Books on Estonia
Update No: 311 - (28/11/06)
The jewel of the Baltic
With a landmass of 45,250 square kilometres and a population of roughly 1.3
million, it is separated from Russia by rivers and lakes, while Latvia is the
only land border. It is a virtual peninsula.
Estonians are of Finnish origin, predominantly Lutheran and were called eastern
Vikings 11,000 years ago. Danes, Germans, Russians have variously invaded
Estonia since 1219. In the 14th century the country was sold for 19,000 silver
marks to German landowners.
It was the first state outside Germany to go Protestant in 1527, of which it is
very proud. It was absurd that it was ever a part of the Soviet Union.
The Estonians are the most enterprising people and they are showing that now by
taking to capitalism like a duck to water.
The death of Milton Friedman
Their guru was Chicago Professor Milton Friedman, who has just died at 94, only
months after the demise of John Kenneth Galbraith, supreme at Harvard, at 98.
These two were in every way at loggerheads throughout their careers, though with
an amused mutual tolerance. Estonia could have been their supreme battleground.
They were opposites in every respect, even physically. Friedman stood 5ft 2
inches tall; Galbraith 6ft 8 inches. The irony was that Friedman rallied to the
cause of the giants, the multinationals, Galbraith to that of the small man in
It will be a question long-debated in economics as to which was nearer the
But for Mart Laar, premier of Estonia in the tempestuous early years of Estonian
independence, there is no doubt.
In 2006 the Cato Institute awarded Laar the Milton Friedman Prize for Advancing
Liberty. Recently Mart Laar also became an economic adviser to Georgian
President Mikhail Saakashvili.
Mart Laar's Biography
When Mart Laar began his second term as prime minister of Estonia in 1999,
the country was in the midst of a fiscal crisis. The collapse of Russia's
economy the year before had left Estonia's stock market reeling, and the
government was struggling to fund the benefits promised by Soviet-era social
Laar realized that the only way for Estonia to weather the crisis was to finally
leave behind the legacy of its communist past. He announced deep cuts to
paternalistic state welfare programs, slashed business taxes, and urged
liberalization of international trade. By the end of his term, the government's
Bureau of Privatisation was dissolved; more than 90 percent of the economy was
in private hands. The economy was growing 7 per cent annually, and Laar was
widely credited as the force behind the creation of the "Baltic
Mart Laar believes in economic freedom because he believes in the Estonian
people. As a young student of history, Laar braved Soviet arrest by researching
Estonian resistance to the World War II occupation. In his first term of office,
he negotiated the withdrawal of Russian troops from the country, introduced the
highly stable Estonian currency, and implemented a flat tax that has decreased
steadily since 1994.
Laar is not an economist, and he says that his boldness came mostly from naiveté.
"I had read only one book on economics-Milton Friedman's Free to
Choose," he said. "I was so ignorant at the time that I thought that
what Friedman wrote about the benefits of privatisation, the flat tax and the
abolition of all customs rights, was the result of economic reforms that had
been put into practice in the West. It seemed common sense to me and, as I
thought it had already been done everywhere, I simply introduced it in Estonia,
despite warnings from Estonian economists that it could not be done. They said
it was as impossible as walking on water. We did it: we just walked on the water
because we did not know that it was impossible."
Laar's dedication to progress and economic freedom has allowed the former
communist state to develop into one of the most dynamic economies in the world,
ranking in the top 10 countries in the Economic Freedom of the World index. At
the dedication in 1995 of the F. A. Hayek Auditorium at the Cato Institute,
House Majority Leader Dick Armey said of Laar's government, "If Estonia is
not a vindication of everything we believe in-from free trade to privatisation
to sound money to balanced budgets-I am at a loss as to how else one could
validate our ideas." Laar has defied common wisdom in Europe to prove that
economic freedom works.
Eesti Energia eyes Jordanian oil sale
Estonian state-owned energy company, Eesti Energia, revealed on November 5th it
had inked a ground breaking deal with the Jordanian firm Oil Shale Energy of
Jordan to acquire a majority stake in the company. An Eesti Energia statement
said that the company has acquired 76 per cent in the Jordanian firm. It added
that the Estonian firm would shortly carry out a feasibility study into
processing oil shale there. "Using this company, we will conduct a
feasibility study into creating an oil shale factory in Jordan," the
statement read, New Europe reported.
To extract oil from oil shale - rocks that contain matter from which petroleum
can be extracted by distillation - the underground rock must first be heated to
extremely high temperatures. This allows hydrocarbons to be released, after
which they must be pumped to the surface for processing.
Estonia produces all its energy from the oil shale reserves in the Baltic state.
The deal was valued at US$250,000 and the stake was sold by the Amman-based Near
East Group, according to the statement.