitation of frontiers. Central Statistical Bureau of Latvia

MONEE COUNTRY ANALYTICAL REPORT 2004

SOCIAL MONITOR: WELLBEING OF CHILDREN IN REGIONS OF LATVIA

RIGA 2004

LATVIA MONEE ANALYTICAL REPORT 2004 4

Central Statistical Bureau of Latvia

The report “ Social monitor: Wellbeing of children in regions of Latvia” was prepared by the staff of the Central Statistical Bureau, Latvian Statistical Institute, Local Government Consultations Centre:

Specific socio-economic features of the regions OĜă erts Krasti Ħš Valent īna Loc āne Population and Demographic change Elm īra Se Ħkāne

Regional living standards Zaiga Priede Intars Abraž ūns Ed īte Miez īte Baiba Zukula Vida Lukaševi ča Ilze L āce

Education Baiba Zukula Health Dace Krievkalne Government finance Inga Vilka Jolanta Supe

Editor Edmunds Vaskis Publisher in Chief Solveiga Sili Ħa Responsible for the English translation Zane Ozola

Explanation of symbols - Zero … Data not available or too uncertain for presentation 5 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

TABLE OF CONTENTS

INTRODUCTION ...... 4 Part I SPECIFIC SOCIO -ECONOMIC FEATURES OF THE REGIONS ...... 6 Part II POPULATION AND DEMOGRAPHIC CHANGES ...... 10 Part III REGIONAL STANDARDS OF LIVING ...... 13 Employment, wages and salaries ...... 13 On the welfare of families with children in Latvia ...... 14 Aspects of social infrastructure in regions ...... 15 Part IV EDUCATION ...... 17 Part V HEALTH AND HEALTH CARE...... 20 Healthcare resources ...... 20 Immunisation ...... 21 Part VI GOVERNMENT FINANCE ...... 23 Local government economic resources and priorities concerning children ...... 23 The Government’s regional policy ...... 25

ANNEX I...... 27

ANNEX II ...... 29

ANNEX III ...... 31

LATVIA MONEE ANALYTICAL REPORT 2004 6

Central Statistical Bureau of Latvia

INTRODUCTION Through the centuries Latvia has been divided into regions. In the Middle Ages the country’s various regions belonged to different feudal territorial formations, for example, the Duchy of Courland (covering roughly the present-day territories of Kurzeme and Zemgale) and Livonia (covering Riga, Vidzeme and Estonia). Although ethnically being part of Latvia, Latgale before World War I was incorporated into the Vitebsk province of the Russian Empire. This is due to the fact that in beginning in the 13 th century, parts of Latvia were administered by the Teutonic Knights before coming under Polish and Swedish rule. In the 18 th century Russia acquired the whole territory of Latvia. As of the beginning of 2004, the country is divided into 5 statistical regions that correspond to the NUTS level 3 criteria accepted by the Statistical Office of the European Community EUROSTAT. Accordingly, these regions form the basis of the analysis in the Report (see the Map below).

Vidzeme Kurzeme Zemgale Latgale Latvia Riga region region region region region Resident population, beginning of 2004 2 319 203 940 787 350 582 313 334 345 349 369 151

Population density per km 2 ,beginning of 2004 35.9 265.8 17.8 23.0 26.2 25.4 Area, km 2, at the beginning of 2004 64 588.7 3 539.3 19 702.7 13 600.8 13 198.7 14 547.2 Natural increase of population, 2003 -11 431 -3 977 -1 639 -1 218 -1 326 -3 271 Demographic burden, beginning of 2004 591 558 631 618 604 604 Number of employees, at the end of 2003 744 742 398 799 84 826 87 085 81 894 91 581 Gross monthly wage and salary in 2003, LVL 192.49 217.82 153.04 171.15 155.03 139.70 Registered unemployment rate, 2003 8.6 4.9 8.6 9.9 9.3 17.8 Share of job seekers in 2003 10.6 10.3 8.8 9.5 9.4 15.5 GDP per capita in 2003, at current prices, LVL 2 433 3 863 1 382 2 015 1 350 1 176 7 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

According to a view circulating among experts in Latvia, there are two different Latvias today - Riga and the remaining regions of Latvia. The data on regions given above and the graph below indirectly confirm this view. The region of Riga has a favourable geographical position at the centre of Latvia and the Baltic countries. It is located at the edge of the Gulf of Riga on the Baltic Sea. Since ancient times Riga has been the centre of the Baltic and one of the largest cities of the Russian Empire of that time. By the population size, economic and many other indicators Riga is the metropolis of the Baltic countries. The city has the highest potential in economic, social, cultural, educational and other areas not only in Latvia but also in the entire Baltic. Apart from Riga, the western and central parts of Latvia that might correspond to the regions of Kurzeme and Zemgale have historically always been better developed. The Region of Latgale is situated in the southeastern part of Latvia, and has a long external border with Russia, Belarus and Lithuania. Of the six statistical regions of Latvia, only Riga with 138% exceeds the average level of the ten new member states of the European Union. Of this, the overall average indicator of Latvia represents 76% and of Kurzeme 63% while that of the poorest region Latgale is only 37%. Regrettably, the average level of all EU member states is still unattainable to Latvia. Graph 1

GROSS DOMESTIC PRODUCTS PER CAPITA IN 2002, BY PURCHASING PARITY STANDARDS (provisional calculation according to Eurostat forecasts)

A variety of social and economic problems influencing family wellbeing and also the welfare of children still persist in Latvia’s regions. These problems are discussed more in detail in the chapters of this Report.

LATVIA MONEE ANALYTICAL REPORT 2004 8

Central Statistical Bureau of Latvia

Part I SPECIFIC SOCIO-ECONOMIC FEATURES OF THE REGIONS

PROF . O. KRASTI ĥŠ AND V. LOC ĀNE , LATVIAN STATISTICAL INSTITUTE

Globally and also on the European scale the whole of Latvia constitutes merely one region. There have even been talking about the Baltic region meaning Latvia, Lithuania and Estonia. But a resident of Latvia can easily detect the markedly distinctive social and economic development of the various parts of the country. The reasons behind these differences should be sought in the century- long history although nowadays the distinctions also keep growing and becoming more deeply rooted. Prior to 2004 there were five statistical (and also planning) regions in Latvia. The basis of these regions is the historical provinces but their borders have changed. The Riga region was the largest encompassing Riga, the country’s capital city. The population of the region stands at 940 thsd or 40% of the total population. According to the population size, the remaining four regions are approximately equal with 320-380 thsd inhabitants in each. By the level of economic development the region of Riga is even more outstanding. In 2001 the value of the region’s gross domestic product was 2918 thsd lats representing 61% of the country’s gross domestic product. To characterise and compare the regional socio-economic development in terms of numbers, a specific regional development index is used in Latvia (the methodology of index calculation is given in Annex I). The index is calculated every year for each group of the territories: the above mentioned five regions, the districts, cities, towns and pagasts (rural municipalities). The regional development index is similar to the Human Development Index that is used in world statistics although the difference from the latter is rather significant. The socio-economic development indices of Latvia’s regions for the last 5 years are given in Table 1. Table 1

THE REGIONAL DEVELOPMENT INDICES OF LATVIA IN THE PERIOD 1999-2003

Region 1999 2000 2001 2002 2003 Riga region 2.102 2.108 2.107 2.106 2.110 Kurzeme region -0.102 -0.344 -0.320 -0.352 -0.401 Zemgale region -0.626 -0.574 -0.558 -0.473 -0.439 Vidzeme region -0.570 -0.542 -0.551 -0.626 -0.668 Latgale region -1.212 -1.072 -1.091 -1.069 -1.090 National average 0 0 0 0 0
Source: „Daž ādā Latvija”. R., 2004.-p.537. Electronic database of territorial statistics.

