Estonia

Abstract

Although the smallest country discussed in this book Estonia is generally regarded as one of the success stories of the post-communist period. While the literature in English concerning Estonia is not extensive — some government publications, occupational reports and surveys by banks and accountancy firms, a handful of articles — the general tenor of this writing is positive, while recognizing that there have in the course of the 1990s been worries about inflation, bank crises, and employment. Like all the countries discussed in this book, the GDP of Estonia actually contracted in the first few years after the end of direct communism, which in the case of Estonia also meant the end of Russian control. Nonetheless, we will try to show that Estonia is reckoned to have done fairly well in terms of exports, FDI, close relationships with particular western countries, as well as in terms of economic stability and the emergence of a viable form of corporate governance. Estonia is also slated for first wave membership of the EU, alongside Poland, Hungary, the Czech Republic, and Slovenia — the small, rather prosperous state in the north-west corner of what used to be Yugoslavia. Estonia is the only one of the three Baltic States (Estonia, Latvia and Lithuania) that is ‘first wave’ scheduled. It may be helpful to start with a note on Estonia’s history, which throws light on its current geo-economic position.