Estonia marks 30 years of restored independence, but is their success down to keeping oligarchs out?
As Estonia celebrates the 30th anniversary of the restoration of its independence on Friday, Dailyrater looks at the elements that led to success for the tiniest Baltic state.
For starters, the nation has garnered an enviable reputation for mastery of the digital realm and leads the region on many economic and social indicators, flying very much in the face of a common misconception about 'slowness' being a national trait, of which more later.
For Tonis Saarts, Associate Professor of Comparative Politics in School of Governance, Law and Society (SOGOLAS) at Tallinn University, the country’s biggest accomplishments besides the EU and NATO memberships and the dominion of the e-realm is establishing “resilient and well-functioning liberal democratic institutions.”
Asked what Estonia did differently than the other two closest Baltic neighbours, Lithuania and Latvia, in executing reforms over the last 30 years, Saarts underlined that Estonia managed to avoid the rise of oligarchs.
“It later had a tremendous – and positive – impact on the quality of governance, economic development, and democracy. The privatisation reforms were playing the key role here in which those reforms were more transparent and better institutionalised in Estonia than in Lithuania and Latvia, and therefore left little room for the rise of national economic oligarchy,” Saarts told Dailyrater.
Reforms were more radical
Indrek Puolokainen, CEO of Swaper, a Tallinn-based fintech company, says that “right decisions” after the restoration of independence in 1991 are behind the country’s success.
“Our government took the risks and made reforms fast. Since Estonia does not have many natural resources, we started to move into the digital era fast and started many digital projects. This has led to the creation of many software companies in Estonia,” Puolokainen said.
Compared to Lithuania and Latvia, Estonia started reforms in the 1990s more radically, says Annely Akkermann, Estonian MP of the ruling liberal Reform Party.
“The 'Clean Sweep' programme instigated by former prime minister Mart Laar and his government threw out all relics of the Soviet system,” the MP went on.
Technology and Digitalisation
Catlyn Kirna, a Lecturer of International Relations. School of Governance, Law and Society (SOGOLAS) at Tallinn University, told euronews.com that the country’s biggest achievement over the last 30 years has been “stability and of course, the technology.”
“Estonia, a very small country, has done wonders in the field of technology…We have built a strong e-Estonia and we remain as one of the most cyber-advanced countries in the world. Granted, it is a bit overhyped but the truth is still very impressive,” Kirna emphasised.
In the beginning, she says, Estonia took a much more “capitalist” route that “broke” society.
“It resulted not only in inequality but also in faster growth, especially compared to Lithuania, which took a very different route. In the end, though, we ended up being in the same position, more or less so. The only distinct difference has been Estonia’s primary focus on technology and a bigger focus on relations with Finland. Recently, Lithuania has been more ahead on foreign affairs overall, especially in dealing with Russia,” Kirna told Dailyrater.
Otto Tabuns, Director of the Baltic Security Foundation, said that besides the EU and NATO memberships, progressive digitalisation of public services, welcoming business environment and simple taxes seem to him as the country’s most commendable achievements over the last 30 years.
“They have allowed residents and visitors to shape their lives more easily in Estonia than in many other countries, those in our proximity, too,” he said.
Although all three Baltic countries have achieved significant reforms during their independence years, it was Estonia that has made sharp policy decisions faster and, often, more efficiently than the other two.
“On the one hand, it resulted in a more rapid development and increased inequality as legacy subsidies were slashed. This was most visible in the agriculture sector, most notably in the periphery. On the other hand, perhaps this has helped many Estonians to become more creative, innovative and risk-taking in achieving success in emerging sectors of the economy. Many resulting successes have put Estonia on the global stage in the most dazzling light,” Tabuns added.
Akkermann told Dailyrater that an initiative called "Tiigrihüpe" (Tiger's jump) brought about a lot of entrepreneurship in the country, and also fostered a slew of digital public services and landed Estonia the NATO Cyber Defence Centre of Excellence.
This particular national programme was introduced by former president Toomas Hendik Ilves in 1996 while he was Estonia's Ambassador to the US.
Joining the EU
For Otto K. Schwarz, an Estonian composer and founder and CEO of Eat Beat OU, a startup based on AI-health-tech mobile application, the EU membership is not so much an achievement as a mechanism for achieving goals.
“Today Estonia is the richest country of the former USSR, as well as the first in terms of life expectancy. In terms of GDP per capita, our country bypasses other European countries such as Portugal and Greece. And in terms of the quality of life, Estonia even surpasses the US and the UK. In addition, Estonia is the first in Europe in respect of the digital economy development and according to the number of unicorns per capita,” Schwarz told Dailyrater.
What also sets Estonia apart from Lithuania and Latvia is that the former is the only Baltic country to have had a liberal government in power for almost 30 years.
“This allowed to create a democratic state with free press, (free) courts and real separation of the government branches,” he noted.
Land and sea guardianship
Michele Milstein, CMO at Endangered Wildlife OÜ, a Tallinn-based Tech4Good Fintech company specialising in the valuation of biodiversity, marvels at how Estonia protects its nature.
“All three Baltic states have extensive forests, but, concerning land, in Estonia, close to 40% of the land is protected compared to around 17-18% in Lithuania and Latvia. As regards marine waters, though, Lithuania has the largest percentage, followed by Estonia. Yet Estonia has the largest number of protected areas, at 17, 634. There is the continual threat in Estonia, however, to the estimated 26,000 to 45,000 species due to the shrinkage of habitable areas and the changing land use,” Milstein told Dailyrater.
“Despite this, with more than 100 years of nature conservation and recent detailed nature and conservation plans in place, together with Estonians' love for nature, one can be positive for the future,” she added.
And what's this about Estonians being slow?
Like many of his countrymen, Tallinn University's Saarts has heard good-natured anecdotes about the supposed slowness of Estonians.
“I think that they have more to do with a pragmatic peasant mentality coupled with Protestantism. It has changed very little over the last 30 years,” Saarts noted.
Schwarz took the observations about Estonians’ supposed sluggishness seriously.
“Historically, Estonians were mostly farmers, and farming requires patience. Nature teaches calmness. But now times are changing,” he said.
“It is a misunderstanding that Estonians are slow. We think 9 times before we move. But if we move, we do it very rationally,” Akkerman, the MP, maintained.
Finally, Tanel Tahepold, owner of Tartu-based software solutions provider Actual Reports, offers an entirely different take on the speed of Estonians.
"We’re definitely the fastest around: we have Ott Tanak, who has become WRC World Champion, making him the first-ever Estonian to take the title. And here is Juri Vips, a promising racing driver, currently in Formula 2, who has set eyes on F1 and already races for Red Bull Junior Team,”.