Let the Good Times Roll. But for How Long?

Some observations on Latvian foreign policy.

www.imf.org/external/np/sec/pn/2006/pn06113.htm).
The main risks posed by the governing coalition’s frenzied rush for wealth are domestic; they are tied to the already visibly overheating economy with its stubbornly high inflation rate (over 6% since 2004), increasing the current account deficit and inflating the real estate bubble. Nevertheless, the focus on rapid economic growth has its implications for Latvian foreign policy as well, both in conceptual terms and in practical approaches to concrete problems.
Almost by definition, the desire to “get rich quick” excludes both long-term thinking and a broad and balanced world view that integrates both opportunities and risks. It leads to focusing only on short-term benefits and to ignoring the long-term consequences of one’s actions. The fact that since the big bang of 2004 Latvia has not developed a serious framework for its post-accession foreign policy is not that surprising in itself. After all, only two years have gone by and it takes time for people to re-orient themselves. An outside observer, however, could be forgiven for getting the impression that there is no real desire to develop such a framework among Latvian foreign policy makers. Not only is the task of re-conceptualizing Latvia’s position and goals in the world hard intellectual and political work, but perhaps even more to the point, such a conceptualization inevitably involves trade-offs, decisions about what we are willing to give up in order to achieve something else. This kind of thinking simply does not mix with the desire to have everything and to have it right now.
As a result, the two major policy documents that the Foreign Ministry produced this summer – “The Basic Principles of Latvian Foreign Policy 2006-2010” and a draft paper called “Latvia’s Participation in the European Union: Basic Principles, Goals, Priorities and Activities 2007-2013” – make for rather frustrating reading. Both documents place a great deal of emphasis on participating in any number of bilateral dialogues and international forums, but apart from a few concrete goals (opening two diplomatic representations every year; achieving visa-free travel to the USA for Latvian citizens), they offer very little guidance on Latvia’s views on various important issues. True, Latvia does have clearly defined positions on some key topics in the EU – it is against any restrictions on the free movement of labor (Latvia recently reaffirmed this position by declining to limit access to its labor market for Romanians and Bulgarians) and also against tax harmonization within the EU.
Nevertheless, one looks in vain for a clear position on the EU Constitutional Treaty or on further enlargement of the EU. Regarding the first issue, the draft paper on EU policy states that “the current uncertainty regarding the Constitutional Treaty must not hinder efforts to improve the practical functioning of the EU”. Regarding the second issue, “The Basic Principles” say that Latvia “supports further enlargement of the EU, taking into account the EU’s ability to absorb new member states and the accession readiness of each candidate country”. Both of these formulations are so elastic as to be essentially meaningless. The same can be said about the formulation of the policy towards Russia, according to which Latvia simply wants “a political dialogue and economic cooperation” with its neighboring country. The position on Latvia’s participation in international peacekeeping operations is equally vague: Latvia has to be “ready to participate ”¦ if it becomes necessary”. Perhaps it is no coincidence that the policies that are clearly defined – on taxes and migration – are the ones that are seen to impinge directly on Latvia’s ability to maintain its present model of economic growth.
Once again, it should be underlined that a lack of clearly defined policies on every conceivable issue would not provide cause for alarm at Latvia’s present stage of development if one got the impression that its foreign policy decision-makers were trying to hammer out such policies, at least on issues of most immediate concern to Latvia. Unfortunately, in the case of some key issues, outside observers might well be concerned that the formulations are kept deliberately vague in order to avoid limiting the government’s room for maneuver.
Take, for example, Latvian-Russian relations, in particular the as yet unsigned border treaty between the two countries. For eight years, since December 1997, when the Latvian government accepted the draft border treaty that had been negotiated with Russia, Latvia’s official position had been that the country was ready to sign the treaty and that any problems with regard to this issue could be blamed on Russia. This was an important element in Latvia’s drive to join the EU and NATO. It affirmed the country’s willingness to accept the loss of a small portion of its territory, the eastern district of Abrene, thus satisfying one of the important preconditions for joining the two organizations, namely having no border disputes with its neighbors. To underline this position, Latvia regularly asked the EU to put the issue of the border treaty on the agenda during its summit meetings with Russia.
After Latvia joined the EU in 2004, it seemed that there was a new willingness on the part of Russia to address the issue. Latvian and Russian representatives met a number of times in the first months of 2005 to iron out any remaining differences, so that the treaty would be ready for signing when President Vīķe-Freiberga went to Moscow in May for the commemoration of the 60th anniversary of the end of the Second World War. But just two weeks before the treaty was due for signing, the Latvian government adopted a declaration which, in essence, reaffirmed Latvia’s claim on Abrene. This declaration not only allowed Russia to back out of signing the treaty, but also came as a complete surprise to Latvia’s Western partners. The government argued that the declaration was necessary because its legal advisers had concluded that the Latvian Constitution did not allow any changes in the country’s pre-war borders without a referendum, but this did not help explain why this constitutional revelation had dawned on the government so suddenly and unexpectedly. One cannot help suspecting that the real reason was that the government lost its nerve and feared the electoral consequences of giving up Abrene, even though a poll in 2005 indicated that a majority of citizens were ready to accept the loss of the region.
