By the 10th century, the area that is today Latvia was inhabited by several Baltic tribes who had formed their own local governments. In 1054, German sailors who shipwrecked on the Daugava River inhabited the area, which initiated a period of increasing Germanic influence. The Germans named the territory Livonia. In 1201, Riga, the current capital of Latvia, was founded by the Germanic Bishop Alberth of Livonia; the city joined the Hanseatic League in 1285 and began to form important cultural and economic relationships with the rest of Europe. However, the new German nobility enserfed the indigenous people and accorded them only limited trading and property rights.
Subsequent wars and treaties led to Livonia's partition and colonization for centuries. In 1721 Russia took control over the Latvian territories as a result of its victory over Sweden in the Great Northern War. During this time there was little sense of a Latvian national identity, as both serfdom and institutional controls to migration and social mobility limited the boundaries of the indigenous people's intellectual and social geography. However, in the 1860s, the Young Latvian Movement was formed in order to promote the indigenous language against Russification policies and to publicize and counteract the socioeconomic oppression of Latvians, 60% of whom belonged to the landless, urban class. This growing proletariat became fertile ground for the ideas of western European socialism and supported the creation in 1903 of the Latvian Social Democratic Union (LSDU), which continued to champion national interests and Latvia's national self-determination, especially during the failed 1905 Revolution in Russia.
The onset of World War I brought German occupation of the western coastal province of Kurzeme, which Latvians heroically countered with several regiments of riflemen commanded by Czarist generals. The military campaign generally increased Latvian and LSDU support for the Bolsheviks' successful October Revolution in 1917, in the hopes of a "free Latvia within free Russia." These circumstances led to the formation of the Soviet "Iskolat Republic" in the unoccupied section of Latvia. In opposition to this government and to the landed barons' German sympathies stood the Latvian Provisional National Council and the Riga Democratic Bloc. These and other political parties formed the Latvian People's Council, which on November 18, 1918 declared Latvia's independence and formed an army. The new Latvian Army won a decisive battle over the combined German-Red Army forces and consolidated that success on the eastern Latgale front. These developments led to the dissolution of the Soviet Latvian government on January 13, 1920 and to a peace treaty between Latvia and Soviet Russia on August 11 later that year. On September 22, 1921, an independent Latvia was admitted to the League of Nations.
The government, headed by Prime Minister Ulmanis, declared a democratic, parliamentary republic. It recognized Latvian as the official language, granted cultural autonomy to the country's sizeable minorities, and introduced an electoral system into the Latvian constitution, which was adopted in 1922. The ensuing decade witnessed sweeping economic reform, as the war had devastated Latvian agriculture, and most Russian factories had been evacuated to Russia. However, economic depression heightened political turmoil, and, on May 15, 1934, the Prime Minister dismissed the Parliament, banned outspoken and left-wing political parties, and tightened authoritarian state control over Latvian social life and the economy.
The German-Soviet Nonaggression Pact of 1939 steadily forced Latvia under Soviet influence, culminating in Latvia's annexation by the Soviet Union on August 5, 1940. On June 14 of the following year, 15,000 Latvian citizens were forcibly deported and a large number of army officers shot. The subsequent German occupation witnessed the mobilization of many Latvians into Waffen SS legions, while some Latvians joined the Red Army and formed resistance groups, and others fled to the West and East.
An estimated 70,000, or 89.5%, of Latvian Jews were killed in Latvia under Nazi occupation. Up to one-third of Latvia's pre-war population (approximately 630,000 residents) was lost between 1940 and 1954 due to the Holocaust and the Soviet and Nazi occupations.
After World War II, the U.S.S.R. subjected the Latvian republic to a social and economic reorganization which rapidly changed the rural economy to one based on heavy industry, transformed the predominantly Latvian population into a more multiethnic populace, and converted the peasant class into a fully urbanized industrial worker class. As part of the goal to more fully integrate Latvia into the Soviet Union, Stalin deported another 42,000 Latvians and continued to promote the policy of encouraging Soviet immigration to Latvia.
In July 1989, following the dramatic events in East Germany, the Latvian Supreme Soviet adopted a "Declaration of Sovereignty" and amended the Constitution to assert the supremacy of its laws over those of the U.S.S.R. Candidates from the pro-independence party Latvian Popular Front gained a two-thirds majority in the Supreme Council in the March 1990 democratic elections. On May 4, the Council declared its intention to restore full Latvian independence after a "transitional" period; three days later, a Latvian was chosen Prime Minister. Soviet political and military forces tried unsuccessfully to overthrow the Latvian Government. On August 21, 1991, Latvia claimed de facto independence. International recognition, including that of the U.S.S.R., followed. The United States, which had never recognized Latvia's forcible annexation by the U.S.S.R. and continued to accredit a Latvian Ambassador in Washington, recognized Latvia's renewed independence on September 2. In 2007, the United States and Latvia celebrated 85 years of continuous diplomatic relations.
Since regaining its independence, Latvia has rapidly moved away from the political-economic structures and socio-cultural patterns which underlay the Soviet Union. Latvia has maintained and strengthened the democratic, parliamentary republic that it revived in 1990. Through a U.S. initiative, on April 30, 1994, Latvia and Russia signed a troop withdrawal agreement; Russia withdrew the bulk of its troops by August 31 of that year. Except for some large state-owned utilities, Latvia has privatized most sectors of its economy, which enjoyed years of rapid development before slowing down in 2007. By the end of 2008, the Latvian economy was facing the risk of recession.
Internationally, Latvia has accomplished a great deal. It became a member of the United Nations (UN) on September 18, 1991, and is a signatory to a number of UN organizations and other international agreements, including the International Civil Aviation Organization (ICAO), the International Monetary Fund (IMF), and the World Bank. It is also a member of the Organization on Security and Cooperation in Europe (OSCE) and officially became a member of the North Atlantic Treaty Organization (NATO) on March 29, 2004. On May 1, 2004 Latvia joined the European Union (EU).
Since 2004, Latvia has emerged as a significant player in foreign affairs, standing out as a successful post-Soviet transition society. Strong memories of occupation and oppression motivate Latvia to reach out to countries struggling to move beyond authoritarian politics and state-controlled economies. It has worked closely with the U.S. and the EU to promote democracy in Ukraine, Belarus, Moldova, and Georgia. Latvia also supports pro-market, pro-free-trade policies in European and international organizations. It was the European Union's fastest-growing economy in 2004 through 2006.
Latvia has developed a policy of international security cooperation through participation in crisis management and peacekeeping operations. In 2006, Latvia deployed over 10% of its active duty military to support UN, NATO, and coalition military operations. That percentage is well above the European average in terms of per capita contributions. In 2008, Latvia increased its participation in the NATO International Security Assistance Force (ISAF) in Afghanistan to 155 soldiers and plans to maintain the number in 2009, despite its economic challenges. While Latvia has been active in the Balkans, budget cuts will force the end of its operations there in 2009. Latvia has supported the NATO mission in Kosovo with peacekeepers, and the European Union Force (EUFOR) mission in Bosnia with liaison officers. Latvia also contributed to the EU and OSCE missions to Georgia. In November 2006, Latvia hosted a NATO Summit in its capital, Riga.
Information by U.S. Department of State