Editor’s Focus: Eye on Latvian Real Estate (part 2 of 2)

By Oleg K. Temple, October 2009.

Unless you've read part one of this article (and perhaps even if you have), you may think I've gone soft in the head when you read the next phrase: it is a good time to be in Latvia! Sure, prices for real estate have crashed through the basement and (largely due to the 3% VAT increase in January this year with another +2% VAT hike looming in 2010) commodity prices have escaped up the chimney taking consumers' income with them in a puff of smoke.

Read more..

Latvia: Milestones on the Road to Economic Recovery

By Oleg K. Temple, October 2009.

So let's pick up where we left off, thus far we have examined the factors that significantly eroded the competitiveness of Latvia such as unwarranted wage increases and low productivity. We have established that Latvian policy makers under the firm hand and watchful eyes of the IMF, the European Commission and other powers have opted for the high road of domestic discipline and restrained spending while uprooting and eradicating problems that have disharmonized the economy. By choosing to crack down on the problems of the economy and reinforce the foundations for sustained competitiveness, the programme aims to avoid the ephemeral success of floating the Latvian lat, while sweeping the real problems under the rug. Experts agree that for the first time, the young country's government seems to be doing what is actually needed, but is it too little too late? Is there a chance that the crisis will continue to escalate until it boils over and the government buckles to the devaluation sermons of the Scandinavian press?

Read further here.

Baltic Tiger: In the Eye of the Storm

By Oleg K. Temple, October 2009.

Unemployment, defaults, foreclosure and bankruptcy have become the bywords of our time. The domino effect that hit the rest of Europe in 2008 was but a glancing blow to some countries such as Norway. The country domestically contained the crisis largely, by virtue of being outside the EU and continued full sail in true Norse fashion. Currency Expert Chuck Butler* comments that the Norwegian krone is HSBC's preferred G10 currency where the bank expects a sustained appreciation over the next 18 months. Whereas the crisis wasn't as kind to Latvia, Lithuania and Estonia, countries that were much more vulnerable, colliding with the recession maelstrom head-on. Indeed, the Baltic countries were caught off-balance in their 3^rd stage of transition to the Economic Monetary Union of Europe. After a decade of unprecedented growth without foundations and safety measures, the inexorable economic law kicked in and the Baltic house of cards built on the shifting marsh of inexperience imploded with a bang. Today, the dust is beginning to settle and it is time to look to the future.

Read further here.

Editor's Focus on Business

By Oleg K. Temple, September 2009.

This month we're kicking off a new series of articles entitled "Editor's Focus" with the aim of illuminating the dark recesses of business to give you an insight of how experts navigating the dangerous waters of mid- and post-crisis economies are keeping their decks dry. Join me, Oleg K. Temple on a thrilling quest for clarity amidst the chaos and meet the giants that thrive atop the tough, green-leafed beanstalks of business.

Read further here.

BBC reports that the super-rich of Russia are losing their influence in politics as well as a large portion of their wealth due to the crisis. It's about time that Russia's oligarchs got a taste of the real world. Mr. Maxim Kashulinsky of Forbes Russian Edition says that they work better under pressure? I disagree, they get more done when no one's watching is more like it. In times of crisis when everyone (including the government) needs money, it is so much easier to get officials to bend the rules when it comes to things like public safety, waste management and environmental issues, taxes, import/export duties, etc. The courts are drowning in cases with everyone suing everyone. Quick deals are made behind closed doors, away from the prying eyes of the press and in all this chaos the gears of business turn smoothly greased along by "strategic investments" and "special favours". Yes, the oligarchs, even those who went from the status of billionaire to millionaire within a couple of months, can really get a lot done for a lot less. Yes, they work much better in this time of crisis when the officials are either off chasing their tails or sitting near their table on hind legs begging for tasty morsels. The crisis defines them, how else does one become a billionaire in less than 10 years? Many major actors, business people and hoteliers cannot claim that status after a lifetime or even a family history of achievement and people just from beyond the iron curtain say they earned that money honestly? I don't think so...