The indices have been so calculated that their average value every year should be equal to zero. Under the conditions such as these only the Riga region can boast of positive development indices whereas the remaining regions have negative numbers of various magnitudes. This can be explained by the significant share of the Riga region in the country as well as by its sharply distinctive and

9 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

outstanding socio-economic development. It is more useful to compare the figures in the table not by the rows (the overall development trend of the country is excluded) but by the columns. It can be seen quite easily that the socio-economic stratification of the regions has diminished only marginally. A comparison of the Riga region development index with that of Latgale, the least developed region, shows that the difference was only 3.31 index points in 1999, 3.18 in 2002 and 3.20 in 2003. To some extent, this might be due to the special support programme for the economically weakest territories implemented in the country for a rather long period. However, if the socio-economic equalisation of the territories will proceed at such a slow pace as before, several decades will be needed to achieve satisfactory results. For an in-depth analysis of the regional development peculiarities, two directions may be followed. The first one would involve focusing on the investigation of key indicators, assessing which of them are of primary importance in assigning positive or negative index values to the region in question. The basic data for this work are given in the Annex II. Since the data are not yet standardised, comparisons are possible both in time (by columns) and by territory (by rows). Only the inflation process may cause certain incomparability, as the value indicators are given at current and not at constant prices. The Riga region is outstanding in respect of nearly every basic indicator. The backwardness of the Latgale region, in turn, is determined by the very high unemployment rate which is the root cause for the low living conditions of the population (this is shown by the total amount of tax payments), low gross domestic product and so on. Table 2

GROUPING OF PAGASTS (RURAL MUNICIPALITIES) IN 2003

Development index In Latvia In the region of Groups Qualitative evaluation Riga Kurzeme Zemgale Vidzeme Latgale more than 3 extreme / extraordinary 1 1 - - - - 2,0 – 2,9 very good 5 5 - - - - 1,0 – 1,9 good 11 6 1 2 2 - 0,5 – 0,9 fairly good 31 9 6 13 2 1 0,0 – 0,49 slightly positive 101 22 22 28 23 6 0,0 - -0,49 slightly negative 149 10 58 39 27 15 -0,5 - -0,9 rather bad 111 2 23 16 12 58 -1,0 - -1,9 bad 50 - - 2 3 45 Total - 459 55 110 100 69 125 In 2003 there were 459 rural municipalities and rural counties in Latvia without urban localities. By grouping these municipalities according to the development indices and regions, the territorial stratification is clearly obvious (see Table 2); this Table shows the actual number of rural municipalities and counties in each group. For the purpose of analysis, these figures can be converted into percentages applying both the “vertical” and “horizontal” hundred. In the region of Riga the majority of rural municipalities are rated as “slightly positive”. 21 municipalities get a higher rating while only for 12 rural municipalities the rating is lower. In the regions of Kurzeme, Zemgale and Vidzeme the modal development rating of rural municipalities is “slightly negative” and there are only a few municipalities rated as “fairly good” and very few have a “good” development index. Only a few rural municipalities in the region of Riga can boast of a “very good” development index. LATVIA MONEE ANALYTICAL REPORT 2004 10

Central Statistical Bureau of Latvia

For the rural municipalities of the Latgale region the modal development index is “rather bad” and there is no municipality there that has been given a good or higher development rating. On the whole, the figures in Table 2 form a triangle placed in the lower left part of the table; the majority of the numbers are below the diagonal line. This gives a visual perception about how rural stratification is going on in Latvia. A similar combined grouping can be made about urban localities. However, the number of towns (77) is on the whole too small for such a grouping. Moreover, some cities are too specific so that it is difficult to compare their development with the development of other towns. First of all, Riga and Ventspils represent such cities. Beginning in 2004 Riga is separated on the NUTS 3 level as an individual region. The analysis of financial statements of enterprises and businesses in 2003 shows capital return in different regions of Latvia. The highest financial profitability (profit or loss “-“ after taxes to the mean value of e equity capital) was in the region of Riga (10.2%) whereas in Latgale it was even negative (-0.1%; the average for Latvia is 4.4%). This points to substantial disparities in the preconditions for economic activity. A detailed analysis of the development features of the Latvian territories is given in the monograph “Daž ādā Latvija: pagasti, novadi, pils ētas, rajoni, re ăioni. V ērt ējumi, perspekt īvas, v īzijas”. R., VRAA, 2004, p.539. (The Diverse Latvia: rural municipalities, counties, towns, districts and regions. Assessments, perspectives and visions) The accessibility level to information technologies in the households of selected regions is currently investigated by means of the first survey on the “Use of Computers and the Internet by Households” in 2004. The results of the survey are not yet available. There are considerable disparities in regard of the coverage of the fixed telecommunications network across the regions of Latvia. The lowest coverage is in the regions of Zemgale and Latgale where coverage is approximately a quarter lower (per 100 population) than the country’s average and nearly by half lower than in the region of Riga (58% of the coverage of the Riga region). Lately the mobile telephone operators are successfully competing with the fixed telephone network operators, especially in the territories with low coverage of fixed telephone network. Due to the specifics of the activity of public telecommunications operators (only 2 operators are engaged in providing mobile telephone services) data on the use of mobile telephones are not published. According to the Household Budget Survey data, the number of mobile telephone users in households is growing dramatically. In 2003, there were 87 mobile telephones per 100 households but in the countryside this number was 67. Besides the number of mobile telephone users is going up very rapidly. Disproportion in the regional development has caused inequality in the distribution of population income in Latvia. According to the Household Budget Survey data, households in the Riga region enjoyed the highest level of income. In the remaining regions household income was below the national average. Household disposable income in the Latgale region was only LVL 57 per household member per month.

11 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Table 3 HOUSEHOLD DISPOSABLE INCOME AS PER CENT OF THE AVERAGE LEVEL OF ALL HOUSEHOLDS

Per cent of the national average 2002 2003 Households Total 100.0 100.0 Riga region 128.0 136.1 Riga, the capital 130.7 144.1 Vidzeme region 84.4 83.8 Kurzeme region 85.4 78.4 Zemgale region 88.8 85.9 Latgale region 73.1 65.4
Source: Household Budget Survey

Data in the table are indicative of the rising disproportion in income distribution among the capital city, the adjacent region and the remaining regions. Unfortunately, not only in terms of absolute figures (in terms of money) but also relatively in comparison with the total number of households, the economic situation of households in Latgale is worsening. Despite a slight increase in incomes in the reference year in the other regions (except Kurzeme), incomes in the reference year in the region of Latgale decreased by 2.8%.

LATVIA MONEE ANALYTICAL REPORT 2004 12

Central Statistical Bureau of Latvia

Part II POPULATION AND DEMOGRAPHIC CHANGES

E. SEĥKĀNE , CENTRAL STATISTICAL BUREAU OF LATVIA At the beginning of 2004 the population of Latvia stood at 2 million and 319 thousand. Of the 5 regions of Latvia, the region of Riga has the highest number of population (41%). There are 2 cities under state jurisdiction in the region of Riga including the capital Riga with 32% of the country’s population. 13%-16% of the total number of population lives in each of the other regions. Graph 2

AREA AND RESIDENT POPULATION OF LATVIA ’S REGIONS

Latvia's regions by area Resident population of Latvia's regions at the beginning of 2004 5% 23% 16% Riga region Vidzeme region 31% 40% Kurzeme region 15% Zemgale region Latgale region 20%

