Monthly Archives: November 2009

Unemployed Estonian construction workers find Helsinki is no haven

Among the many casualties of the economic crisis in Estonia are those who work in the building trades. The absence of new Estonian building construction means that these tradespeople have no work. Many of them have therefore crossed the Gulf of Finland in search of employment.

Helsingin Sanomat, Helsinki’s largest daily newspaper, has launched an occasional series on the adverse consequences stemming from the influx of Estonian construction workers to Finland. It seems there are two main problems, both stemming from the existence of unscrupulous construction contractors which, it seems, are most likely to employ expat Estonian workers.

First, many of these contractors have been found to cut corners, avoid tax payments, violate building codes, and generally perform shoddy work. Second, Estonians employed by these contractors don’t always get paid. Intriguingly, some of these unscrupulous contractors are owned by Finns, while others are owned by Estonians. But in both cases their victims are the owners and tenants of improperly constructed buildings — and Estonians with empty pay packets.

The H1N1 virus claims its first Estonian fatality

The first Estonian to die from swine flu is a 13-year-old boy in Harju County. But Estonia hasn’t yet begun to administer swine flu vaccine; the first 100,000 doses are expected to arrive in the country on December 7th and will be made available only to people in designated high priority groups.

Overall, Estonia has to date reported 269 confirmed cases of swine flu infection; the country’s first H1N1 case was reported in May.

EarthTimes has a good summary of the current extent of swine flu infection in all three Baltic states.

Estonia is one of the world’s least-corrupt nations

I discuss in my book a few instances of petty corruption that I observed in Estonia in 1992, including [in chapter 8] a deal to reclaim a confiscated drivers license by bribing a policeman with a gift of cognac and roses.

But this sort of corruption was the exception rather than the rule, and it struck me as a vestige of the Soviet survival toolkit rather than anything deeply rooted in Estonian culture. In 1992 and in the succeeding five years that I lived in the country, I found that most Estonians were inclined to play by the rules.

These observations are supported by Transparency International’s 2009 Corruption Perceptions Index, released today. The index ranks 180 countries according to “the perceived level of public-sector corruption”. Estonia is ranked 27th in the world and is tied for 12th place in the European Union.

Estonia’s ranking places it far ahead of Baltic neighbors Lithuania (#52) and Latvia (#56). Estonia is also perceived as being less corrupt than Hungary (#46), Italy (#63), and Bulgaria and Romania (tied at #71). The United States is ranked 19th. The world’s least corrupt countries? New Zealand, Denmark, and Singapore.

Number of Estonians out of work sets a new record

unemploymentThis has been a big week for bad economic news from Estonia. Fast on the heels of Thursday’s depressing GDP report, Statistics Estonia, the official Estonian statistics agency, yesterday published the 3rd quarter unemployment figures — and they are not pretty. Both the number of people unemployed (102,000) and the overall unemployment rate (14.6%) are at record-high levels for the current era of Estonian independence, dating back to 1991.

Estonia now has the third-highest unemployment rate in the European Union (EU), trailing only Latvia (19.7%) and Spain (19.3%). The average unemployment rate across the 27 countries in the EU is 9.2%, while the unemployment rate in the United States is currently 10.2%. (Lithuania’s 3rd-quarter unemployment figures have not yet been released; Lithuania had the third-highest unemployment rate in the EU in the 2nd quarter.)

The Estonian employment situation is particularly bleak for young people. The unemployment rate for people between the ages of 15 and 24 has now reached 29.2%; fully three out of every ten young Estonians who are seeking a job cannot find one. This rate has doubled over the past year.

Has the Estonian economy turned the corner?

At the Tallinn Central Market (keskturg)

Economic activity at Keskturg (Tallinn Central Market)

The official estimate of Estonia’s third-quarter gross domestic product (GDP) was released today by Statistics Estonia. The number is grim, but if you squint and tilt your head a bit you might—just possibly—be able to see the glass as half-full.

The total value of all goods and services produced by Estonia in the July-through-September period this year declined by 15.3% compared to what was produced in the comparable period of 2008.

To place this in a regional perspective, Estonia’s GDP collapsed more than did Lithuania’s (down 14.3%), but it wasn’t quite as bad as Latvia’s (down 18.4%).

SEB economist Mikael Johansson (quoted in this Dow Jones wire report) sees in the 3rd quarter data a sign that the Estonian economy has stabilized. His cautious optimism is supported by this Statistics Estonia chart:

estonia 3q gdp

The bars show the ugly quarterly GDP declines, stretching back nearly two years. But optimists will want to focus on the pink line, which shows that the rate of decline in Estonian exports bottomed out in the 1st quarter and that exports have been shrinking more slowly over the past 6 months; and the red line, which suggests a bottoming of industrial decline in the 2nd quarter.

One footnote: Statistics Estonia notes that the -15.3% GDP figure is a preliminary, “flash” estimate; a more accurate 3rd quarter GDP estimate will be released on the 9th of December. Mark your calendar.

Before the Berlin Wall fell, hands were joined across the Baltic States

baltic wayToday we commemorate the 20th anniversary of the fall of the Berlin Wall, the most visually arresting symbol of the collapse of totalitarianism across Eastern Europe and the former Soviet Union.

