Less politics, more business

Back in January, when then Prime Minister Einars Repse suddenly fired his deputy Ainars Slesers, the latter responded by saying that Repse would end up paying for what he did. Lo and behold, two weeks later the Repse-led Cabinet resigned, and a month after that a new Cabinet was formed, with Slesers resuming his position as deputy prime minister in charge of economic development. Now comfortably back in power, Slesers claims that the minority government is doing well and will even survive until the next elections in October 2006..

What are you expecting from today's [May 28] visit by Moscow Mayor Yuri Luzhkov, a man with significant influence and capital?
It is very important during Mr. Luzhkov's visit that he can see business opportunities in this region. I believe good business projects from Moscow could be a good example for other Russian investors interested in Latvia, because Latvia is open for investments. It doesn't matter where they are coming from - Russia, Germany, the U.K. or United States - we are very open.
After the First of May, Latvia became part of the European Union, part of a market of 450 million consumers. Naturally Russia has an interest in the market, and Latvia can be like a gateway between the EU and Russia. Therefore this business center [Moscow Culture and Business Center] is a very good base for launching new projects.

What will you do as deputy prime minister and transportation minister to facilitate more Russian investment?
We have one of the lowest tax rates in Europe - 15 percent corporate tax, reduced from 25 percent. Another thing I strongly have stressed is to have a direct dialogue with Russia, and we believe that by looking into the future it will be easier to solve existing problems. Less politics, more business - this must be the attitude in the new Europe, because we must be good neighbors.
Today at the Baltic Forum where I gave the opening speech, I said very clearly that we don't need intermediaries between Latvia and Russia. We must do it by ourselves. We don't need Brussels to settle our bilateral relations. Russia had elections and got a new government; we have a new government. Let's cooperate.

But in today's Latvias Avize, Normands Penke, the Latvian ambassador to Russia, seemed to suggest the opposite of what you just said - that hopes for an improvement in relations were in vain, that it was naive to think that Russia would adopt a new stance toward Latvia after its elections.
Mr. Penke should think more about his duties as ambassador and not play politician. I think he's speaking too much, and he has to think about what he's saying. You cannot say everything you think if you are an ambassador. I think we will have a discussion with Mr. Penke about his attitude, because if he is ambassador to Russia he must think about how to draw the two countries closer.

As the head of Latvia's First Party, you have promised to help bridge the gap between the two parts of Latvian society. How successful have you been at this, and how much will you be able to do before the end of this year?
We are the only party that can succeed on this issue. We are the ones who raised the issue of integration and consolidation of society from day one. Because of our initiative the position of integration minister was created. We are working on it. We know there are difficulties with education reform, and our party took responsibility also for the Ministry of Education because we don't want to have this confrontation between Latvian and Russian radicals.
We, as a center party, would like to try to solve these things through dialogue. And we are getting quite many Russians supporting us - who are becoming members of our party.

You are also transportation minister, and recently you came forth with a very interesting initiative to bring more competition in the air industry. Will you actually be able to do this?
I will. Last year we [Riga International Airport] had a 12 percent increase of passengers, which is good for airport development but not for Riga. This year I told the airport authorities and airBaltic that we have to do something about this. We have to increase direct flights; we have to reduce costs. And by the end of this year we will have an increase of 30 percent to 1 million [passengers]. Next year we will double it to 2 million.
We are going to do this. Riga is going to become the largest airport in the region, and it will be a hub for this region. It will be the EU's largest airport next to Russia.

You also mentioned Ryanair in this context.
Ryanair, Easyjet and others are going to be here, because we will provide them good terms. We are reducing airport costs. We will change our philosophy: Today our airport is just like one entity, and we will use it as a tool for development of our economy.

But won't you meet resistance from airBaltic?
AirBaltic is going to be one of the winners of this situation. This year they will have half a million passengers, and their plans are to have 1 million. More competition will increase business.

Baltic Pulp - in August last year you said the environmental damages outweigh the economic benefits of this billion-dollar project. What is the status of the pulp project for Latvia?
We will study information coming from the environment-investigation bureau at a government meeting. We have to find a balance between economic and environmental interests, because the Daugava River is a source of drinking water for many Latvians, so we have to be careful.

But what is your gut feeling on this project?
No comment. Let's not speculate during this pre-election time, when everyone would like to use statements [for their own purpose]. Let's wait and see.

You just returned from China speaking about trade, Asian markets, the Silk Road and developing Latvia's ports. Is this all realistic?
Yes. China today is one of the largest exporters to Europe, and they are using seaways to transport goods, which takes more time and is more expensive. We could establish more trade by rail, which could go by rail through Kazakhstan, Russia, Latvia. The question is: why Latvian and not Russian ports? Because we are in the EU. China is not thinking about Latvia just as a transit place, but as a distribution and logistics center, just as Rotterdam does with goods coming from different parts of the world.

But what about Russia? Anything that comes to Latvia must go through there.
But this will be big business for Russia. Two days ago I discussed it with the Russian transport minister [in Slovenia], and Russia is open for business opportunities. Russia would like to protect its ports, but the reality is that the St. Petersburg port is already overcrowded now. There will be enough business for everyone.