business

Can Valdis Zatlers Heal Latvia's Wounds?

His own reputation tarnished, Latvia's new president has a chance to clean house

President Valdis Zatlers, has promised -- as do so many freshly minted statesmen -- to heal and unite the nation. This is quite a challenge. His election opened a major fissure between the Latvian public and the political elite.

In the week between his nomination and the parliamentary vote in late May, Zatlers' reputation was torn to shreds by the liberal media. Minutes after the vote, at his first live press conference, he was aggressively harangued by a handful of Latvian print journalists. Nor was there any refuge outside the parliament building, where the new president was greeted by an angry throng that had gathered earlier to support his rival Aivars Endzins.

Even his inauguration day on 8 July failed to pass peacefully, as opponents organized a belittling, alternative ball, putatively celebrating the inauguration of Latvia's "First Rabbit" -- a reference to the Zatler family's pet -- which was even attended by a government minister. On taking up office, the 52-year-old orthopedic surgeon appeared a bruised, battered, and distinctly un-presidential figure.

Three factors combined to cause this crisis. First, as with so much of the Latvian policy process, the procedure of choosing the president lacked transparency and ultimately, popular legitimacy. The president is selected by the 100-member Saeima, or parliament, and Zatlers won 58 parliamentary votes to the 39 of his sole rival candidate, Endzins.

Second, Zatlers proved to have a major skeleton in his closet, placing a significant question mark over his character, moral compass, and suitability for high office because of his published admission of underreporting income to tax authorities.

Third, his predecessor, Vaira Vike-Freiberga, had set the bar almost impossibly high, having been the most popular politician in modern Latvia's history. Almost any successor would pale in her shadow.

SECRET ELITE

The nomination process was manipulated by a secretive Latvian elite. The president of Latvia is elected by a simple majority parliamentary vote, reducing the presidency to part and parcel of day-to-day political horse-trading. Political parties had initially nominated three presidential candidates in the final weeks running up to the vote. The ruling People's Party had nominated Maris Riekstins, the prime minister's chief of staff. A ruling coalition partner, Latvia's First Party/Latvia's Way, nominated Karina Petersone, a former culture minister. The opposition New Era nominated former foreign minister and European Commission member Sandra Kalniete.

Despite media interviews and tours around the country, these candidates were merely going through the motions. They surely must have known, as did the liberal press and intelligentsia, that their candidacies were decoys. The modern Latvian presidential election process throws up surprise, last-minute candidates that do not go through a rigorous public examination and debate. The big, unanswered question remained -- who would be the elite's candidate?

Thus it was no great surprise that just over a week before the scheduled election, the coalition parties unceremoniously dumped their earlier candidates, and united around Zatlers, the director of the Traumatology and Orthopedics Hospital in Riga. At the last minute, the opposition Russian-speaking party Harmony Center proposed Endzins, a former Constitutional Court judge, as an alternative candidate. Kalniete of New Era withdrew her candidacy in favor of Endzins, prompting a rare show of Russian-speaking and ethnic-Latvian political party harmony. However, this was a token opposition. The ruling parties were assured a plurality of votes in the parliament.

Thus the public only had one week to acquaint themselves with their likely new president. Inevitably, the media searched for scandal. It quickly uncovered an article by Endzins, a former member of the Latvian Communist Party, written during the Soviet era, denying that Latvia had been occupied by the Soviet Union.

More importantly, in an interview with Diena, Latvia's newspaper of record, Zatlers inadvertently admitted accepting morally and legally dubious cash gifts (or, as he preferred to call them, "gratitude payments") from grateful patients. More importantly, Zatlers admitted not declaring this income to the tax authorities. The State Revenue Service and the Anti-Corruption Bureau immediately investigated Zatlers' income and the legality of these "gifts." Although he was ultimately fined a mere 250 lats (350 euros), he was left a tainted figure, and he trailed Endzins in every single opinion poll before the election.

Nevertheless, the ruling coalition kept faith with Zatlers. Why the unwavering support?

First, Zatlers has longstanding links to Prime Minister Aigars Kalvitis' People's Party, having signed the party's founding declaration in 1998 (although he has never been a member).

GLOBAL PLAYER

More importantly, the government coalition wanted to see a more pliable and less confrontational president in Riga Castle. Vike-Freiberga, Zatlers' predecessor, had primarily focused on foreign affairs. However, her all too infrequent forays into domestic politics saw outspoken criticism of the role of "oligarchs" and business capital in Latvian politics. She had recently faced down the government, and won, in a confrontation over a new security law that she had opposed.

Latvia's president is elected for four years and the duties include foreign affairs and defense. The president also can propose legislation and can return measures approved by the Saeima for reconsideration.

Vike-Freiberga was certainly a thorn in the side of the political elite. She dominated the Latvian political stage from 1999 to 2007, and achieved unheard-of levels of popular support from a jaded public that is typically suspicious of the political class. Indeed, her success was largely based on her status as an outsider -- a retired psychology professor from the French-speaking University of Montreal in Canada, she had been resident in Latvia for less than a year when elected president. She devoted most of her presidency to foreign affairs, believing that Latvia's future security would be guaranteed by rapid accession to the European Union and NATO.

In Latvia, if nowhere else, she was seen as a major international player. This also meant that she rose above the grubby infighting of the Latvian political scene. As a result, she was an inspirational figure, representing the Latvia that many wanted to see -- sophisticated, intellectual, and punching above its weight -- rather than the Latvia that actually existed.

In contrast, Zatlers, with his ill-fitting suits, stumbling English (in contrast to his fluent Russian), and murky personal finances is far more representative of contemporary Latvia. There are surely very few adult Latvians who have not made a "gratitude payment" or bribe to a physician, policeman, or bureaucrat.

WHEN WEAKNESS IS A STRENGTH

And this is where Zatlers' political opportunity presents itself. By bringing national attention to petty corruption, it may finally be tackled in a substantive way. Indeed, a determined focus on domestic affairs, particularly the long-standing problems with corruption, civil culture, and tolerance that were sidelined in the race to join the EU and NATO, will differentiate him from his predecessor's diplomatic globe-trotting.

Zatlers has the opportunity to publicly demonstrate how an individual can admit past mistakes and change for the better. If he can overcome the blistering nomination process and difficult start to his tenure and substantively tackle these domestic issues, then, against all the odds, his presidency may well prove far more inspiring than that of his predecessor.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE