Latvian Soviet Socialist Republic - Economy

Economy

The Soviet period saw rebuilding and increase of the industrial capacity, including the automobile (RAF) and electrotechnic (VEF) factories, food-processing industry, oil pipelines and the bulk-oil port Ventspils.

Part of the incorporation of the Latvian SSR into the Soviet Union was the introduction of the Russian language into all spheres of public life. Russian became a prerequisite for admission to higher education and better job occupations. It was also made a compulsory subject in all Latvian schools. Vast numbers of people were needed for the new factories and they were purposefully sent there from different parts of Russia, thus creating a situation wherein bigger towns became more and more russified up until the 1980s.

National income per capita was higher in Latvia than elsewhere in the USSR (42% above the Soviet average in 1968). After the collapse of the Soviet Union, all of the economy branches associated with it collapsed as well. While a significant Russian presence in Latgale predated the Soviet Union (~30%), the intense industrialization and the heavy importation of labor from the Soviet Union to support it, led to significant increases in the Russian minority in Riga, even forming a majority in Latvian urban centers such as Daugavpils, Rēzekne, Ogre. Those areas were also hardest hit economically when the Soviet Union collapsed, leading to massive unemployment. Sharp disagreement with Russia over the legacy of the Soviet era has led to punitive economic measures by Russia, including the demise of transit trade as Russia cut off petroleum exports through Ventspils in 2003 (eliminating 99% of its shipments), after Latvia refused to sell the oil port to the Russian state oil company, Transneft. The result is that only a fraction of Latvia's economy is connected with Russia, especially after it joined the European Union.