IV. POLITICAL ENVIRONMENT

Latvia has excellent bilateral relations with the United States
and seeks to improve them.  The leading political issue that
could affect Latvia's business climate would be any serious
downturn in relations with Russia.  While the Latvian government
and all major political parties support a free-market system,
Soviet methodology and regulatory tradition sometimes linger
among lower-level bureaucrats.

Latvia is a parliamentary democracy; 10 parties are represented
in the current Parliament.  Four parties hold 70 percent of the
seats.  The governing center-right "Latvia's Way" party is
Western-oriented and favors a rapid transition to a free-market
system.  The largest opposition party, the nationalist "Latvian
National Independence Movement" (lnnk) holds similar views on the
economy.  The "farmers' union" focuses on protecting the
interests of Latvia's small farmers.  The largest party on the
left is the opposition "Political Union of Economists," which
favors retaining agricultural cooperatives and state factories
within a free-enterprise system.  Parliamentary elections are
next scheduled for October 1995.