14% 21% 15%

13 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

According to the 2000 Population Census data, 624 thsd families lived in Latvia. 83% of the total population lived in these families. The average family size at the beginning of 2000 was 2.84 persons. In the year of the previous Population Census (1989) there were 3.12 persons on average living in each family. The trend toward the diminishing of the average size of family continues. Nearly half (47.9%) of all families in 2000 were families with one child but 36.1% of the families had two children. Only every sixth family has three or more children aged up to 24 years. There is a rather high proportion (32.5%) of one-parent families consisting of mother or father with children. Yet the number of single fathers who bring up their children is much lower (20.8 thsd) than the number of those families where children are brought up by mother (181.5 thsd). In 2000, the largest families (3.0 persons) lived in the regions of Vidzeme and Zemgale but the smallest in the Riga region (the average family size 2.7 persons). The proportion of men and women in Latvia is 46% and 54%. The percentage of men in total population in Riga region is 47%. Since 1990 the number of men both in Latvia as a whole and in the region of Riga region has decreased by 14% and that of women by 12%. Since 1990 the number of population has decreased by 12.6%. It has likewise decreased in all regions but most of all in the Riga region (by 16.1%) followed by Kurzeme (13.7%) and Latgale (11.2%); the population decrease was less marked in the regions of Vidzeme and Zemgale (by 6.8% and 8.5%). In recent years the population decrease rates have slowed down. In 2003, the number of the country’s population decreased by 0.53% (compared with 2.17% in 1992; of this decrease, 0.49 % was due to the natural movement and 0.04% due to migration). The low birth rate, increasing mortality and the negative net migration in Latvia have also caused changes in the age structure of the population. Since 1990 the number of children and adolescents aged 0-14 years have fallen by 251 thsd and their share in the total population has decreased from 21% to 15%. The main reason is the rapid decrease in the birth rate. Since 1987 the number of births in Latvia has decreased by a factor of 2. The number of children and adolescents since 1990 has fallen in all the regions of the country. Over the same period the number of population of working age has gone up. This is mainly due to the changes in the retirement age both for men and women. In 1990 the working age was 16-54 years for women and 16-59 years for men but at the beginning of 2004 it was already 15-58 and 15-61 years, respectively. In terms of per cent distribution, the lowest number of children and adolescents live in the regions of Riga and Latgale. At the same time the number of pension-aged population is also the highest in both of these regions.

LATVIA MONEE ANALYTICAL REPORT 2004 14

Central Statistical Bureau of Latvia

Graph 3

MAIN POPULATION AGE GROUPS IN LATVIA AND ITS REGIONS (at the beginning of 2004)

Latvia

Riga region

Vidzeme region

Kurzeme region

Zemgale region

Latgale region

0% 20% 40% 60% 80% 100%

Below working age Of working age Over working age

From 1993 the share of children and adolescents in the demographic burden is lower than the share of retirement-aged population. At the beginning of 2004 the number of children and adolescents per 1000 working age population was 1.4 times lower than the number of retirement-aged population. The share of Latvians, the basic population, in the total number of population of Latvia at the beginning of 2004 was 58.6% whereas in 1989 (according to the Population Census Data) it was 52.0%. Simultaneously with the increasing percentage share the absolute number of ethnic Latvian inhabitants continues to decrease. Russians occupy the second place in the percentage distribution of population. In 1989 the percentage share of Russians was the highest (34%; data of the Population Census). The respective number has decreased and in 2004 was 28.8%. The fact that in 1989 the number of Latvia’s population also included the military of the former USSR troops and their family members who according to the intergovernmental treaty between the Republic of Latvia and the Russian Federation left the territory of Latvia at the beginning of the 1990s should also be taken into consideration. The largest share of Latvians are in the Vidzeme region (83.5%) but in the Latgale region, which borders the Russian Federation and in the Riga region it is by half lower (43.5% and 46.1%, respectively).

15 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Graph 4 ETHNIC COMPOSITION OF THE RESIDENT POPULATION IN LATVIA AND ITS REGIONS (at the beginning of 2004)

Latvia

Riga region

Vidzeme region

Kurzeme region

Zemgale region

Latgale region

0% 20% 40% 60% 80% 100%

Latvians Russians Other ethnicity

The birth rate in Latvia has decreased from 14.2 births per 1000 population in 1990 to 9.0 in 2003. Except in Latgale, there are no great differences in the birth rate. As the share of young and elderly persons in Latgale is the lowest, the birth rate in the region is also the lowest. The highest total fertility rate was in the Kurzeme region (1.42) but the lowest in the regions of Latgale and Riga, 1.21 and 1.23 children per one woman.

LATVIA MONEE ANALYTICAL REPORT 2004 16

Central Statistical Bureau of Latvia

Part III REGIONAL STANDARDS OF LIVING

Z.P RIEDE , I.A BRAŽ ŪNS , E.M IEZ ĪTE , V.L UKAŠEVICA , B.Z UKULA , I.L ĀCE , CENTRAL STATISTICAL BUREAU OF LATVIA

Employment, wages and salaries

Work is one of the most important human activities and usually it is also the main source of livelihood. A loss of a job can therefore cause serious consequences such as worsening of the living conditions, loss of social contacts and even social exclusion. According to results of the Labour Force Survey the total number of employed in the country in the period between 1996-2002 has not changed and in some years it ranged from 940 thsd to 990 thsd persons. It is noteworthy that in the last 3 years (from 2001) a tendency of rising employment has been observed reaching in 2003 1007 thsd persons. The said survey proves that in 7 years (beginning in 1996) the number of job seekers has decreased by 120 thsd persons. A comparison of selected regions of Latvia allows concluding that these positive trends are not observed in every region. The most advantageous situation in the area of employment persists in the Riga region covering slightly more than 40% of the total employed population in the country. Graph 5

SHARE OF JOB SEEKERS IN THE TOTAL NUMBER OF ECONOMICALLY ACTIVE POPULATION (in percent)

% 25 Riga region 20 Vidzeme region 15 Kurzeme region 10 Zemgale region Latgale region 5 0 2000 2003

One of the indicators characterising the regions is the wages and salaries. In 2003 the highest salaries and wages were paid in the Riga region (13% more than the country average), but salary and wage earners in Latgale were paid only 73% of the national average.

17 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Graph 6

AVERAGE GROSS MONTHLY WAGE AND SALARY PAID TO EMPLOYEES AT THE MAIN JOB (LVL per month)

LVL 250 Riga region 200 Vidzeme region 150 Kurzeme region Zemgale region 100 Latgale region 50 0 2000 2003

Comparatively the most pessimistic situation can still be observed in the region of Latgale where the economic activity of the population is the lowest in Latvia. The employment rate in the region is only slightly over 40% and a rather large part of the employed (nearly every fifth) is connected with the agricultural sector, moreover, quite often this is work on own farm to provide livelihood for own family. The rate of long-term job seekers is rather high (2/3 of the total number of job seekers).

On the welfare of families with children in Latvia

An increase in household disposable income could be seen in 2003 1. Compared with 2002, household disposable income in all households rose by 8.6% and reached LVL 87 per household member per month. The increase in income was, however, not equal in the households of various regions. The gap between Riga, the region of Riga and other regions have widened. Although in comparison with 2002, household disposable income in the region of Riga in 2003 rose by 15.4%, it has decreased in the households of Latgale by 2.8%. In 2002, household disposable income per household member in Latgale represented 57.1% of the household income in the Riga region but in 2003 only 48.1%. Table 4

HOUSEHOLD DISPOSABLE INCOME PER HOUSEHOLD MEMBER (LVL average per month)

2003 as 2002 2003 percent of 2002, % Latvia 80.00 86.88 108.6 Riga region 102.43 118.23 115.4 Vidzeme region 67.52 72.78 107.8 Kurzeme region 68.30 68.10 99.7 Zemgale region 71.07 74.61 105.0 Latgale region 58.44 56.83 97.2 There are also differences in household disposable income in households with different number of children. The lowest percentage of households with children is in the region of Riga but the highest

1 The Household Budget Survey data are used in discussing household income and the at-risk-of-poverty rate. LATVIA MONEE ANALYTICAL REPORT 2004 18

Central Statistical Bureau of Latvia

in Kurzeme. In comparison with the other regions, the share of one-parent families in Latgale, the poorest region of Latvia, is the highest (3.8%) while in Vidzeme it is 2.6%. A tendency can be seen that the more children in the household, the lower household disposable income per household member. Families without children have the highest household disposable income per household member. In the Riga region the income of households with 2 and more children is 8.1% lower than the income of households without children but in Latgale it is 35.7% lower. Household disposable income of households without children in Latgale is 1.9 times lower than in the corresponding households in the Riga region but for households with 2 and more children it is lower by a factor of 2.8.

