Crisis in Latvia. Crisis Diary. April 2009

Crisis diary by Katya

2009/04/26

Less purchases, less waste. I was with a friend during a waste collection disposal. We collected the waste along highways. We collected in half in less than in a recent years. My friend opposes my explanation of the reduction of waste in connection with the crisis. She says that crisis has started only in October of 2008. But I still disagree because I think that the crisis has began in spring of 2008 – in one moment during the spring the crowded streets of Riga became empty. Citizens of Riga were surprised – what has happened? Where are the cars? The explanation was simple. The rise of food, utility payments, public transport tickets prices was so sudden and acute that people began to economize on gasoline savings-account. The cost of life in Latvia in spring of 2008 was so shocking high that all were agreed- it cannot go longer like this. Riga had become the 48th more expensive city in the world and an overwhelming leader of cost of living in Baltic countries. The fact that at the moment the prices of groceries have reduced for 20-30%, falls the prices of real estate and it promises to be less charges gives an calming effect to the people and there is a feeling that it will make some sense also from this crisis.
In addition to beer bottles and coffee mugs, along the road I found cheap eau de Cologne and perfume bottles as well. Some says that during the Soviet era it was popular such cheap alcoholic drink: eau de Cologne diluted with water 1:1. Who knows, maybe it returns in fashion.

2009/04/25

A week when states bankruptcy should start

700 000 lats was a price of a house in 2008. 80 000 lats is a price that the house has been sold in 2009. It is said that real estate prices are going to drop even more, at least until the end of the year. There is an opinion that the prices are going to drop until the level of those real estate prices that can be in Latvia.
Offer of real estate is not very good one. Old houses with a huge deterioration factor and terrible heat leak which have been built during the Soviet era or the second option – newly built houses about what every person passing by can tell horror stories on the quality of these buildings – water system emergencies appears 10 times more often than in the ones built in Soviet era. And while making love you can become famous because of the incredible lack of acoustic insulation.
All think the same – the old Soviet houses are better, they have been there for 30 years and will still be the same.
Banks auction apartments on credit relief costs. Its popular to auction flats on sites like www.izsoles.lv/cat/186/ and www.torgi.lv/lat/lots/list .

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All persons that rent apartments or offices lower prices, defers only to ask. A month ago I heard the first offer to rent an apartment for free paying only utility payments.

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People repair old bicycles and buy repairing parts. Greater consent deserves the cheap bikes. State has found money to build a new bicycle-track Rīga – Berģi.

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Less than 40 min it was possible to watch opening debt of moto-season. You can see well what people have bought in the good years.

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Chalk's ratings of the most popular TV news program "Panorama".

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Who are going worse - Latvia, Estonia or Lithuania?

While listening to the news you get a feeling that there is emulation between these three neighbor countries. At the beginning Lithuanians made jokes about Latvia because Latvian Ambassador in Lithuania dismissed a janitor from work. The press essentially guts the national airline air Baltic low profit margin and the astronomical salary of president Bertold Flick at the same time. Now Latvians can rejoice – Estonians are going bad as well - Air Estonia struggles for survival and Estonians also cut welfare benefits and have reduced eligible expenses, street lighting budget was reduced as well. Similarly, the Latvians are very pleased about the poor economic performance of Lithuania although they are not nearly as bad as the ones of Latvia.
In Latvia tax revenues are lagging behind by 12.8% and the country's consolidated budget deficit creates 354.2 million lats already.

