The COVID-19 pandemic and the Russian invasion of Ukraine in 2022 have presented challenges to poverty reduction in Latvia. Due to these factors, Latvia suffered from a high unemployment rate in 2020 and an increasing inflation rate in 2022. Because of this, growth in the Latvian economy has slowed, prompting the government and organizations to take action to ensure Latvia is still on track to meet the 2030 U.N. Sustainable Development Goals (SDGs).
The Impacts of the Pandemic
Prior to the COVID-19 pandemic, the unemployment rate in Latvia had significantly lowered, standing at 6.3% in 2019, the lowest percentage visible over a decade. After the onset of the pandemic, the unemployment rate increased to 8.1% in 2020. Women faced the disproportionate impacts of unemployment at the onset of the pandemic. In 2020, Latvia’s GDP saw contracted by 3.9% but expanded by 4.5% in 2021, according to the World Bank. The World Bank reports that the number of people in Latvia living under the national poverty line stood at 21.6% in 2019 but increased rapidly to 23.4% by 2020.
Growing Inflation Due to the Russia-Ukraine War
Another economic instability happened when the impacts of the Russia-Ukraine war touched international trade in Europe. In Latvia, inflation became an issue. As a result of the Russian invasion of Ukraine, “food, energy, and other raw material” costs have risen. Inflation in Latvia rose beyond 10%, the highest rate visible since 2008.
By March 2022, inflation in Latvia reached 11.5%. “Housing-related goods and services” rose by 14.5% on average while “transport-related goods and services increased by 22.9%, driven by a 43.3% increase in fuel prices,” according to the Central Statistical Bureau of Latvia.
The growing inflation rates are most harshly affecting impoverished families, but pensioners are most at risk of poverty amid the rising prices, with many unable to afford their heating bills.
Efforts Toward Poverty Reduction in Latvia
In May 2022 the Latvian government adopted the second Voluntary National Review (VNR), which “evaluates progress, challenges and presents new initiatives to accelerate the achievement” of the SDGs, according to the U.N. These SDGs include No Poverty (SDG 1) and Decent Work and Economic Growth (SDG 8).
In a 2022 report assessing Latvia’s SDG progress, Prime Minister Krišjānis Kariņš said that “We are helping those most in need and promoting equal opportunities for all in Latvia.” He explained further that the government is prioritizing housing and mobility initiatives to expand economic growth and promote decent work out of Riga, Latvia’s capital city. Furthermore, Latvia is “improving access to health care, including significantly increasing salaries for the lowest paid medical practitioners.” The government is also raising the minimum income threshold for individuals most vulnerable to poverty. During the COVID-19 pandemic, the Latvian government provided support to people and businesses impacted by economic stagnation and lockdowns.
The Latvian Platform for Development Cooperation (LAPAS) came about in 2004 to bring Latvian non-governmental organizations together in order to promote development in Latvia. LAPAS works toward the achievement of the U.N. SDGs through advocacy efforts, global education priorities, the promotion of local organizations and educating and updating the public on developmental issues via workshops, social media, lectures and more.
Through ongoing commitments toward achieving the U.N. SDGs, the Latvian government and organizations can reduce poverty in Latvia while igniting economic growth and improving the quality of life in Latvia overall.
– Olga Petrovska