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ESTONIA


 



In-depth Business Intelligence 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 8,383 6,413 5,500 95
         
GNI per capita
 US $ 3,870 4,130 3,870 72
Ranking is given out of 208 nations - (data from the World Bank)

Books on Estonia

REPUBLICAN REFERENCE

Area (sq.km) 
45,226 

Population
1,341,664

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

Capital 
Tallinn

Currency 
Kroon

President 
Arnold Rüütel


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 business. 

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It will be a question long-debated in economics as to which was nearer the truth. 
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 programs. 
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 Tiger." 
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. 

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ENERGY

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.

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