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Riga – an Unfinished Symphony on the Baltic Sea (2001)


This rather lengthy piece on Riga was written in 2001 for a magazine called Hanseatic Business. It coincided with Riga’s 800th anniversary.

RIGA      -       An unfinished symphony on the Baltic Sea

To understand what is happening in Riga today, you simply need to remember the city legend. Since its founding 800 years ago, the people of Riga are routinely visited by a demon that asks whether the city has been completed yet. If the Rigans say that the city is ready, the demon will sink it to the bottom of the Daugava River. Rigans quickly got the hint. The Germans who founded Riga, and the Poles, Swedes, Russians and Latvians that later ruled it, always made sure that the building of Riga never came to a halt.

Since its founding in 1201, Riga has been a living symphony of diverse cultures, orchestrated by changing economic and political forces, written by people who know that they can never let the music stop.

The Riga of  2001 retains that same exuberant, unrelenting character. It is Latvia’s largest city and national capital, but it is also a great deal more. It is a city that was founded with a purpose, and despite changing identities through history, it continues to serve that same purpose in a new Europe and a globalized world.  It is the strategic heart and centre of the Baltic Sea region – Europe’s northern gateway into the Eurasian continent. More than a thousand years ago the Vikings passed through it on their way down the River Daugava to reach Ancient Russia, Byzantium and the Black Sea. Today multinational shippers, traders and financiers are using Riga once again as their preferred location in the Baltic Sea region for growing east-west, north-south business.

Riga’s role as a magnet for international business, politics and culture has never been more important than it is today as Latvia edges ever closer to the European Union and NATO, and as Riga reasserts itself once again as the cultural Pearl of the Baltic Sea. Ten years of Latvian independence has allowed Riga to take full advantage of a democratic system and an open free market economy to attract investment from around the world. This influx of foreign investment is not only renewing the old, (800-year old Riga is on UNESCO’s World Cultural Heritage List) but also creating a great deal new, steadily erasing the scars and neglect of 50 years of austere Soviet rule.

The renewal process has accelerated in each year since 1991, bringing with it new business development, major infrastructure improvements and a growing sense of excitement – you can feel it in the streets that Riga is being reborn once again. U.S. President Bill Clinton made an historic visit here in 1994, and an endless stream of world leaders, international investors and artists have been visiting ever since. In May 2000 the historic Old Riga district completed a well deserved facelift, just in time for the EBRD Annual Meeting and its 2,500 European delegates, most of whom had never seen Riga before. Riga has been the talk of Europe ever since.

While some say that Latvia has been returning to Europe ever since it regained its independence following the collapse of the Soviet Union in 1991, those who come to Riga quickly realise that Latvia never really left. Although Stalin’s Red Army occupied the city in 1940, and the ensuing Cold War may have left it on the wrong side of the Iron Curtain, Riga never lost its European essence or charm. Fifty years of Soviet brand  communism barely made a dent on Latvia’s 800 year old Western European culture. In Riga today, Europe is discovering one of its long lost jewels.

Riga is a European city from its inception. You could say that Riga first joined Europe 800 years ago, when German missionaries and armed crusaders swept into the territory of modern-day Latvia. Although ancient Latvian and Liv tribes had settled this region for centuries, Europe arrived in the person of German Bishop Albert, who, in the name of the Pope, founded Riga in1201 and began building its first churches, fortresses and walls. Native Latvians lived in and around Riga, but from its creation it was the most international of Baltic Sea cities.

It has been a city constantly in motion ever since. As a Medieval Hanseatic city from the 13th until the 16th centuries, it bustled with trade and commerce, and attracted wealth and cultural riches from throughout the region. Even Greek, Arab and other traders from the far Mediterranean were well known in Riga’s Hanseatic ports and markets. Under Swedish rule in the 17th century it was the largest city in the Swedish Kingdom, eclipsing Stockholm across the Baltic Sea. Russia’s Peter the Great coveted Riga as his ‘Window to the West’ and seized it from the Swedes in 1710, setting the stage for a new development boom that would make it one of the richest and most powerful cities of the ‘westernising’ Czarist Russian Empire.