19 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Table 5

HOUSEHOLD DISPOSABLE INCOME PER HOUSEHOLD MEMBER IN 2003 IN THE REGIONS OF LATVIA (LVL per month) Total in the Riga Vidzeme Kurzeme Zemgale Latgale

country region region region region region Households – total 86.88 118.23 72.78 68.10 74.61 56.83 Households without children 98.83 126.19 82.75 84.29 85.98 65.60 with 1 child 82.15 105.55 76.86 66.20 74.84 54.65 with 2 children 75.85 124.62 61.01 54.08 62.50 44.38 with 3 and more children 68.86 116.02 55.16 49.50 56.45 42.16 The above-mentioned might have caused an increase of social inequality and, among other factors, can influence children’s welfare in Latvia. In the period between 2000 and 2003 the at-risk-of-poverty rate in the country has slightly risen. A fall in the at-risk-of-poverty rate can be seen in the Riga region and Kurzeme. In the remaining regions, in turn, the at-risk of-poverty rate has increased. Graph 7

AT-RISK OF POVERTY RATE IN LATVIA ’S REGIONS, %

% 35 30 25 20 2000 15 2002 10 2003 5 0 Country as a Riga region Vidzeme Zemgale Kurzeme Latgale whole region region region region

One-parent families with children 2 as well as families with many children face a very high at-risk of- poverty rate. A tendency has been observed whereby the more children in the household the higher the-at-risk-of-poverty rate (see the Annex III).

Within the limits of their financial possibilities local governments provide support in cash or in kind to families that are in a situation of social risk. The largest amounts of resources for social maintenance benefits in 2003 were spent in the regions of Riga and Latgale, LVL 8 mln and LVL 2.4 mln, respectively. On average LVL 61 were paid to one recipient of local government benefits in the economically strongest region of Riga whereas in the remaining regions this amount was substantially lower and ranged from LVL 22 to LVL 25.

2 Here and in the next pages - aged less than 18 years LATVIA MONEE ANALYTICAL REPORT 2004 20

Central Statistical Bureau of Latvia

Aspects of social infrastructure in regions For a long period the most typical form of dwelling ownership in Latvia was state or local government ownership. However, along with the transition to a market economy an opportunity was opened to people to get state- or local government dwellings under their ownership. From 1990 the share of state or public dwelling stock in the country is diminishing. In 1990 it represented 69.2% of the total dwelling stock but at the end of 2003 it was only 16%. This can be explained by the denationalisation of the dwelling stock, privatisation and construction activities predominantly within the private sector. The housing stock has increased on average from 19,2m 2 in 1990 to 23.9m 2 per inhabitant at the end of 2003. However, the average increase per inhabitant has been higher in cities and towns than in rural areas. Unfortunately statistics on dwelling conditions in the regional breakdown is either outdated or no available and this hampers focusing on the problem in this aspect. Besides, configuration at the regional level (NUTS 3 level) has changed over time. Another component of infrastructure, the roads, reached 64.4 thsd km in length at the end of 2003; of these, 30.6% were paved roads. As there are 2 cities under state jurisdiction in the region of Riga with only streets comprising the length of the roads and only one region, the total length of roads in this region is the lowest, slightly more than 5 thsd km. The highest number of roads is in the regions of Vidzeme and Latgale. At the end of 2003 there were 649 thsd passenger cars registered in Latvia. The distribution of these cars by region is highly out of proportion although it corresponds to the economic situation in the country. 44.4% of the cars are registered in one region, the region of Riga. The second next by the number of registered cars is the Vidzeme region with 16.1% of the total number of registered cars. The smallest number of cars has been registered in the Latgale region, 12.1% of the total number. This breakdown of the number of cars by region has not changed in the last 10 years. One of the most popular pastimes in Latvia is attending theatre performances. Currently there are 9 professional theatre companies, six of which are stationed in Riga. Unfortunately in order to see a performance rural population has to travel to the capital city. At the same time no regional differences have been observed regarding accessibility of cultural institutions such as libraries and culture houses to the broad public. On the contrary, Latgale, which is confronted by serious economic and social problems, has no problems in the area of culture. This testifies to the deep cultural roots in the region. In 2003, there were 894 libraries operating in Latvia, the majority of them in the regions of Vidzeme and Latgale, 25% and 23%, respectively. The Riga region has the highest number of library users (36%), followed by the Latgale region (18%). Cultural life in regions most often is concentrated in the culture houses where the population can take part in amateur art groups and units. It is worth noting that in 2003 there were 554 culture houses operating in Latvia; of these, 39% were in the Vidzeme region but 26% in the Latgale region. In Latvia the number of recorded crimes per 10 000 population (the crime rate) in 2003 was 223. The crime rate in the Riga region with its nearly one third of the total population has always been higher than in the other regions and country as a whole; in 2003 it was the highest with 246 criminal offences per 10 000 population. A comparatively high crime rate in 2003 was observed in the Vidzeme region (206) and Latgale region (207). In previous years (1994-2001) there was a rather high crime rate in the Zemgale region

21 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

but in recent years the increase in the crime rate has been lower than in the other regions; in 2003 there were 191 offences per 10 000 persons. Similarly as in the Vidzeme region, the increase in registered criminal offences was small but with a clearly discernible upward trend reaching in 2003 190 recorded criminal offences per 10 000 population.

LATVIA MONEE ANALYTICAL REPORT 2004 22

Central Statistical Bureau of Latvia

Part IV EDUCATION

B.Z UKULA , CENTRAL STATISTICAL BUREAU OF LATVIA The system of education in Latvia might still be assessed as well developed. It has retained the good traditions of the pre-independence education system supplementing it with the latest ideas of the European education system. Basic education (ISCED level 2) is compulsory for all children aged less than 18 years. Basic and general secondary education is free of charge. Education is provided not only in the official state language (Latvian) but also in the languages of national minorities (Russian, Polish, Belarussian and Ukrainian). In the period between 1990-2004 several changes have taken place in the education system of Latvia. So, for example, at the beginning of the transition period in Latvia the number of pre-school establishments nearly halved. There were 750 pre-school establishments in Latvia in 1992 and 550 in 2003. In the regional breakdown, the most dramatic fall (by 35%) in the number of pre-school establishments occurred in Latgale, the least developed economic region. As the preparation of 5-6 year old children for school is compulsory, the number of children in pre-school establishments has increased. It should be also noted that in recent years the number of pre-school establishments in the regions of Riga and Vidzeme has been growing but on the whole they are not able to ensure the necessary number of places. At the beginning of the school year2003/2004 17.4 thsd children were waiting for a place in a pre-school establishment; of these 58% were in the region of Riga and 17% in the region of Kurzeme. The fee for attending a pre-school establishment has increased dramatically, however, within their financial possibilities local governments compensate part of the payment for children’s stay in these institutions. Table 6

PRE -SCHOOL ESTABLISHMENTS School year 1995/1996 School year 2003/2004 number of number of number of number of establishments children in pre- establishments children in pre- school school establisments establisments Pre-school establishments, total 608 72847 550 70311 of which: Riga region 215 28587 197 28207 Vidzeme region 108 12048 103 11282 Kurzeme region 87 10204 86 10124 Zemgale region 94 10727 73 10551 Latgale region 104 11281 91 10147 There have also been changes in general education. Up until 1996 the number of general schools was rising and schools were opened as closely as possible to children’s place of residence. From 1999, the small rural schools were closed due to a lack of finances on the part of local governments that took an active part in the optimisation of the network of education institutions. Beginning in 1999, the number of schoolchildren in general schools is going down due to the decrease in the birth rate in the country.

