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  2003 2002 2001 Ranking(2003)
Millions of US $ 8,383 6,413 5,500 95
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Arnold Rüütel

Update No: 309 - (26/09/06)

Estonia has a new president
In a surprise result a Western-leaning former diplomat and journalist was narrowly elected Estonia's president on September 23rd, ousting the incumbent, Arnold Ruutel, who had been favoured in the race. 
Toomas Hendrik Ilves, 52 was reared in the United States and has a psychology degree from Columbia University. Ilves received 174 votes from the 345-member electoral college, made up of lawmakers and municipal leaders, compared to 162 votes for Ruutel, the electoral committee said.
Ruutel's disadvantage was perhaps that he is 78 years old and would therefore have been in his eighties for most of his term of office. That may have been held against him in a country which has a decided cult of youth. Curiously the two presidents Estonia has had since independence were both over sixty when elected, the first, Lennart Meri being an exceptionally distinguished man, the leading Estonian dissident through the long dark night of communism and the world's leading scholar of Finno-Uguric languages and cultures, to which group Estonia belongs.


Ilves said after his election that he wants to take the former Soviet republic "more to the centre of Europe." 
"Estonia should be among the idea generators in Europe," he said at a news conference. This it already is with its initiation of the flat tax, an idea taken over from radical fre market economists in the US.
Ilves - known for always wearing bow ties - is expected to integrate the country further into the European Union and firm up already warm relations with the United States. Estonia joined the EU and NATO in 2004 and is hoping to adopt the euro in the next few years.
Ilves is a two-time foreign minister and former ambassador to the United States, Canada and Mexico. He is also a former journalist for Radio Free Europe in Germany.
Born in Sweden to Estonian parents, he moved to Estonia in 1996. Critics had dubbed him "an American in a bow tie" and said he had spent too much of his life abroad to understand current domestic issues. 
They also said he had no experience in dealing with Russia, Estonia's huge neighbour, with whom relations have been icy since the Baltic country's regained its independence in 1991. "The road to Moscow goes via Brussels," Ilves said, when asked how he intends to handle relations with Russia. Brussels is the main seat of the EU's institutions.
His five-year term as president starts from October 9th.
While holding few powers apart from representing the country abroad and being the supreme military commander, the president is seen as a balancing power above the fray of partisan politics.
But past presidents - especially Lennart Meri, who died earlier this year - have shown that the head of state can also have a large influence on domestic opinion and become an internationally respected figure.

Bush coming to town in November 
The United States never recognized the incorporation of Estonia, Latvia and Lithuania into the Soviet Union in 1940, and has kept close ties with the three countries since they regained their independence in 1991. Each one of them is regarded with special affection by Americans, who well remember their key role in bringing down the Soviet colossus,
There was something awful about the way these three were gobbled up in 1940 that sticks in the gullet. Every thinking American knows this. 
President George W. Bush is one of the same. He will visit Estonia before a NATO summit in neighbouring Latvia in November, Estonian officials and the White House said on September 7th. Bush will stop by the Baltic country on November 28th for talks with Estonia's Prime Minister Andrus Ansip and President Ilves in what is sure to be a cordial atmosphere. 
Estonia joined the alliance, as well as the European Union, in 2004. The former Soviet republic is a close US ally, with troops serving in Iraq and Afghanistan. 
A White House statement said the president's trip would underscore NATO's role in "fostering a Europe whole and free." It said the visit would highlight "new allies that have successfully transitioned to free-market democracies, contribute to the war on terror and offer lessons learned and expertise to others pursuing liberty." 
Former US President Bill Clinton visited Tallinn in June 2002, but Bush's visit would be the first to the country by a sitting U.S. president. In February, Clinton received one of Estonia's highest honours, the Order of the Cross of Terra Mariana, for supporting the Baltic nation's bid to join NATO.


