Sunday, December 27, 2009
Sunday, November 29, 2009
Being post-Latvian and other weird existential dilemmas
by Juris Kaža
An essay I wrote over the summer (2000- JK), a tirade, perhaps, in parts, has been widely read and discussed among the Latvian diaspora, "diasporans" who have moved to Latvia, and regular expatriates from Western countries in Latvia. I belong to the second group. I suggested that there were getting to be simply too much dissonance between what Latvia is, where it is going, and what it apparently will never be -- and some very important parts of my "Latvian" identity.
At the end of the essay, perhaps written in an excessively dark mood, I said that I and other former exiles, unlike many and probably most "Latvian Latvians", had options, meaning options outside, away from or beyond the "Latvia thing". It is perhaps the last twist that is the most interesting, because I suspect there really isn't a "where" that diasporans can go to anymore. Very few snails run away from their homes, and it isn't because they are slow.
So what does "beyond" mean, why go there, and why even look for the space if it might not be there? I think a lot of the "why" was laid out in the earlier essay, and since then, I have gathered a few more examples that Latvia, at one level of analysis, is a frighteningly depraved society, from its dregs to its top. A great example of the dregs was the young Latvian woman, who was probably in her early teens when independence was regained and can't really claim to have lost her best years and had her mind twisted under decades of Communism. She simply "lost" her 18-month-old child while on some rambling drunken excursion along the coastline. The most likely explanation is that the toddler wandered into the surf and was swept away. So it goes, to quote Kurt Vonnegut.
Meanwhile, mommy hasn't a clue, just a couple of other kids and some drinking pals with a car (the toddler was lost on a drunken motorized ramble), which means they were not your hardcore derelicts.. With mothers like this, does Latvia really need crack cocaine?
As for the top, there is the wonderful story of a county executive (or whatever you call a "pagasts") running over an 18 year old girl while driving drunk. Even if we accept the version that the dead woman caused an unavoidable accident, and that the driver couldn't have stopped to avoid hitting her even if cold sober, what could justify simply leaving the corpse by the roadside and spending the next few days trying to get the car fixed to cover traces of the accident? OK, there was the case of U.S. Senator Edward Kennedy some 30 years back, but at least he came clean the day after. And if we accept Kennedy's version of events, he made some attempts to rescue the young woman who drowned in his car when he drove off a bridge.
The former Latvian county executive, who briefly had charges dropped of failing to assist an injured person (one can't give first aid to the dead, sort of makes sense…), has apparently continued his drinking. In his favor, he did help to pay for the funeral of the girl he (inadvertently, let us assume) killed. But the criminal investigation was only continued after a major uproar -- perhaps a good sign after all.
My gut reaction to this kind of stuff is that a) Booze-mommy ought to have her tubes permanently cut and the other kids put up for adoption b) I'm not going to, like some minor Old Testament character, rend my garments and wail if somebody takes a hunting rifle and terminates the ex-pagast executive mutt. And so we slide into serious -- and, to borrow a term from a Bruce Sterling novel -- batshit ravings. Western raised and educated person, foam dripping from chin, starts advocating forced sterilization and vigilante drive-by shootings.
Which brings me to the "fucking kuce" syndrome.
Let's rewind to the corner of Lacplesa and Terbatas in downtown Riga, where there is this big, abandoned construction pit with a wooden fence and walkway around it and a narrow driveway to some courtyard behind the pit (now a building that housed Dienas bizness for several years --JK). In the morning, somebody swings a car halfway into the driveway and stops it, completely blocking the busy sidewalk. From the silhouette barely visible through the ubiquitous darkened glass, I see it is a woman and mutter under my breath -- "kuce nevareja citur stavet" (couldn't the bitch park elsewhere) but what I was thinking, but didn't say, was "fucking kuce", a mongrel phrase sounding straight out of 70s American Latvian creole, where the best one I heard was the dialogue:
" Kur ir Lenars? (Where's Lenars?)"
"He's asleep, pliks, on the pods." (He is asleep, naked, on the toilet).
That's just an aside. It turns out the woman who so abruptly stopped her car in the middle of all the rush-hour pedestrians was unlocking some kind of metal bar designed to keep non-residents or whatever out of the back lot by ripping their car antennas off. "Fucking kuce" also looked dumbly apologetic -- a Latvian babushka barricaded into the wooden walkway on the other side of her car was starting to lambaste her. I felt I had overreacted, and even felt a tinge of guilt for what seemed like gut-reaction sexism. But when I thought about it, it was merely giving gender specificity to anger with the "kuce" remark.
