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Address by the President of the Republic of Estonia at the Economic Forum in Oslo, April 10, 200210.04.2002
Ladies and Gentlemen!
I have the honour to conclude the formal part of the seminar Business Partnership with Estonia. It is a pleasure to admit that within the state visit such a distinguished forum takes place to intensify economic relations between our countries. I am convinced that presentations made by representatives of the government and businessmen lay a sound foundation to learn more about each other, which would deliver new trade agreements and investment plans.
Ladies and gentlemen!
As an Estonian citizen and the President I can assure you that the strength of small states lies mostly in the capability to establish and intensify relations with other states. Adherence to this policy has led to the recognition of Estonia in the world and I would like to bring just a few examples from the international context. Estonia has achieved equal ranking to the United States by the economic freedom index. By competitiveness Estonia is quite close to Norway, ranking the 22nd in the world. Last year Estonia was assigned a country rating of A raising us to the category comparable to other developed countries.
Foreign trade and foreign investors have made a significant contribution to Estonia's economic restructuring and rapid development. Estonia has close ties and co-operation with the Baltic Sea States. Relations with Norway have also been stable and future-oriented, having a firm contractual base. Estonia and Norway have concluded a free trade agreement, an investment protection agreement and tax agreements. And now Norwegian companies are among major foreign investors in Estonia.
Estonia's exports to Norway has increased two and a half times over the recent years; more than one and a half times have risen Norwegian imports to Estonia. However the share of bilateral trade to overall trade is still relatively low. Therefore I visualise multiple development opportunities in our economic relations with Norway: both in investments, industrial output and in tourism.
Estonia is attractive to investors ranking second among Central and Eastern European countries after the Czech Republic by foreign direct investments per capita. I should also mention that about 94 per cent of the foreign investors interviewed were satisfied with their investments in Estonia!
What does attract foreign capital to Estonia? Answering the question I can rely on studies summarising foreign investors' - including also Norwegian - opinions.
According to the foreign investors the business environment in Estonia similar to other transition economies has low cost base, i.e. competitive labour cost and raw material prices. Next the investors rank stability - in the political, economic and financial sense of the word. Besides stability the foreign investors associate Estonia also with key words like "dynamic" and "developing". Beyond doubt, Estonian market is growing rapidly. Our gross domestic product has grown by an average of five per cent a year during the last seven years. We anticipate the growth to become sustainable in near future. Apart from the above Estonia's openness has made us a gateway to the rapidly growing market of ninety million people in the Baltic Sea region.
In my opinion, which has also been reflected at today's seminar - Estonia's dynamics is best characterised by rapidly developing information technology and telecommunication. The Estonians as a Nordic people are susceptible to new technology. Forty per cent of the population uses the Internet and sixty per cent - mobile phones. We are pleased to see that among other foreign businessmen also Norwegian investors in Estonia appreciate highly our telecommunication network.
Both foreign investors in Estonia and local businessmen consider skilled, motivated and rapidly adaptable workforce our major resource. Nevertheless we cannot rely on cheap labour and current progress vis-à-vis several other transition economies.
Estonia's policy-makers are looking further into the future in order to strengthen our current and create new advantages. Therefore one of the future priorities of the national policy is education. Primarily it means enhancing vocational and continuing training in collaboration with businessmen.
We secure Estonia's future through support to research and development. Although Estonia's living standard is only about forty per cent of the EU average, public research and development expenditure of gross domestic product is 86 per cent of the developed states' expenditure. We should not overlook advancing co-operation between research institutes and undertakings that has also been significant in Scandinavian experience.
No doubt, it is also important to sustain existing advantages: economic stability and strong financial system. Enhancement of business environment is under major attention: ongoing improvement of legislation, support to new businesses and investments.
We hope that such a policy will sustain Estonia's rapid development in future years as well and create a favourable soil for trade and foreign investment growth. Dear participants, you have a chance to be involved. I wish you a good start and success!
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