Here is a Finnish perspective on events:- 

President-elect Toomas Ilves wants to unite nation
The office of the Presidency has a powerful symbolic significance in Estonia, and the President is a key figure in moulding public opinion. He has practical power primarily in questions of appointments. One task of the next president will be to put forward a new commander for the Estonian armed forces, to replace Tarmo Kouts, who is moving into politics.
Ilves said at a press conference on September 23rd that he would use the power of his office to work on behalf of the people. He also said that he would serve as a national unifier, as polls indicate that more than 60 per cent of the people supported him. 
Prime Minister Andrus Asnip of the Reform Party, who also supported Ilves, saw the election as an important phase in bringing the division of the nation to an end.
Backing Ilves were his own Social Democratic Party as well as the right-wing liberal Reform Party, and an alliance of the conservative Pro Patria and Res Publica. 
While the powers of the Estonian President are largely ceremonial, the Presidential race has nevertheless ignited the passions of the nation, and has sharply divided the Estonian people. Thousands of supporters of Ilves gathered in the Tammsaare Park next to the venue of the meeting of the Electoral College.
Ruutel's supporters mustered up a much smaller group.
"It is a question of principle. The people have expressed their opinions in opinion polls. Now we will see if the message gets through or not. Otherwise the same thing that happened in Hungary could happen here", said IT professional Marten Vill, who predicted that Ilves would win.
Ruutel supporter, Centre Party Chairman Edgar Savisaar, said before the vote that Ruutel's election would have a positive impact on development in Estonia. He fears that with Ilves, the impact would be negative. "Ilves is unpredictable in domestic politics", Savisaar said. 
Casting a shadow over the vote was a court appeal lodged over the choice of two electors.
The cities of Loksa and Sauen had first sent supporters of Ilves to the Electoral College, and some of the representatives of the local councils had later tried to replace them with supporters of Ruutel.
If both appeals are successful, Ilves would be deprived of the margin required for being elected President.
But somehow now there is a momentum building up for a new president. That is Toomas Hendrik Ilves.

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Budget surplus continues to rise

The Estonian economy is showing healthy signs of growth with the budget surplus already reaching three billion kroons (192 billion Euro) as of the end of July, New Europe reported.
The Estonian Finance Ministry, while announcing the figures, attributed the healthy revenue expenditure ratio to the buoyant economic scenario.
When calculated on a seven months basis, the budget revenues were estimated at 17.2 per cent higher compared with the corresponding period of 2005. Most significantly, the figure advanced by a billion kroons in just one month in July.
In all, the ministry said 37.3 billion kroons were paid into the state budget over the January-July period, 60.8 per cent of the annual 2006 target. Expenditures for the period amounted to 34.3 billion kroons, or 55.9 per cent of the target.
Estonia continues to adhere to a surplus-based fiscal policy, with the additional revenues going to a reserve fund. Recently the government endorsed the size of the 2005 budget surplus - 1.8 billion kroons (115 million Euro) - and decided to place the full sum into a pension reserve. Earlier this year, the Statistical Office reported that the size of the surplus was 1.6 per cent of GDP, the fourth highest in the EU. According to Eurostat, in 2005 Denmark had the biggest budgetary surplus of 4.9 per cent in 2005.
Inevitably, political parties were at odds how to use the surplus, with Villu Reiljan, the leader of the populist People's Union, one of the three parties in the ruling coalition, proposing that the funds be used to boost the social sphere.

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Work on Estlink cable begins in Gulf of Finland 

The laying of the submarine section of the Estlink power cable connecting Finland and Estonia started in Tallinn on September 11th. The 350-megawatt cable is due to couple the Baltic and Nordic electricity markets for the first time, News Room Finland reported. 
Three-fourths of the 100-kilometre cable is to be laid at the bottom of the Gulf of Finland and pushed slightly beneath the seabed to protect it, Indrek Aarna, the chief executive of contractor Nordic Energy Link, said. Work on the cable is due to be completed in September. The cable is to be taken into use at the end of November or the beginning of December after tests have been completed. The project is a 110 million Euro joint venture between Baltic utilities Eesti Energia, Latvenergo and Lietuvos Energija, as well as Finland's Pohjolan Voima and Helsinki Energy, the news report said.

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