This year Riga celebrates its 800th anniversary, but exactly one century ago the ‘never ready’ Riga experienced a cultural and commercial explosion, that converted it from a walled garrison town and with a bustling river port into an elegant, modern European city. The population reached 400,000, money poured in, and the city blossomed with development, as hundreds of ornate Art nouveau (Jugendstil) apartment and office buildings sprouted up around the carefully planned parks and increasingly elegant boulevards of the city. Anchored by its grand Opera House, theatres, concert halls and museums, Riga became a playground for turn-of-the-century artists and aristocrats, who mingled freely with the politicians and businessmen that spurred the growth of the city. It was city with a lord mayor that was properly British, an administration that was firmly Czarist Russian and a business and cultural community that was prosperously German. Riga’s wealth, high fashion style and provocative elegance prompted many visitors to call it the Paris of the North.

As Riga blossomed, so did the national consciousness of the Latvian people. During this Golden Age of Riga in the second half of the 19th century, the native Latvian population -  subjugated so long by foreign powers -  began to experience a national awakening. In the countryside and cities, Latvians began to develop an awareness of a national identity, rooted in the language, traditions, values and beliefs of their ancestral Baltic tribes. While Latvians were not fated to run their country for seven centuries, it was the local Latvian population that actually made it run. Even as Riga created endless wealth for neighbouring powers, it was Latvians who designed and built the magnificent buildings, administered the local government and private projects, and worked in the offices, shops and factories. The emergence of a Latvian national identity, fed by pride and patriotism, and led by literature and the arts, eventually created the political power necessary to establish Latvia’s full independence on November 18, 1918. Riga became a very Latvian (yet still international) city from 1918 until 1940 and became Sovietised from1940 until 1991. Today, ever-changing Riga has a fresh personna – it is Latvia’s proud contribution to the glittering capitals of a New Europe.

If Riga is a constantly shifting unfinished symphony, then in 2001, Riga celebrates what appears to be the overture to another economic, political and cultural Rennaissance, as it hosts a spectacular series of events to commemorate its 800th anniversary. From June 7 – 10 Riga will serve as the hub of the 21st International Hanseatic Days, hosting thousands of fellow ‘Hansans’  from over a hundred cities in Europe.  From July 25 – 29, Riga displays its deeply Latvian character at the 23rd Latvian Song and Dance Festival. For four days 30,000 Latvians representing choirs and folk dance ensembles throughout the country will pour into the city to fill its historic cobblestoned streets with traditional and contemporary song and dance.

Throughout the year hundreds of concerts, exhibits, conferences and other special events will be held to celebrate Riga’s 800th anniversary, but the festivities are expected to reach a spectacular climax at Riga’s big birthday bash  August 17 – 19. Thousands of visitors from around the world are expected in town to help Riga and the people of Latvia celebrate the 800th birthday of this elegantly rambunctious city.

Riga’s nearly 800,000 inhabitants speak Latvian, Russian and English freely, although German and the Scandinavians languages are becoming increasingly familiar in offices, factories and shops. Riga’s educated labour force serves the ports, the financial industry, state and local government and private enterprise. Latvia’s vigorous 10-year privatisation policy for homes and buildings, has put the majority of Riga’s most lucrative properties into private hands, spurring growth and development, especially in Riga’s bustling downtown area.

Riga is Latvia’s state capital, but it is also rediscovering its role as a cultural centre for the entire Baltic Sea region. Riga has 4 television stations and 12 radio stations, broadcasting in Latvian, English and Russian, and serves as the base of operations for hundreds of independent newspapers and periodicals (including 7 women’s magazines). Latvia is a country of avid readers and the large number of book publishers and book stores in Riga attests to this fact. (The Norwegian Narvessen chain is everywhere in the city, and doing a brisk business. )

While the stately ‘White House’ on Riga Canal – the Riga Opera – has reclaimed its place as the jewel in Riga’s cultural crown, the city’s seven professional theatres, excellent concert halls, countless music clubs and all-night discos add depth and colour to Riga’s always lively night life. In the summer, the colourful squares of Old Riga are teeming with crowds in cafes and beer gardens, yet even in the cold winter months, Riga’s younger generation keeps the clubs and discos jumping all night long. This is one city on the Baltic Sea that never sleeps.

