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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)

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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: 291 - (01/04/05)

Estonia's government collapses
The government of Estonian Prime Minister Juhan Parts collapsed in late March. The Parts government stepped down on March 24 after parliament voted no confidence in Justice Minister Ken-Marti Vaher. A new candidate to form a new government will be appointed within two weeks. 
Parts announced the dissolution of his coalition government - the 10th to lead the country since independence from the Soviet Union in 1991 - after some coalition lawmakers sided with the opposition in a no-confidence vote against Justice Minister Ken-Marti Vaher. Vaher has come under fire for his proposal to draw up a system of annual quotas for the number of corruption cases to be handled by regional prosecutors. 
The government's resignation took effect on 24th March. After that, President Arnold Ruutel had two weeks to name a candidate for the post of prime minister. Parts, 38, has said that he would work to form a new government.
The next general elections in Estonia are scheduled for March 2007.

Estonia president in consultations on new prime minister
President Ruutel has begun consultations with leaders of parties represented in parliament on the candidacy of the prime minister. Ruutel met on March 29th with Andrus Ansip, chairman of the Party of Reforms who gave his ideas about a coalition that could form a cabinet of ministers. Ansip was the first to visit the president's palace on March 29, and much of the speculation has focused on his nomination. Ansip is deemed the likeliest candidate to succeed.
But Ruutel would meet leaders of other parties in the coming days. Sources close to the presidential chancellery said a candidate for the prime minister could be called within two days. 
Many expect that the leader of reformists, Andrus Ansip, will be commissioned to form a new government.
This, in turn, has given rise to two likely scenarios for the next coalition government: a right-wing coalition of Res Publica, the Reform Party and Pro Patria Union, or a mixed bloc of Res Publica, the Reformists and the Centre Party.
Ansip was scheduled to meet with party leaders from both Res Publica and Pro Patria on March 30th, intensifying speculation that a right-wing coalition with 54 seats in Parliament was likely to materialize. If it does, the new Cabinet would be further to the right than the previous one, with Pro Patria replacing the People's Union. 
Parliamentary parties proceeded with meetings even before the government of Juhan Parts resigned on March 24th. Generally, all parties said they were open for cooperation with any partners, with the exception of Pro Patria Union, which said it would never join a coalition with the Centrists.
Centre Party Chairman Edgar Savisaar said that a coalition based on a common world-view would be easier to build and might last longer. 
"It is understandable that Ansip has started with an attempt to compose a coalition of the Reform Party, Res Publica and Pro Patria Union. If he succeeds at that, he would have to be commended," said Savisaar.
"Of course the main dispute between us and the Reform Party is, on one hand, the continuation of the tax reform the Squirrels [the Reformists' mascot - ed.] promote, and on the other hand, introduction of a progressive income tax, which is our long-term goal," said Savisaar. "However, in the tax policy we also have common positions. Neither of the parties supports an increase of the tax burden."

The Parthian shot of Parts
Parts said in a news conference on March 24th that no party in Parliament should avoid the responsibility of forming a government, and that the Reform Party and maybe the People's Union could be the principal driving force in shaping the new coalition.
"It would be logical from our point of view that the parties who caused the government crisis should take the responsibility of providing Estonia with an operative government," Parts said of his coalition partners. "These are the ABCs of democracy."
In Parts' opinion, differences in the programmes of local parties could never block the way to forming a ruling coalition, because in practice a compromise is always possible.
Parts admitted his Cabinet was very diverse as it united the more left-leaning People's Union, the right-wing Reform Party and the center-right Res Publica. He said that a possible union of Estonia's three right-wing parties - Res Publica, the Reformists and the Pro Patria Union - would be "one possible scenario." Together the three would have 54 seats in the 101-strong legislature.
Whether Res Publica and the Reform Party, who last year signed a memorandum on a possible merger, could mend fences was still a matter of conjecture. Parts said Res Publica, a young party he helped create in 2001, would consider cooperating with the Reformists, if Ansip admitted the no-confidence vote on Vaher and the whole government crisis were in fact actions of manipulation.
The outgoing prime minister suggested the government crisis would trigger changes in Estonia's political landscape. "I do not exclude that soon we will hear about consolidation of left-wing forces, which would have been very positive. I think today there is a great opportunity for that. I believe they will use it," said Parts.
However, cooperation between leftist forces in Parliament seemed to have reached a dead end after the March 29th meeting of the Center Party and the Social Democrats. The latter's chairman, Ivari Padar, told the ETV public television channel that an agreement with the Centrists did not look possible due to a different understanding of democracy. 
"We do not consider creation of a leftist government really probable, but in politics everything is a matter of negotiations," said Padar. Parts strongly rejected the idea that he should give up the position of Res Publica chairman due to the government crisis.
"I do not think at all that the government's collapse is some sort of failure for Res Publica. Res Publica is not a party that would hold onto power at all costs, otherwise we could have acted differently," Parts insisted.
Parliamentary speaker Ene Ergma, a member of Res Publica, kept her seat after MPs opted to re-elect her to the position on March 24th. Her new deputies will be Andres Lipstok from the Reform Party and Toomas Varek of the Centre Party. 
Peeter Kreitzberg from the Social Liberal parliament group failed to keep his deputy speaker position. 
Lipstok, who had earlier replaced Rein Lang as the deputy speaker when the latter had become the new foreign affairs minister, was re-elected.