23 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Table 7

GENERAL SCHOOLS School year 1995/1996 School year 2003/2004 number of number of number of number of establishments children establishments children General schools of all kinds 1094 347541 1044 327358 of which Riga region 236 132327 240 120215 Vidzeme region 242 56335 236 55327 Kurzeme region 173 49283 163 47449 Zemgale region 208 54620 192 52683 Latgale region 235 54976 213 51684 In Latvia, the first private general schools that were accredited by the state were opened in 1991. In the school year 2003/2004 there were 41 private general schools in Latvia; of these, 63% were located in the Riga region, 12% in the Vidzeme region and 12% in the Kurzeme region. Graph 8

GENERAL SCHOOLS IN LATVIA 'S REGIONS IN THE SCHOOL YEAR 2003/2004

General schools in Latvia's regions Pupils in general schools in in the school year 2003/2004 Latvia's regions in the school year 2003/2004 20% 23% 16%

37%

16% 18%

23%

16% 14% 17%

Riga region Vidzeme region Riga region Vidzeme region Kurzeme region Zemgale region Kurzeme region Zemgale region Latgale region Latgale region

At the beginning of the 1990s the number of pupils at boarding schools increased. In the school year 1991/1992 there were 26 boarding schools with 4867 pupils in Latvia but in the school year 1995/1996 enrolment in 25 boarding schools totalled 5476 pupils. From 1998 onwards the situation stabilised. In the school year 2003/2004 there were only 18 boarding schools with 3997 pupils in Latvia. The majority of boarding schools are situated in the regions of Zemgale and Riga, 5 in each with 31% and 27% of the total number of children at boarding schools. According to the data of the Ministry of Education and Science, in 2003 14 thsd children aged 5-16 years, or 4% of the total number of children, did not attend school, had not obtained basic education and were not registered with education institutions. The highest number of such children was in the

LATVIA MONEE ANALYTICAL REPORT 2004 24

Central Statistical Bureau of Latvia

region of Riga (53% of total) and the region of Latgale (28%). Unfortunately this statistical information is not complete and should be treated with caution. There is no serious economic and social justification for the fact that children aged 5-16 years do not attend school except the attitude of families towards educating their children, which had worsened at the beginning of the 1990s. Currently the number of such children tends to diminish as both the families and children have appreciated the role of education upon entering the labour market. At the beginning of the 1990s the number of pupils in vocational education establishments fell dramatically (67.4 thsd in the school year 1990/1991 and 42.4 thsd in the school year 1995/1996) but the situation stabilised beginning in 1995. Table 8

VOCATIONAL EDUCATION ESTABLISHMENTS School year 1995/1996 School year 2003/2004 number of number of pupils number of number of pupils establishments establishments Vocational education establishments 133 42377 111 46789 of which Riga region 53 20748 40 19803 Vidzeme region 22 5671 21 6597 Kurzeme region 18 4338 14 7251 Zemgale region 17 4261 14 4999 Latgale region 23 7359 22 8139 In total, 46.8 thsd pupils in Latvia attended vocational education establishments in the school year 2003/2004 and 3.6% of these studied at 11 private vocational education establishments. 50% of the pupils in the school year 2003/2004 studied engineering sciences and technologies. The majority of vocational education establishments are located in the region of Riga (36%) and the pupils of these establishments represent 42.3% of the total number of pupils. Comparatively many pupils (17.4%) attend vocational education establishments in Latgale. There has been a rapid increase in the number of higher education institutions and in the number of students. In the school year 2003-2004 there were 49 higher education institutions in Latvia compared with 28 higher education institutions in the school year 1995/1996. It should be mentioned that higher education institutions are concentrated in the capital Riga (76%), however, many of them have opened subsidiaries in various regions of Latvia (55 subsidiaries in total; of these, 18 were opened in Latgale). Compared with the school year 1995/1996, the number of students in the school year 2003/2004 has increased by a factor of 2.7 (46.7 thsd students in the school year 1995/1996 and 127 thsd in the school year 2003/2004). It is noteworthy, however, that the proportion of students studying social sciences is rising but in such fundamental areas as natural sciences, medicine and engineering sciences it is decreasing. Enrolment in the higher education institutions with studies financed from the budget is decreasing year by year but the number of students studying for a fee is growing (75.8% of the total number of students in the school year 2003/2004). Tuition fee in the higher education institutions of Latvia ranges from LVL 300 to LVL 1500 per year. It is worth noting that at the same time the average

25 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

gross wage in the country in 2003 was LVL 192.49 and in the Latgale region LVL 139.70 per month.

LATVIA MONEE ANALYTICAL REPORT 2004 26

Central Statistical Bureau of Latvia

Part V HEALTH

D. KRIEVKALNE , CENTRAL STATISTICAL BUREAU OF LATVIA Since the beginning of the 1990s the health protection system has experienced a radical transformation. On one side, it is provided with qualified medical personnel and its technical equipment has been improved due to the acquisition of contemporary diagnostic and therapeutic equipment. On the other side, owing to insufficient funding, the system is becoming commercialised. For the patients, hidden fees for surgical manipulations, hospitalisation and a visit to a good specialist have become a rather widespread phenomenon. Not infrequently there are cases when due to a lack of money patients have to give up receiving health care services. The reforms carried out in the reorganisation of the health care system appear to be ineffective. Currently a new master plan is being worked out in respect of the stationary health institutions, envisaging centralisation and a considerable reduction in the number of hospitals. At the same time the achievements within the health protection system are undeniable. For example, infant mortality (infant deaths in the first year of life) in Latvia has decreased from 13.7 per 1000 live births in 1990 to 9.4 in 2003. In 2003 the highest infant mortality rate was in the region of Kurzeme (12.0) but the lowest in the region of Riga (8.0). The mortality rate has declined in all regions of the country. Since 1990, the mortality indicators of children aged 0-4 years have also decreased. The time series of this information in regional breakdown are not available but for 2003 regional data are the following: 17.7 deaths of children aged 0-4 years per 1000 live births in the Kurzeme region, 13.6 in the Zemgale region, 12.5 in the Latgale region, 11.2 in the Riga region and 11.0 in the Vidzeme region.

Healthcare resources

In recent years attention within the healthcare policy has been focused on increasing the share of outpatient services. Patient registration to family doctors that provide healthcare to all members of the family started in 1997. At the end of 2003 the share of primary care doctors (internists, family doctors and paediatricians) 3 represented 29.2% of the total number of physicians working at the basic job. In comparison with 2000, the number of paediatricians has decreased both in the country as a whole and in individual regions and the share of these specialists in the total number of physicians in regional breakdown ranges from 6.5% in the Vidzeme region to 4.4% in the Riga region. The regional breakdown reveals wider disparities in percentage distribution of family doctors. At the end of 2003 nearly every third of the total number of physicians was a family doctor in Vidzeme (27.7%) and Kurzeme (28.3%) whereas in the region of Riga the share of family doctors in the total number of physicians was nearly three times lower (9.9%). However, a calculation of the number of inhabitants per family doctor shows that the highest indicators are in the Latgale region (2567 inhabitants per family doctor) and in the Riga region (2528) whereas the lowest is in Vidzeme (1864).

3 Here and further in the text the total number of physicians at the basic job is given; dentists are excluded. 27 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Graph 9

NUMBER OF INHABITANTS PER FAMILY DOCTOR IN THE REGIONS IN 2000 AND 2003

3000 2500 2000 2000 1500 2003 1000 500 0 Latvia Riga region Vidzeme Kurzeme Zemgale Latgale region region region region

Compared with 1995, the total number of hospital beds has decreased rapidly both in the whole country and individual regions, on average by 34%. Compared with 1995, the number of beds in the Vidzeme region has fallen by 41% and least of all (by 26%) in the Latgale region. In the last three years the total number of hospital beds stabilised and at the end of 2003 there were 79.1 beds per 10 000 population. Of the total number of beds, the share of paediatric hospital beds ranges from 6.2% in the Zemgale region to 10.4% in the Riga region, giving the country1s average of 8.8%. The average number of specialised beds in gynaecology, parturition and pregnancy in 2003 was 1287. The largest share of beds of this profile was in the Kurzeme region (10.6%) but the smallest in the Riga region (5.6% of the total number of beds).

