In the 20 years since joining the EU and NATO, Latvia's GDP has nearly doubled. Despite this, it remains the third poorest EU member state according to Eurostat. Among the ten EU entrants in 2004 were also Latvia's neighbours Lithuania and Estonia, as well as Poland. All have outpaced Latvia economically during the two decades.

On the other hand, Latvians have never lived better, and economists say the country is now at the level of the old EU states around 2008. Still, Latvia continues to ask the question: why are Lithuania and Estonia doing better?

The challenge of keeping pace with the rest of the Baltics can be traced back to the 1990s. Historically, Latvia has held a leading position among its neighbours. However, after the Baltic states gained independence, they faced a critical decision on their business approach. Having slightly more wealth and opportunities for embezzlement, pushed Latvia towards a ”Russian way” of conducting business, while its neighbours embraced innovation.

Many missed opportunities and circumstances in later years only widened the gap. Rapid post-EU accession politics, known as ”the fat years”, followed by too rapid belt-tightening during the global financial crisis, including the collapse of Latvia's Parex Banka, led to a significant emigration of qualified workforce.

On top of that comes half-finished reforms in education and health as well as a lack of investment into education and science, which have been starving for years, along with rather weak attempts to attract foreign investors and make Latvia attractive to them.