Refusal to celebrate Victory Day in Moscow
The Estonians are refusing to send a delegation to celebrate the 60th anniversary of Victory Day, May 9th, in Moscow. For them, May 1945 merely saw them exchange one totalitarian regime for another, as the Soviets clamped down again on the Baltic states.
Relations with the Russians are still strained, with one in five of the population of Russian ethnicity. The wounds are by no means all healed. The younger generation of Russian Estonians are the best bet that eventually they will. They are learning Estonian at school and mingling with Estonians proper. Inter-ethnic marriages are still rare, but are rising in number. The far greater opportunities for the Russian Estonians in Estonia then in Russia make an increasing number of them identify with their adopted country.

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ENERGY

Ministry wants Energia dividend

The dividend from the Estonian state-owned power utility Eesti Energia to the state could reach 97m kroons (6.2m Euro), New Europe reported recently. 
The state has received no dividends from Eesti Energia. The finance ministry's proposal for the payment of dividends is that the company has been earning considerable profits for several years in succession, making it possible to invest and, considering the capacity of servicing of loans, also to pay dividends. "Besides, we are guided by the principle that trade in greenhouse gas emission quota will start in 2005, and could bring additional revenues and money flows that could be used for investments without fear that the payment of dividends would make it impossible to make the necessary investments," the ministry said.

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TELECOMMUNICATIONS

Teleglobe expands IP capacity links with Estonia's Elion

Canadian carrier Teleglobe International Holdings Ltd said it has doubled the wholesale IP capacity furnished to Estonia's telecom/IT service provider, Elion Group, which currently is seeing accelerated growth in its retail broadband subscriber base, a recent company statement said. The deal covers international carrier and internet access support for digital subscriber line (DSL) customers and other high-speed connection customers at domestic incumbent Elion. Elion's DSL subscriber base reportedly grew more than 50% in 2004 to about 77,000 lines, to about one out of every four homes in Estonia, and accounted for approximately 63% of the internet access market in Estonia at the end of last year, according to reports in Telecom Web and sister publication Tarifica Alert. Teleglobe has provided international telecom services to Elion, a subsidiary of AS Eesti Telekom, since 1990. The expanded deal provides access to Teleglobe's Tier 1 internet backbone which directly connects to over 90 countries at bandwidth speeds from 64Kb/s to 10Gb/s.

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TOURISM

Raffles Intl to make debut in Estonian hotel market

Raffles International, the hotel management arm of Raffles Holdings, boosted its hotel management list recently by signing a contract to run a hotel in Estonia, The Business Times reported.
Through Osauhing Evans Kinnisvara - its local subsidiary there - it sealed a deal with Tornimae Hotel to manage the Swissotel Tallinn Estonia. This is the second hotel contract that Raffles has secured in Eastern Europe after signing one last year for the Swissotel Krasnye Holmy Moscow in Russia.
Scheduled to open in early 2007, the 28-storey Swissotel Tallinn Estonia will have 239 rooms.
It is situated in a prime city location and will be part of a multi-complex comprising apartments and shopping centres. The hotel will include facilities like conference and meeting facilities, food and beverage outlets, three executives floors and a health club.
Said Rein Tiik, chief executive officer of EKE Invest: "Since our initial discussions with Raffles International, we have been impressed with the company's expertise in hotel management and strength in brand marketing. We are delighted to enter into this partnership with them to operate the first deluxe hotel in Tallinn to tap into the growing business market in Estonia.

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