A few days later, while the pedestrian walk lights were lit on Crash Corner (Lacplesa and Caka), I started crossing with my five year old (now 14 -JK) and some scraggly unshaven geezer wobbled through the pedestrians against the lights on his bicycle. The thought of "inadvertantly" elbowing the mutt and sending him sprawling into the gutter flashed into my mind, but was quickly overtaken by the revelation: "Fucking kuce syndrome!" or FKS.
I will write FKS from now on as I am not trying to test my readers and possible editors by seeing how many times I can write "fuck" in one essay with any socially redeeming value. FKS is simply the abrupt, shorthand version of exasperation with the whole sleazy white-trash side of Latvia (where the white trash, unlike in Alabama, cut across the whole socio-economic spectrum, from elected officials to shave-headed, convicty-looking teens and gutter mutts rummaging in the trash bins).
The female gender in FKS isn't inadvertent. When I think about it, Latvia is so often represented as a woman -- Mother Latvia mourning her dead, the maiden at the top of the Freedom Monument blasphemously nicknamed Milda, and the Folk Girl, as some translation software might render the Latvian "tautu meita". So, to put it in a single cute phrase, I got a case of FKS with Milda.
So what does one do about frequent attacks of FKS? For the ex-pats, it’s a simple matter. Time to move on, perhaps time to ask for a raise. The we-have-to-be everywhere multinationals, after all, will spend pretty big bucks to keep normal Westerners happy in environments where, instead of breakfast television, you watch the locals eating your pets in the middle of the pot-holed street. This is the kind of place where the local police chewing betel nut-- or whatever it is that keeps them giggling-- watch the pet breakfast and give hand jobs to the flash suppressors on their Kalashnikovs. Compared to that kind of place -- which lies only a few notches up the scale from football-in-the-streets-with-human heads Sierra Leone -- Latvia is a relative paradise, but a salary review is always worth a try.
As far as moving, your ordinary ex-pat American, German or Swede can then add Latvia to his or her "been there, done than" list for better or worse. After all, one didn't get into the business of being an international sales/marketing/finance or whatever person in order to have a dull and unchallenging life. The market, so to speak, comes with the mutts, be they in greater or lesser numbers. (I use "mutts" here loosely according to a vague memory of New Jersey gangster slang from some old Martin Scorsese movie, where "mutt" means some pathetic, dissolute, half-wit, half-criminal not too far from its actual meaning of "mongrel dog" as in "Vinny is a fuckin’ mutt, we outta kick his head"… )
Diasporans who have had it, I suppose, could do the same -- the move part, at least, but that brings me back to the analogy of the snails. Snails can't leave home, at least not without some possibly fatal and disfiguring jettison-your-exoskeleton thing. And then what?
I am still some distance from tossing it with Latvia, but I have done some serious thinking and that is where the whole post-Latvian issue arises. There is a major collision of rationality versus programming here, probably not only for me but for any other diasporans who may be thinking as I do. For one thing, we diasporans (former exile Latvians) are imprinted (like ducklings with their mothers) with wanting or at least missing a Latvian environment. For most of my growing-up life, I, a naturalized American citizen, studied or worked with "the Americans" and went to Saturday school and partied with my people, the Latvians. Twenty odd years on, it would turn out that "my people" and the inhabitants of Latvia were related but different tribes.
When it came to core matters, primary social contacts, serious relationships and the like, it was automatically predominantly Latvian. I dated Latvian girls in the US and later in Europe, married an exile Latvian woman, and after we split up in 1991, I remarried to a Latvian Latvian. Latvian all the way! It was instinctively unthinkable otherwise, and this is perhaps something that only Jewish American readers of this piece or other ethnics will fully understand.
Getting out of this place, where I don't see an obvious defeat for white-trash Muttland against the Latvia I was given illusions about, means losing this instinctively important Latvian environment. And then where to? I've spent thirteen years in Sweden, two of my sons live there, but -- boring! BORING! This is not meant to be offensive to Sweden. What they have done is to make their country into one big white middle-class suburb with an all-too-predictable, reasonably well-behaved, semi-homogenous population, where young women wrapped head to toe in Muslim chadors tell semi-clueless TV reporters: "Jag är också svensk" (I am Swedish, too). And in their heads, they are probably right.
