Estoniais, no doubt, the most successful post-Soviet country according to all socioeconomic indices. Lauri Lepik shared the secrets of Estonia’s reforms with The Ukrainian Week.
U.W.: Estonia is one of the most successful post-soviet countries. Before the debt crisis, it was viewed as a role model for other EU members. What is the key to your success?
I believe Estonians have the healthy common sense of a farmer. This means that we do not like living in debt. Thanks to this policy, years before we were hit by the world financial crisis, we set up a stabilization fund that eventually received around 12% of the country's annual GDP.
First, when the crisis broke out, our government introduced severe austerity measures that are felt even today. Second, we always preferred to have a balanced state budget. We cannot spend more than our projected income. Another thing I believe is important is that our government is honest in communicating with its citizens and warns them in advance about how bad the situation is. Despite austerity measures that affected everyone, the parties that formed the coalition government again won the elections last year. Thus, our experience shows that you have to act quickly and openly and be honest in explaining your reasons and measures to the electorate. People need to be told about the situation as it is and about the anticipated consequences. Our experience shows that this is the only way to maintain the voters` trust, reach understanding and unite them to a certain extent.
Back then, Estonia was very much interested in joining the eurozone and meeting its strict criteria, so we had to take these factors into account. Thus, it was in fact a combination of internal and external factors that made the implementation of austerity measures possible.
U.W.: The Russian Federation recently increased its military presence in the Baltic region. At the same time, it continues to accuse Latvia and Estonia of discriminating against foreigners and the Russian language. With Vladimir Putin’s return to the presidential office, Russia will likely step up its integrationist efforts in the post-soviet territory. Do Estonians feel safe under NATO's umbrella?
Russiais our neighbour, and it is natural for us to take interest in what is going on there. As a NATO member, Estonia does not feel threatened by Russia in any way. In the context of the collective defense and solidarity agreement that we signed, it is difficult to presume that someone would threaten us. We have noticed a concentration of modern Russian armaments near its western borders, but we do not see any reasonable explanation for this. The question remains open, but it is not for us to answer; our Russian colleagues may be in a better position to do so.
As far as the Russian military aircraft flying over the Baltic region are concerned, from the very first day when Estonia, Latvia and Lithuania joined NATO, our partners in the Atlantic Alliance began patrolling Estonian airspace. It is important, because it shows solidarity among NATO countries. Moreover, it also means that NATO forces have a visible presence in the region. This relieved us of the need to have our own military airplanes, which are expensive not only to purchase but also to maintain. This distribution of duties is based on the collective understanding of solidarity among allies. On 8February, 2012, the NATO Council passed a decision making the mission of patrolling our airspace open-ended.
After that, the number of military flights over Estonian territory has greatly increased. It is very easy to see that there is more transit flow from the Kaliningrad Oblast to Russia in the Baltic region, but they have not violated international airspace regulations. Moreover, the NATO patrol mission helps us to identify which planes are in the air above Estonia. Normally, there is no threat to our airbases.
I am aware of the information regarding Russia's intentions to increase its presence in the post-soviet space and Mr. Putin’s statements to this effect. But frankly, we integrated with the West a long time ago. I can’t see a scenario under which this decision on the part of the Russian leadership would affect us.
U.W.: How important is it for Estonia to close itself off from the Kremlin's influence while implementing reforms? Do Estonians fear Russia?
In my opinion, it’s a question of one’s worldview. We did not start from scratch in 1991, and we did not forget what had happened in the past. It all depends on individuality and age. Every Estonian family has its own story of Russian repression in the 1940s and later when our compatriots were murdered or exiled to Siberia. This is a living memory which we were not allowed to voice during the occupation, but which was transferred from generation to generation among circles of friends and family.
If we look at the things that were done in practice to overcome Russia's influence, it was not all that difficult. In 1991, after restoring an independent state, we decided to create the new bodies of the political public service that were needed to manage it, such as the Ministry of Defense or the Ministry of Foreign Affairs. Of course, in soviet times there was the Ministry of Foreign Affairs of the Estonian SSR, which was made up of six KGB officers. But we introduced a new model of civil service and hired new staff, which turned out to be fairly easy at a time when patriotically minded young enthusiasts were willing to join the civil service in our young country. This is precisely the reason why Estonia had a 32-year-old prime minister. The Minister of Foreign Affairs was 28, some ambassadors 25, and they had to work with colleagues from other countries who were twice their age. Of course, this was a conscious choice. We were inexperienced in the early days of independence, but we combined this inexperience with a strong desire to build an independent Estonia. This was a general sentiment back then. In the atmosphere of new approaches to governance, old apparatchiks sensed that they were unable to meet the new demands and that no one welcomed their way of running the country. That’s why we were able to completely overhaul the civil service in a fairly short period of time. This is one of our main achievements of the past 20 years.
Moreover, it is also an issue of patriotism. A certain number of people in our country liked the soviet system, but even they eventually switched to the Estonian side. Of course, we cooperate with the Russian Federation to a certain degree. In particular, I’m referring to the withdrawal of Russian troops from Estonia in 1994. We cooperated with the Russian side in various sectors later and continue to do so now. Our current relations with Russia are close to normal in that we cooperate on a practical everyday basis. For example, we are open to the idea of launching a train connection between Saint Petersburg and Tallinn. There is also a ferry line between these two cities. We have recently seen more tourists from Moscow and Saint Petersburg who love celebrating the Old New Year in Tallinn. I don’t expect any major shifts in the political domain, but solving all the radical questions there requires time and attention from our side.
