Latvia

Latvia enjoyed only a short period of independence between the two World Wars. In 1940 the country was made part of the USSR. It finally became independent with the collapse of the Soviet Union in 1991; however, 30% of Latvian population remains Russian.

Latvia had a stable GDP growth in the past decade prior to the financial crisis and even exceeding 10% in 2005. Majority of companies were privatized and the country is now a quickly emerging free-market economy, being a member of both the EU and NATO.

The strategic location makes Latvia an important commercial and trading center between the East and West. The country excels in exports of timber, paper and agricultural products. Light industry and boom in commerce and finance support the economy.

Crises in the first half of 1990s and the Russian financial crisis of 1998 had a negative impact on the economy, however, Latvia recovered quickly. The country`s economy was quite heavily based on foreign credit speculation before the financial crisis thus making it vulnerable to instability and putting it under a lot of stress recently.