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Estonia
 

Country
GDP per Capita: $3,714 GDP (USD Billions): 5.2 GDP Growth Rate: (1.1)% External Debt as a % of GDP: 52% Inflation (CPI): 3.2 Currency: 1 Kroon=100 Cents USD Conversion Rate: 1USD=16.22 EEK Population (Millions): 1.4 Labor Force (Millions): .717 Unemployment: 9.6 Language: Estonian, Russian, Ukrainian, English, Finnish Major Industries: oil shale, shipbuilding, phosphates, electric motors, excavators, cement, furniture, clothing, textiles, paper, shoes, apparel Political System: Democracy Economic System: Free Market Literacy Rate: 100% President: Lennart Meri, Prime Minister: Mart Laar Capital: Tallinn Facts: Candidate country for the first round of the EU admission

Estonia

Estonia's continued adherence to market reforms, disciplined fiscal and monetary policies, and a liberal free trade regime resulted in GDP growth in 1998 of 5.5% and a decrease in inflation to 6.5% from 11.2% in 1997. A high but slightly decreased current account deficit was estimated at 8.6%. The fall in GDP growth is largely due to the impact of Russia's financial crisis and reduced investment in emerging markets in the wake of the Asian financial crisis. Like other small emerging markets, Estonia will face difficulties in 1999 as a result of continuing fallout from Asia. Key events of 1998 were the start of official EU accession talks, banking sector consolidation. nine banks were reduced to five. and the important role that Swedish capital played in the large banks (Swedbank's acquisition of a majority stake in Hansapank has accounted for the large increase in foreign direct investment). The IMF urged Estonia to maintain a stable economy and good reputation in international markets and to avoid populist policies in the run-up to March 1999 parliamentary elections. The government completed restructuring of state-controlled Estonian Telecom, the sale of 49% of which will be the flagship privatization in 1999 and the largest public equity transaction in the Baltics. Estonia expects to join the World Trade Organization in 1999. SOURCE: CIA FACTBOOK

Comment:

One of the first transition economies to experiment with Western capitalisation, Estonia provides an almost fully privatised economy with equal opportunities for foreign and domestic investment. The country acts as a gateway between Western Europe and Russia and its location is enhanced by direct access to the Baltic Sea. In recent years trade has been directed away from Russia towards the West. Surprisingly, 8% of all U.S. foreign direct investment is in Estonia. The country has enjoyed economic growth barring the effects of the Russian and Asian economic crises. Working its way into EU accession the key sectors of the economy include: Oil shale energy, telecommunications, chemical products, banking, services, food and fishing, timber, shipbuilding, electronics and transportation.