Republic of Estonia
LOCATION AND SIZE.
Located in northeastern Europe, bordering the Baltic Sea on the west, the Gulf of Finland on the north, Latvia on the south, and Russia on the east, Estonia has an area of 45,226 square kilometers (17,500 square miles), smaller than New Hampshire and Vermont combined. The capital, Tallinn, is situated on the Gulf of Finland; other major cities include Tartu, Parnu, and Narva. Estonia is the smallest of the Baltic countries (the others being Latvia and Lithuania) that emerged as independent republics when the Soviet Union dissolved in 1991.
The population of Estonia was estimated at 1.43 million in July 2000, with a density of 32 persons per square kilometer (82 per square mile), one of the lowest population densities in Europe. In 2000 the birth rate was 8.45 per 1,000 population, while the death rate was 13.55 per 1,000, giving Estonia a negative population growth rate of negative .59 percent. The government may introduce tax breaks for families with 3 or more children in 2001 in an attempt to increase the population growth rate. Estonia is relatively prosperous and has not experienced any massive emigration , yet its net migration rate was estimated at-0.79 migrants per 1,000 population in 2000. The population is also aging, with just 18 percent below the age of 14, and approximately 14 percent older than 65 years of age. The urban population makes up about 73 percent of the total.
Ethnic Estonians, ethnically and linguistically close to the Finns, make up 64 percent of the population, and ethnic Russians (living mostly in and around Narva) form 29 percent of the population. Other minorities include Ukrainians, Belarusians, and Finns.
Ethnic Russians made up only 4 percent of the population before the Soviet Union annexed Estonia in 1940, but Russians immigrated in large numbers during the Soviet period of industrialization. After Estonia restored its independence in 1991, only Russians (and their descendants) who had lived in the country before 1940 were granted Estonian citizenship. All others were subject to a citizenship exam testing Estonian language proficiency. Many did not speak Estonian, and by 1998 about 22 percent of the Estonian population was considered foreign (9 percent had Russian or other foreign passports and 13 percent were stateless). In 1998, under pressure from Russia and the European Union, the government eased the citizenship provisions and amended the language law.
The Bank of Estonia was established in 1990, and became the central bank following its merger with the Estonian branch of Gosbank (the Soviet central bank) in 1992. The early days of independence witnessed a rapid proliferation of banks—42 were started by the end of 1992—when they encountered serious solvency difficulties, caused by stagnation and bad loans (granted to insolvent private debtors or loss-making state firms). The sector has since been consolidated through mergers and the closure of loss-makers, and in 1998 there were 11 banks. The 4 largest in 1998 were Eesti Uhispank (Union Bank of Estonia), Hansapank, Eesti Hoiupank (Estonian Savings Bank), and Tallinna Pank, and there was only 1 foreign bank branch (Merita Bank of Finland) and 5 foreign bank offices. In 2000 Hansapank and Uhispank were owned, respectively, by Swedbank and SEB (both Swedish). The financial sector is considered modern and efficient. About 10 percent of Estonians banked online in 2000, and since only a few users had credit cards, banks developed other online payment systems.
Boosted by crowds of Finns visiting Tallinn for shopping and pleasure, tourism has grown by 15 percent yearly since 1993. The number of visitors in 1998 was 1.5 million and the revenues US$660 million. In 1998 the number of visitors increased by one-third from the previous year due to the abolition of visa requirements for Nordic countries and the lower costs of travel to Estonia. The government-funded Estonian Tourism Board, besides attracting visitors to Tallinn and Tartu, advertises Estonia's national parks and reserves and its Baltic seaside resorts.
Estonia's consumer goods boom is based on economic growth and high consumer confidence. Estonians have a passion for household electronics and, as the absence of customs tariffs keeps imported household appliances cheaper, toasters, coffee makers, and mixers are found in the majority of Estonian homes. Finnish retailers, attracted by liberal regulations, dominate retail in Tallinn. Finnish tourists form a quarter of the retailers' clientele, lured by Estonia's lower value-added tax . Estonia's clothing is 20 percent less expensive than in Finland; and Estonian food, especially cheese and alcohol, is cheaper. In 2000 Estonia had an upper-income class of about 10,000 and a growing middle-class numbering about 60,000, both fueling domestic retail demand.
Estonia has no territories or colonies.
Economist Intelligence Unit. Country Profile: Estonia. London: Economist Intelligence Unit, 2001.
Iwaskiw, Walter R., ed. Estonia, Latvia and Lithuania: Country Studies. Washington, DC: Library of Congress, 1997.
Open Estonia Foundation. Welcome to the Estonia Country Guide. <http://www.ciesin.ee/ESTCG> . Accessed August, 2001.
U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html> . Accessed August 2001.
U.S. Department of State. FY 2000 Country Commercial Guide: Estonia. <http://www.state.gov/www/about_state/business/com_guides/2001/europe/index.html> . Accessed March 2001.
Welcome to the Embassy of Estonia. <http://www.estemb.org> .Accessed September 2001.
Estonian kroon (EEK). One kroon equals 100 sents. There are bills of 1, 2, 5, 10, 25, 50, 100, and 500 krooni, and coins of 1 and 5 krooni and 5, 10, 20, and 50 senti. The EEK is pegged to the German mark at a rate of 8:1.
Manufactured goods, machinery and transport equipment, timber, chemicals, food.
Machinery and transport equipment, manufactured goods, chemicals, fuels and lubricants, food.
GROSS DOMESTIC PRODUCT:
US$7.9 billion (purchasing power parity, 1999 est.).
BALANCE OF TRADE:
Exports: US$2.5 billion (f.o.b., 1999). Imports: US$3.4 billion (f.o.b., 1999).