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Economical feasts and mad going

Economical bridal fashion has returned. Mini-weddings of 5 persons, a Chinese dress from e-bay and a little celebration in some hall with a fireplace which has been arranged cheap or in cafe, owned by acquaintances. Friends take photos. Filming? What video? It is possible to rent jewellery from the shops, only the rings have to bee bought.
Latvians were used to make meetings in cafés and pubs. Now home parties become in fashion. Returns popularity of board games – there is a wide choice of them in stores. Returns home cinema viewing as well.
Celebrations and festivities are out of fashion. Picnics have become it the top. A friend of mine celebrated her round anniversary in a picnic style apologising about the fact that on the table were not a lot of food and the same was very simple. What can a person with a doctorate can afford if all men in the family have lost their jobs? Woman – the only one with a job is a widely occurring phenomenon now. Not all the men tolerates situation like this. Unfortunately popular solutions to the male become drinking, mad going and suicides.
People cannot afford to visit psychotherapists. They can or jump out of the window or receive free medical treatment at psychiatric hospital. Recently I went to visit my male acquaintance in the mad house. He didn’t resist after a break of his own business and his woman didn’t accept the role of the only one who earns money. The guy has been in psychiatric hospital for a month and a half. Psychotropic medicines – not these more expensive and the best ones- he will take a long time more.

2009/04/20

Super-offers

Super-alcoholic cocktails have been actively promoted in the mass media. Make judgments by yourselves - advertising slogans are "beer meets vodka", "beer meets tequila" (www.aldaris.lv/en/162/150/, www.aldaris.lv/en/162/151/ ). In advertisement has been told: "This is a light alcoholic beer cocktail [..] especially made for those who enjoy night life adventures and fun." The old Russian proverb comes to mind "Водка без пива - деньги на ветер" (beer without vodka is like money let in wind [wasted money]). Results that these cocktails are economically advantageous. To which part of society these cocktails have been orientated?- to the youth. Looking into this site www.aldaris.lv/en/ you can see smiley youth jogging around, having fun and taking a bath in a lake (hope sober). The message in those advertisements is that alcoholics help to start a conversation, brings together people, give beautiful moments. Transmits that its good to drink a glass of beer with friends after a well-made work.
On the channels of news medics are back again. And they don’t like that these cocktails have been orientated to youth, and they are also disappointed that during this period of crisis people use this cheap and available antidepressant – alcohol, too much.

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Luckily not all are going down with an alcohol. For about 80% has increased amount of visitors in libraries.
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Still about super-offers. Well known persons in society think about survival as well and are willing to undress for the sake of good. Theater Daile offers a play with the elements of striptease "Naked deer". It is a true story on how do Latvian men danced striptease. Famous showmen, singers, dancers and actors are participating.

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Super dinner offers. Food and beverage companies offers quick, inexpensive and high quality service to feed entire collective bringing all the necessary right to the office. Extra-cheap yoghurts at the price of 13 centimes appear in the shops.
Farmers ride to the city and sell milk and other agricultural products without intermediaries. In February the first farmers centre was opened in Čiekurkalns market. While the potatoes, carrots and milk residents of the city can buy without leaving home – farmers tours around the periphery and struggle for survival knocking at the doors.
Believe or not, radio is informing about possibilities to buy fish directly from the fishing boats which stops in the River Daugava opposite the fish pavilion. But a fisherman in Liepāja has passed all the necessary permits and sells herrings and flounders legally. It is cheaper without intermediaries and those who live in the city get more fresh fish. In Liepāja there are only 3 fishing-boats left, others have been cut into scrap metal.

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A wide variety of spoof and begging. In the city central park pensioners are running posterior to ask 20 centimes for bread and milk. A girl with braked teeth requires 2 lats for maintenance of her child. New guy already from the summer asks for money to buy a transport ticket home at the far corner of the Latvia. Old ladies ask mobile phones to make a short call but it turns better not to give to use a mobile phone to these ladies because its possible that they are making phone calls to a private numbers of charge.
Insurance spoofs. In four month of this year so many cars have been stolen than in total in the last year. BMW X5 Jeep, Lexus, etc. expensive cars steals gas stations - filled with gasoline they leave without paying. My husband saw how an owner of a Hummer jeep was barging with a car park guardian and paid some lats only after a long discussion.

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Latvia has become a significant exporter of used exclusive cars. The jeeps, mainly BMW X5, which have been bought in the good years, are disposed from owners and leasing companies export them abroad.