The government’s April declaration effectively put the border treaty back on ice, but it has not been forgotten. As recently as in May, 2006, at the EU-Russia summit in Sochi, it was on the agenda for discussion between the two sides. Both before and after Latvia’s parliamentary elections a number of prominent politicians have expressed their conviction that the treaty should be signed. In the eyes of some large Western countries, the signing of the treaty would be an important step in improving the relationship between Latvia and Russia. Yet one searches in vain in Latvia’s foreign policy guidelines for any mention of the treaty or for any defined principles which should be taken into account when dealing with this issue. If, as seems probable, the new Latvian government will once again return to the problem of the border treaty, it will probably do so on an ad hoc basis without placing its actions in any wider context than the immediate political and economic gains and losses the treaty might bring.
A second example of this kind of situational thinking is the policy towards Belarus. Latvia’s policy positions reflect its concern for fostering democracy in neighboring states. “The Basic Principles” declare that Latvia backs “EU support for political and economic reforms in the EU’s eastern neighbors”. In February, 2004, Riga hosted a high-level conference on promoting democracy in Belarus and Ukraine attended by, among others, Senator John McCain and former US Ambassador to the United Nations Richard Holbrooke. This was seen by many as a sign that Latvia was ready to take a leading role in promoting democracy in Belarus.
However, since then Latvian policy has been significantly more circumspect with regard to its eastern neighbor, which is a significant source of cargoes carried by Latvian railways and shipped from Latvian ports. In 2005 34% of the freight carried by the Latvian state railway company originated in Belarus.
So it is no surprise that Latvia is (together with Lithuania and Poland) among the countries blocking the initiative of the European Commission to cancel certain preferential tariffs granted to Belarus, even though the initiative is supported by almost all the other member states. The three countries have been loud critics of “Europe’s last dictator”, yet all three seem to fear losing their income if Lukashenko decides to punish one of them by shifting his export routes to a neighboring country. Apparently they cannot agree on how to put on a united front to prevent Minsk from successfully playing its game of divide and conquer.
Some Latvian politicians like to talk about finding the right “balance” between “values” and “interests”, sometimes even engaging in silly ruminations about what percentage of Latvian foreign policy should be determined by values (say, 70%) and what percentage by interests (oh, roughly 30%). This kind of discussion is pointless not just because it underlines what nobody really doubts – the fact that states do not act altruistically all (or even most of) the time. Worse, it offers no guidance for Latvia’s diplomats or signals to its partners about what they can expect from the country. How will anyone know on any given occasion whether the Latvian government is going to act altruistically or selfishly? How will the government itself know? Roll the dice?
What is needed is not some arbitrary percentage of “values”, but clear principles that can serve as guidelines in a complex and changing world, at the same time serving Latvia’s long-term interests. One would expect these principles to broadly reflect the country’s values which, it must be emphasized, are values not just because they are “good” only in abstract terms, but because in the long run they are seen as beneficial. True values are not contrary to, but congruent with interests. For instance, support for democracy is not based only on idealism. History has shown time and again that undemocratic regimes are a threat to peace, which is why there could be no greater guarantee of Latvia’s long-term security than truly democratic regimes in both Russia and Belarus.
Moreover, there is a pressing need for guiding principles in other areas too, in areas the ethical dimension of which is less apparent. For instance, it does not suffice to state with respect to EU policy – as the draft policy paper does – that “Latvia’s goal in the EU is to promote the welfare of the inhabitants of Latvia and to raise their quality of life”, at the same time saying nothing other about the structure of the EU than that it should be “unified” and “strong” and promote economic dynamism. Even from a cynical short-term perspective, it can hardly be in Latvia’s interests to create the impression that we joined the EU only for the money we will receive from the Structural Funds. But in the medium and longer term, the EU still is – as always – a work in progress and its institutional structure can have a very real effect not only on Latvia’s welfare, but on its security as well. Considering the increasing disillusionment of the Western Europeans with the new member states and the growing power of Russia, The Economist recently warned that “Eastern Europe’s drift and complacency have never been riskier”. Of course, figuring out what EU structure would best suit Latvia’s needs and developing a policy to promote that goal are no easy tasks, but one does not get the impression that anyone in the political class is even trying to think about the issue seriously.
Next year Latvia will have to take clear positions on a number of issues which are not only individually complex, but are also to some extent mutually interconnected. During the first half of 2007, the EU under the German Presidency is widely expected to try to breathe new life into the Constitutional Treaty. A common European energy policy will also be at the top of the EU agenda. Negotiations will begin on a new Partnership and Cooperation Agreement with Russia. And Latvia’s bilateral relations with Russia may become more active not just because of the border treaty, but also because of the agreements signed this October on economic cooperation and the formation of an intergovernmental commission to discuss issues of mutual concern. The adoption of a tactical and short-term approach to these issues carries the risk not only of producing contradictory and self-defeating policies, but also of leaving the country vulnerable to manipulation by other players. In the longer term, the lack of a clearly defined policy for strengthening Latvia’s position in the EU and for defining its relationship with Russia threatens to leave the country out in the cold if the international climate becomes more hostile to small countries caught between an increasingly unsympathetic West and an aggressive East. The principle of instant gratification – whether applied to domestic or foreign policy – can lead to a painful morning after.