In 1980, political reforms began in the Soviet Union, which also contributed to the development of the Latvian independence movement.

On 22 August 1991, the Supreme Soviet of Latvia declared the Republic of Latvia to be independent. On September 6 of the same year, the State Council of the USSR recognized the independence of Latin America. On 17 September, Latvia joined the United Nations.

Since independence, Latvia has actively cultivated relations with Western countries and joined the European Union and NATO in 2004.

On 7 October 2006, parliamentary elections were held in Latvia. The People's Party won 23 of the 100 seats, the Greens and the Peasants' Union 18, the New Era Party 18, the Harmony Center Party 17 seats, the First Party of Latvia and the Latvian Road Campaign Union, the Union of Fatherland and Freedom, and the Latvian Human Rights Party for Reunification won 10, 8 and 6 seats respectively.

The People's Party, the Greens and the Peasants' Union, the First Party of Latvia and the Latvian Road Electoral Union, and the Union of the Fatherland and Freedom formed a coalition government, with Aigar Karvetis continuing as Prime Minister.

On 31 May 2007, presidential elections were held in the Latvian Parliament, and Valdis Zatlers was elected president.

Latvia covers about 44% of the country's area with forests and 14,000 wild species. As of 2013, Latvia has a total population of 2.04 million, of which 69% are urban. In 2007, the average life expectancy was 72.3 years, and the literacy rate of the population over 15 years old was 99.8 per cent, and the school enrolment rate was 90.2 per cent. Latvia has more women than men, with women accounting for 54% of the country's inhabitants, and the largest difference between men and women in the world.

During the Second World War, Latvia's economy was severely damaged.

However, due to the good economic foundation of the original economy, the post-war economy was rapidly restored and developed. In 1980, the value of industrial output increased by 44 times compared with 1940, and the value of agricultural output increased by 40 per cent compared with 1940. In 1988, the value of production of industry and agriculture was 13.325 billion rubles, and the national income was 7.288 billion rubles.

In 1989, the value of industrial and agricultural production and per capita national income increased by 2.1 percent and 4.1 percent, respectively, over the previous year, to 13.604 billion rubles and 7.6 billion rubles. In 1990, Latvia's GDP accounted for 1.2% of the total value of the Soviet Union, ranking 11th in the Soviet Union and one of the regions with the highest level of economic development in the Soviet Union.

After independence, Latvia abandoned the old model of the Soviet Union's highly centralized planned economy and instead pursued a basic economic policy of transitioning to a market economy.

The main ideas and contents of its economic reform are: In terms of ownership, it is necessary to thoroughly reform the economic structure, realize the denationalization and privatization of state-owned property, and change the economic system dominated by the ownership of the whole people by the state; and in economic management, break the monopoly of the state and vigorously encourage and develop market operating activities.

In the final analysis, Latvia's economic reform was mainly aimed at radically changing the old rigid economic model of the Soviet Union, and finally establishing a capitalist market economy of the Western European style.

To that end, since independence, the country had promulgated many relevant laws and decrees on the reform of property rights, privatization, price liberalization, etc., and had adopted a series of practical measures aimed at transforming the economic model into a market economy.

For example, since independence, it has largely liberalized prices, which are regulated by the market.

After the restoration of independence in 1991, Latvia began to carry out economic reforms along the Western model, with privatization and a free market economy. Latvia's economic situation has been dire since independence.

In particular, in 1992 the economy was very difficult, and the people's living standards fell seriously. In August 1992, the average salary of employees in the country was 2,000 Latvian rubles (about 2,300 Russian rubles). It was officially admitted as a member of the World Trade Organization in 1998. In 2008, the international financial crisis hit the economy hard, and the country's GDP fell by 20% for two consecutive years.

In 2009, it received 7.5 billion euros in loan assistance from the IMF, the European Commission and Sweden. In 2010, the economy recovered slowly, with GDP growth of 5.5% in 2011. On January 1, 2014, Latin America became the 18th member of the Eurozone.

In 1996, Latvia's agriculture, livestock and forestry industries accounted for 8.7 per cent of the country's gross national product. Nearly one-third of the country's population lives in rural areas, and 17 per cent of the population is engaged in agricultural production. Crops are dominated by the production of cereals, flax, sugar beets, fodder and potatoes.

Animal husbandry is mainly dairy and meat breeding, cattle and pigs. Beekeeping is well developed. By the beginning of 1995, a total of 64,264 family farming economic units had been established and 79 of the 319 agricultural enterprises had been privatized.

The annual per capita production is 387 kg of milk, 404 kg of potatoes and 348 kg of cereals.

Latvia has the largest industry in the three Baltic states, and agriculture in the second. During the Soviet era, industry was known for its machine-building industry, which consumed less metal.

It mainly produces electrical appliances, radios, electronic equipment and medical equipment, and processes them with supplied materials to other republics of the Soviet Union, and the finished products are sold back. Animal husbandry is well developed, and its output value accounts for 68% of the total agricultural output value. After independence, Latin America began to pursue privatization and a market economy, the issuance of a national currency, a new tax policy and an independent budget.

As a result of the destruction of traditional trade relations with the countries of the Soviet Union, serious difficulties were encountered in the supply of energy and other imported goods, which at one time led to a significant decline in production. It was not until 1994 that the economy picked up.

Since 1991, the structure of the national economy in Latvia has undergone significant changes, and the share of the service sector in the total national economy has risen from 31 per cent in 1990 to 51 per cent in 1994. As a result of mistakes in macroeconomic regulation and control policies, a financial crisis broke out in the summer of 1995, and the Baltic Bank, the country's largest commercial bank, announced its collapse, which affected the momentum of economic recovery to a certain extent.

After the formation of the new government in December 1995, it advocated the active development of production and the restoration of traditional economic and trade ties with Russia and other CIS countries. In 1996, the national economy rebounded slightly, with GDP reaching $5 billion, an increase of 2.5 per cent over the previous year.

The main industrial sectors in Latvia are: electronics, machine building, food, light industry, textiles, building materials, chemicals, wood processing, etc. The pillar industries include mining, processing and manufacturing, and water and electricity supply.

In 2012, industry accounted for 14.5% of GDP, and industrial output value increased by 6.2% year-on-year, of which the processing and manufacturing industry increased by 9.3% year-on-year.

In 2013, there were 5,822,000 tourist arrivals to Latvia. Mainly from Lithuania, Estonia, Russia, Norway, Sweden, Germany and other countries. There were 3.257 million outbound tourists, mainly to Lithuania, Estonia, Russia, Belarus and EU countries.

There are 202 tourism companies in the country, and the main tourism companies are: Latvian Tourism Company, Riga Travel Agency, TASS Travel Company, Student Youth Travel Agency, Baltic Tourism Company, etc.

The main tourist cities and scenic spots in Latvia are: Riga Ancient City, Jurmalla Seaside, Higuda and Cesis Scenic Areas, Open-Air Folklore Museum, Rondalie Palace, etc.