Publication: Monitor Volume: 4 Issue: 111

Riga respondedyesterday to the publication in the Moscow press of a “black list” ofLatvian companies said to be targeted for economic sanctions by the Russiangovernment. The fifteen companies–mostly transportation firms, portterminals and banks–are accused of supporting the Fatherland andFreedom/National Independence Movement, headed by Prime Minister GuntarsKrasts. Latvia’s state secretary for Foreign Affairs, Maris Riekstins,responded that the black list did not amount to a boycott decision, but wasrather a propaganda gesture and an attempt to test Latvia’s reaction.Latvian Foreign Minister Valdis Birkavs met with representatives of theaffected companies, some of whom denied ever having supported Fatherland andFreedom. (BNS, June 9)

Meanwhile in Moscow, officials of Rosmorflot (Russia’s state-ownedCommercial Fleet) announced that the fleet has sharply cut back on both portcalls and food and fuel supply in Latvia. The officials stated directly thatthe move was meant to show Latvia that it can not afford tensions withRussia. (Russian agencies, June 8)

Moscow’s ability to impose major economic sanctions is limited, becauseRussia itself needs Latvia’s transit routes and ports as long as it lacksthe means to build comparable installations on its own coast. Meanwhile,Moscow is using pinprick measures, some of them painful. Recent importrestrictions, for example, are severely damaging Latvia’s fishing andcanning industries. Moscow has, furthermore, introduced complicatedpaperwork requirements for Latvian truckers engaged in the transit trade.

Trade restrictions and the blacklist threat are not simply punitive, butseek to pressure Latvian business circles into advocating politicalconcessions to Russia. Some circles have risen to the bait, which Moscow hadearlier used with Finland as a major element in the relationship long knownas “Finlandization.” Krasts and his Fatherland and Freedom respond that suchmeasures demonstrate the risk of trade dependence on Russia, and should spurLatvia to accelerate the reorientation of its foreign trade.