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Update No: 253

Estonia has the highest reputation of all post - Soviet countries for its successful transition economy. Actually nothing irritates Estonians more than being called 'post-Soviet,' but that they are, nevertheless. They prefer to recall the heritage of the Teutonic Knights and the influence of Scandinavia, particularly of the Finns, with whom they share common linguistic and ethnic roots.
The repute for economic success is well founded, the republic posting impressive figures for advance year after year. GDP grew by 4.5% in 2001 and is expected by the IMF to grow by 5% in 2002. Inflation at 5.7% in 2001 is a problem, but is expected to come in at 3.8% in 2002, again according to the IMF.
The trade accounts are in severe deficit, some 6-7% of GDP. But this is a normal problem for a transition economy (Latvia and Lithuania are in like case). The essential thing is that Estonia is an undoubted success story. It has completed its alignments to the 29 chapters, of the EU's acquisition communitaire ahead of time. For this small, but strategically placed country in the Gulf of Finland EU entry soon is certain and NATO entry highly likely.

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CONSTRUCTION

FKSM wins tender to complete Parnu Hospital construction

A 262.7m kroons (US$14.8m) bid by the Talinn-based builders FKSM has been picked as the winner in a public procurement tender for completing the construction of a new hospital building in the popular West Estonian sea resort and regional capital Parnu, reports New Europe.
The supervisory council of Parnu hospital decided to declare a bid by AS FKSM worth 262,668,000 kroons as the winner, BNS News Agency quoted the board Chairman of the Parnu Hospital Foundation, Urmas Sule, as saying. Entries were placed in the tender by the construction companies AS Skanska EMV, AS FKSM, AS Merko Ehitus and OU Eesti Ehitus.
The new 290-bed hospital must be ready by March 2003.
To finish construction, the hospital foundation will take a loan that will be repaid in accordance with the principle of solidarity by the foundation, the Parnu municipality and the national government.

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FINANCIAL NEWS

Estonian currency linked to euro instead of Deutschmark

An exhibition of banknotes of the 12 European countries that have now been replaced by the euro has been launched at the museum of the Bank of Estonia. Estonia's economic life is not directly affected by the use of the euro, since businesses have run their transactions in euros ever since 1st January 1999, Estonian Radio has reported.
The Estonian kroon was previously tied to the Deutschmark. 
A corresponding amendment to our legislation was made by the Riigikogu [parliament] in December. One can also say that the Estonian kroon has been tied to the euro ever since 1 January 1999 when it became our accounting currency.
The introduction of the new currency will not affect Estonia in any way at all, since our foreign trade is conducted in accounting currency and we cannot see any pressure emerging to increase prices.
The official rate is 15.64664 Estonian kroons. The rate has been unchanged for the past two years and will continue to be so in the future.

Estonia's posts 5.8 per cent inflation in 2001

Estonia's inflation or consumer price index (CPI) grew by 5.8 per cent in 2001, as compared with 2000, the Statistical Department of Estonia said, ETA News Agency has reported.
Goods became 4.9 per cent more expensive in a year while the prices of services gained 7.6 per cent and the prices of food products 7.1 per cent. Industrial goods became by 2.4 per cent cheaper...

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SHIPPING

Estonian Port of Tallinn handles more oil, fewer passengers

Of all groups of goods passing through Tallinna Sadam (Port of Tallinn), in freight turnover it was oil that grew most last year, BNS News Agency has reported.
Oil cargoes showed a growth of 17.7 per cent year on year, reaching 20.971m tonnes, the Port of Tallinn told BNS. After a sharp decline in November, oil shipments grew to 1.69m tonnes in December.
All told, the port's freight turnover in 2001, according to current data, totalled 32.243m tonnes, up by 9.9 per cent against the previous year. In December the port handled 2.626m tonnes of goods.
Rolling stock passing through the Port of Tallinn showed a year-on-year increase of 8 per cent, shipment of bulk goods was up by 6.8 per cent and of containers, by 4.4 per cent, at respectively 4.38m, 3.655m and 0.788m tonnes. The turnover of mixed cargoes dropped by 31 per cent to 2.199m tonnes.
Goods in transit, at 24.51m tonnes, showed a growth of 11.7 per cent.
The port company served 5.739m passengers last year, a drop of 4.7 per cent, as compared with 6.02m passengers the year before. Of the total, 4.607m passengers travelled on the Tallinn-Helsinki route, a year-on-year decline of 3.6 per cent.
Some 345,700 persons travelled last year between Estonia and Sweden, down by 25.4 per cent from the year 2000.

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TRANSPORT

Estonian Railways freight transport down

Eesti Raudtee's (Estonian Railways) cargo volume fell by 2.5 per cent in 2001, as compared with 2000, while transit grew by 4.84 per cent. Eesti Raudtee lost last year 28 per cent of its local cargo handling since Eesti Polevkivi (Estonian Oil Shale) started transporting oil shale to Narva power plants on its own railway section. Local cargo handling formed 13.6 per cent of all cargo last year, ETA News Agency has reported.
Export cargo also fell by over 28 per cent; its share of all cargo fell from 2 to 1.5 per cent. Imports fell 4.4 per cent to 6.65 per cent of all cargo. Transit cargo grew 4.84 per cent and formed over 78 per cent of all cargo. Eesti Raudtee transported last year nearly 38.5m tonnes of cargo, of which transit formed 30m tonnes...

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