As for what to do in, say, Sweden, there's probably some narrow-niche possibility to work writing about wireless telecommunications, broadband internet, lots of that nifty stuff the Swedes can do. I would then get some of it myself and use it, guess what-- to keep in touch with Latvia. So there is one kludge of a solution -- virtual Latvia, but reality in some place with a lower "where did we drop the baby on our last bender?" rate and fewer FKS experiences during the average week. But then we are sort of back to square one, repeating dramatic history (monitoring, with bated breath, the freedom struggle) as wacko farce (watching a broadband stream of the latest LNT TV report about some political mutt who makes $50 000 a year legally and is building a house out of the opening titles of "Dallas" on land his mother bought from her savings as a kolhoz milkmaid during the Soviet era).
So what else to do? There is a bit of diasporan networking and clustering (the "Trimdie" --diasporan in Amero-Latvian creole--house on Bruninieku, hanging at Osiris, seeing if there are still diasporan evenings at the World Federation of Free Latvians or PBLA office, whatever). I probably hit some of the wrong evenings at the PBLA, some years back, because it seemed like much of the crowd was what I would call Type V diasporans. Type I diasporans are bubbly teeny-boppers who see Latvia as a big theme park extension of Garezers, the Latvian summer camp in Michigan and who have lots of cheery fun on some American Latvian Association two week (if it's Tuesday we play the kokle in Aizkraukle) trip. Type IIs seem to predominate -- they are the 20-somethings who come to Latvia for both adventure, idealism, beer, casual sex, interesting work, Paddy Whelan's, whatever. This is the demographic group most suited for a wide range of stuff like foot-soldiering global wars, discovering America, chasing off on Gold Rushes, starting dot-coms and garage bands and other dangerous, unserious and fun stuff.
The Type IIIs are rare. They are middle-aged people who ought to be wringing their hands about children's college tuition. They have to be career fuck-ups, wackos or foreign government paid consultants to be here. Type III includes 51-year old (now 60 -JK) me (shit, I never thought I would ever be writing that age back when I was listening to the Rolling Stones "Colors" and smoking grass in 1968). The Type IVs are basically your spry retired folks, some a touch kiddie-minded (to translate the Latvian expression "berna prata") and many are here to do good things. The Type Vs are the ones who seem to have come to DIE in Latvia and save their grandchildren hassles with the urn at Riga Airport customs.
I'm not knocking this group. It cuts back on a lot of weirdness like the small "reburial" business -- digging up grandma from Perpetual Rest Cemetery in some US suburb and replanting her three rows down from Banner of Stalin General Gronkoplyordov in one of the classier Riga graveyards. I will always remember meeting an acquaintance from Sweden back in the late 1980s who filled me in on his latest doings: "I was at both of (famous Latvian exile playwright) Martins Ziverts' funerals."
So to return from this major, but, hopefully, amusing sidetrack, the PBLA evenings that I hit were a little overstocked with Type Vs and a smattering of my people, Type IIIs, mostly with “what a weird scene this is” looks on their faces. And anyway, there is more to life than telling spry ladies who are your mother’s age and come from Chicago that it has been a while since you were a “jaunietis” (a callow youth) attending some callow youths’ seminar on folklore at their Daugavas vanagu house.
Anyway, to try to seek solace in diasporan clustering often tends to end up as a futile effort at rewinding the unidirectional film of history. It will never be the ALJA (American Latvian Youth Association) Congresses of the 1970s again, when we were all a disparate, but strangely united group escaping from our everyday immersion in the sea of "Americans". My old friend Martins Zandbergs recently celebrated his double nickel (55) and there was a cross section of the whole ALJA and ELJA (European Latvian Youth Association) scene there. My memories of the 1970s and 1980s seemed like recollections of some common astronaut training, and now we were all landed and scattered on different parts of a small, but disturbing planet -- the paper moon we used to study from a distance.
There's also not much point to getting together and bemoaning the locals. In the early to mid-1990s, it was probably like the German Wessie-Ossie thing. "They haven't a clue, lots of them are awful, but they're our folks and they'll come around soon enough." Well, the "soon" soon passed and some of us are thinking more and more of the enough part.
One of the great fortunes that turn out to be misfortunes of the Latvian nation is that it is small. Small is beautiful except in wars and revolutions. 25 million Latvians and 20 armored divisions would have made it considerably harder for Stalin in 1940. Double-digit millions of folks (with the right density of global scatter) would also make another solution possible -- the Singapore model.
I'm talking about a small, efficient, clean, honest, very much Chinese part of the Chinese nation that, while sharing significant elements of culture and the Chinese language, is a far cry from 1 billion Commie-deformed mutts of the Chinese mainland (this is a country where televised mass executions seem to have little effect on official corruption). Clearly, the majority of the Chinese (and I may be wrong here) are going to have to go through the same agonizing and possibly interminable post-Communist come-down that the Latvians did, once the totalitarian geezers running China die off.
