This site was created by MBA students at the American University in
Washington, DC.
Fall 1999
________________________________________________________________________________________Back to American University's
Information Technology Landscape in Nations page.
The people of Latvia do not take Y2K seriously because the truth is simply too frightening to seem credible and because they know little about technology, business, or how the two work together. Latvia's mishandling of the crisis forces foreign governments and businesses to group Latvia among the world's least prepared and least reliable nations. Latvia has brilliant leaders in Latellekom and Latvijas Banka, who have worked long, hard, and publicly to limit the negative effects of the potential coming crisis. But most CEO's and political leaders in Latvia look as unaware of and as unprepared for this potential crisis as they were for the collapse of Russia's economy last year.
Latvia relies heavily on Germany, Sweden, and Russia for its resources. The majority of the energy resources Latvia uses come from Russia, and most of the money made in Latvia depends on markets east and west of the country. If Russian cargo cannot be shipped to Latvia, it will matter little whether Ventspils and Riga ports have checked their systems for non-compliant chips. Fifty percent of German firms and 15% of Swedish firms are predicted to be unable (for financial or physical reasons) to survive Y2K. This should be of significant concern to everyone in Latvia. The Russian atomic energy regulatory agency said it would do nothing about Y2K, in affect leaving Russia likely to face power failures, meltdowns or both. Latvia may not be too dependent on chips and programs, but Russia and Europe determine how well Latvians live through technology advances.
The government has not been honest about the Y2K issue in Latvia and people take it for granted. Thus, people are not even beginning to plan for simple procedures and actions to make sure they will survive. A positive factor in Latvia is the fact most people live within walking distance of a farm, a bakery, or a place to fish. Anywhere in the country of Latvia but Sigulda, one can dig two meters down and find water.
Transborder Data Flow and Privacy
Republic of Latvia
Article 17 of the Constitutional Law on Rights and Obligations of a Citizen and a Person states, "(1) The State guarantees the confidentiality of correspondence, telephone conversations, telegraph and other communications. (2) These rights may be restricted by a judgeís order for the investigation of serious crimes." [fn 1] Legislation on the protection of personal data is expected to be introduced by mid-1998. The law is being prepared by a working group operating under the Ministry of Transportation. Another working group operating under the Ministry of Culture is preparing legislation on the protection of databases maintained by the government sector. [fn 2] Latvia has broadened access to government-held information. In April 1997, Latvia's parliament amended the law on state secrets to extend access to classified information to non-citizen employees of the Interior Ministry and other state security agencies. The law mainly applies to Russian residents of Latvia who intend to become Latvian citizens. [fn 3] On November 16, 1995, it was reported that telephones in the Latvian Defense Ministry were tapped. The Latvian Defense Ministry responded by stating Latvia's "military counterintelligence service reserves the right to ensure the security of communications at the Ministry of Defense and structures of the national armed forces." [fn 4] In April 1994, a bugging device was found on the switchboard of the "Dienas Bizness" newspaper. [fn 5] Latvia is a member of the Council of Europe but has not signed the Convention for the Protection of Individuals with Regard to Automatic Processing of Personal Data (ETS No. 108). [fn 6] It has signed and ratified the European Convention for the Protection of Human Rights and Fundamental Freedoms. [fn 7]
The three Baltic states (Latvia, Estonia, and Lithuania) came into force
in June 1998 and agreed on a trilateral agreement which removes the last
trade restrictions between the Baltic states. The standardization
of customs procedures allows the free movement of labor between all three
countries. Additionally, the countries signed a pledge to recognize
the others' secondary and vocational school certificates. These developments
will obviously assist the countries in utilizing their IT workforce in
a more efficient and effective manner.
The government of Latvia is extremely interested in becoming known as the "Switzerland of the North" - being a major financial services haven. Some may believe this former Soviet republic is an unstable place to do banking, however many are moving money to the economy. There are two key attractions for investors to do so being secrecy and flexibility.
The country has a law called Bank Secrecy which established a significant amount of credibility in the field of financial services compared to many other countries offering similar investment opportunities. Here, the Latvian way is free of American and Western European influences with regard to records privacy and information dissemination.
Latvian financial representatives are known to be flexible and innovative when delivering financial services. The economy is free and open and all major currencies (and soft currencies like the ruble) can be held and dealt with. The Latvian banks are connected to the major stock exchanges, currency, and commodity markets allowing access to an array of products and services.