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The President of the Republic At Estonian-Georgian Business Forum Tbilisi, May 10, 2006

Honourable Mr. Inaishvili!
Thank you for the warm reception and cordial greetings!

Honourable Ministers, Excellencies,
Ladies and gentlemen!

Notwithstanding the geographical distance between Estonia and Georgia, our countries are close to one another in so many ways. However, economic ties between our two countries are rather modest: last year the total trade turnover, most of which came from fruit, remained less than three million euro. So far also mutual investments have been all but non-existent.

Of course, considering the geographical distance between our two countries, it is not suprising at all: as a rule, discovery of more distant markets begins when ties with the nearest neigbours have become solid. I believe that Estonia has now reached that stage, and better information is what entrepreneurs now need for full realisation of the potential of economic cooperation between Estonia and Georgia.

I am also pleased that the contractual base for economic cooperation between Estonia and Georgia is becoming stronger: the Agreement for the Avoidance of Double Taxation is ready to be signed. An agreement on investmens protection is being prepared.

But first of all, we would like to introduce you, our dear Georgian friends, Estonia and its economy. I would like to make a brief introduction to the following presentations.

Estonia, just like Georgia, is located at a crossroad of trade routes and has been in the sphere of interest of various political forces for centuries. Following the restoration of our independence in 1991, the most essential question was how to create a political, economic and social environment that would allow the optimal development of our nation and our state. Politically, it meant a move towards Europe, but the closing up of traditional markets and a tremendous need for investments brought about the necessity for rapid economic integration into Europe.

Already fifteen years ago we initiated radical reforms, both in the economy and the state as a whole. The reforms were aimed at building an open society, inviolability of private property, free market, facilitation of private enterprise. As the result of the reforms we were able to achieve relatively quickly a stable economic environment that has been internationally recognised as one of the most liberal and open economy in the world. The competitiveness of the Estonian economy was dupported by our Europe-oriented aspirations that involved strengthening of our institutions and legal base, but also modernisation of enterprises. The creation of a favourable business climate has gone hand in hand with the modernisation of the public sector and tax system

These changes have been gradual but continuous and consistent, and have enhanced our international partners’ trust in us. This is evidenced by large amounts of foreign investments and in the level of Estonian interest rates, which is comparable with that of the EU developed countries.

As a result of all that, Estonia is one of the fastest growing economies in Europe: in the years 2000-2005, the average GDP growth exceeded 7.6 percent, whereas the last year’s output growth approached ten percent. The number of people employed has been steadily increasing, and in 2005 the average wage amounted to 514 euro per month. In comparable prices our per capita GDP is over a half of the EU’s average level. It is clear that the continuation of such favourable development requires constant work. Innovative spirit and flexibility will remain important for maintaining the competitiveness of the economy and in the development of the entire society.

In light of the abovesaid, I would like to express recognition to Georgia’s reform process and aspirations towards Europe. Estonia has followed Georgia’s progress very closly, and I believe that Georgia feels Estonia’s serious interest in cooperation and our support to the development of Georgian state. Naturally, there is still room for expanding our economic cooperation, both in the field of trade and investments. We know that Estonian enterpreneurs have been relatively successful at investing their capital and know-how to other countries. I assume that if they find suitable projects, Estonian enterpreneurs could have a real interest in investing in Georgia.

Today’s business forum provides an opportunity to exchange information and create contacts. We are expecting that the next seminar will take place in Tallinn in autumn. For today I wish you meaningful discussions, interesting contacts and success in the realisation of your ideas in the future!

© 2006 Office of the President l tel: + 372 631 6202 l fax: + 372 631 6250 l