Folia Geographica 10. sējums - Latvijas Universitāte

VIETU UN REĢIONU ATTĪSTĪBACertificates) to facilitate the acquisition of new dwellings comparatively inexpensively and theirtransformation into private flats. After privatisation, the new owners (mainly former tenants)were then allowed to decide completely and without reservation on the form of their future use.A retention of the dwelling function was not really prescribed. Of course the premises couldpromptly be rented or leased or even resold; however, compared with the quickly andconsistently accomplished privatisation process in Lithuania, this form of mass privatisation ofnational wealth was very much hindered in Latvia due to lengthy political discussions. This hadlittle effect on the changes of the downtown commercial landscape in Riga, since theseapartments usually lay in large suburban housing estates, where very few apartments located onthe ground floor were restructured for service or retail trade outlets.Factor III: General basic economic conditions for the progress of retail trade afterprivatisation or after the newly establishment of enterprisesThe privatisation or the start-up of an enterprise was always connected with the retailers’hopes for long-term economic success on their investments. As already stated, many formerlynational enterprises in Riga were forced to leave their locations because of the radicaltransformation of the property market; most of them had to stop their commercial activities onvery short notice. Further, the general condition of the retail trade was otherwise affected by alarge number of different economic variables and imponderables, which can generally bearranged into two categories: first of all, into those aspects that derive from the conditions andthe changes of structures existing internally in the trading business (procurement of wares anddealing with goods before the sales); secondly, in those determinants that lead to changes of thesales market, which can be called external commercial factors (e.g., the consumer habits andthe purchasing power potential of the customers).The liberalisation of the mercantile laws led to a more or less intensive deregulation ofthe post-socialist commercial situation in Latvia. It came at the same time as independence fromthe Soviet Union and led to a complete reversal of former trade routes. The mutual exchange ofgoods, both between the Baltic States and the Commonwealth of Independent States and amongLithuania, Estonia and Latvia, broke down completely in 1991/92. Only through the signing of afree trade agreement on 13 September 1993 (taking effect in the middle of 1994) did a revival ofinternal Baltic trade take place. A similar agreement with the European Union entered intoeffect on 1 January 1995, and in the course of the same year international trade agreements werealso signed between the Baltic States and Russia (CIS). Eventually all three Baltic States raisedrather high protective tariffs for imported goods until 1994/95; the goals were to increase thecompetitive power of the native food and consumer-goods industries and to achieve additionalfiscal value absorption, particularly for imported luxury wares. These temporarily limitedmeasures had great importance for the respective state budgets in the first years after 1991,because only by the end of 1993 was Latvia able to introduce a new tax system, includingamong other things a value added tax (VAT).Parallel to the international business connections, new wholesale structures had to bedeveloped, since (with the privatisation of trade) the former state enterprises were notfunctioning and therefore usually rapidly dissolved. In order to obtain goods in the time shortlyafter political independence, many retailers were forced to develop individual deliveryarrangements with foreign suppliers in western Europe. Many dealers in Riga had to travel asindividuals or in small groups to trade fairs abroad, often to Germany, to make contacts and buywares directly, which they imported as soon as they returned to Latvia. This very cumbersomeprocedure was extremely nerve-racking due to the numerous border controls. It did howeverpersist because the profit margin for the retailers was largest for such imported goods. Onlygradually was a new system of mostly locally or regionally operating wholesalers, who wereable to participate in a clear specialisation, established. Despite all difficulties associated withthe procurement of wares, this reconstruction in the retail trade was connected with so farunheard-of economic possibilities. Dealers who could use the initially existing institutional oradministrative chaos intelligently for the own business purposes were able to accumulate asmall fortune within a short time. The internal commercial conditions in Latvia led to generalcompany-related adjustment and restructuring measures in retail trade. Numerous retail chains82