No Pain, No Gain

ESTONIA With a gross domestic product of around 16.7 billion euros, Estonia is one of the fastest growing economies in the eurozone.

By Agatha Akhabue

“Estonia economy has been growing very fast lately,” says Urmas Simson, economist at the Swedbank Estonia.

Swedbank is the biggest bank in the Baltic states. Photo: Agatha Akhabue Fältström

“An economy doing well usually means when somebody says that the economic is growing fast compared to last year,” he explained.

It also has one of the lowest minimum wages across Europe.

The difference is obvious, compared with nearer neighbours Finland and countries of the Scandinavia.

“We have to consider the bases where these countries started in 1990 and where we started. It’s very different,” says Urmas.

“The different, for example, when we compare against Finland and Scandinavia twenty years ago is big. It does not happen overnight that you start factories and start to make things that create much value just in one year.

“It takes time. People learn how to do things slowly. That is what happened in the last twenty years in Western Europe.”

Despite the comparison, the workforce that Estonia needs to power its factories and create value is lacking.

Its population is ageing and going into decline. Along with it come lowered productivity and huge dependence of external energy imports.

Estonia is working to achieve long-term growth. The continuous effort is to maintain fiscal balance and restore the reserves. Among government moves are plans to improve the balance of reserves and restoration.

Despite the low wages, people seem to live well in Estonia.

In the last 20 years, life has changed in totally different ways for many, says Eiki Nestor, a member of  Riigikogu The parliament of Estonia.

But there is a catch

“We must understand that the first ten years of any economy is not always easy. People will see a very rich result after some time.

“But life has changed here for the better.  We have to learn from experience from our neighbours Finland and Sweden.

“Before they got to where they are today, they passed through what we are [now] passing through.

It is a phase in our economy and it will pass.  Estonians should be positive and more understandable.”

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About Agatha Akhabue Fältström