Immunisation

Over the last ten years cyclical fluctuations have been observed in the occurrence of infectious diseases. Unfortunately the same tendencies can be observed in the incidence of children’s vaccine- dependent infectious diseases. In 2000/2001 there was a rapid increase in the incidence of epidemic parotitis (mumps) among children and adolescents reaching 957 cases per 100 000 children of the respective age. In 2003 this indicator fell to 14 cases per 100 000 children of the respective age. Since 1992, heightened incidence of diphtheria cases has been observed and in spite of immunisation measures, immunity against diphtheria is still insufficient. Table 9

INCIDENCE OF SELECTED INFECTIOUS DISEASES AMONG CHILDREN AND ADOLESCENTS

Number of cases 1995 1998 1999 2000 2001 2002 2003 Chickenpox 8539 7133 4105 5676 6206 5777 6787 Rubella 714 140 87 57 224 1907 218 Scarlet fever 904 1090 1234 590 381 616 457 Mumps 58 33 31 1449 4901 175 67 Whooping cough 57 140 54 129 156 157 99 Diphtheria 107 22 13 28 16 4 9 Tick-borne encephalitis 180 143 45 73 38 19 48 Lyme disease 20 73 33 32 28 31 61 LATVIA MONEE ANALYTICAL REPORT 2004 28

Central Statistical Bureau of Latvia

Viral hepatitis 1010 834 533 400 297 127 72 Yersiniosis 136 62 69 19 39 32 16

Beginning in 2001 the Immunisation State Programme for 2001-2005 is effective in Latvia; the main objective of the Programme is to ensure the protection of the population of Latvia against infectious diseases. Within the framework of the Programme children are immunised against diseases such as tuberculosis, diphtheria, tetanus, whooping cough, poliomyelitis, measles, mumps, b-type infection caused by Pfeiffer’s bacilli and hepatitis type B infection. An assessment of the immunisation level of the children 4 allows making a conclusion that the situation in the country is slowly improving. A comparison of the immunisation coverage of one-year-old children in 2000 against diphtheria and tetanus both in the whole country and also in regional breakdown shows that the level of immunisation has increased and in 2003 it covered 94.6% (96.8% in the Vidzeme region and 92.7% in the Kurzeme region). Similar trends can be seen in the immunisation coverage against whooping cough. Although by the end of 2000 the immunisation level in the regions of Zemgale and Kurzeme had not reached 90%, at the end of 2003 it was 92.9% and 92.6%, respectively (94/5% in the country as a whole).

4 The calculation of the Central Statistical Bureau on the immunisation level in the country is based on the data from the “Survey on Children’s Immunisation against Infectious Diseases” compiled by the Public Health Agency. The denominator shows the number of the immunised children at the end of the year but the numerator represents the total number of children of the respective age group in the country at the end of the year (CSB data). The indicators obtained by way of calculations differ from the information provided by the Public Health Agency in its publications and data requests where the total number of children recorded by the health institutions is used. 29 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Part VI GOVERNMENT FINANCE

I. VILKA , LOCAL GOVERNMENT CONSULTATIONS CENTRE , J. SUPE , CENTRAL STATISTICAL BUREAU OF LATVIA

Local government economic resources and priorities concerning children

The issues discussed in previous chapters indicate serious problems that should be solved at the local government level. Predominantly these are problems typical of all regions. To a great extent success in solving these problems depends on the economic resources at the disposal of local governments. There is a two-level system of local governments in Latvia. The second level includes local governments of the country’s 26 administrative districts and 7 cities under state jurisdiction. In the autumn of 2004 the first or the local level covers the local governments of 63 towns and cities (including 7 cities under state jurisdiction), 453 local governments of rural municipalities and 20 county governments. The 7 cities under state jurisdiction belong simultaneously to both levels. In view of the ongoing administrative-territorial reform the number of local governments is decreasing. It is planned that following the implementation of the reform there will be approximately 100 local governments. Changes are also planned at the regional level and instead of the currently operating 33 administrative units there will be 5-9 regional local governments. In 1999 5 statistical regions were established in Latvia. These regions are neither administrative, nor local government co-operation nor planning regions. The main objective behind the establishment of these regions is to analyse information on the country’s territories.

There is a non-traditional division of local government budgets in Latvia. The local government budgets consist of the basic budget and the special budget. The basic budget is the main component of the budget.

• Revenues of the local government basic budget are generated from the deductions from taxes (personal income tax, real estate tax, gambling tax) and duties, local government duty, budget subsidy and target subsidy, subsidy from the local government financial equalisation fund, payments for services, deductions from local government profit, receipts from local government property lease, sale of property and other law-guaranteed income. • The special budget comprises the sources of income earmarked for specific objectives (from the privatisation fund, the natural resources tax, the excise tax and receipts from ports).

The district local governments have no revenue base of their own. Revenues of their basic budgets are generated from the subsidies from the local government financial equalisation fund. The size of the subsidy depends directly on the number of population in the district, the number of children aged 0-6 years and 7-18 years, the number of persons over working age, the number of children in children’s homes and the number of inmates in the homes for the elderly. In 2002 total revenues collected by the local governments of Latvia amounted to 556.1 mln lats and the revenues of the special budget totalled 53.4 mln lats. The local government budget is growing

LATVIA MONEE ANALYTICAL REPORT 2004 30

Central Statistical Bureau of Latvia

year by year, thus, for example, the basic budgets amounted to 419.6 mln lats in 2000 and 454.3 mln lats in 2001. The distribution of local government revenues among the 5 statistical regions (NUTS 3) in 2002 is given in Table 10. As can be seen, there are no wide disparities among the local budget revenue per capita. Moreover, the indicator for the region of Riga, the economically strongest region, is lower than the country’s average. The current local government financial equalisation system ensures equalisation of this indicator. It is worth noting that the analysis of total revenues of the local government basic budgets does not provide a completely objective overview of the financial capacity of local governments, as the size of local government revenues also depends on the chosen organisational form of implementing its functions (most frequently this choice is in the cases of providing utilities and amenities). If a local government enterprise implements a certain function, its revenues and expenditures do not appear in the budgetary account whereas if it is an institution, then all revenues and expenditures are included in the budget. For this reason it is important to compare local government tax revenue per inhabitant. In 2002, total local government tax revenue in the basic budget represented 275.1 mln lats or 49.5% of the total revenue of the local government basic budget. Table 10

LOCAL GOVERNMENT BASIC BUDGET REVENUES IN 2002 Territory Population 1 Basic budget Basic budget Tax revenue, Tax revenue revenue, thsd revenue per thsd lats 2 per inhabitant, lats 2 inhabitant, lats lats Latvia 2345768 556065.7 237 275126.6 117 Riga region 947746 219316.4 231 154527.9 163 Vidzeme region 355726 98278.8 276 31830.5 89 Kurzeme region 317062 73999.6 233 33552.8 106 Zemgale region 347099 83900.1 242 30649.7 88 Latgale region 378135 80570.8 213 24565.8 65 1 CSB data at the beginning of 2002. 2 Calculated by author of chapter following the data of the Treasury. Cash flow data. Table 10 shows that in respect of local government tax revenue per inhabitant there are considerable disparities among the regions. The region of Riga has the best indicator but the indicator of Latgale, the weakest region, is lower by a factor of 2.5. A comparison of the situation in 2002 with that in 2000 shows that the disparities in tax revenue per inhabitant among the regions have widened. One of the obligatory permanent functions of local governments is to take care of people’s education . Local governments have to ensure access to basic and general secondary education to its inhabitants and to provide to pre-school and school age children places in education and upbringing institutions. One of the few functions of the district local governments is to organise methodological work in education as well as further education of pedagogical staff. Total expenditures of the local government basic budget in 2002 were 589.3 mln lats. Of these, 254.7 mln lats or 43% were allocated to education. In comparison with 2000, expenditures for education have increased but not so rapidly as total expenditures. Thus the share of expenditure in education has decreased. The largest part of expenditures for education is spent on teachers` salaries and as a target subsidy from the state budget it is included in the local government basic budget. In 2002 the target subsidy was 94.7 mln lats representing 37% of the expenditures for education. 31 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Table 11

LOCAL GOVERNMENT BASIC BUDGET EXPENDITURE FOR EDUCATION IN 2002 Territory Population 1 Basic budget Expenditure Share of Expenditure expenditure, for education, expenditure for for education thsd lats 2 thsd lats 2 education, % per inhabitant, lats Latvia 2345768 589934.6 254723.3 43 109 Riga region 947746 245798.8 100165.7 41 106 Vidzeme region 355726 99840.9 4363.4 44 123 Kurzeme region 317062 76197.8 34528.7 45 109 Zemgale region 347099 84265.0 37834.9 45 109 Latgale region 378135 83832.1 38560.6 46 102 1 CSB data at the beginning of 2002. 2 Calculated by author of following the data of the Treasury . Cash flow data. Data in Table 11 show that expenditures for education per inhabitant across the regions of Latvia are relatively similar. The difference between the higher and lower indicators is 1.2 times. Just as in the country as a whole, the largest part of expenditures in all regions are allocated to education, as local governments consider education to be one of the most important function. Although the average indicators of the regions do not reflect this, there is a difference due to the population size between the larger and smaller local governments in their ability to ensure qualitative and contemporary equipment for education institutions. The abilities of the larger local governments are greater.

