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Estonia

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  ESTONIA

REPUBLICAN REFERENCE

Area (sq.km) 
45,227 

Population
1,423,316

Principal 
ethnic groups 
Estonians 63.9%
Russians 29%
Ukrainians 2.7%

Capital 
Tallinn

Currency 
Kroon

President 
Arnold Rüütel

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Background:
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 Western Europe. 

Update No: 262 - (22/10/02)

The Estonians are aspiring to bounce their way into the modern world in a generation or two. With a GDP per capita of more than US$10,000 they are still poor by Western European standards. But they are catching up fast.

Exemplary model of reform
The Estonians are way ahead of any other former Soviet state in reform. Partly due to their Protestant tradition and partly due to the traditions of the Hanseatic League, to which Tallinn and Parnu belonged, the country is also right next to Finland, with whom it shares close linguistic and cultural ties. This last fact was decisive in giving Estonia an edge over Latvia, also Protestant and linked to the Hanseatic League.
The Estonians invited the Germans in to advise them after independence and set up a currency board system in June 1992, creating the first independent currency in the FSU. They have not looked back since and have a very good record, GDP growing by around five per cent annually ever since. There has been an alternation of governments and parties in power, but each of them has been committed to reform. The present premier, Siim Kallas, heads a government that is no exception. Tireless in following up reforms, it is branching out in new directions.

Widening its foreign relations
Estonia now trades 70% of its foreign commerce with the EU and is shortly, in 2004, or 2005 at the latest, to join the organisation in full complement. NATO entry is also an imminent affair.
The Central Associations of Estonian Employers has decided to establish a representation of Estonian entrepreneurs in Brussels. It will be able to become an active member of the Union of Industrial and Employers' Confederations of Europe (UNICE) after full EU entry.
The Estonians have representation in Sweden, Finland, Germany, the UK and Russia, the main Nordic nations in other words. In late September the French foreign trade minister cane to Tallinn and met Kallas. The premier wants to see greater French involvement. France is only 19th in FDI stakes in Estonia, a lowly position for the fourth largest economy in the world. Cultural and religious hurdles probably matter here.
Kallas went to the US earlier in the year where he has established warm relations with the Bush Administration. While Germany is the key ally in Europe, the US remains the indispensable ally world-wide. There is a large diaspora in North America and an interchange between it and Estonia is appropriate. The outlook for US - Estonian relations could not be more promising.

A constitutional revolution
Kallas has a restless mind. He is concerned to see Estonia in the forefront of reform in every sector, not just that of the economy.
At an extraordinary forum of state officials in Tartu recently, Kallas suggested scrapping his post and giving the premier's responsibilities to the president, as well as several other changes. At the moment the president is little more than a ceremonial figurehead.
There were sceptical reactions to his ideas among Estonian observers. Ken-Marti Vaher, deputy chair if Res Publica party, described the proposals as utopian. "They would demand huge changes in the constitution. That is very difficult and takes a lot of time. Maybe Kallas is trying to draw public attention away from the recent scandals Reform party members have been involved in," he said.

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AGRICULTURE

Estonia produces interim harvest report

By 15th September, 97 per cent of the sown area under cereals, 88 per cent of the sown area under rape and turnip rape, and 49 per cent of the area under potatoes had been harvested, ETA News Agency has reported, quoting, the Statistical Department of Estonia. 
According to preliminary data, in 2002, cereals were grown on 272,800 hectares, of which 97 per cent has been harvested. One hectare of harvested area yielded on an average 2,002 kg of cereals, of which 2,495 kg of rye, 2,340 kg of wheat and 1,812 kg of barley. Rape and turnip rape were grown on 33,600 hectares, of which 88 per cent has been harvested...
Potatoes were grown on 18,200 hectares, of which 49 per cent has been lifted. One hectare yielded on average 19,555 kg of potatoes.

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INFORMATION TECHNOLOGY

Estonia to provide computers for Georgian military academy

The Estonian government decided on 24th September to allocate 565,000 kroons for the purpose of donating a computer class to the Georgian military academy. The Defence Ministry asked the Foreign Ministry to apply for the money from the government's humanitarian and development-aid reserve to carry out the project of opening a computer classroom at the Georgian united military academy, since this project would be an important step in fostering bilateral cooperation with Georgia, ETA News Agency has reported.
The Defence Ministry received a letter asking for such aid from the Georgian defence minister, Davit Tevzadze, in June. The ministry said that the project would be a real expression of support to Georgia towards modernizing its state defence education system. The project will include buying 11 computers, installing Internet connections and necessary software and furnishing the classroom...

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SHIPPING

Norwegian company buys 100 per cent of Estonian Shipping Company

The Norwegian shipper Tschudi & Eitzen Group announced on 8th October that it had concluded an agreement on the purchase of 100 per cent of shares in Eesti Merelaevandus (Estonian Shipping Company, ESCO), BNS News Agency has reported. Tschudi & Eitzen signed the deal after months of negotiations with the ESCO majority owner, ESCO Holding. Tschudi & Eitzen said in a press release it was satisfied that the talks with creditors regarding both ESCO Holding and Estonian Shipping Company ended with such a result that the company would continue its business in Tallinn in future.
The Tschudi & Eitzen Group was a majority owner in Estonian Shipping Company earlier by holding majority shares in Baltic Sea ASA, the owner of 80 per cent of shares in ESCO Holding. ESCO Holding meanwhile was the owner of 100 per cent of Estonian Shipping Company, with 20 per cent of the shares pledged to the Estonian government as a collateral for liabilities...
The latest available data on Estonian Shipping Company's performance dates from the year 2000 when the company made a loss of 400m kroons on sales of 1.138bn kroons. A year earlier the company had posted a loss of 322m kroons on sales roughly as big as in 2000.

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TELECOMMUNICATIONS

Estonia expects 13m Euro from sale of UMTS licences

The Estonian government has written 200m kroons (12.8m Euros) into the draft of next year's state budget as anticipated revenue from the sale of third-generation mobile licences, although there is no definite buyer in sight, New Europe reported. "The budget for next year does contain money from the sale of third-generation licences," 'Eesti Paevaleht' quoted Finance Ministry spokesman, Eero Raun as saying. "The plan is to sell up to four licences, each at 50m kroons," he added. The daily quoted Ruan as saying the possibility that all four licences will not be sold has been taken into account. The manager of mobile operator, Radiolinja Eesti, Sami Seppanen, said the government's plan was not realistic. "I'm very surprised that two licences got a launch in Latvia," Seppanen said. "That three or four licences will be sold in Estonia is in no way certain," he added. The head of operator EMT, Peep Aaviksoo, said the idea had come from somewhere, and that four licences was considered appropriate for Estonia. "I cannot help but have doubts about it," he said. While the government endorsed the draft of the 2003 state budget on September 17th, the revenue side of the draft has not been made public.

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