Meanwhile, we have no less "Chinese" Chinese living in a little tropical cyber-island which moved into the 21st century already in the late 1980s. For the sake of argument, I am ignoring the more bizarre and smiley-faced-authoritarian aspects of Singapore -- the ban on chewing gum, the canings of some foreigners, hangings for drug possession, etc. The point is that aside from these quirks, part of the Chinese nation has established a wealthy, honest, efficient, technocratic little society where those Chinese live who don't find stumbling behind an emaciated ox in the rice paddies of Bat Dung province to be the meaning of life.
I wish there were enough diaspora Latvians to make a Latvian Singapore (with chewing gum allowed) possible. I might move there. Everyone would speak Latvian, there would be almost no I dunno-where-I-dropped-the-toddler-moms, almost non-existent FKS incidents, there wouldn't be five cable channels of Russian-language TV (three with dubbed maudlin 1980s Uruguayan soap-operas), no white-trash mutt authorities and bureaucrats.
The island of Tobago, with its tropical climate and historic links to Latvia would be an ideal place to establish a Latvian-speaking mini-Singapore but, alas, Tobago has its own population. They would, at best, find such a proposition amusing and bizarre and at worst, toss out the whole lot for infringing the sovereignty of their little republic.
Vilnis Zalkalns (now dead for several years -- JK), a long-time Latvian activist and radio journalist in Sweden, proposed something like the Singapore idea on the cusp of independence in the early 1990s. He suggested that all the then-exiles move to a single, medium-sized town in Latvia and sort of take it over, setting an example of Western political, economic and ethical lifestyles. This was also a charmingly bizarre idea. I think Tukums was one of the towns under discussion because it had a very high proportion of Latvians.
Vilnis is one of those diasporans, roughly of my generation, who has chosen to visit often rather than to return. I think his work at the Radio Sweden Latvian Service as well as some health concerns are important reasons why Vilnis, one of the most dedicated Latvian patriots I know, hasn't moved to Latvia. But I also think he is very skeptical of the viability of Latvia as a "civilized" society and genuinely worried that it will degenerate into a semi-Russified banana republic. Anyway, it is now probably too late to head for Tukums. It would simply drive up rents and real estate costs and probably line a few pockets before someone wisely decided to give it up.
To tell the truth, there are probably no viable post-Latvian options, at least not on the social level. That only leaves some kind of individual psychological remodeling to do. One has to bend all those big Latvian parts back and extrude from oneself a new personality where being Latvian is just one big component, like loving golf. Functionally, outside of Latvia, there is no difference between people who meet at a workplace or a social setting and where some have spent the weekend golfing and others being Latvian. I choose golf as an example because to me knocking a small ball between holes on a grassy field is utterly bizarre. So is being Latvian to some middle American whose ancestry is a largely forgotten ethnic mixed salad.
The thing is, I suspect that in a totally American environment-- back in Boston or seeking new challenges on the West Coast or wherever – I will tend to harangue people about Latvia like others harangue semi-captive audiences (coffee breaks and lunches) about golf. I know a lot about Latvia and most Americans know jack shit about it and it makes you feel good to think you are enlightening them. It also makes you feel European--which Latvians historically were and politically hope to be-- because reasonably educated Europeans tend to lose track of fewer foreign countries than Americans do. Europe, after all, is one big cluster of foreign countries and many are small enough so that their inhabitants risk wandering into another country on long afternoon drives. The whole Schengen thing in the EU only encourages this, letting European citizens cross three borders shirtless, in shorts with a Belgian library card in their back pockets. At Riga airport, you probably go to a detention cell for this and get your library card stamped so that you cannot use it in Latvia for five years.
And so the expatriate’s paradoxes multiply. With being Latvian tucked away in an appropriate niche, one finds oneself still being semi-European, with that problem having its roots in being Latvian. That probably makes it kind of difficult to scrunch oneself back into the peculiar space-time warp that is America. If I could teleport into a situation where there was a job and a home for all my children waiting, it would probably be to the US, at least for a couple of years, just to check the place out 25 years down the road.
