Introduction:
After a brief period of independence between the two World Wars, Latvia was annexed by the USSR in 1940 - an action never recognized by the US and many other countries. It reestablished its independence in 1991 following the breakup of the Soviet Union. Although the last Russian troops left in 1994, the status of the Russian minority (some 30% of the population) remains of concern to Moscow. Latvia joined both NATO and the EU in the spring of 2004.

Location: Eastern Europe, bordering the Baltic Sea, between Estonia and Lithuania

Population: 2,274,735 (July 2006 est.)

Languages: Latvian (official) 58.2%, Russian 37.5%, Lithuanian and other 4.3% (2000 census)

Country name: conventional long form: Republic of Latvia
conventional short form: Latvia
local long form: Latvijas Republika
local short form: Latvija
former: Latvian Soviet Socialist Republic

Capital: name: Riga
geographic coordinates: 56 57 N, 24 06 E
time difference: UTC+2 (7 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins la

Economy - overview:
Latvia's transitional economy recovered from the 1998 Russian financial crisis, largely due to the government's budget stringency and a gradual reorientation of exports toward EU countries, lessening Latvia's trade dependency on Russia. The majority of companies, banks, and real estate have been privatized, although the state still holds sizable stakes in a few large enterprises. Latvia officially joined the World Trade Organization in February 1999. EU membership, a top foreign policy goal, came in May 2004. The current account deficit - 15.7% of GDP in 2006 - remains a major concern. The perception that many of Latvia's banks facilitate illicit activity could damage the country's vibrant financial sector.