The Government’s regional policy

In view of the problems related to the uneven regional development in Latvia, the Ministry of Environmental Protection and Regional Development was established in 1993. At the beginning of 2003 the Ministry of Regional Development and Local Government Affairs started activities combining in one ministry the former public administration bodies responsible for local government supervision, regional and local government development, all-level territorial planning and housing development, which previously had been placed under the authority of various ministers. The first important document “Conception of the Regional Development Policy” (henceforth in the text “Conception”) concerning regional development of Latvia was adopted in 1996. The Conception defined the objectives and tasks of the regional development policy directed towards ensuring favourable and equal environmental, household and labour conditions in all regions of Latvia, minimising unfavourable disparities and promoting sustainable development and integration into the European Union and its regional policy process. In 1998 the Cabinet of Ministers confirmed the Conception of National Planning of Latvia and the Rural Development Programme. According to the law “On Particularly Supportable Regions” a state joint stock company “Re ăionu att īst ība” (“ Regional Development ”) was established under the supervision of the Ministry of Economy and entrusted with the management of the Regional Fund.

LATVIA MONEE ANALYTICAL REPORT 2004 32

Central Statistical Bureau of Latvia

In 2001 the Cabinet of Ministers adopted the National Development Plan (NDP). One of the priorities for the period 2003-2006 set out in the NDP is a balanced and sustainable development of the country’s territory, and this should be considered as a basis for overall development of Latvia. Currently there are two documents determining to a great extent the country’s regional policy and planning: the Law on Regional Planning (adopted by the Saeima on 21 March 2002) and the Law on Territorial Planning (adopted by the Saeima on 22 May 2002). The objective of the Law on Territorial Planning is to promote sustainable and balanced development of the country applying an effective system of territorial planning. The Law determines the levels of territorial planning and documentation, the timetable for the preparation of documents, the order of territorial planning and public discussion as well as the competence of state institutions at the national level, the level of planning regions, districts and localities. The objective of the Law on Regional Planning is to promote sustainable and balanced development of the country, taking into consideration the specific features and possibilities of all territories and individual parts minimising the unfavourable disparities among the territories; this objective also includes preservation and development of the characteristic features and growth potential typical to the nature and cultural environment of every territory. The Law defines the set of regional development and planning documents and the timetable for the preparation of documents, their mutual reciprocity as well as the functions and responsibilities in development planning of institutions at the national, regional, district and local level. The Law also lays dawn that for the planning of regional development local governments need to establish five planning regions (the regions of Kurzeme, Latgale, R īga, Vidzeme and Zemgale). The National Regional Development Council (NRDC) was established in compliance with the Law on Regional Development. The task of the NRDC is to ensure co-ordinated activities in the programming and introduction of the European Union structural funds as well as to co-ordinate the regional and structural policy. In April 2004 the Cabinet of Ministers confirmed the basic formulations of regional policy determining the country’s regional policy for the next 10 years. The basic formulations include the main principles of regional policy, its objectives, priorities and direction of activities. The objectives and direction of activities included in the formulations show the priorities of regional policy. The planning documents of regional policy were worked out according to the basic formulations and the objectives and priorities set out in the National Planning. The National Planning was worked out by evaluating the planning documents for the country’s regional development. This year saw the start of operations of the State Regional Development Agency (SRDA), an institution under the supervision of the Ministry of Regional Development and Local Government Affairs that was established on the basis of the reorganised state limited liability company “Regional Development” by broadening its functions. The aim of the SRDA is to manage the Regional Fund in compliance with the aims and tasks set out in the Regulation of the Regional Fund and to provide public services in the area of regional development.

33 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Annex I METHODOLOGY OF CALCULATING THE REGIONAL DEVELOPMENT INDEX Similarly as with the calculation of the human potential development index, the calculation of the regional development index begins with the selection of key development indicators and this is done by experts. Specifically for the calculation of the regional development index in Latvia 8 main indicators are used: - GDP per capita, - unemployment rate, in per cent; - personal income tax per capita per year; - non-financial investment per capita per year; - level of demographic burden, in per cent; - number of economically active enterprises and businesses per thsd population; - population density per km 2 - changes in resident population in the last five years, as per cent of total population at the beginning of the period (territory attraction index). For the calculation of the district development index the same 8 basic indicators are used but for the assessment of rural municipalities, one has to put up with 6 and for the towns – with 4 of them. Since these key indicators are expressed in different measuring units, it is necessary to standardise these indicators before they are combined. On the left side a formula applied by the UN Development Programme is given but on the right side there is the formula which is widely known in the statistics theory and mathematical statistics and which is used in Latvia:

x − x I = i min ; i − x i max xi min

x − x = i i ti ; si

where xi - is the value of key indicator No.1 in the given territory, for example, in the region; − xi min and xi max the minimum and maximum values in a group of territories;

xi - the weighted arithmetic mean of this indicator;

si - its standard deviation, the mean quadratic deviation . The main advantages of the indicator used in Latvia are the following: it is less sensitive to essentially different observations (artefacts); the breakdown of the territories both by selected main indicators and the total overall index can be compared with the rule of normal breakdown, besides, the sharply distinctive territories can be easily separated.

LATVIA MONEE ANALYTICAL REPORT 2004 34

Central Statistical Bureau of Latvia

The standardised values of selected key indicators can be easily added up and the medium value can be calculated. In Latvia these are first of all multiplied by expert-determined relevance weights (scales). The weighting system has been modified so that the total of weights equals one. Normally the weights of selected basic indicators are determined within the range of 0.05 to 0.3. The main characteristics of thus calculated territorial development index are as follows: 1. Its mean magnitude within the limits of a group of territories and the year equals zero. The indices do not show the overall development of the group of territories across a number of years. Methods have been worked out how to adjust the development index so that it should characterise the overall development. 2. The standard deviation of the index is 1. If by their development the territories can form a breakdown that is close to normal (approximately 60-75% of the total number), the index obtained ranges from –1 to +1 but if the index is below –3 or over 3, the development of the territory in question should be assessed as extreme and the underlying reasons should be clarified. (More in the monograph “Daž ādā Latvija”, R., 2004, p.539).

35 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Annex II Table 1

BASIC SOCIO -ECONOMIC INDICATORS OF LATVIA ’S REGIONS Riga Kurzeme Zemgale Vidzeme Latgale National Region Region Region Region Region average Gross domestic product per capita, in lats, at current prices 1997 1815 1535 853 864 877 1344 1998 2214 1515 861 858 800 1491 1999 2496 1552 948 926 764 1627 2000 2812 1829 1032 1026 844 1832 2001 3064 1958 1182 1160 1158 2044 Rate of officially unemployed, in per cent 1999 5.8 11.7 11.0 10.0 17.8 9.7 2000 4.7 10.2 10.1 8.3 16.8 8.5 2001 4.2 9.3 9.5 8.1 15.5 7.8 2002 5.2 9.8 9.8 8.4 18.1 8.9 2003 4.9 9.9 9.3 8.6 17.8 8.6 Personal income tax, average per inhabitant, lats 1999 96.6 68.7 51.7 51.4 44.0 72.5 2000 107.4 73.9 58.7 57.9 47.1 78.6 2001 121.2 75.4 64.0 67.7 48.8 86.8 2002 122.1 75.7 64.1 68.0 49.3 97.2 2003 155.9 96.5 89.6 92.5 66.1 114.1 Non-financial investment on average per inhabitant, lats 1999 577.1 477.8 207.4 266.4 183.0 400.8 2000 769.1 530.7 229.7 248.4 199.8 487.2 2001 822.1 504.9 244.6 282.2 211.8 513.5 2002 831.7 546.7 400.5 369.3 268.7 568.3 2003 961.9 620.7 448.8 388.8 329.1 652.0 Level of demographic burden 1999 635.4 712.8 695.9 753.1 721.5 684.8 2000 616.2 683.6 679.5 705.1 681.6 657.8 2001 606.0 672.8 663.9 692.4 668.2 646.0 2002 569.0 627.2 617.4 643.1 619.4 602.9 2003 557.8 617.7 604.4 631.4 604.3 590.8 Number of economically active enterprises, average per 1000 population 1999 24.5 12.8 10.5 11.8 9.4 16.6 2000 25.4 13.0 10.4 11.5 9.3 16.8 2001 26.7 13.0 10.4 11.7 9.2 17.3 2002 28.4 13.4 10.7 12.0 9.5 18.2