By space time warp, I mean that the US is pulling away from much of the rest of the world technologically (expect for the mobile phone systems, a mare’s nest of standards) and economically, thereby speeding ahead in time. America’s space is warped because it is still somewhat huge and insular and even the most ethnically diverse social settings are simply accepted as part of the charm and color of that part of America, never mind where the Hmong running the gas station or the restaurant came from and what travails they may have endured. Hmong, Chechens and Paraguayans, I get the feeling, are simply viewed as the human equivalent of exotic flora in America. Like the Yucca cactus, which is not found everywhere, they simply are accepted as being there to enrich and set apart the landscape. That’s the US at its best. At worst, the wrong kind of ethnicity will have the original brand of white trash putting on the sheets…
In Europe we still view nations a little differently. For one thing, they are real, you can drive (except from interminable countries like Sweden) and take a look at them. To be sure, the EU has started the long-term process of changing nations from being clearly defined building blocks of the European house to something more like texture shifts in the common European fabric. Put that argument to some Latvians, at least, and they will retreat (stretching the fabric analogy) to the logical equivalent of a corner and shout that they are proud to be a rag that no one really wants to add to the quilt.
So even to be European, you have to have your patch to stand on and from which to gladly and willingly tear down your ancient moss-covered fence and become part of a “we” that doesn’t erase the special “us” of your nation. In that sense, the French and the Germans are already becoming post-French and post-German (and the cynics are muttering that the latter couldn’t go post-German fast enough) in a real way. Unfortunately, Latvia is standing just inside the threshold of the new century as a kind of fenced-in fen with many of the denizens staring in sullen horror over a shanty-town barrier. In this environment, described more lavishly in my earlier screed, some of the younger and brighter “Latvian” Latvians are getting out in the manner of true emigrants. For them, being post-Latvian is simply being pre-British or pre-American (which their children will be), or perhaps just European (but from the part that isn’t quite making it). For the 20-somethings, being post-Latvian is also a reversible state. Maybe when they are 35, some will come back – if the mutts haven’t completely trashed the place,Which leaves my generation with no viable answer to the problem of being post-Latvian
Friday, November 27, 2009
Wednesday, November 18, 2009
Saturday, November 07, 2009
Tuesday, November 03, 2009
According to the website, the practice is not sanctioned by he Latvian Trasnplantation Center, but legal experts say selling kidneys is not forbidden (though in a legal gray area).
Prices asked for "healthy kidneys" on the Latvian classified ads site zip.lv range from LVL 5000 (USD 10 000) to LVL 50 000 (USD 100 000).
The kidney sellers interviewed by apollo.lv say they are in debt and unemployed, or in some cases, willing to sell the organ in order to "live, rather than exist" (an 18-year old) after paying off unnamed bills and debts.
While many of the organ sellers may be genuinely desperate, some may be using their kidneys as a substitute for the easy credit of a few years ago, when it was possible to borrow several tens of thousands of LVL to buy luxury goods, electronics, foreign travel or an apartment).
The reports of organ selling put Latvia, an EU member state, on the same level as some Third World countries, where the practice is widespread among the poor.
Sunday, October 18, 2009
Monday, October 12, 2009
The letter was written in a very Swedish informal style -- Dear Fredrik, etc. and signed with first names. This made it even more believable that it was not a fake opinion article, but most likely a leaked letter. The signature of Peter Wolodarski, one of the editorial page writers, lent credibility to this version. OK, it was Sunday afternoon, I was not at the office, I was surfing the Swedish press, so I wrote it up. But it was not fucking April 1, when you are on the lookout for such stuff.
OK, the squareheads* got me on this one, gotta write a correction on the LETA wire....
*a bizarre name for Swedes I heard in an American cowboy movie, where one referred to a Swedish prarie settlement as a place "with nothin' but squareheads living there". :)
Saturday, October 10, 2009
October 10 turned into a day of written and video/audio soundbites amounting to obituaries for Latvia's (once?) leading daily "liberal" newspaper Diena (The Day). It was no wonder, as the chief editor of the Diena media group, Nellija Ločmele, the editor-in-chief of Diena, Anita Brauna, the editor of the editorial and op-ed page, Pauls Raudseps and several senior reporters announced their resignations after it was disclosed that Diena (along with Dienas bizness, a business daily) had been sold to the British Rowland family.
Wednesday, October 07, 2009
Monday, October 05, 2009
Sunday, October 04, 2009
Tuesday, September 22, 2009
That would be bad enough -- the TP prevented a bill proposing a tax on housing from being moved into the legislative process in the national parliament, the Saeima. So instead of voting on some kind of tax on residential properties, there will be no vote or parliamentary discussion, essentially reneging on the promises made to international lenders to implement such a tax.
But there is more. The TP has expelled, without any hearing, the Saeima deputy and party member Dzintars Ābiķis, who voted against blocking the bill from the legislative process. He didn't vote for raising taxes, he didn't vote in favor of the residential housing tax, he simple voted for letting the legislature discuss, amend and put to a vote a bill drafted in an effort to comply with international lenders.
