RUSSIAN AMBASSADOR: RELATIONS WITH LATVIA GOOD,

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
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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

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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).

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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