VZCZCXYZ0003
PP RUEHWEB

DE RUEHRA #0923/01 3101604
ZNY CCCCC ZZH
P 061604Z NOV 06
FM AMEMBASSY RIGA
TO RHEHNSC/NSC WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 3514
INFO RUEKJCS/SECDEF WASHDC
RUEHNO/USMISSION USNATO 2140

C O N F I D E N T I A L RIGA 000923 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 11/06/2016 
TAGS: PREL OVIP PRESIDENT LG
SUBJECT: SCENESETTER FOR BILATERAL BETWEEN PRESIDENT BUSH 
AND LATVIAN PRESIDENT VAIRA VIKE-FREIBERGA 
 
Classified By: Ambassador Catherine Todd Bailey for Reason 1.4(d) 
 
¶1. (C) Mr. President, we are extremely honored that you will 
visit us November 28-29.  Over two years into NATO and 
European Union membership, Latvia has emerged as a 
significant international player, despite its modest 
population and resource base.  Latvia stands out as a 
successful post-Soviet society that has become a respected 
voice in the international community.  Strong memories of 
occupation and oppression strengthen Latvia's resolve to 
reach out to countries near and far striving to join the 
forward march of freedom.  Latvia has troops on the ground in 
Iraq and Afghanistan, and remains solidly Transatlanticist in 
its orientation.  The country remains one of the fastest 
growing economies in the European Union.  Its geographic 
position offers great potential as a stepping-stone for U.S. 
exports and investors.  Embassy Riga daily makes it a 
priority to expand bilateral trade and investment.  Latvia's 
support for pro-market, pro-free trade policies is important 
to the U.S., especially in European and international 
organizations.  Your meeting with President Vaira 
Vike-Freiberga provides an excellent opportunity to reinforce 
our partnership with Latvia in projecting freedom, democracy, 
and market-based prosperity. 
 
President Vike-Freiberga 
------------------------ 
 
¶2. (C) Latvia's hosting of the summit is a real capstone for 
President Vaira Vike-Freiberga and what she will add to her 
legacy.  It is indicative of the high personal regard in 
which she is held within the alliance that a country of 
Latvia's small size would host the summit.  But her excellent 
reputation extends beyond Europe.  Her candidacy for 
Secretary General of the United Nations, with an emphasis 
 
SIPDIS 
that selection of this important post should be based on 
merit rather than a regional rotation, that it was time for a 
female Secretary General, and the need for reform at the UN, 
was short but she rapidly moved into third place--even though 
some candidates had been in the race for nearly two years. 
Her performance in the race will likely open doors for her as 
she considers her options after her term in office ends next 
July. 
 
Expanding Bilateral Trade and Investment 
---------------------------------------- 
 
¶3. (U) Latvia's open, agile and expanding market-oriented 
economy provides U.S. companies a promising export and 
investment destination in a newly-enlarged EU.  The country 
has created a very business friendly environment that is 
attractive to foreign companies, and the country is 
experiencing explosive GDP growth (10.2 percent in 2005).  In 
May of this year, Embassy Riga and the Government of Latvia 
staged an extremely successful Pan-Baltic Trade and 
Investment Conference focused on American business. 
President Vike-Freiberga opened the conference (with the 
Prime Minister in attendance) to an audience of approximately 
150 business people from the U.S. and the Baltic states.  She 
also held private meetings on the margins with a number of 
the U.S. businesses that attended--to thank them and 
encourage further trade and investment.  At the conclusion of 
the conference, two firms announced plans to expand their 
presence in Latvia.  In many ways, Latvia is still a land of 
discovery for Americans and American companies, and 
strengthening economic ties between Latvia and the United 
States is a top priority for this Embassy. 
 
¶4. (SBU) American companies have invested more than 350 
million dollars in Foreign Direct Investment in Latvia during 
the last decade.  The financial sector is expanding rapidly, 
and GE Money is an American firm taking full advantage of 
these opportunities.  The company entered the Latvian market 
in 2004 and has grown extremely quickly.  GE Money is in the 
process of acquiring a local bank so that it can further 
expand its presence in Latvia and become a full service bank. 
 There are excellent prospects in manufacturing as well. 
Earlier this year, American door and window manufacturer 
Jeld-Wen opened a wood fiber plant near to town of 
Aizkraukle.  This represented a 60 million dollar investment, 
and is the single largest foreign investment in the 
manufacturing sector in Latvia in the past decade.  In 
October, U.S. firm New Century Holdings began construction of 
a new glass manufacturing facility called Groglass.  This 
facility will use cutting edge technology to produce a 
special type of glass that has increased transparency (allows 
more light to pass through).  The amount of the investment in 
this new facility is expected to be around 30 million 
dollars.  Another sector presenting opportunities to American 
firms is infrastructure.  We expect a major American hotel 
 
chain to open in Riga by 2010. 
 
Elections 
------------ 
 
¶5. (SBU) Latvia's October 7 parliamentary elections, the 5th 
since independence was restored in 1991, provided a vote of 
confidence in the incumbent minority government of Prime 
Minister Aigars Kalvitis.  Kalvitis' government has focused 
on low taxes and creating a pro-business environment, while 
building good relations with the US and Europe and 
simultaneously working to improve the strained relationship 
with Russia.  Kalvitis will continue as PM and little change 
in policy is expected as a result of the election.  The big 
surprise in the election was the unexpected success of the 
center-left, Russian-oriented Harmony Center party which 
bested its more strident competitor, a party named For Human 
Rights in a United Latvia (PCTVL). 
 
Tolerance 
--------- 
 
¶6. (C) One political theme that I hope you can touch on 
during your meeting with President Vike-Freiberga is 
tolerance, inclusion and respect for others.  One of the 
legacies of Soviet rule is a distrust of differences and a 
tendency to focus on the past rather than looking forward. 
This manifests itself in a variety of ways.  Attacks on 
individuals of color, including an Embassy family member, 
attributable to racism are too often chalked up to 
"hooliganism."  Attempts by Riga's small gay community to 
hold a pride march were met by violence and the interior 
minister said that securing the event would be a bigger 
security challenge than the NATO Summit.  These attacks 
violate basic human rights.  In addition, there is still 
tension between ethnic Latvians and the sizable ethnic 
Russian population, particularly over language issues.  When 
you were here in May 2005 you stressed that Latvia is now a 
multi-ethnic society that has the responsibility to reach out 
to all who share the future of Latvia.  Your continued 
assistance in stressing this message would be greatly 
appreciated. 
 
Visa Waiver 
----------- 
 
¶7. (C) Latvia has long advocated entry into the Visa Waiver 
Program (VWP), and the Latvians assiduously raise this issue 
at every opportunity with U.S. Government officials who visit 
the country.  To most Latvians, admission to the VWP would 
symbolize that Latvia is fully accepted in the community of 
Western nations and that the US fully recognizes Latvian's 
contributions.  Latvia has taken a number of steps to become 
compliant with VWP criteria.  For example, the country will 
soon begin issuing biometric passports that include digital 
facial recognition.  While the non-immigrant visa refusal 
rate for Latvians has dropped in recent years, it still 
remains substantially higher than the 3 percent permissible 
under VWP legislation. 
 
¶8. (SBU) My Embassy team and I believe that your visit will 
highlight to the Latvians the strength of our bilateral 
relationship and continue discussions on some of the economic 
and social issues that are crucial to Latvia's future 
success.  It is an honor to have you visit twice in 18 months 
a country as you well know that serves as a very strong 
partner. 
BAILEY