The TP has also suggested that it wants to talk to the IMF and other lenders in what very much sounds like an attempt to renegotiate a done deal, putting forth their own terms (whatever they may be). To be sure, the international lenders' terms are harsh, they allow absolutely no spending of the loaned funds for economic stimulation (that is left to EU structural funds, which Latvia has CharlieFoxtrotted** so far). And oh yes, the TP has a bit more current voter support (around 1.7 %) than Stalin would get. Just the guys to talk on behalf of the Latvian people.
And yet that is not the end of the story. The government has drafted a budget that simply doesn't cut spending by the amount agreed with international lenders (by around LVL 271 million instead of the required LVL 500 million).
So what is happening? EU and IMF honchos are soon descending on Riga to ask the headline question in person. The opinion, already widespread earlier -- that the Latvian government is a bunch of untrustworthy, capricious fuckwits-- is crystallizing even more. And that means, we may not get the next tranche of international loans no matter what anyone does. I mean, when the signature of a major coalition party amounts to goatfuck a few months later...
Where do we go then? -- probably devalue the lat, print cash (could have been done earlier to spare everyone the agony of salary cuts and firings) and buy time through the winter, possibly with Dombrovskis being pushed out of office or resigning (getting off the tracks before the train hits). After that, with the TP zoonoids in charge, you can write your own black comedy...
* Russian-derived word for total chaos, literally, a honky-tonk whorehouse in chaos
Friday, September 18, 2009
The Labor Inspectorate head and staff members are suspected of using European Union (EU) social and regional program funds to hire fictitious employees (apparently real persons who never worked a day at the government agency but funneled almost all of their salaries to the bank accounts of the alleged conspirators).
Elce told journalists she would cooperate with the investigation and denied that she had benefitted from the diversion of EU and other public funds.
The "fiddle" with EU funds seems to have been an internal one for the enrichment of those involved, but its alleged existence raises suspicions that the agency could have been (and still be) open to bribe-taking to cover up illegal, unsafe and unethical labor practices and the use of black and gray market labor (illegal aliens, legal residents paid in envelopes).
Events such as this indicate that the KNAB is keeping its earlier promise of "we will come for you" with regard to corrupt public servants, but it does little to diminish the image of Latvia as a state where corruption, incompetence or both are endemic to the structures of public administration.
Tuesday, September 15, 2009
Sunday, September 13, 2009
Valdis Dombrovskis, like the summer weather in mid-September in Latvia, is on borrowed time. It is hard not to see and hear that the knives are out for him. Both his own coalition partner, the People’s Party (Tautas partija/TP), and the loyal opposition (no ministers, but hitherto behind the government) of Latvia’s First Party/Latvian Way (Latvijas pirmā partija/Latvijas ceļš LPP/LC) are shaking the coalition so hard that pieces are sure to fly off.
The LPP/LC said at a recent party leadership conference that they would not support Dombrovskis’ government. with Riga vice-mayor Ainārs Šlesers calling for the Prime Minister to step down in so many words.
Guess who will step up?
Not even a few months had passed since the June municipal elections put the twins Nils Ušakovs (of the pro-Russian Harmony Center/Saskaņas centrs/SC) and Šlesers in charge of the Latvian capital when the “alpha twin” Šlesers started talking of taking up the call to head a government after the 2010 elections. Now, it seems, the trumpet is sounding in his ears a bit earlier.
The People’s Party has been quarreling with Dombrovskis on economy policy and accusing the government (here one must agree with Latvia’s most unpopular party in voter polls) of poor communication both within the government and with the general public. It looks like they are ready to jump as well, but hoping that the 2010 elections will boost their ratings significantly beyond the present 1.5 to 1.7 % the TP has gotten in recent polls (one thinks that given the historical ignorance of some young people plus the spin that he is actually a nice guy from Purvciems could get Vjaceslav Molotov an higher rating than the TP).
The TP wants to draft “ businessman” and ordinary rank-and-file member Andris Šķēle to make a come-back as Prime Minister (unless he trips and falls under the Bulldozer -- one of Šlesers’ municipal election symbols). Interestingly, when asked what business Šķēle had been doing on a TV talk show, Vineta Muižniece, the TP parliamentary faction leader, said that it was a private matter for Šķēle.
Certainly, whatever it is he has been doing has gotten little publicity compared to other business figures, such as Mārtiņš Bondars, ex-chairman of Latvijas Krājbanka (The Latvian Savings Bank), who have hinted at entering politics. We can read the bank’s annual reports. We can look at the track records in private business of people such as Vitālijs Gavrilovs, who ran the brewery Aldaris for many years. Other than peripheral involvement in some windpower project and alleged involvement in the failed first attempt to start digital terrestrial television, I really don’t know what Škele has been doing as a businessman these past few years. Does anyone else?
