Latvia eases immigration restrictions in bid for cash infusion | Europe| News and current affairs from around the continent | DW | 09.03.2010
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Latvia eases immigration restrictions in bid for cash infusion

Latvia is desperate to attract new investors that could help the recovery of the country’s weak economy. But its recent easing of visa restrictions for non-EU citizens has sparked a nationalist outcry.

The city of Riga, Lativa

Latvia regained its independence in 1991

In an effort to stimulate its struggling economy, the Latvian parliament eased restrictions for non-European Union investors to obtain legal residency in the Baltic country, leading some to fear a Russian immigrant invasion.

The changes, which are to take effect on July 1 this year, allow five-year residence permits to citizens of countries outside the EU if they invest at least 25,000 lats (35,000 euros) in a local company, or if they own expensive property in the country.

Riga Mayor Nils Usakovs proposed the idea, saying that fears of increased Russian immigration were unfounded. He told Deutsche Welle that the changes will only help the economy.

Women in traditional Latvian dress

Critics say the new law could threaten Latvian culture

"If (foreigners) buy property or they invest money in the Latvian economy, they stay here, they spend money here," said Usakovs, who also leads the Russian opposition party Consensus Center.

"Probably they get involved in other business projects. So I imagine, it helps to overcome the crisis."

Soviet memories

Despite winning approval in parliament, right-wing nationalists as well as ordinary citizens have protested the changes. About 100 demonstrators gathered at the parliament building in Riga last week singing the national anthem and carrying signs that read "Let's sell the corrupt members of Parliament but not our land!"

"Instead of doing business with properties and temporary residence permits, the government should think of how to boost production," one woman said.

Conservative parliamentarian Peteris Tabuns spoke against the amendment, saying the new guidelines would increase Russian control of the economy, and eventually politics.

"You'll see an investor arriving with five, 10, 15 and 20 children, grandmothers and so on," he said during parliamentary debate. "We have seen it already during the Soviet occupation. They'll speak their native language and will ignore the Latvian laws and virtues."

A map showing the city of Riga

Ethnic Russians form nearly 30% of Latvia's population

No figures exist on how many foreigners would take advantage of the changes, but analysts expect interest to be highest in former Soviet-bloc countries.

No solution

Latvia's economy is one of the worst in the EU, with wages shrinking by 12 percent in the final quarter of 2009 and unemployment at nearly 23 percent – the highest in the 27-nation bloc.

Those grim figures have led Martins Kazaks, chief economist at Swedbank, to speculate that the law's overall contribution will be relatively small.

"To attract the investors Latvia would need to improve the overall economic environment," he said. "One may take a look at this from the point of view that, yes, this may to some extent attract some investors. But it's certainly not going to solve the situation that Latvia is facing."

Author: Gederts Gelzis (acb)
Editor: Jennifer Abramsohn

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