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Latvia, one of the three Baltic States, covers an area of 64,589 square kilometres. Latvia's population is 2.2 million and has fallen by 12 per cent since 1991 due to emigration and a falling birth rate. The capital of Latvia is Riga. Latvia celebrates its national day on 18 November (Independence Day).
Latvia regained its independence from the Soviet Union in August 1991. Under the Constitution, the President is elected by members of the unicameral Parliament (Saeima) for a four-year term and has limited powers. The President appoints the Prime Minister, approves the Cabinet and may return legislation to the Saeima. The Saeima has 100 members, who are elected democratically.
Latvian President Andris Berzins, a member of the ruling coalition Greens/Farmers Union Party, was elected on 2 June 2011 with his term commencing on 8 July 2011. Dissolution of parliament was successfully put to a referendum on 23 July 2011 as proposed by Berzin’s predecessor Dr Valdis Zatlers. Following the referendum outcome, elections for a new Parliament will be held on 17 September 2011.
Latvia was invited to join the EU and NATO at the end of 2002 and completed the reforms necessary to comply with membership requirements. The referendum to join the EU was supported by 73 per cent of voters. Latvia joined NATO on 2 April 2004 and the EU on 1 May 2004.
The global financial and economic crisis has hit the Latvian economy extremely hard. After years of double-digit growth, mainly funded by external borrowing by the country's banks, the lack of further readily available credit brought the economy to a halt. Latvia's GDP contracted by 18 per cent in 2009 and a further 0.3 per cent in 2010. The Latvian economy is now recovering, with a predicted growth of 3.3 per cent in 2011. Unemployment has risen 3 percentage points to16.6 per cent in the first quarter of 2011.
On 23 December 2008 the IMF approved a 27-month Stand-By Arrangement for Latvia to support the country's efforts to stabilise the economy. The IMF package was part of a coordinated international effort which loaned Latvia €7.5 billion (A$15.4 billion) — equivalent to almost one-third of Latvia's GDP. In November 2009, in consultation with the IMF and the European Union, the Dombrovskis Government tabled a budget in Parliament designed to cut the country's 2010 budget deficit and thereby meet the demands of foreign lenders. The re-election of the Government in October 2010 affirmed Prime Minister Dombrouskis handling of the economic crisis which saw Latvia institute the largest budget cuts in Europe.
The loan instalments conclude on 22 December 2011 with repayments due in 2012, however the European Commission and the IMF may offer an extension of the loan repayment schedule. Latvia is considering possible consequences on interest payments if the loan was to be extended. At this stage Latvia has intentions of returning to the international markets in 2011 and is confident it will be able to repay the loan.
Australia recognised Latvia's regaining of independence on 27 August 1991. Australians of full and part Latvian descent number around 30 000, but the Latvian-born community, most of whom arrived in Australia in the 1940s, is small and ageing.
There have been high level visits in both directions. A Parliamentary delegation led by Senator Grant Chapman visited Latvia in September 2003. Then South Australian Governor Bruno Krumins visited Latvia in August 2001 for Riga's 800th anniversary commemorations and met with the President and Foreign Minister. Lt Governor Krumins visited Latvia again in 2003.
Latvian visitors to Australia have included: a parliamentary delegation led by the Speaker, Mr Indulis Emsis in August 2007; the State Secretary of the Ministry of Foreign Affairs, Mr Normans Penke, in 2006; a Latvian parliamentary delegation led by the then-Speaker, Mr Alfreds Cepanis, in 1996; and the then-Latvian Minister for Foreign Affairs, Mr Georgs Andrejevs, in 1993.
The Australian Ambassador in Stockholm is accredited to Latvia. The Latvian Ambassador based in London has non-resident accreditation to Australia. Latvia is represented in Australia by Honorary Consuls in Victoria, South Australia and New South Wales.
Two-way merchandise trade between Australia and Latvia was A$11.6 million in 2010. Australia exported A$7.3 million worth of goods to Latvia during this period, primarily alcoholic beverages. Imports from Latvia in this period totalled A$4.3 million, primarily furniture, mattresses and cushions.
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