LATVIA MONEE ANALYTICAL REPORT 2004 36

Central Statistical Bureau of Latvia

2003 30.6 14.0 11.2 12.9 10.0 19.5

continued Riga Kurzeme Zemgale Vidzeme Latgale National Population density per km 2 Region Region Region Region Region average 1999 287.0 24.2 26.6 18.3 26.5 37.5 2000 276.9 23.6 26.2 18.1 26.2 36.6 2001 274.7 23.3 26.3 18.0 26.0 36.3 2002 272.5 23.2 26.3 17.9 25.8 36.1 2003 272.7 23.0 26.2 17.7 25.4 35.9 Population change during flexible five-year periods 2000-1995 -5.0 -4.5 -3.5 -2.5 -5.1 -4.3 2001-1996 -6.3 -5.5 -3.3 -2.4 -4.1 -4.8 2002-1997 -7.6 -6.7 -2.8 -3.2 -5.2 -5.7 2003-1998 -7.4 -5.8 -2.3 -3.2 -5.1 -5.4 2004-1999 -6.1 -5.5 -2.0 -3.5 -5.3 -4.9
Source: Database of territorial statistics

37 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Annex III Table 2

GROUPING OF HOUSEHOLDS IN REGIONS BY TYPE IN 2003, % All Riga Vidzeme Kurzeme Zemgale Latgale households region region region region region Households, total 100 100 100 100 100 100 of which households with children: one adult with children 3.3 3.2 2.6 3.6 3.3 3.8 couple with children 18.0 14.9 20.6 24.4 18.6 18.0 other households with children 14.2 13.3 16.4 14.2 12.9 15.7 Households with children, total 35.5 31.4 39.6 42.2 34.8 37.5

Graph 1

THE AT -RISK -OF -POVERTY RATE IN HOUSEHOLDS OF VARIOUS DEMOGRAPHIC TYPE

% 40

35

30

25

20 2000 15 2002 2003 10

5

0 Households with One-parent 2 adults with 1 2 adults with 2 2 adults with 3 children family with child children and more children children

LATVIA MONEE ANALYTICAL REPORT 2004 38

Central Statistical Bureau of Latvia

Table 3

STATE SOCIAL BENEFITS TO FAMILIES WITH CHILDREN , THSD

1997 2000 2001 2002 2003 Child birth grant – number of grants 18.8 20.1 19.4 20.0 21.0 Childcare benefit – number of recipients 53 43 47 47 46 Of which: for a child under 1.5 years 25 23 24 24 25 for a child aged 1.5 to 3 years 28 20 23 23 21 Family state benefit – number of benefits 506 435 459 452 441 Additional payment to the family state benefit for a disabled 7.3 8.1 9.0 10.3 1 10.3 1 child Survivor’s pension to underage children 4.6 6.3 6.9 7.4 7.8 State social security benefit to a child in case of loss of a 1.0 1.2 1.2 1.2 1.2 bread-winner 1According to amendments to the law “On Social Assistance” effective since 1 July 2002, additional payment is granted to disabled children at the age of 16-18 years. Table 4

AVERAGE AMOUNT OF SOCIAL PROTECTION BENEFITS TO FAMILIES WITH CHILDREN , LATS PER MONTH

1997 2000 2001 2002 2003 Childbirth grant 112.61 182.19 183.55 184.37 184.60 Childcare benefit 9.75 19.37 19.14 19.16 19.87 Of which: for a child under 1.5 years 12.00 30.00 30.00 30.00 30.00 for a child aged 1.5 to 3 years 7.50 7.50 7.50 7.50 7.50 Family state benefit 4.93 5.30 5.40 5.65 7.21 Additional payment to the family state benefit 26.25 37.28 34.41 34.33 49.56 for a disabled child 1 - paid Survivor’s pension to underage children - paid 31.02 38.27 38.64 39.22 41.91 State social security benefit to a child in case of 24.14 28.10 29.35 29.39 30.24 loss of a bread-winner - paid 1According to amendments to the law “On Social Assistance” effective since 1 July 2002, additional payment is granted to disabled children at the age of 16-18 years. Table 5

MUNICIPALITY SOCIAL BENEFITS TO FAMILIES WITH CHILDREN , THSD

1997 2000 2001 2002 2003 Number of persons who have received free of 110.5 75.5 72.2 69.8 44.8 charge lunch in schools and kindergartens Number of persons who have received allowances 46.6 81.3 46.8 47.8 45.2 for child's education, training

39 LATVIA MONEE ANALYTICAL REPORT 2004

Central Statistical Bureau of Latvia

Table 6

EXPENDITURE ON MUNICIPALITY SOCIAL BENEFIT FOR FREE MEALS AT SCHOOLS AND KINDERGARTENS , THSD LATS

2000 2001 2002 2003 National total 2256.5 2329.7 2392.3 1405.2 Riga region 977.5 921.8 921.8 179.2 Vidzeme region 348.5 360.3 396.7 345.5 Kurzeme region 168.2 196.8 195.4 189.1 Zemgale region 314.6 340.5 361.5 323.6 Latgale region 447.7 510.3 516.9 367.8

Table 7

EXPENDITURE ON MUNICIPALITY SOCIAL BENEFIT FOR THE CHILD ’S EDUCATION AND UPBRINGING , THSD LATS

2000 2001 2002 2003 National total 1182.7 582.7 636.8 661.8 Riga region 531.0 252.1 292.4 328.4 Vidzeme region 200.2 89.3 84.5 84.6 Kurzeme region 120.0 68.2 76.6 90.2 Zemgale region 168.4 82.8 90.8 91.5 Latgale region 163.1 90.3 92.5 67.1

Table 8 MATERNITY BENEFITS 1997 2000 2001 2002 2003 Number of persons that have received 13.3 11.5 11.8 12.6 13.8 maternity benefit, thsd recipients Average amount of maternity benefit, 2.98 4.01 4.52 4.96 5.85 lats per day

Table 9

NUMBER OF RECORDED CRIMINAL OFFENCES IN REGIONS PER 10 000 POPULATION 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 National total 130 158 237 206 163 158 155 152 152 184 212 217 211 223 Riga region 158 190 266 230 204 211 206 195 191 229 260 255 250 247 Vidzeme region 98 123 202 167 119 112 119 118 124 141 162 190 182 206 Kurzeme region 91 119 177 159 126 111 101 101 111 146 149 173 181 190 Zemgale region 118 152 238 211 146 134 135 130 127 154 182 192 177 191 Latgale region 95 110 196 185 118 96 99 108 114 144 189 177 171 207

LATVIA MONEE ANALYTICAL REPORT 2004 40

Central Statistical Bureau of Latvia

Graph 2

NUMBER OF RECORDED CRIMINAL OFFENCES IN REGIONS PER 10 000 POPULATION

300

266 260 255 250 250 247 230 229 211 206 200 204 National total 190 195 191 Riga region

Vidzeme region 158 150 Kurzeme region

Zemgale region 237 223 212 217 211 Latgale region 100 206 184 163 158 158 155 152 152 130 50

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

41 LATVIA MONEE ANALYTICAL REPORT 2004