Folia Geographica 10. sējums - Latvijas Universitāte

VIETU UN REĢIONU ATTĪSTĪBAStarting a newly established commercial enterprise within a self-owned business premisewas still hardly possible in the years 1991 and 1992. One reason for this was the fact thatprivatisation had not yet fully occurred. The second hindering factor was the liquidation ofnational trading ventures which made too few business premises in good condition available.And the third reason was the announcement on the restitution of real estate (see Factor II). Aboom in the establishment of retail trade finally came in the period from 1993 to 1995. Thus thenumber of the retail businesses rose around 50% in Riga between 1992 and 1996. The salesareas in the retail trade increased in the periods mentioned in the Latvia by about 66%, and theaverage sales area per 1,000 inhabitants increased by an appropriate order of magnitude. On theother hand, since these start-ups usually consisted of small companies, the increase of the salesarea per retail outlet was modest in relation to East Germany. No extreme degree of informalityin the retail trade was reached in Latvia in comparison with the development in Poland, Russiaor Albania; therefore, the increase in sales kiosks and ambulatory street traders in the city areaoccurred within a relatively modest framework, except in the big market areas (see below). Thenew laws made it also possible for prospective foreign investors to create new commercialactivities in Latvia.Consequently, the combination of the privatisation process and the newly foundedcompanies in the retail trade together resulted in a mixture of different possession and propertystructures, whereby the portion of the enterprises which were still (at least partly) state propertywas already largely irrelevant by the middle of the 1990s. Internationally operating retail chainsbased abroad (in Western or Central Europe), which in particular suggest the shopping streets inthe cities of Budapest, Prague or Warsaw, are represented in the Latvian capital only to a smallextent and have been implemented only since the end of the 1990s in post-modern passageways.Compared to the outskirts of the Polish, Czech and Hungarian metropolises, where since themiddle of the 1990s huge self-service department stores or shopping centres had already settled,only some not very big units were recently opened in Riga (also see below). Latvia still has acomparatively small sales market. The prospects of fast economic success from internationalinvestments in retail trade were (and are) much smaller than in the countries directly to the eastof Central Europe. Nevertheless, an important internationalisation of trade can be observed inthe city centre, where numerous domestic companies specialise in selling imported brandedarticles as franchisers. The fact that the privatisation was mostly steered endogenously does notmean that no domestic chains, operating locally or even country-wide, could be established.The retail trade in Riga must almost exclusively be managed in rented premises;therefore, the following section will clarify, among other things, who the landlords of the shopsfor re-established or newly founded retail businesses are.Factor II: The transition of the real estate and land marketThe mode of restitution (denationalisation) of land and buildings expropriatedillegitimately and afterwards nationalised during the Soviet era was also of crucial importancefor the structural changes in the retail trade. As Table 2 shows, appropriate laws for theintroduction of restitution procedures were already adopted in Latvia in the year 1991. Theselegislative efforts were profound (as in neighbouring Estonia): not only citizens were entitled tolay claim for the return of the expropriated real estate property but also emigrants (livingabroad), so far as they could prove to have inhabited the country before the indicated deadline(17 June 1940). The purely quantitative result of the restitution legislation was that 3,943residential buildings in Riga were returned to their former owners. The restitution procedureswere surprisingly fast; by the end of 1993 half of all formerly expropriated buildings hadalready been returned to the former owners, and by the end of 1997 almost all the old legal titleswere restored.Which consequences did this rapid restitution of real estates have in particular for theprivatised retail businesses in the Latvian capital? Those formerly state-owned retail tradecompanies whose shops were located in buildings for which a property restitution wassubmitted had to start direct treaty negotiations with the pre-Soviet era former owners (qua newowners), if they wanted to use the business premises further. This put the retailers in a very poorstarting position.80