VZCZCXRO8694
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHRA #0110/01 0461142
ZNY CCCCC ZZH
P 151142Z FEB 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 3764
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 RIGA 000110 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/15/2017 
TAGS: PREL ECON CVIS ETRD PINR RS LG
SUBJECT: RUSSIAN AMBASSADOR: RELATIONS WITH LATVIA GOOD, 
BUT LATVIANS BAD 
 
REF: A. A) 06 RIGA 519 
     ¶B. B) 06 RIGA 481 
 
Classified By: Ambassador Catherine Todd Bailey for Reason 1.4(d) 
 
¶1. (C) SUMMARY:  In a February 14 meeting, Ambassador Bailey 
and Russian Ambassador Kalyuzhny discussed the possibility of 
inclusion of non-citizens in the Visa Waiver Program; 
Kalyuzhny's view that there was a potential for significant 
transit cargo growth at the Freeport of Riga if the Latvians 
would develop a better strategy for the port; the state of 
Latvian education and Kalyuzhny's allegations of poor 
treatment of the Russian-speaking minority in Latvia. 
Kalyuzhny expressed appreciation for the USG and Ambassador 
Bailey's support for the proposed Latvia-Russia border 
treaty, and said that overall the Russia/Latvia bilateral 
relationship was in good shape.  Nevertheless, he continued 
his standard criticism of the treatment of the 
Russian-speaking minority in Latvia, charging that it was a 
"virus" that could "infect" the rest of Europe. END SUMMARY. 
 
¶2. (U) Ambassador Bailey met for over two hours with Russian 
Ambassador Victor Kalyuzhny at the Russian Embassy on the 
morning of February 14.  Kalyuzhny was accompanied by his 
DCM, political counselor, and his personal assistant 
(translator).  Embassy pol/econ chief, pol/econoff 
(notetaker), and Embassy translator accompanied Ambassador 
Bailey.  The Russian Embassy in Riga just completed a 
substantial renovation to the chancery.  Kalyuzhny was 
clearly proud of the improvements to his Post, and took some 
time to give Ambassador Bailey an extensive tour of the 
premises. 
 
Speeches in Munich 
--------------------------------------------- --- 
 
¶3. (C) Kalyuzhny opened the meeting with a reference to the 
comments made at the Munich security conference.  He 
underscored that Putin had referred to President Bush as "his 
friend" in his speech and Kalyuzhny stressed that it was 
normal that there would sometimes be differences between the 
U.S. and Russia.  He said he hoped that Secretary Gates'scomments did not suggest that the U.S is preparing for a new 
war with Russia.  Ambassador Bailey responded by stressing 
that there is not a new cold war with Russia and that the 
U.S. values Russia as a partner in addressing a number of 
issues, including the recent six-party agreement on North 
Korea. 
 
Visa Waiver Program 
--------------------------------------------- ---- 
 
¶4. (C) Kalyuzhny asked Ambassador Bailey for a status update 
on the Visa Wavier Program (VWP), inquiring as to whether it 
is realistic to expect Latvia to eventually join the program. 
 Ambassador Bailey outlined the recent history of the program 
and President Bush's Tallinn initiative to bolster the 
program with a further emphasis on security but more 
flexibility on refusal rates.  Kalyuzhny urged that, should 
Latvia join the VWP, the USG treat non-citizen residents of 
Latvia the same as Latvian citizens for purposes of travel to 
the United States.  Ambassador Bailey stated that Embassy 
Riga currently treats Latvian citizens  and non-citizen 
residents the same on the visa line and that there are 
comparable issuance rates for the two groups. 
 
The Latvian Business Climate and Riga Freeport 
--------------------------------------------- ---- 
 
¶5. (C) In response to a question on our efforts to promote 
American businesses in Latvia, Ambassador Bailey detailed 
several recent US investments by General Electric and 
Jeld-Wen Company (a door skin manufacturer).  Kalyuzhny 
reflected on changes to the Latvian economy in recent years, 
with a reduction in manufacturing, noting in particular the 
closure of sugar refineries mandated by the EU. 
 
¶6. (C) Noting our efforts to improve security and 
transparency there, Ambassador Bailey asked Kalyuzhny for his 
sense of the business climate at Riga Freeport.  Kalyuzhny 
articulated a critique of the stagnation of Riga Freeport 
that focused on internal Latvian politics, uneven 
privatization of the land at the port, and a jockeying for 
short-term advantage by entrenched business interests as 
reasons Latvia has not taken full advantage of what could be 
a thriving, profitable national asset.  Noting Russia's 
discussions of a common tariff policy with China, India, and 
Kazakhstan, Kalyuzhny thought that Riga could benefit from 
the increased overland transport this would create.  He 
suggested that as many as 1 million containers a year could 
transit Riga, but significant infrastructure improvements 
would be needed at the port, which he said currently handles 
 
RIGA 00000110  002 OF 003 
 
 
only 170,000 containers annually.  Kalyuzhny blamed the 
center-right New Era party, which currently hold's the 
position of Riga mayor, for many of the problems, saying they 
are "sawing off the branch on which they are sitting."  He 
noted as an aside that Russia was hesitant to use Ventspils 
Port for major business so long as Aivars Lembergs remains 
Mayor of Ventspils--due to what he claimed to be Lembergs' 
unpredictable behavior.  (Comment: Lembergs has gotten 
himself crosswise with the Russian oil and gas industry, 
likely over kickbacks he wanted for the transit of Russian 
oil through Ventspils.  Given Kalyuzhny's connections with 
that industry, it is not surprising that he would be so 
critical of Lembergs.  End comment.) 
 