Businessmen, diplomats and tourists from the world over are discovering that Riga not only has some of the finest restaurants in Northern Europe, but a surprisingly large and fascinating variety as well. Riga’s restaurants run from elegant to exuberant, and offer French, Italian, Japanese, Chinese, Russian, Indian, and of course, Latvian, cuisine. And Riga has no shortage of Irish pubs and Internet cafes.

Riga also has its share of stars in the sports and entertainment world. In Latvia, hockey is the national passion, and Latvia’s men on ice are the toast of the town each time they play at home or away. Latvia’s National Hockey Team has qualified for the Olympics and is already building hopes for a medal in Salt Lake City in 2002. Yet Rigans follow the results in the professional National Hockey League as well, since NHL all-stars such as Sandis Ozolins and Arturs Irbe are leading a pack of promising young stars in the league. Basketball and soccer are equally popular, and golf is becoming the hottest new activity in the city. One 9-hole course is already operating, an 18-hole course will soon be completed and a world class golf course and country club is in the planning stages. All are just minutes from the city centre and expect to be very busy.

Richard Wagner once lived and worked in Riga (a street, concert hall and cafe are named after him) but today internationally renowned Latvian composer Peteris Vasks is writing Riga’s most powerful and expressive symphonies. The Latvian Academy of Music and the Riga Opera have produced world class soloists such as Inese Galante, Sonora Vaice, Eline Garance, Inga Kalna, Egils Silins and Ingus Petersons, all of whom are now lighting up the stages of European cities. Violinist Gidon Kramer and the Kramerata Baltica are international hits and former Rigan Mariss Jansons has established himself as one of the world’s premier orchestra conductors as the leader of the Oslo Philharmonic Orchestra and the Pittsburgh Symphony Orchestra.  The New York Times recently reported that Jansons is a leading candidate to take over the helm of the New York Metropolitan Opera.

But music in Riga takes many shapes and forms, and is being heard with increasing frequency around the world. The energetic post-traditional folklore group ILGI are widely known and respected stars of the “world music” scene and Latvia’s hottest rock group, ‘Brainstorm’ (they grew up in nearby Jelgava but now live in Riga)  became a smash across Europe in 2000 when their hit single ‘My Star’ took 3rd place at the Eurovision Song Contest. In a recent Internet poll, ‘Brainstorm’s charismatic lead singer Renars Kaupers edged out Latvia’s President Vaira Vike Freiberga as the person who has done the most to promote Latvia’s reintegration into Europe. Both deserved the honour and both continue to be two of Riga’s most beloved and popular residents.

Post-Cold War Riga has emerged as one of the fastest growing financial, industrial and transit centres in the Baltic Sea region. Passenger turnover at the Riga International Airport (which will complete a major new expansion phase in 2001) has doubled since 1993, and cargo turnover in Riga’s commercial harbour has tripled. Riga has over 22 banks banks, including branches of the German Vereinsbank, French Societe General and  Swedish Hansabank, and a representative office of the German Dresdner bank. International electronic bank transfers are routine and easy, and the ubiquitous ATM machine has become an integral part of Riga’s street scene.

Although Latvia experienced a banking crisis in 1995, thanks to the firm hand of  the Bank of Latvia, and assistance from the World Bank and other international financial structures, Latvia’s banking system today is stable and has once again earned the trust of Latvia’s residents and the international banking community. In 1999 Standard and Poor assigned Riga a “BBB Stable A3” longer term issuer credit rating, with a positive outlook to the municipality of Riga. The credit rating is largely supported by Riga’ strong financial performance, comparatively low debt burden and healthy growth prospects.

The municipality of Riga operates in a newly created economic system that is still characterised by the ongoing redistribution of service responsibilities, equalisation  payments and tax income between the Central and local authorities. Although local fiscal power is largely restricted in Latvia, giving Riga limited expenditure and revenue flexibility, the city has shown a strong commitment to retaining viable finances. Operating surpluses (revenues minus expenses) averaging 6 percent of the operating revenues have been reported each year since the city was vested with autonomous budget responsibilities in 1993.

The city has invested heavily in its engineering infrastructure (the Riga Water Project, Riga Public Transportation Project and Riga Waste Disposal and Processing Project), yet as can be expected in a city that vows never to be completed, a great deal still needs to be done.

About 80 per cent of all Latvia’s enterprises with foreign capital and approximately 50 per cent of the country’s foreign investment stock are located in Riga. Riga has been one of the leading cities in the Baltic region for attracting foreign investment, largely because of its overall economic stabilisation, successful privatisation process and good infrastructure.

