Historical similarities and strong willpower

Maintaining an active political dialog, strengthening economic cooperation and promoting cultural ties, especially people-to-people contacts; these are the goals of the Ambassador of Latvia to Hungary, Vilmārs Heniņ¹. In a recent extensive interview with Diplomacy&Trade, he discusses political, economic and cultural ties with Hungary, including the development of tourism because it facilitates people-to-people contacts between the two nations.

Vilmārs Heniņ¹ took up his position as the Latvian Ambassador to Hungary in September 2016.  He tells Diplomacy&Trade about the objectives he set for himself at that time. “It was not very difficult because I had an excellent legacy from previous ambassadors who created a very good background for my job. Like my predecessors, my activities here are based on three main principles: to maintain active political dialog, to strengthen economic cooperation and to promote cultural ties, especially people-to-people contacts.”

Ten years in Budapest

The Latvian Embassy in Budapest celebrates its 10th anniversary this year. According to the Ambassador, there were several reasons for the establishment of the embassy in 2007. “We decided to open an embassy here because Hungary was and is a very important regional player with huge and historical experience. It was also taken into consideration that Latvia and Hungary are like-minded countries in various matters, for example, supporting and promoting the EU Eastern Partnership policy and the EU enlargement policy towards Western Balkans.

As for Latvian-Hungarian political relations, Ambassador Heniņ¹ points out that they are excellent. “Looking back on the last two years, we have seen quite intensive political cooperation including visits and meetings. In 2016, we celebrated the 25th anniversary of re-establishing diplomatic relations that were originally signed in 1921 (and then again in 1991). It was after my arrival that the Latvian foreign minister visited Hungary, while from the Hungarian side the head of the Hungarian Parliament’s Foreign Affairs Committee and – last June – the Hungarian foreign minister went to Latvia. The same month, the Speaker of Latvian Parliament visited Hungary. Of course, there is also cooperation in the framework of the 16 + 1 group (of China and Eastern Europe): the Hungarian Prime Minister visited Latvia in November 2016, participating in the 16 Plus One conference while the Latvian Prime Minister was here in Budapest for the same purpose in November 2017. So, I would say we have a very intensive political dialogue. We also have plenty of cooperation on the ministerial level, especially in EU affairs of mutual interest like the Eastern partnership and the Western Balkans.”

A good example of regional cooperation mentioned by the ambassador is the one between the NB 8 (Nordic - Baltic) Group and the Visegrád Four – these are regular foreign ministers’ meetings held annually, which are useful forums for the exchange of views on different matters.

Air policing

Latvia and Hungary cooperate in the area of defense, as well. The two countries have signed a number of cooperation documents between the Ministries of Defense. There have been a number of visits, including that of the Commander of the National Armed Forces to Budapest. Hungary has given a significant contribution to strengthening regional security in the Baltic region. Hungarian air force jets took part in the Baltic Air Policing Mission in the second half of 2015 and are scheduled to do it again in 2019. “We highly appreciate Hungary's participation in this mission of deterrence that strengthens NATO'S eastern flank. I believe it is a strong demonstration of solidarity by Hungary towards Latvia, towards the Baltic States,” the Ambassador points out.

Stable growth in trade

The former Latvian ambassador to Hungary, Imants Liegis told Diplomacy&Trade four years ago that, “there is a lot of scope in increasing the volume of bilateral trade” between Latvia and Hungary. In this regard, Ambassador Heniņ¹ highlights that “we can see a stable growth in the volume of bilateral trade. In 2017, this figure increased by some 40%, although, the growth was not balanced: Latvian exports increased by 7% and a Hungarian exports by over 30%. The most important thing is that we see growth in the volume of trade and in the interests of business people to increase this cooperation.” Many Latvian brands, some that are internationally known, are present in the Hungarian market. Mentioning some examples, he points to the timber company Latvijas Finieris and the cosmetics firm Stenders. “If we are speaking about new technologies, we have the telecommunication and data transmission equipment providers Mikrotikls and SAF Tehnika, while in the food industry, Latvia has a famous company, Kaija whose fish products are widely available in Hungary. So, there is always potential, but it depends on the opportunities business people see in the market. The role of our embassy is to provide the necessary additional support, this is why we are organizing several events for promotion. For instance, at the end of March this year, an economic seminar will be held in Riga with the aim of enhancing our cooperation further,” he adds.

The Ambassador highlights that the embassy – just as he himself – is interested in promoting tourism. “It is because it is not only about business, but also about people-to-people relations, it’s about getting to know each other a bit better. We have organized several trips for Hungarian journalists and tourism operators to Latvia, to explore tourism opportunities and possibilities there. The Hungarian government has policies for opening to the East and to the South. I would suggest for Hungarians to also open to the North regarding tourism. Latvia has 500 kilometers of sandy beaches. We are a safe country and prices are quite friendly by Hungarian standards. We are a green and clean country with high quality services for tourists. Of course, we have to mention the direct flight connection between Riga and Budapest, by our national airliner company Air Baltic, three times per week. They will put into service their newly bought Bombardier C300 aircraft on this route.”