But this collapse was a multi-year process which began, arguably, with the Solidarity workers’ strikes in Gdansk in 1980 and didn’t end until the formal dissolution of the Soviet Union in December 1991.

While the demolition of the Berlin Wall captured the bulk of the Western media’s attention, it followed by 2 1/2 months an event of perhaps greater political impact and certainly of broader geographical reach. This event, known as the Baltic Way, occurred when more than one million Estonians, Latvians, and Lithuanians joined hands to form a human chain that stretched for 600 kilometers (373 miles) from Tallinn to Vilnius.

The event, held on 23 August 1989, was organized to mark the 50th anniversary of the signing of the Molotov-Ribbentrop Pact, which laid the foundation for the Soviet occupation of the three Baltic States.

The Baltic Way was a brazen nonviolent defiance of authority, and it was all the more remarkable for having been organized long before the availability of Twitter, e-mail, or cell phones. It inspired and gave strength to democratic movements across Eastern Europe and paved the way for the breach of the Berlin Wall 10 weeks later.

Read more about the Baltic Way here. And watch a musical tribute to the event here.

Estonian boots on the ground in Afghanistan

NATO flagAs the United States ponders its future military strategy in Afghanistan, let’s take a moment to consider Estonia’s contributions to NATO’s efforts in that conflict.

Estonia joined Operation Enduring Freedom in 2002, and the following year its troops were folded into the NATO-led International Security Assistance Force (ISAF). Estonia currently has 289 soldiers on the ground in Afghanistan, most of whom are deployed in Helmand Province, where fighting is fierce. Estonia’s Afghan contingent represents 10 percent of its full-time armed forces, making Estonia the largest per-capita military contributor to the ISAF effort. Six Estonian soldiers have died in Afghanistan, a casualty rate, as a percentage of the population, approximately double that of the U.S.

Some vivid on-the-ground reporting from a journalist embedded with Estonian troops in Masood appears in today’s Washington Times.

Estonia also provides non-military support to Afghanistan, including $1.5 million in development aid that has contributed pediatric medical equipment, an oxygen delivery system for the largest hospital in Helmand Province, and funding for a library facility at Kabul University.

Why is Estonia so committed to Afghanistan? One answer is provided by Major Janno Mark, commander of the Estonian contingent. He is quoted in the Washington Times article:

“The people in Estonia understand we’re a member of NATO. We can’t just consume security; we have to contribute to it …. Looking at who is our neighbor, you can understand why we have to be a good and active member.”

Major Marks’s perspective is shared by many Estonians: the belief that the country’s investment in Afghanistan today will pay dividends, in the form of adherence on the part of other NATO members to their Article 5 commitments, in the event of any future Russian threats to the Baltics.

Tallinn begins to prepare for its turn as European Capital of Culture

European cultural capital logoBeginning in 1985, the European Commission has showcased one or more cities each year as the European Capital of Culture. The designation serves to foster arts and cultural programs and promote tourism in the chosen cities. Vilnius and Linz are this year’s Cultural Capitals, and for 2011 the anointed cities are Turku and Tallinn. (Riga’s turn will come in 2014.)

And crafty Tallinners have devised a way to stretch one year into two. Foundation Tallinn 2011, the organization charged with preparing the capital for its year in the limelight, has announced a competition entitled 52 Ideas and Surprises. Fifty-two grants of 10,000 kroons (US$ 938) each will be awarded to 52 “ideas that help turn Tallinn into more cultural, friendlier, brighter, happier, homely [I think they mean "homey"], unpredictable, and lovable place,” and one of these projects will be showcased during each week—of 2010.

The competition was launched yesterday and will be open through the end of November, so you have four weeks to develop and submit your ideas. Winners will be announced in December at www.52.ee.

A complete list of all past and future European Capitals of Culture can be found here.

Gender inequality persists in Estonia

Plenty sisterEstonia is making achingly-slow progress toward gender equality, and the country still has a long way to go. According to the World Economic Forum’s Global Gender Gap Report 2009, Estonian women are about 71 percent as empowered as Estonian men. This ratio has been creeping upward, albeit at a snail’s pace, over the past four years. But other countries are improving more quickly, so Estonia’s standing in the world, which fell in 2007 and 2008, remained stuck at 37th place in 2009.

The annual study examines gender equality in four areas, and Estonia distinguishes itself in none of them. The four areas (along with Estonia’s global rank in each): economic participation and opportunity (36); educational attainment (37); health and survival (41); and political empowerment (50).

The report exposes some glaring areas of inequality. Unlike its near neighbors Finland (#2 overall in the world), Latvia (#14), and Lithuania (#30), Estonia has never had a woman as head of state. And Estonia’s index of wage equality for similar work was cringe-inducing; Estonian women earn only 60 percent as much as their male counterparts who do similar work.

Estonia was the 18th-ranked country in Europe, but it did place far ahead of such gender-inequality powerhouses as Luxembourg (#63 in the world), Italy, (#72), and Greece (#86). And the study revealed that Estonian women are 63 percent more likely than men to enroll in post-secondary education. Can this perhaps be viewed as a favorable leading indicator of future equality?