State Economy Estonia - State Economy Estonia, a former Soviet Bloc nation like many former Soviet countries has had to transition from a communist economic system to a more free trade market like its Western neighbors.
Estonia, as a new member of the World Trade Organization, is steadily moving toward a modern market economy with increasing ties to the West, including the pegging of its currency to the euro. The economy benefits from strong electronics and telecommunications sectors. Estonia has been invited to join the European Union and will do so in May 2004. The economy is greatly influenced by developments in Finland, Sweden, Russia, and Germany, four major trading partners. The high current account deficit remains a concern. However, the state budget enjoyed a surplus of $130 million in 2003.Is Estonia secure enough to do business in? The answer is yes, as Estonia is a member nation of the E.U. it will have support of the other member nations and add stability to its political and economic outlook. With an intact industrial infrastructure, though in need of updating is intact and functional. Thanks to foreign investment in the form of joint business ventures greatly improved telephone service; substantial fiber-optic cable systems carry telephone, TV, and radio traffic in the digital mode; Internet services are available throughout most of the country - only about 11,000 subscriber requests were unfilled by September 2000.
Though, Estonia still has its share of problems like being the transshipment point for opiates and cannabis from Southwest Asia and the Caucasus via Russia, cocaine from Latin America to Western Europe and Scandinavia, and synthetic drugs from Western Europe to Scandinavia; increasing domestic drug abuse problem; possible precursor manufacturing and/or trafficking; potential money laundering related to organized crime and drug trafficking is a concern as is possible use of the gambling sector to launder funds.
Even with its problems Estonia looks like a good place to do business in Europe, and has trade agreements with Russia, Germany, Finland, and Sweden, the prospects for profit look good for companies here. Estonia could become the European equivalent of Hong Kong, or South Korea.
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