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The President's Academic Council discussed issues related to foreign investment in Estonian economy

President Arnold Rüütel today at Kadriorg chaired a session of the Academic Council of the President of the Republic of Estonia.

Dr. Garri Raagmaa, Director of Pärnu College, and University of Tartu, made the first presentation. He focused on the world experience of economic development policy, and raised a question of how Estonia could successfully ?glocalise?.

The second presentation was made by Professor Urmas Varblane, Assistant Dean (research), Faculty of Economics and Business Administration at University of Tartu. He dealt with the role of direct investments in Estonian economy and stated that the current rapid rise of labour costs in Estonia and the lack of work force satisfying the investors? requirements would diminish Estonia?s attractiveness for those foreign investors who had used the low level of local labour costs as the main competitive advantage. According to Professor Varblane, that process might be beneficial for Estonia, provided that at the same time we managed to ensure the entering of new foreign investors into Estonian market who could generate significantly higher added value. This requires that certain choice criteria were defined within the framework of foreign investment policy, and that investments were directed also to places other than Tallinn by developing necessary infrastructure, said Urmas Varblane.

Andrus Viirg, senior investment adviser of Enterprise Estonia made the third presentation, where he gave an overview of the foundation?s activities in the field of foreign investments promotion. Among other issues, he treated the foreign investors? motivation to invest into Estonia, and Estonian enterprises? possibilities of internationalisation.

During the discussion that followed the presentations, the President?s Academic Council found that the economic policy, which is based on the current competitive advantages in Estonia, is not adequate for ensuring long-term competitiveness and sustainable development. ?Estonia has to be attractive for investors who are capable of offering more sophisticated high added-value products and services. To manage direct foreign investments, Estonia needs a well-designed policy that will define certain criteria for choice. In order to achieve the influx of new and knowledge-intensive investments to Estonia, it is necessary to elaborate and focus the national education, immigration, regional, and innovation policies, and to strengthen horizontal cooperation and cluster development,? the President?s Academic Council states in its resolution.

Public Relations Unit of the Office of the President
Kadriorg, December 16, 2005

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