Border Treaty Between Latvia and Russia 
--------------------------------------------- ---- 
 
¶7. (C) Ambassador Bailey next raised the border treaty and 
commented that the Latvian political leadership should be 
commended for working well together to move the treaty 
forward.  Kalyuzhny thanked Ambassador Bailey for her support 
and encouragement of the Latvians on this issue.  He said 
that the current overall state of the Latvia-Russia bilateral 
relationship was good, commenting that there is now a 
"dynamic perspective" between Latvia and Russia.  "The border 
treaty is the base, and it is now the task of the diplomatic 
corps in Latvia to help the GOL go through."  He added that 
the "broader perspective" on relations between the two 
countries is "looking really good," and that there may be 
progress in other areas such as transit policy.  He 
contrasted this with the situation with Estonia where, 
referring to the debate on the bronze soldier statue, he said 
"maniacs" were in charge, and that people like that should be 
"separated from society" and "given treatment."  Kalyuzhny 
noted that there had been previous proposals to tear down the 
Soviet WWII victory monument in Riga, but said that seemed to 
be in the past. 
 
Latvian Education and the Plight of the Russian Minority 
--------------------------------------------- ---- 
 
¶8. (C) Although generally positive on the bilateral 
relationship, Kalyuzhny spent the next 20 minutes disparaging 
the state of public schools in Latvia and decrying the plight 
of the Russian minority population.  He sketched a vision of 
the Latvian educational system sliding slowly into the abyss, 
with many Latvian students no longer qualified to study at 
Russian universities.  He contrasted this situation with the 
excellent schools in Latvia during the Soviet era, noting 
that all current Latvian government leaders were educated in 
this system.  As with the port, he blamed the New Era party, 
from its time in national government, for much of the 
decline, pointing particular blame at the education minister 
who oversaw legislation to increase the mandatory use of 
Latvian language in high schools.  In response, Ambassador 
Bailey highlighted U.S. cooperation with Latvia to help 
improve education--including Post's efforts to catalyze a 
nursing education partnership that will link Stradins 
University in Latvia with Bellarmine University in 
Louisville, KY.  She also described the Fulbright program, as 
well as other scholarship programs. 
 
¶9. (C)  Kalyuzhny repeatedly urged Ambassador Bailey to 
advocate on behalf of the Russian-speaking minority in 
Latvia, intermingling issues of education and citizenship. 
He said that Latvia's unfair treatment of its 
Russian-speaking population, especially its laws on the use 
of the Latvian language, are "a virus" and "a flu" that have 
the potential to infect the rest of Europe.  While praising 
transport minister Slesers proposal to allow non-citizens to 
vote in local elections, Kalyuzhny said that Latvia needed to 
rethink its entire policy on citizenship.  History and 
language tests were unfair requirements and, at a minimum, 
people over a certain (unspecified) age should be granted 
automatic citizenship if they have lived in Latvia for a 
certain number of years.  Ambassador Bailey, while noting 
that the U.S. requires language and history tests for 
citizenship, refused to be drawn into Kalyuzhny's attempts to 
insert us into this issue. 
 
June Presidential Elections in Latvia 
--------------------------------------------- ---- 
 
¶10. (C) Discussing the upcoming presidential elections in 
Latvia, Kalyuzhny said that the next President needs to be a 
"real Latvian," someone who has lived the majority of their 
life in Latvia, rather than a returned expatriate; that 
he/she will not be "politically impartial," but rather will 
have connections to the ruling coalition; and that the next 
president will be weak in relation to the current one (and 
noting that this was the correct role under the Latvian 
constitution). 
 
RIGA 00000110  003 OF 003 
 
 
 
¶11. (C) COMMENT: Kalyuzhny was recently the subject of an 
editorial in the most influential Latvian language daily 
urging the GOL to request that Moscow remove him for his 
alleged "improper interference" in Latvian internal affairs. 
His rhetoric in this meeting on treatment of the ethnic 
Russian population was a glimpse of some of what he has said 
that so rankles the Latvians.  And he was more bombastic than 
in his previous meeting with us in June.  Nevertheless, he 
seemed to separate those issues from the overall 
Russian-Latvian relationship.  He also went to great lengths 
to emphasize the importance of the U.S. ) Russia 
relationship and to downplay Putin's speech in Munich and 
thank us for our support for the border treaty.  Although we 
found common cause with the need to develop the Riga port, 
his criticism of New Era, which has fought for greater 
transparency at the port, means that we are unlikely to agree 
on the methods for improving the port.   We continue to find 
these sessions valuable as an insight to Russian thinking on 
Latvia.  END COMMENT. 
BAILEY