The three largest segments of foreign direct investment in Riga during the 90’s have been transport, storage and communication (35%), financial intermediation (25%), and wholesale and retail trade (15%). According to a recent EU PHARE report, the ten sectors of Riga’s economy most attractive to foreign investors are:

-        manufacture of food products and beverage/food processing

-        information technologies

-        manufacture of electrical machinery

-        manufacture of fabricated metal products and machinery

-        wood processing and paper production

-        manufacture of chemicals and chemical prpoducts;pharmaceuticals

-        manufacture of textiles

-        tourism and hotels

-        transport and transit

-        finances

In 2001 Latvia has embraced the Information Age and Riga has become the centre of an ambitious plan to make Latvia the recognised regional leader in the information technology and telecommunications sector (IT & T). 150,00 Rigans study in over 200 city schools and 21 higher educational establishments in the city. Riga’s universities and technical schools are preparing over 5,000 IT&T students presently and the number of graduating IT students is expected to triple over the next 3 years. The Riga International College of Business Administrationis is now offering professional training for future E-commerce managers. The Stockholm School of Economics in Riga offers business administration courses in English, taught by Western-educated professors.

Software companies such as Lotus, Oracle, Novell and Microsoft also offer IT training programs and IBM is contributing to computer courses at the University of Latvia. In the beginning of 2001 the Latvian government announced its intention to convert to a totally e-government system, streamlining its bureaucracy and facilitating greater information and transparency in all public affairs.

This is possible in part because of the vigorous free competition in the data-communications sector. Several companies operate in this area and provide both fixed-line and wireless communications solutions. Service is provided by the large privatised local phone company, Lattelekom, and by international providers such as Telia and Equant. Approximately 35 Internet Service Providers (ISP’s) operate in Latvia, and the vast majority operate from Riga. The are undergoing rapid consolidation. The most popular types of communication are 56K and ISDN dial-up connections, although radio links are becoming popular in the business community.

Latvia has one of the highest mobile telephone penetrations rates (20%) in Eastern Europe; in Riga the rate is 35% and growing. The competition between the two existing GSM connection providers has resulted in increasingly lower prices and a license for a third lucrative GSM network operator was recently granted.

In a city like Riga, where constant growth, change and development is an 800-year tradition, the incentives for foreign investment are substantial. While 50 years of Soviet rule did add a few odd (some would say ugly) buildings to the city, communism’s greatest impact on Riga came from sheer municipal neglect of all that was already there. Grand turn-of-the-century buildings, elegant residential neighbourhoods and a highly attractive commercial district were either clumsily converted to utilitarian (often military) purposes, or simply left to gather dust. Today, with an infusion of local and foreign capital, they are all coming back to life again.

The state and municipal governments offer competitive incentive packages and projects proposals, with no restrictions on foreign investment. There is a free land market to develop and foreign companies are encouraged to participate in the privatisation process. Many major development projects have been successfully completed and the state and municipal bodies are learning how to better support the goals and interests of the private sector.

The city that can’t stop building itself has a number of ambitious projects for the early part of the 21st century that are sure to keep the legendary demon away.  The Latvian government is still formulating a funding package for the spectacular National Library project intended for the left bank of the River Daugava, which many believe will be join the Sydney Opera House as a world famous city landmark. The city hopes to build a major international convention and trade centre nearby, which would anchor Riga’s role as a gateway between east-west/north-south trade. A new transport corridor (bridge or tunnel) is planned across the Daugava and a modern  ‘Aquapark’ complex is on the drawing boards for Riga’s extremely popular Mezaparks culture and recreational park. Mezaparks already features a massive outdoor theatre that serves as the main site for the Song and Dance Festival’s 30,000 performers and spectators, and has hosted such international stars as Joe Cocker, the Pet Shop Boys, BB King and Brian Adams.

The city of Riga is indeed on the move again. During 2001, the organisers of Riga’s 800th anniversary are calling it  ‘the city of inspiration’.  As Latvia joins the rest of Europe in building the new Europe of the 21st Century, it is very likely that the inexhaustible energy of this city on the Baltic Sea will no doubt serve as an inspiration to many. Its unfinished symphony plays on.

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