I don’t believe the “Šķēle factor” will revive the TP, which is widely and accurately blamed for its blind and deaf belief that the “fat years” would continue forever. What is more worrisome is that if fall guy Dombrovskis falls, “pedal to the metal” Šlesers may step up to the Prime Minister’s chair even ahead of the 2010 elections (it is anybody’s guess what may happen to the economy and the social fabric of the country over the next year, but it won’t be anything good). The LPP/LC, to my mind, is a cryptofascist party backed by religious fanatics who have repeatedly attempted to restrict the free speech rights of sexual minorities in Latvia. The authoritarian mind set of these people may then treat other dissidents -- such as angry spontaneous demonstrators -- no differently.
Another sign that Dombrovskis has expended his usefulness is the fact that the ink is dry on a number of critical international lending agreements and the cash is rolling into Latvia’s state coffers. There is no need to have guys hanging around whose party leadership (Dombrovskis is from the New Era/Jaunais laiks/JL) pledged in church to be committed to clean and honest government (many saw this as a balagāns/cheap show, but maybe not the Main Man up there). The international loans (and the lenders will not have armed auditors standing next to every bureaucrat) are the biggest opportunity for corruption and state capture, dwarfing the infamous G-24 credits of the early 1990s, where mere tens of millions vanished down the rathole.
Knowing what a Charlie Foxtrot (cluster f**k) the Latvian government (any Latvian government) can be, there was a substantial risk that the whole international borrowing process could have been bungled, leaving Latvia at least temporarily insolvent. Better to have had Dombrovskis and the JL guys at the wheel for that. Since it didn’t happen, we can clear the bridge and put a real pirate crew on deck now that the ship didn’t sink.
However, that doesn’t change the fact that another LVL 500 million will have to be cut from the 2010 budget in the next few weeks, with equally much coming out of the 2011 budget. So even if he gets a premature shot at the Prime Minister’s chair, Šlesers will face some real challenges as well as likely social unrest and a noticeable bleed-off of the potential workforce as economies recover in countries that Latvians can easily emigrate to.
Wednesday, September 09, 2009
Monday, September 07, 2009
Tuesday, September 01, 2009
Tuesday, August 25, 2009
Sunday, August 23, 2009
Taxation is theft. We tolerate it because the thief, government, uses at least some of the loot rationally and sometimes we (civil society) get a piece of it back when using a public service such as education, the police and, in a number of countries, basic health care. When the system starts to break this implied promise, or otherwise grossly disappoint or appear to deceive us, society takes spontaneous action to keep more of the wealth it creates under its own direct and, generally, radically de-centralized control.
This is not meant as some kind of libertarian economic tirade, but a forecast that in Latvia, we will very likely see a resurgence of the grey economy -- the kind where most economic activity works as it should, but as much of it as possible takes place outside the tax system.
It is important to understand that the grey economy is nothing but the everyday, legal economy with a strongly diminished or completely absent incentive to make payoffs (taxes) to the state. It is not the black economy, where many activities are malum in se (evil per se) such as knowingly selling guns to criminals, trading in goods stolen or obtained by fraud, selling the fruits of forced labor and the like. Many would include the trade in state-prohibited intoxicants in black market activities, but that is another issue.
Latvia has a history of grey market activity going back to the 1990s and beyond. It stems from Soviet times when most of the population rightly regarded the state as a totalitarian monster(the Gulags, the KGB) and/or a pathologically lying buffoon (Brezhnev, Communist ideology, promises of socialist prosperity) and did everything in their power to deny to the state or expropriate back from it the fruits of their labor. To put it concisely -- stealing from the state was a virtue. It was the only relatively safe form of resistance.
The grey market continued to evolve during the 1990s, in the general chaos of legislation and system transition. Those who had “stolen” from the state under the Communists often saw little reason or incentive to stop. Only as Latvia reformed and rationalized its tax system, as the state bureaucracy became marginally less byzantine, as accession to the European Union approached and was achieved, did the grey economy recede. With lower tax rates and an apparent “return on taxation”(schools were built, roads fixed, hospitals upgraded), there was less to gain from trying to beat the system, plus there were considerable internal costs in doing so. A bookkeeper keeping two sets of books will ask to be rewarded (on or off the books) appropriately. Concealment and evasion strategies must be formulated in addition to the management time needed to run the core business.
