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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 Western Europe.
Update No: 26 - (25/04/03)
New Government forms
The Estonian republic is in the throes of a political upheaval, which should not make such a big change for all that in its current policy stance. All parties in Estonia, bar the minority Russian ones, are in favour of NATO and EU membership, both due for June 2004.
The president, Arnold Ruutel, has named Republican Party Chairman, Juhan Parts, as prime minister designate. Res Publica, the party's actual name, is broadly centrist. It won 28 seats in the 101-seat parliament on March 2nd and has two allies in the Reform party and the Popular Union giving it leadership of a 60-seat bloc, enough to form a coalition government.
The coalition refused to accept the participation of the Centrist Party. That party has recently been involved in widely-publicised political scandals.
Recently, Ruutel asked Tallinn Mayor and Centrist Party leader, Edgar Savisaar to form the cabinet. However, Savisaar turned down the offer, saying a coalition had been set up behind the winner's back.
New parliamentary speaker
Meanwhile, Vice President of the Estonian Academy of Sciences, Ene Ergma, was elected speaker of the Estonian parliament, which is the second most important post in the country. Her nomination was confirmed in a 66 to 3 vote. Thirty ballot papers were qualified as invalid. The vote involved 99 of the 101 deputies. No other nominations had been proposed.
Ergma is a member of the Res Publica party and was elected to parliament for the first time. She was born on February 29th, 1944 in Rakvere. In 1969, she graduated from the Moscow State University where she majored in astronomy. She is a doctor of physics and mathematics. Ergma is a professor of Tartu University.
NATO membership beckons
The Estonians are particularly gratified at joining the North Atlantic Treaty Organisation, in effect, along with forthcoming EU membership, conferring Western status on the Baltic state. The Estonians have always seen themselves as honorary Scandinavians, and therefore, Westerners, and not at all as a Russian outpost, despite the 20% of the population who are ethnically Russian, including a majority in Tallinn, the capital. But the younger Russian generation are assimilating successfully, keen to become Estonians. For Estonia is the one decided high achiever among FSU states, even if social problems remain. Again it is a matter of the generations. Those who grew up in Soviet times are unfortunately poorly adapted to the testing conditions now facing the country, the often-harsh world of the market economy. But the young are taking to it like a duck to water by and large.
Small-scale enterprises have been springing up in the interstices of the dismantled Soviet-era economy. Foreign investment has been attracted in and the new market economy is a model of liberalism and a testament to reform. EU entry will require more regulation and customs dues, not less, with the compensation of joining a vast continental market. The auguries for Estonia look good.
GDP climbs 5.8% in 2002
Estonian GDP in 2002 increased 5.8% year-on-year to amount to 106.5bn kroons, according to early figures, a source in the republic's statistics department said recently, reports New Europe. The source said that most growth in production was noted in construction (14.7%), the restaurant and hotel business (12.7%), the mining industry (10.6%) and wholesale and retail trade (10.1%). At the same time, production fell in agriculture (4.7%), fishing (2.5%) and in electricity, gas and water supplies (1.9%). Inflation in 2002 amounted to 2.7%.
Estonia blazes Internet trail
A crumpled piece of paper taped on the locked door of a bank branch at 125 Parnu Street provides the evidence: Closed. It's a common sight along this capital's streets. But it's not a sign of financial calamity.
Banking is actually booming in this former Soviet republic -- via Internet. The number of Estonians who bank online soared from zero in 1997 to 700,000 this year. That's half the country's 1.4 million people, The Mercury News reported.
From Tallinn to Tartu, scores of bank branches have closed, forsaken by cybersavvy Estonians. Nearly all businesses, from one-man shops to utilities, interact with banks in cyberspace.
The rapid embrace of online banking is but one example of the remarkable tech transformation of this Baltic nation where most people didn't even have a phone when Soviet control ended in 1991. Estonia has the most advanced information infrastructure of any formerly communist eastern European state. Dubbed E-Stonia by some, the country ranked No. 8 out of 82 countries in putting the Net to practical use in a recent World Economic Forum report. The country ranked No. 2 in Internet banking and third in e-government.
The government has launched a one-stop home page for online state services. Estonians can use it to digitally sign government forms or legally binding contracts with other people.
The government also set up a site called "Today, I'm Deciding" to let citizens offer their own opinions on legislation. It's got a chat room where they can debate the merits of bills or offer up legislation of their own.
Estonia's progress is especially impressive considering its condition at the time of the Soviet collapse, when you could count the number of modern personal computers on two hands, said technology consultant Linnar Viik. That relative backwardness proved an unexpected benefit. Estonia leapfrogged countries wedded to older technologies.
Many Estonians who now rely on wireless phones never had a landline phone. And most who now use the Internet to pay bills have never used a Western-style cheque book.
About 70 per cent of Estonians own mobile phones - about the same as the European Union average. Some 40 percent of Estonians have a home computer with online access. In business, online access is over 80 per cent. Estonia's second-largest bank recently began a service that lets people use mobile phones as debit cards at restaurants, hotels and gas stations.
Estonian paper makes case for investment in new Lithuanian nuclear plant
Lithuania's plan to build a new modern, and safer, nuclear power plant to replace the old nuclear plant using dangerous technology has forced Estonia into decision-making as well, the 'Postimees' newspaper has reported.
The newspaper asked the question: "Should we invest billions of kroons in oil-shale boilers alone or should we invest a part in nuclear energy?
"The plan to construct a nuclear plant in Lithuania is a good opportunity for us to go into the nuclear power business."
By 2016, Estonia must close its old oil-shale boilers in Narva. Oil-shale-based electricity can only be produced by two new energy blocs (which are under reconstruction). At its present consumption level, Estonia would need another three or four new energy blocs in 10 years' time, which would require about 10bn kroons (US$700m) in investment.
The EU will soon open its energy market to all consumers. In Estonia, the market will open in 2013, which is why it will have to think of a common Baltic energy market while it plans its energy resources. Besides Estonia, Latvia and Lithuania, Russia and Belarus will also be in this market. If Lithuania builds a new nuclear power plant, oil shale will face serious competition.
Instead of pointlessly investing billions of kroons in oil shale, which at some point will no longer be able to compete with nuclear energy due to rising environmental taxes, it might indeed be reasonable for Estonia to participate in the Lithuanians' nuclear project.
If the three Baltic countries optimize their energy resources together in an economically viable way, all consumers will benefit from a lower electricity price. Nuclear electricity, combined with oil-shale energy, might provide a power basis for the region's energy needs while Latvian hydroelectric power might be more extensively used when the rivers are full.
It is difficult to say yet whether the project will end up as a gigantic merger of energy producers. The plan for a joint enterprise of Estonian and Latvian energy providers that surfaced a few years ago demonstrated that energy producers are interested in this.
Ample experience shows that an energy market fully open to competition is no magic weapon for lowering the price of electricity, but is rather a threat to a secure supply. Energy companies based on private capital seek to make a profit and are interested in higher electricity prices, which is why investment in the development of new production capacities is blocked.
As investment in either oil shale or nuclear energy need not be made today, but in a few years, this would be a good time to consider all alternatives on the energy market and identify the pros and cons for each of them.
'Postimees' reported on the same day that Gunnar Okk, chairman of the board of Estonian Energy, Eesti Energia, the state-owned electricity provider, had said that Estonia should participate in the construction of the new nuclear power plant in Ignalina, Lithuania. "Estonia should definitely become a stakeholder in the Ignalina power plant. This means it should make a financial contribution towards its construction," Okk said.
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