Latvia and the Latvians Frederic T. Harned, Harvard University (part of a larger M.I.T. study), 1973

General Information

II. Economy

Latvia entered a period of swift industrial growth and economic development in the second half of the nineteenth century, when it was a part of Tsarist Russia. The Baltic coast soon became one of the most developed parts of the empire. It was the only area to have achieved general literacy by 1897. [1] The port of Riga carried a significant portion of Russia's European trade. This tie, together with the influence of the German baronial class and Latvia's trade partnership with Europe between the two world wars has left a lasting Western imprint on the population. Economic growth was seriously impaired by World War I. Much of Latvia's industrial plant was destroyed or evacuated to Russia. The loss of its source of raw materials and of its markets, due to its subsequent separation from the Soviet Union and the autarchic policies of the latter, led the Latvian government to concentrate on the development of the country as a source of high-quality agricultural products for the urban Western markets (on the model of Denmark). Since 1940, the Soviet government has concentrated on re-developing the republic's industrial significance, due in part to its relatively skilled labor force, its well-developed rail and highway network, and its proximity to major population centers. [2]

Nearly 38% of the Latvian labor force is employed in industry, making it the most heavily industrialized of the Soviet Union republics. [3] The most important branches of industry are machine building and metalworking, which alone employed 31% of the industrial labor force in 1971. Light industry employed 23%, the lumber, cellulose and paper industries, 13%, and the food industry, 13%. [4] With less than 1% of the USSR's population, Latvia produces over half of the motorcycles, almost half of the telephones, one-third of the trolley cars, more than one-fourth of the railroad passenger cars, about one-fourth of the radios and radio-phonographs, 19% of the refrigeration plants, 12% of the washing machines, and 4.3% of the agricultural machines made in the USSR. [5]

The Latvian peasant has traditionally lived on his own farmstead, with his house located in the middle of his fields, rather than in a village as was the pattern in central and southern Russia. When collectivization on the Russian model was forcibly accomplished between 1947 and 1950, losses and disruption were very great. [6] Thousands of "kulaks" were deported to Siberia. Grain production in 1950 was roughly half of what it had been in 1940. Meat production was down 35%; milk, 40%. [7]

Approximately 20% of the working population in Latvia are employed in agriculture. [8] This figure includes some 163,000 collective farmers and 14,000 workers and employees, primarily occupied in sovkhoz work. Just as during the period of independence, animal husbandry remains the most important branch of agriculture. In 1970, 77% of the monetary income of Latvian kolkhozy was obtained from the sale of animals and animal products (i.e., milk and eggs). [9] Cattle and hogs are the most important types of livestock. Crops grown include rye, barley, oats, wheat, flax, sugarbeets, potatoes, and fodder grasses. [10]

The Latvian ports of Riga, Ventspils [Vindau] and Liepaja [Libau] handle more than 40% of the Soviet foreign trade that travels via the Baltic. Riga's share in Baltic shipping is second only to that of Leningrad. [11] However, winter routes can usually be maintained in Riga with the help of ice-breakers, and the ports of Liepaja and Ventspils are essentially ice-free. [12]

In both level of productivity and standard of living, Latvia is among the leading Soviet republics. The per capita produced national income in 1970 was 1,574 rubles, second only to Estonia's and one-third higher than the corresponding figure for the USSR as a whole. [13] The diet of the average Latvian includes considerably more protein and less cereal than that of the average Soviet citizen.

Of all 15 union republics, Latvia ranks first in the amount of useful living space for urban residents, first in hospital beds per 10,000 residents, second in doctors per 10,000 (at 36.2, one of the highest ratios in the world), [14] first in the number of radios, TV's and radio loudspeakers per capita, [15] second in per capita trade turnover and in the proportion of the population having a savings account, and fourth in the amount of money saved per capita. [16]Their consistently high showing in all these indices demonstrates that in a general sense Latvia and its neighbor Estonia are among the most developed and economically favored parts of the Soviet Union.

1. Soviet Union 50 Years, 1969: 278.
2. Maciuka, 1972: 19-20. In 1938, approximately 6% of the Latvian population was employed in industry, including 1% in metalworking, vs. 17% and 5%, respectively, in 1966. Percentages computed from King (p. 44) on the basis of 1935 population (Rutkis, 1967: 292), and from LME (II: 282) and LTS (1968: 307), on the basis of 1966 population (Rutkis, 1967: 296). King (1965: 69) notes that in 1950 the production of the machine-building and metalworking, industry was already 1157% of that for 1940.
3. Nar. khoz. Latvii 1971: 38.
4. Nar. khoz. Latvii 1971: 76.
5. Nar. khoz. 1970: 70-79. Nar. khoz. Latvii 1971: 34-35.
6. See Rutkis, 1967: 344-356. Isolated farm-houses have not disappeared entirely, although the authorities have continually pushed for the re-settlement of farmers into villages.
7. Widmer, 1969: 392-393.
8. Nar. khoz. Latvii 1971: 264-265.
9. LTS, 1970: 220.
10. Ibid.: 171; LME: II: 284.
11. Rutkis, 1967: 473.
12. King, 1965: 17.
13. Nar. khoz. Latvii 1971: 56. Soviet calculation of national incomes excludes services and is thus not really comparable to Western figures. See R. Campbell, et al., "Methodological Problems Comparing the US and the USSR Economies" in Soviet Economic Prospects For the Seventies (Washington: U.S. Govt. Printing Office, 1973): 122-146.
14. See Nar. khoz. 1970: 561; LTS, 1968: 350.
15. Latvia had a considerable number of radio receivers during the period of independence. The proportion of wave receivers (allowing a choice of channels) to loudspeakers (wire transmissions, 110 choice of channels) in the Baltic republics was roughly double that for the USSR as a whole as late as 1959 (F. Gayle Durham, Radio and Television in the Soviet Union, Research Program on Prob1ems of International Communication and Security, Center for International Studies, M.I.T., 1965: 96), and is still significantly higher than the all-union average. See Nar. khoz. Latvii 1972: 240.
16. Nar. khoz. 1970: 546, 563-564, 579; Soviet Union 50 Years, 1969: 312-340; Figures for hospital beds are for 1966; others for 1970 and 1971.