The Latvian government decided recently that it plans to increase the military budget so that it reaches the NATO two percent GDP benchmark. Latvia is currently devoting only one percent of its GDP to its armed forces but the Latvian President Raimonds Vejonis made statements that Latvia adhere its promise to NATO.
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| Latvian President Raimond Vejonis |
Exact numbers are difficult to predict at the moment as the budget negotiations are still ongoing. What we do know already is that Latvia plans to invest in four sectors that it deems a priority. These four sectors are defense, internal security, healthcare and education.
It is estimated that the Latvian defense budget will rise in 2016 by 59 million euros while the Latvian Defense Minister Raimonds Bergmanis hopes to secure an increase of 68 million euros.
The defense budget for 2015 is set at 254 million euros which accounts for one percent of the GDP. Doubling this defense budget to the two percent benchmark should be achieved by 2018.
Analysis
Latvia held a presidential election on June 3th 2015. The winner was the former Defense Minister Raimonds Vejonis of the Latvian Green Party.
Over the past years Latvia kept a low profile unlike Estonia, who is one of the few NATO members reaching the two percent GDP benchmark, or Lithuania, who is actively building coalitions and takes a very anti-Russia stance.
Latvia however still faces the same threat like the other Baltic States, namely its vulnerability against a Russian military action ranging from covert Hybrid War to an overt invasion. It shouldn’t thus be a surprise that President Raimonds Vejonis aims to increase its military capabilities within the term of its presidency. Increasing the budget will take an effort since doubling it by 2018 means that Latvia needs to increase it by 80-85 million euros annually.
It is unknown what Latvia plans to do with the increased military budget. It is unlikely that Latvia will expand its current Armed Forces but will most likely start to a modernization program to give its Armed Forces more capabilities, thus forming a bigger deterrent.
