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Latvia: 25–31 July 2016

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A pro-Kremlin TV report focuses on the economic problems in Daugavpils, a Russian-speaking city in Latvia, presenting them as the destructive consequences of Russian countersanctions.

Event: On 7 July, a news program on Russia’s state-owned TV channel NTV Mir reported on the economic problems at the DLRP locomotive repair plant in predominantly Russian-speaking Daugavpils, Latvia’s second-largest city. The NTV journalist argued that the factory is nearly bankrupt because of Russian countersanctions imposed in response to European Union sanctions against Russia after its aggression in Ukraine. The news story also presented Latvia’s broader economic problems as the result of Russian countersanctions.  NTV Mir is one of Latvia’s most viewed TV channels—especially among Russian-speakers.

The false fact or narrative: The NTV story based its DLRP story on comments by current and former plant employees. The journalist did not interview either DLRP managers or outside experts familiar with the factory’s overall operations.  Thus, the story’s claim that DLRP is close to bankruptcy is dubious.    

In offering a broader picture of Latvia’s economic problems, the author interviewed Einars Graudins (see the video starting from 2:15), presenting him as a “political scientist and economist.” Graudins argued that Russia’s countersanctions have cost 10,000 jobs and caused hundreds of millions of euros in losses to the Latvian economy. “It should be understood that these losses have not reached their peak yet in Latvia,” stated Graudins. The NTV story also emphasized declining tourism revenues, implicitly linking that to Russian countersanctions too.

Graudins is a prominent advocate of non-citizens’ and Russian-speakers’ rights in Latvia. He regularly expresses pro-Kremlin opinions in the Russian mainstream media, which presents him as an impartial political scientist or economist and often uses him as “a Latvian expert.”

Reality on the ground: Russia’s countersanctions have certainly hurt specific sectors of Latvia’s economy—particularly agriculture and transportation. However, they have not stopped overall economic growth. Latvia’s GDP has expanded every year since 2011. Latvian economists estimate that in 2015, direct losses due to Russian sanctions amounted to €60 million, or 0.25 percent of Latvia’s total GDP. Yet this has not led to significant layoffs, as Graudins insists. On the contrary, official statistics released in June suggest that Latvia’s unemployment rate is falling. His claim regarding the drop in tourism is also inaccurate. Official statistics suggest the opposite: in the first quarter of 2016, Latvia received 366,000 overnight visitors—a 1.6 percent rise over the year-ago period.

Graudins’ comments in the NTV story appear to be edited. Between two of Graudins’ phrases—“job losses” and “10,000 people” (see video starting from 2:22)—there are signs of editing which may have distorted Graudins’ meaning. Namely, we know neither the journalist’s question, nor the context in which Graudins mentioned the 10,000 people. In the possibly edited version, that latter sound bite is linked with job losses.

Latvia’s media outlets have reported that DLRP’s prospects have always been risky because it does business in the volatile and unpredictable Russian market. While Russian countersanctions do have an indirectly link to the factory’s problems, Latvian economists argue that the main issue is the falling value of Russia’ currency, the ruble. DLRP board member Natalia Petrova has optimistically claimed that shifting its focus to the European market will help the locomotive plant “ avoid the war of sanctions and the declining value of the Russian ruble.”

  • narrative laundering, 
  • card stacking, 
  • changing the quotation.

Audience: Russian-speakers in Latvia, residents of the Latgalia region and viewers in Russia.

Analysis: The pro-Kremlin media tries to portray Latvia as a victim of deep economic problems.  Some years ago, these stories emphasized the consequences of the 2008 financial crisis. Emphasis has since shifted to the “boomerang effect” of Western sanctions: that Russia’s countersanctions damage the Latvian economy and would be lifted if the EU ended its punitive economic measures against Russia for its actions in Ukraine. This helps foster the belief that anti-Russia sanctions are not worth the damage they cause, and may foment support inside Latvia for Moscow’s policies. Such disinformation also sends the message that Latvia’s economy cannot successfully function without Russian cooperation.
Latgalia’s economic problems make a promising target for Kremlin propaganda. In recent years, media and Western pundits have mentioned the region as a potential conflict zone where Russia could try to implement its hybrid war strategy; the widely discussed BBC pseudo-documentary World War Three: Inside the War Room depicted Daugavpils as the hub of such a war. DLRP plays an important role in the region’s economy. Thus, a focus on the plant’s problems is more generally emblematic of the economic and social insecurity of Latvia’s Russian-speaking minority, and may eventually undermine popular support of EU sanctions against Russia.