By the middle or the end of the 1990s, the superprofitable business of plundering Soviet-era assets for a song and selling them in foreign markets was also drawing to a close. While making 300 % profit on selling the metal from an abandoned Soviet factory (with most of the labor bartered for vodka) was an incentive to keep such transactions off the books, there was less incentive when earning 25 % from a foundry that did most of its work buying legitimate scrap and selling to export customers that did not want to look like they were buying from bandits and insisted the business at least look like it was paying taxes.
What I see happening is that the massive state budget cuts, hitting at core public services such as education, health care, public safety and pensions, will trigger another boom for the grey economy. If anyone has not caught on to this destruction of “return on taxation”, they will catch on when the government raises a whole slew of taxes (the new tax on residences, higher income and VAT taxes -- in short, whatever was dreamed up this week and may be shuffled around next week). It is time to dust off the grey market experiences of 10 years ago.
The government is very aware of what its own actions are inciting in society -- otherwise it would not be urging the State Revenue Service/VID (or what is left of it after planned massive staff cuts), regulatory bodies and the police to crack down on tax evaders and “illegal” business. Instead of becoming more service-oriented and business friendly, the VID will, if government directives are carried out, revert to its worst inquisitorial auditor/punisher face. File your quarterly papers a day late (even if the taxes they refer to were transferred on time) -- fine ‘em, fine ‘em. Misspell your company name, forget a digit of the registration number, whatever -- off with your head! Now that makes deceiving these fuckers an honest sport again!
Aside from reverting to a state of low intensity civil-war-by-deception with the tax-collecting, regulatory and repressive organs of the state, some businesses (I like to think) have other incentives for paying wages by envelope rather than paying them after tax. Business owners see that off-the-books wages have tangible social benefits, while paying the state social tax has the opposite result. Beggars still huddle on downtown streets, hospitals are closed (for whatever reason), teacher’ s salaries are cut to barely above minimum wage, no matter how much taxes and social fees are paid. When paying envelope wages, the employer knows that the money is being spent by Jānis for his sick mother, by Ieva for her child’s education, by Sergey to modestly renovate his apartment. In other words, the enterprise becomes a kind of private welfare space, spending the money denied the state in more visibly and tangibly beneficial ways. This is not to say that all envelope wages are paid with this kind of consciousness, probably in many cases, this arrangement is part of haphazard and often exploitative labor relations. But then again, back when taxes were paid, weren’t they paid to have labor law enforcers do their job?
In a very rough and often uneven way, a functioning grey economy can at least partly replace the missing “return on taxation” from the Latvian government, which has, during the blind and foolish administrations of the “fat years”, painted itself into a fiscal corner in several dimensions. Officially, the IMF and other lenders are telling it to get its act together, save billions in the next couple of years, cost what it may socially, while society and the real economy are saying -- we won’t pay! (but we will pay some of those deserving it). In effect, the collapsing public services are replaced, in an unevenly distributed way, by the funding diverted to the grey economy.
The grey economy is no replacement for a functioning modern moderate welfare state (as Latvia has tried to pass itself off as being), nor is it a rational step in consciously moving toward a night-watchman state or minarchy (which Latvia seems to be stumbling toward, whether it knows it or not). It is an improvised solution based, not on a reform of the system of governance, but is a symptom of chronically bungled and incompetent governance.
The next developments in Latvia’s economy are going to be pretty rough. European countries with labor markets accessible to Latvian citizens will recover ahead of Latvia. There will be another wave of labor emigration, numbering in the tens of thousands, in the period 2010-2013. Like their predecessors to Ireland and Great Britain in the late 1990s and the first decade of the 2000s, these Latvian economic immigrants are unlikely to ever return permanently to Latvia. Their presence, however, will generate additional repatriated funds, which will be of some limited benefit to Latvia. The Latvian economy, however, will be deprived of much of its best, brightest, most skilled and entrepreneurial labor, increasing the demographic burden on those remaining beyond the mere numbers of those emigrating. Not only warm bodies, but productivity will emigrate, and with that, there will be less value generated by the domestic Latvian economy to reallocate to pensioners and already depleted public services. As for basing an economic recovery on exports, it will be pretty hard when many of the best export producers will have “exported” themselves.
So where will those remaining behind go? Not abroad, obviously. It is a bit exaggerated to think that there will be a day when the last Latvian shuts off the lights at Riga Airport. But in terms of economic and demographic tipping points, there may well be a point at which a sufficient number of “the best and the brightest” have departed, effectively switching off the lights at the end of any tunnels.
So where will the remaining ones go? I think they are already moving into the virtual, tentative, experimental, not-as-disfunctional-as-the-official-economy space that is the burgeoning, resurrected grey economy. And I do not blame them at all.