2009/04/06

One of the extreme-sports shop –X treme sports – has been closed. Another one  - Burusports –  is struggling for survival.
The foul of Burusports has been followed by the press and we know even one new word - "legal protection".
Still now occasionally emerge new terms relating to bankruptcy – bankruptcy of private individual, for example.

2009/04/05

A phenomenon of good news

The people are so exhausted from the bad news that have started to do two things  - don’t watch television and read newspapers and to seek for a good news and sources of inspiration.
I have heard that Capital of K.Marx has become mega-popular in the world  but my acquaintances don’t read it yet.
An susceptive Latvian girl has opened the good news portal http://www.labaszinas.lv. The portal informs that streets will be repaired in Daugavpils, a new business canter will be built in Bauska, a passive house is built in Ģipka where the heating costs per year will be as big as the average heating costs in Latvia per month - 100 lats.

2009-04-04

New low-cost eating-houses arise. In March two new cheap eating-palaces have opened: "Bufete" on K. Valdemara street and "Jautrie cālīši" (“The lively chickens”) on Matīsa Street. It seems that it is good time for cheap cafeterias business, although until recently - in the autumn - the just-opened eating-house on K. Barona street went on the bankruptcy soon after the opening. Cafes and restaurants start offering "The Student Menu" - for example, you can taste reasonable-price stroganoff in the newly restaurant "Cats" on Dzirnavu street.
The National Kitchen self-service feeding-net "Lido" decorate their windows with huge ads: “Lido reduces prices. 2 Lats = 1 Lido lat.” You can take your breakfast in Lido for about 1.50 lats (~2 euro) - it is cheaper than to take some fast-food in booth “Narvessen”: you have to pay  about 1.80 lats (~2,60 euro) for an old sandwich, and 85 centimes (1,20 euro) for cold 'Nestle' tea. Anyway, even after price reducing, dining in Lido is not a extra cheap pleasure - it is impossible to have some simple diner under 3 lats (~4,30 euro) there.
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Cheap eating-places are the top issue. New website http://izdevigipaest.lv (“to eat economically”) has appeared. Website informs about eating-house where you can eat just for 2 lats.
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After the non-heating period the sanatorium for mentally ill persons has been heated for some days. The existence of sanatorium is under the question - the state has no money for neurotic patients, nor it have the patients.
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Often I hear phrases like that: “Thanks Good, I have no debt”; “Thanks Good, I got in time to sell my car/ my apartment before crisis has arrived,” “Thanks Good, I had intuition enough not to buy that flat a year ago.” Some friends are selling their cars to return their debts. Banks reputation is fallen to racketeers level. The real estate deflation is enormous - now you can buy two- flat apartment for 18 000 lats. Real estate prices are fallen two times during the year.
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A new shopping mall "Riga Plaza" (www.rigaplaza.lv) has opened this week. Significant traffic jam in streets around the mall has formed on the opening day. Running people with their arms full of shopping bags were observable.
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Stores offer discounts for new collections. Some friends enjoy these discounts, as they say, cheep shopping abroad is not necessary now, and say that they no longer need to go abroad to shop. On the other hand - some friends - shoppaholics - with the martyr expression on faces admit that they hadn’t done any shopping last 3-5 months.
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My greatest surprise is the terrible service quality of the client service in the shops and restaurants despite the economical crisis. Shop sellers, consultants, waiters in restaurants are not trained to provide better customer service. To my opinion, the quality of customer service is the key for survival in this era, but in reality you can see exhausted, uninterested, miserable women with no smile on their faces. Another pole is salespeople’s meddlesome attitude, which makes you run out of the shop. Often you can see inexpert cashiers, especially in food stores - they look very slow and careful when marking strip code of the item. It could not be a problem, until such a cashier is the single one in all the store and the big queue arises in front of this only cash-desk. In the shopping moll and in the beauty salons you have possibility to hear a lot about the private life of the client consultants.