Euro recommended

In January 2014, Latvia became the 18th country to replace its national currency with the euro. With regards to his country’s – and the Latvian people’s – experience with the euro and whether he would recommend it to decision-makers in Hungary, Ambassador Heniņ¹ points out that “in general terms, this decision gave comprehensive stability for the country’s national economy and the financial system. It gives us not only the feeling but also the practical experience that we belong to the core of the EU. If you look at the figures pre-euro and post-euro, one consequence was that our credit rating increased by two levels. As for the government bond rates, it changed from 3.25% before 2014 to the current 0.71%, which means that over these four years, we saved an amount equivalent to about 0.6% of our GDP. The private sector took advantage of the low interest rate. According to calculations by experts at the Bank of Latvia, introduction of the euro significantly decreased the interest rate for house or apartment purchases (in Latvia this interest rate is about 2.3%, comparing with 6.4 % in Hungary). It significantly reduced interest rates for business deals in the private sector, as well. Banks and private businesses in Latvia have saved EUR 70 million per year due to the fact that there is no need for conversion of currencies. Investments increased by around 10%, while the rate of unemployment is down around by 10,000. Joining the euro-zone also eliminated the risks of devaluation. Money transfers to other euro-zone countries are faster and cheaper. So, our experience after these four years is definitely positive.”

Retaining the population

Emigration to more developed countries within the European Union is not only a Hungarian phenomenon. According to statistics, over 300,000 people have emigrated from Latvia since the year 2000. The Ambassador says “this was characteristic especially during and after the 2008-09 world economic crisis. We really feel the consequences of emigration. First of all, it is about the shortage of the qualified working force (just like in Hungary). Our government takes this situation seriously, we have a special remigration plan to slow down and reverse this process, but this will take a long time. One impetus for remaining in Latvia would be further improvement of living standards and salary increases. Some experts believe that a monthly salary of EUR 1,000 would be an indicator for people to seriously consider staying instead of moving to Western Europe.”

Cultural relations

In March 1997, the Hungarian and Latvian governments signed an agreement in Budapest on cultural, scientific and educational cooperation between the two countries. “Generally speaking, our cultural relations are quite good. The main focus is on music, but, of course, other branches of art are also represented. For example, in 2017, the Latvian chamber orchestra Kremerata Baltica gave several concerts with the Concerto Budapest Symphony Orchestra and they even went on a joint Asian tour! Very soon, they will be in Hungary again as participants of the Budapest Spring Festival, accompanied by Argentinian pianist Martha Argerich. The duo of Latvian pianist Diana Zandberga and Hungarian cellist Ágnes Kállay is also a fruitful cooperation, dating back to 2013, when they interpreted chamber music by Latvian and Hungarian composers. They will perform at the Embassy’s centennial reception in November this year. Back in 2015, opera singer Elina Garanca performed with the Budapest Philharmonic Orchestra and the following year, the Budapest Festival Orchestra went on tour to Riga. Apart from music, the Latvian New Theater also performed in Budapest in 2017 in the framework of the MITEM Festival. At the exhibition ‘Design without borders’ hosted by the New Budapest Gallery last year, Latvian designer Raimonds Cirulis was an award winner. In late 2017, the Riga Poetic Documentary School participated at the Versio Film Festival here, in Budapest. Just this January, Latvian circus artist Andrejs Fjodorovs received a silver prize at the Budapest International Circus Festival. Finally, it is important to mention the Latvian language teaching activities at the Institute for Baltic and Slavic Languages of Eötvös Loránd University. The embassy’s cooperation with the institute has been long-lasting and always excellent,” Ambassador Vilmārs Heniņ¹ concludes.

Trade figures

According to the latest figures available, the turnover of bilateral trade between Latvia and Hungary in the first nine months of 2017 was EUR 152.3 million. This included Latvia’s export to Hungary in the amount of EUR 34.8 million (an increasing of 7%) and Hungarian exports to Latvia worth EUR 117.5 million (increasing by 36%).

The main product groups for Latvian exports composed of machinery and mechanical appliances; electrical equipment (35%), timber products (25%), Pharmacy and cosmetics (14%), peat (5%) and food (3%), while Latvian import items from Hungary were mainly made up of machinery and mechanical appliances; electrical equipment (43%), chemical products (20%), transport vehicles (14%), food (5%).

Livs: Finno-Ugric relatives

As Ambassador Heniņ¹ explains, “in Latvia, we have a small group of indigenous people with Finno – Ugric roots – Livonians (or Livs) who have had great significance in the development of the modern Latvian language and culture. We still have around 200 people who recognize themselves of belonging to this group of Finno-Ugric origin and they are, therefore, distant relatives of the Magyars. Their language is close to Estonian and Finnish, two other peoples with Finno-Ugric roots in the region. The Livonians, living mainly on the western coast of Latvia (also known as the Livonian Coast), have their own cultural traditions, have their own cultural association and cultural center. A special Livonian Community House was built in 1939 – partly with support from the Hungarian government – as a symbol of cooperation between the Livonians and their linguistic kins – the Estonians, Finns, and Hungarians. Over time, the Community House has become one of the most recognized symbols of the Livonians within Latvia and beyond.”