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ESTONIA


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 6,413 5,500 5,100 100
         
GNI per capita
 US $ 4,130 3,870 3,780 74
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km) 
45,227 

Population
1,408,556

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

Capital 
Tallinn

Currency 
Kroon

President 
Arnold Rüütel

  

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. 
The referendum on EU entry was won by the pro-EU side quite comfortably, 66.9% to 33.1% against
Nobody would dispute Estonia's excellent credentials to belong to Europe. Founded by the Teutonic Knights and the mercantile Hanseatic League in the early Middle Ages it was always looking across the sea rather than inland. Just across the Gulf of Finland, it is in all but name a Scandinavian country. It adhered to the Reformation before any other European state in the 1520s and has been a model of Nordic propriety ever since. The Protestant work-ethic is proverbial.
The very success of Estonia since independence outside not only the USSR, but also the EU, however, gave some Estonians second thoughts. The Centre Party, Estonia's largest opposition group urged the nation to vote against EU membership. They object strongly to the fact that the EU is requiring the Estonians to scrap a great deal of their free trade practices, adopted since 1991. It is as if they have to join a new USSR, which does not take account of their peculiarities.
It is arguable that the Estonians could have achieved all that they need from integration into Europe already without the drawbacks. Since independence they have done remarkably well. The Germans, their traditional allies, helped to set up the koruna, their new currency, in June 1992. They soon established a free trade regime second to none in the world. It was a question of a bonfire of controls. 
GDP leaped ahead at 5% rates of annual growth. The sagacity of the move to monetary independence was shown in 1998-99 when they were the one FSU state to survive the rouble crisis without much in the way of reverse.

Update No: 278 - (01/03/04)

The Estonians are faring pretty well, all things considered. Their economy is humming along and their future looks assured in the EU, which they are joining in May.

The Gaelic model
The ideal to which the Estonians are aspiring is that of Ireland, another small country, which has made a huge success out of EU membership. The Estonians do not speak English as their native tongue, but they are by and large fluent in English, as well as German. The historic ties are with Germany. 
The Second World War was the traumatic event for the Estonians. Previously they had had four ethnic communities, but the war eliminated two of them, the Jews and the Germans. That left the Estonians themselves alone with the Russians, who had swallowed them up in the name of Communism in 1940. The Russian minority is 26% of the total population, but predominates in the towns, being a majority in Tallin, the capital
There is no such dominance of the British in Dublin, although Belfast is another matter. Ireland is a small well-integrated country and that is what the Estonians aspire for their own country. The process will take time, but the young Russians are keen to belong to what is seen as a land of opportunity and increasing plenty. But security is still seen as a problem.

NATO membership the security answer
The Estonians are already members of NATO, the security umbrella of their choice. Two recent decisions concern it. The air force chief, Mart Vendla, has announced that Amari Airfield, 30 kilometres southwest of Tallinn is likely to become the NATO air base needed by the organisation for its operations in Estonia. Tallinn Airport is not suitable for that role, breaching EU noise and pollution regulations.
Amari is a former Soviet army base with an airfield, which, after renovation, could serve the purpose well.
The opposition leader, Siim Kallas, a former premier, has informed his colleagues in the Reform Party that he thinks Estonia should end compulsory conscription and move towards a fully professional armed forces, capable of just such specialist missions as the effort in Afghanistan. The country's security cannot be guaranteed by a larger force, but only by NATO. Spending should be concentrated on first-class equipment, antiaircraft defence and other high-technology weapons that can only be effectively deployed by career soldiers.

Foreign help forthcoming
The Estonians are doing well and receiving a lot of help from abroad to do so. Their GDP is growing by 5 % this year, which is exactly the average rate of growth that they have sustained since independence twelve years ago in 1991.
Estonians are on the top of the latest business trends. For Mari Kooskora, Director of the Centre for Ethics at the EBS in Tallinn, post-Enron social responsibility is just as great in Estonia as in the West. "For years, the main value has been success and earning money," she says. "But today, people realise that's not enough. They want more human trends in business."

Bridge to the Russian bear
Ms Kooskora strikes another note when she points out: Foreign businesses are interested in us because of our geographical position and historical relations with Russia. We are a bridge to the big market."
Indeed, Estonia has also been called the Hong Kong of the North. It is an excellent gateway to Russia. The flavour of business there is, nevertheless, set by the West, one very good reason to prefer it to entering Russia itself. Not for nothing will Estonia be part of the EU by June, 2004. Estonia offers an EU office right next to the huge Russian marketplace. A steady stream of Scandinavian and Western European money is flowing into the service industries, real estate, shopping malls and retail chains. Statoil, Carlsberg and Finnish and Swedish telecom and banking firms are present. MacDonald's, Coca-Cola and Philip Morris are in town. The Russians appreciate the cosmopolitan atmosphere themselves and are establishing their own joint ventures.
The process is still in its early stages. There is great scope for catching up. But there is every reason to suppose that in a generation or two Estonia will become a prosperous nation unmistakably of the West. 

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TRANSPORT

Tallink Group to offer new daily ferry service

Estonian shipping company Tallink Group will offer a daily ferry service from Helsinki to Saint Petersburg via Tallinn from April 2004, the company directors said at a business fair in Helsinki. The ferry Fantasia, which is currently being used on the Tallinn-Stockholm route, will operate the route. The ferry will complete a round trip once a day and will carry up to 1,700 passengers. It is 136 metres long and 24.6 metres wide. There are currently over 260 passenger ferries leaving Saint Petersburg each year, Aripaev newspaper reported. Tallink will add another 365. Head of Tallink, Enn Pant, said that an even larger ferry might be used in future


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