Economy of Estonia

Estonia Economy

Estonian economy is growing fast, partly due to a number of Scandinavian companies relocating their routine operations and Russian oil transit using Estonian ports. Estonia has a strong information technology sector. A high percentage of households have a fast internet connection.

The reform process in Estonia since independence brought a dire economic situation. The legacy of the Soviet dictatorship with a centrally planned industrialization policy has saddled the country with unbalanced industrial structures and under-performing companies. Add to that fuel shortages and a shortage of raw materials for industry, and it is clear that Estonia had considerable difficulty in the first years after independence.
Yet the transformation from a planned economy (the Soviet Union) to a market economy quickly. It began with the establishment of a central bank and allowing commercial banks. Three years after independence, 50% of the gross domestic product (GDP) achieved by the private sector. After initial losses in GDP in 1994 grew for the first time in years, with 3.5 to 5%. In 1995 Estonia signed an association treaty with the European Union accession to the EU in prospect.
A major problem for Estonia is the pollution. During the Soviet domination of the Soviet army has hundreds of thousands of tons of oil dumped on Estonian territory. Many toxic materials in the soil and (ground) water came.

Estonian Trade

Estonia has quickly become an exporting country par excellence. Estonia exports mainly to Finland, Sweden, Russia, Latvia and Germany. In 1999, for about $ 2.5 billion exported. Performed were food, textiles, wood and charcoal. Imported products were machinery, foodstuffs, mineral products and textiles, mainly from Finland, Russia, Sweden and Germany. In 1999, for about $ 3.4 billion imported. Trade with the Russians fell dramatically after independence, from 70% to 15%. Only in recent years is the weather better in that regard.

Estonian Industry

Estonia is well educated, technically skilled workers to Western European standards are poorly paid. This makes it very attractive for foreign companies to invest in the Estonian economy. Companies mainly from Finland, Sweden and the United States invest heavily in the timber industry, textile and manufacturing industries. Americans and Finns to invest particularly in the computer industry, electronics and automotive industries. Estonia is 40% covered with forest (1.8 million ha). The operating results in timber for furniture, for paper making and is an important fuel. The timber industry contributed 12% to the GDP and is one of the industries with the best prospects. Substantial foreign investment by the flourishing engineering industry and electronics industry. In 1995 these were the most exported products (electric motors, cables and high-tech products). The textile industry exports mainly to the United States and European countries.
Estonia has large stocks including phosphorus used in fertilizer production. The chemical industry also produces including plastics, paint and varnish.