U.W.: The Russian ethnic minority makes up about a third of the population in Estonia and Ukraine. Russians are a significant majority in the Estonian district of Ida Virumaa. How effective was the policy of integration regarding this part of the population? What could Ukraine learn from the Estonian experience in this regard?
In fact, we Estonians don’t divide people based on their nationality. We do not have any official statistics, and nowhere do we officially inquire about the nationality of one person or another, because we understand that this is a form of discrimination. That is why we do not collect such data.
We have three categories of people on the national level. The first includes citizens of Estonia regardless of their nationality. The second is stateless persons, i.e., those who live in our country but have not made up their minds about obtaining Estonian or some other citizenship. Under national legislation, such people are allowed to travel across the territory of the EU. The third category is citizens of other countries who have obtained a permit to live in Estonia. As far as the integration program is concerned, I believe it was a wonderful and very successful initiative. It took us a long time, around 15 years, and it is still continuing. In order to implement it, we needed to have a strong political will and a clear understanding of its necessity within society. It means not only studying Estonian but also resources and means that would make the process of study interesting. The result was a success. The young generation of Russian-speaking people in Estonia now freely speaks its native language, plus Estonian and English or some other foreign language. Young Estonians are bilingual and speak their native Estonian plus some other European language. People understand that the command of a language is not a political issue, but their personal asset, which increases their competitiveness on the labour market in any part of the world. This is another Estonian accomplishment that we owe to the program I mentioned.
There has recently been an increasing number of Russian-speaking citizens of Estonia who send their children to Estonian-speaking kindergartens in order to help them integrate in the community as early as possible. Of course, they also maintain their native language. Moreover, we are now reviewing the subjects taught in Russian-language schools with an eye toward having more subjects taught in Estonian. We are also increasing the number of school textbooks published in Estonian.
This process is continuing and will spread to new generations, but it is not about assimilating Russian-speaking citizens of Estonia. The effort is to increase their integration in society so that they, too, can take advantage of the benefits of living in a democratic country.
U.W.: How does Estonia preserve the memory of soviet repressions on the state level?
That is a very good question. Put simply, we call a crime a crime and remember it as such – this is the only way to overcome it. Estonia has many means with which to achieve this goal. We have the Institute of Remembrance, which collects people’s testimonies. We have published several volumes about Estonians in the GULAG camps who were exiled to Siberia or imprisoned. There are hundreds of books written by those who experienced exile or prisons. Additionally, we have a research institute that addresses this issue and works with archival documents to study people’s lives. I should also mention a number of professional organizations that study the history of repressions. Everyone is doing what they can to find out whether a particular Estonian spent time in prison, where he or she was exiled, etc.
We have a museum and countless monuments dedicated to the victims of soviet and Stalinist repressions. Preserving the memory of these people is only natural—it’s not a mandatory political tool. We are doing all of this, above all, to help ourselves learn what happened to our compatriots, identify the locations of concentration camps and graves, and pay tribute to the memory of the victims.
U.W.: Are Estonian entrepreneurs interested in the Ukrainian market?
In fact, they are immensely interested in investing in Ukraine, which they recognize as an attractive country with great potential – its domestic market, transit routes, etc. Our entrepreneurs do not have a language barrier, which is a huge advantage. Estonian businesses are now actively working in such sectors as steelworks, pharmaceuticals, food production, construction and real estate, IT, energy and financial services. This is how I see the overall picture. Significantly, an increasing number of Estonian businessmen who own businesses in Ukraine come to our embassy to tell us about the problems they have faced there – corruption, excessive red tape, refusal of VAT reimbursement, and in some cases, what we consider illegal attempts to take over the company.
It is hard for me to say anything definite about the future. From my own experience, I know that it is my duty and task to provide detailed information to Estonian businessmen who are thinking about entering the local market and to explain what the situation is here in an objective and straightforward way. I must warn them of possible risks. We provide them with a clear picture of the local investment climate, its benefits and drawbacks, but it is up to companies themselves to make decisions.
U.W.: How does Estonia promote itself in the world?
Estoniais a small country that is very serious about promotion and attracting foreign investors and tourists. We have a clear idea of what we want to promote in the world and how to do it, what our main markets are and what resources we have at our disposal. We began working on this in 2000-2001 when we founded the company Enterprise Estonia tasked with promoting Estonian business abroad, attracting direct foreign investment and promoting Estonia’s tourism sector worldwide. After Estonia joined the EU, this company set up its own startup fund, which provides grants for start-ups in Estonia and grants to support the economy. Enterprise Estonia has 10 offices abroad – in the Silicon Valley in California, Shanghai, Tokyo, Helsinki, Stockholm, Saint Petersburg, Moscow, Hamburg, London and Kyiv. I believe it is operating fairly efficiently. Its 2012 budget is €140 mn (including all grants and funding to represent Estonia's brand worldwide). Half of the direct foreign investment in Estonia has been secured precisely by this company.
