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After centuries of Swedish and Russian rule, Estonia attained independence in 1918. Forcibly incorporated into the USSR in 1940, it regained its freedom in
1991 with the collapse of the Soviet Union. Since the last Russian troops left in 1994, Estonia has been free to promote economic and political ties with
Update No: 256 - (23/04/02)
Estonia is justly seen as the great success story among the Baltic states. When Latvians were polled recently on which of the three was most successful a
clear majority said Estonia, some Lithuania and only around a tenth said Latvia.
Success of reform course
This perception corresponds to the consistent reform course that has been followed for ten years now. An early adoption of a national currency board in July
1992 under German supervision greatly helped. Indeed the Germans, with historic ties with Estonia going back to the Middle ages, have been staunch supporters
of the reform process.
It is the Russians that the Estonians wish to keep at arms' length. Local Russians are being more easily assimilated than in Latvia. The Finish connection
across the Gulf of Finland is being assiduously cultivated.
Lure of the West
But the great news is EU and NATO entry, now both certain and soon. The new premier, Silim Kallas, went with his Latvian and Lithuanian counterparts to
London in mid-March to discuss NATO enlargement with Tony Blair. Estonia is decisively under Western influence once again and breathing a sigh of relief
that that is so.
But everything Western is not so wonderful. President Arnold Ruutel is concerned about the spread of drugs abuse and AIDS, which were much less in evidence
before independence. The social fabric is still rent by a polarisation between rich and poor. Not everyone did well in the last ten years. The growth has
been from a low base. But with foreign investment, especially Scandinavian and German, attracted to Estonia by its location, its low wages and educated work
force, the prospects remain excellent.
Estonian national airline posts first ever profit
Estonia's national carrier, Estonian Air, posted a profit of 15m kroons in 2001, its first ever profit over the 10 years of operation. For this year, however,
Estonian Air forecasts a slim profit again, ETA News Agency has reported.
In 2001, Estonian Air boosted its turnover to nearly 800m kroons from 777m kroons in 2000. In 2000, the company posted a loss of 10m kroons. In 1999, Estonian
Air had a turnover of 721m kroons and a loss of 56m kroons. Estonian Air's vice president, Erki Urva, told ETA that it took the company 10 years to make a
profit since the company started with the Soviet-era Aeroflot aviation company heritage.
In 1996, the company was partly privatised by Danish Maersk Air...
EBRD sells 50 per cent of its shares in Estonia's Hansabank
The European Bank for Reconstruction and Development has sold half of its shares in Hansabank, the leading bank in the Baltic States, to a number of
reputable institutional investors, reducing its stake to 4.85 per cent from 9.7 per cent, a press release from EBRD stated. The EBRD acquired its initial
stake in 1998 as part of an effort to provide institutional strength to Hansabank and help promote its growth in the region.
CA IB Corporate Finance Limited acted as global coordinator and bookrunner to sell the EBRD's 3,824,392 shares. The offering was an international accelerated
bookbuilt private placement, under Rule 144A of the US Securities Act of 1933. The transaction was launched and concluded on 25th February 2002.
Kurt Geiger, Business Group Director for Financial Institutions at the EBRD, said the sale is a key element of the Bank's mandate to help Estonia's transition
to a market economy. It highlights the EBRD's ability to help strengthen financial institutions, as well as eight years of successful cooperation between the
EBRD and Hansabank. In that time, Hansabank has become the leading bank in the Baltic States. Moreover, Mr Geiger said the transactions should benefit the
local capital markets by making a larger number of shares freely available. Although it has reduced its shareholding, the EBRD remains a significant investor
and lender to Hansabank and is strongly committed to its further development.
The offer price was set at €12.30 per share, raising a total of €47.04m. The price is equivalent to a 2.79 per cent discount on the closing price of 22nd
February on the Tallinn Stock Exchange. The book was 1.5 times oversubscribed and the shares were placed primarily with dedicated emerging European funds in
continental Europe and the UK. Around 1.9m shares or 50 per cent of the offering were placed with Hansabank's major shareholder Förenings Sparbanken AB
(Swedbank), increasing their shareholding to 60.08 per cent.
FOREIGN LOANS & AID
Estonia receives 2bn kroons in foreign aid in 2001
Estonia received 2bn kroons of foreign aid in 2001, 36 per cent more than in 2000, a report to be submitted to the government on 9th April showed, with 63 per
cent of the foreign aid coming from the EU and 36 per cent from the Nordic countries, ETA News Agency has reported.
Estonian government institutions received foreign aid to integrate the country and meet EU membership tasks. The EU allocated 460m kroons (29.4m euros) to
Estonia via its PHARE programme: 59 per cent of the aid was used as investment to make Estonia EU compatible and 41 per cent to increase the administrative
capacity. SAPARD (Special Accession Programme for Agriculture and Rural Development) has allocated 12m euros (187.8m kroons) to Estonia in 2000-06 and paid
out 4.62m kroons (295,000 euros) in 2001. ISPA (Instrument for Structural Policies for pre-Accession) has planned to allocate 447.6m kroons (28.6m euros) to
Estonia each year during the period 2000-06. Last year, seven ISPA projects were signed in Estonia, with a total value of 848.23m kroons (54.2m euros), of
which EU will pay 40.5m euros.
Starting with 1992, Estonia has received a total of 11.97bn kroons in foreign aid.
Estonia to abolish waiting lists for telephones by March 2003
Valdo Kalm, chairman of Estonian Telephone's board, has said that his enterprise must abolish waiting lists for telephones by no later than the beginning of
March next year. Estonian Telephone will spend 20m kroons on the project, Aripaev web sited reported.
As of 1st April, 9,600 applicants, most of them private individuals, were waiting for a standard telephone to be installed. The longest waiting list was in
Harjumaa District [near Tallinn] where about 3,000 were waiting.
According to Ain Parmas, head of media relations at Estonian Telephone, there were 11,000 individuals on the waiting list at the beginning of the year. Among
them, nearly 3,000 have been waiting for a telephone for more than five years. At the beginning of 2001, there were 24,000 names of the waiting list...
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