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The World, Europe and Latvia in 2013

Jan 09, 2013
By Karina Oborune

The new year is a good starting point to predict what political and economic impact there will be in the world, in Europe and Latvia. With no doubt, this decade is a very important decade, similarly as was the early 20th century, especially if we remember such important years as 1914, 1917, 1919, as well as the early 19th century – 1812; 1517 in the 16th century and so on.

2013 brings a lot of political changes – a new presidential administration will begin its work in the U.S. (though with the same president), elections for Chancellor in Germany and elections in Italy take place. Furthermore, in 2013 in the international arena there will be a vast number of conflicts and civil wars (especially in the Middle East, Iran, Afghanistan, Pakistan) compared with the non-violence in Europe. There will be devastating natural disasters and airplane crashes, problems with data security. There will be an increase of the political and financial power of the United States, China, India, Russia; there will also be better economic results in Russia and Norway because of high oil prices.

On the one hand, due to a possible political and economic crisis in Europe, there will be problems with both the dollar and euro. In the autumn there could be a second wave of economic crisis much sharper than in 2008. In order to solve these problems, the EU should become closer in terms of economic, monetary and political union. The unemployment level in Europe will increase, especially among the youth and especially in Greece and Spain; an increase in housing prices in Europe and the possibility of the bursting of the real estate bubble in Scandinavian countries, an increase in taxes and spending cuts in most European countries, including Latvia seem on the way. On the other hand, there will be more investment in Central and Eastern European countries.

2013 in Latvia will bring political changes. There could be some problems in relations with other countries (especially Russia), which will mostly depend on politicians and the mass media, especially social media. Based on the vast number of corruption scandals, there could be some dramatic changes in politics where some politicians will leave the political arena, with new political leaders appearing in Latvia. There will be changes in part, or the whole of government. Municipal elections could have an influence on parliamentary elections later on. Harmony Center is under threat in holding on to its running Riga municipality. There will be great changes in the educational sector. Because of struggles between the ruling coalition and opposition, society will be more radicalized. Therefore, conflict situations will be both inside and outside the country. The government will still work to solve re-emigration and demographic issues, but with no great success.

The economic situation in Latvia has improved, no doubt, but the eurozone will have an impact on Latvia’s economy. More and more people will support the euro, especially due to large-scale information campaigns informing society, as well as from the opposition to the euro that will continue this year. There are still some problems, such as high unemployment (13.4 percent) and a high number of people with troubled loans. However, salaries will increase. The maternity, paternal and parental social benefits will be increased this year. There will also be changes in the banking system in Latvia. More attention should be dedicated to exports – not only by large companies, but also smaller enterprises which should not neglect exporting advantages.

Based on the provided forecast above one could conclude that 2013 will bring more negative and dramatic changes, especially in economics; however, one should bear in mind that this year will determine the tempo, scale and level of development in the political and economic arena in the coming years, which, it seems, could bring a prosperous 2020s.

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