Latvians - Economy



Subsistence and Commercial Activities. Of the total population, 54.7 percent are employed. Of this percentage, three-quarters work in goods production and one-quarter in service. Between 1945 and 1991, Latvia's economy was an integral part of the Soviet Union's. This resulted in relative stagnation of the agricultural sector and overexploitation of forest resources. Industry is dependent on energy, labor, and raw materials imported from elsewhere, and the products manufactured are exported. The industrial sector employs 30.7 percent of all those employed. Heavy industry produces 54 percent of the country's gross national product; light industry, 19 percent; and agricultural and food processing, 25.4 percent. Among industrial products are diesel engines and generators, electrical railroad and street cars, radios, telephone equipment, other electrical and electronic items, pharmaceuticals, and textiles. Of all those employed, 15.1 percent work in agriculture. Farming has been mechanized and requires energy from outside sources. Most land is farmed by large state and collective farms. The private farming sector is just resuming. The agricultural emphasis is on animal husbandry to produce eggs, meat, and milk, and on field crops (e.g., barley, flax, oats, peas, potatoes, rye, sugar beets, and wheat). Economic restructuring according to market principles began in mid-1990, but only 1 percent of the labor force is thus far employed in the nonstate sector. Latvia has very little mineral wealth and no coal, natural gas, or oil. Its economy in the future probably will be based on farming, forestry, light industry, and service.

Trade. There is strife between the people who constituted the power structure under the autocratic Soviet regime with its command economy and those attempting to establish a market economy with private ownership. In order to retain their status and influence, the former struggle to establish a neocolonial situation; the latter attempt to open the economy to private entrepreneurs. Still present is the old Socialist trade network, with government-owned stores and distribution network, and farmers' markets. Simultaneously, newly established private manufacturing and retail establishments vie for resources.

Division of Labor. Legally there is equality between the genders. In fact, men occupy the more prestigious and better-remunerated jobs. Women employed outside the home are still responsible for the "second shift" of family shopping and household chores; they receive little or no help from the men and do without the convenience of modern appliances. There is also an ethnic division of labor. Latvians predominate in agriculture, forestry, printing, and communication; non-Latvians are concentrated in industry (Russians make up more than 41 percent of industrial workers), sea and railroad transportation, and white-collar jobs.

Land Tenure. All real estate was acquired by the Soviet government and was owned by "the people" (i.e., the government). Since 13 June 1991, there has been an effort to return real property to its former owners or their heirs. Private owners' rights over property and duties toward society are in the process of being established.


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