The Estonian myth

VILNIUS - Estonians think that Estonia is the best, and Lithuanians think that Estonia is the best, though some doubters in Estonian superiority appeared in public this summer.

The legend of Estonian superiority started with Tallinn officials-made black PR, unusual for officials in Europe, stating that Estonia is the best, especially in comparison with Estonia’s two poor Baltic southern neighbors. It started with the rule of arrogant Estonian President Lennart Meri in the early 1990s, but finished with the politically quite decent Prime Minister Andrus Ansip, who took office in 2005. An interesting fact: Meri-era Tallinn used to make fun of the influence of former communists in Lithuanian political life of those times, but in 1986-1989, Ansip himself was an instructor in the Industry Department and head of the Organizational Department of the Tartu District Committee of the Communist Party; Estonian President Arnold Ruutel, who succeeded Meri in the post of president from 2001-2006, was from the former communist nomenclature as well.

“We have ambitions to become better than Estonians,” Lithuanian Prime Minister Andrius Kubilius said on June 2 at the Baltic Development Forum in Vilnius, congratulating his Estonian counterpart Ansip with the coming introduction of the euro in Estonia.

Indeed, the adoption of the euro is the greatest advantage of Estonia, in comparison to the other two Baltic countries. The euro attracts investments. If a foreign investor does not have the intention to analyze deeply all the figures of a country where he considers investments, the euro for him is then a clear sign of the quality of the country.

Actually, Lithuania could have had the euro much earlier than Estonia, but missed the chance. Lithuania planned adopting the euro from Jan. 1, 2007, and actively prepared for the changeover to the single EU currency. However, the average annual inflation rate in Lithuania was 0.1 percent higher than the reference value established by the Maastricht Treaty. It would have been enough for the Lithuanian government to agree with the Vilnius municipality about not raising the price of bus and trolleybus tickets and the criteria would then have been met. This was the main failure of the entire career of former Lithuanian Prime Minister Algirdas Brazauskas.

Another advantage of Estonia is the fact that the Estonian government did create a financial reserve during the good years before the crisis, while Latvia and Lithuania were spending madly. On July 12 this year, Ansip visited Kubilius in Vilnius and mentioned that fact at the same time paying tribute to Kubilius who is the most unpopular politician in Lithuania now.

“Andrius Kubilius has been doing perfect work. People find it difficult to tell between a good and a bad guy. The view is better from afar! Estonia knows that the decisions that Andrius Kubilius had to take, regarding budget cuts and tax increases, were tough but necessary. I do not think that Estonia’s decisions were any better. Only our situation was different. During the years 2002-2007, when growth was high, we had accrued our reserves. While you had to immediately apply very strict austerity measures leading to consolidation of public finances. Lithuania’s achievements are surprising and inspiring,” Ansip said during a joint press conference with Kubilius.

On Aug. 11, delfi.lt published an analysis by Povilas Gylys, professor of economics (he was Lithuanian foreign minister in 1992-1996), in the article Estonians don’t live better than Lithuanians. Gylys gives some figures. According to Eurostat, in 2009, GDP fell 14.1 percent in Estonia, 14.8 percent in Lithuania and 18 percent in Latvia. “Where is the big difference here?” asks Gylys rhetorically. The unemployment figures of March 2010 are as follows: 17.4 percent in Lithuania, 19 percent in Estonia and 20 percent in Latvia. According to the number of child deaths, Lithuania is in much better position (the lower the place, the less the children’s mortality): Lithuania is 173rd in the world statistics while Estonia is 166th and Latvia is 159th. The life expectancy, according to the data of 2009, is as follows: Lithuanians will live 74.8 years, Estonians – 72.82 years and Latvians – 72.15 years. According to the number of prisoners the situation is as follows: 240 prisoners for each 100,000 Lithuanians, 292 prisoners for each 100,000 Latvians and 333 prisoners for each 100,000 Estonians.

Those Gylys-presented figures can be enriched by data from the World Bank regarding the share of the shadow economy: Lithuania is No. 64 in these world statistics, with a shadow economy share of 34 percent, while Estonia is No. 102 with 42.3 percent share of the economy in the shadows and Latvia is No. 109 with 44.3 percent share. For comparison, two countries, Romania and Bulgaria, having a reputation of being the most corrupt in the EU, are respectively No. 87 and 97. Lithuania is the No. 1 destination for Estonian foreign investments (some 30 percent of all Estonian foreign investments, according to Ansip). Data released by Eurostat states that in the second quarter of 2010, among EU member countries, Lithuania recorded the highest growth rate (mostly due to booming exports) with an increase of 2.9 percent compared with the previous quarter, followed by Germany with 2.2 percent and Estonia with two percent.

However, Estonia is slightly ahead of Lithuania in the recently published index by the U.S. magazine Newsweek. The index is based on education, health status, quality of life, economic competitiveness and political environment. Lithuania is the 34th best country to live in the world, while Estonia is ranked 32nd and Latvia is 36th. Regardless, all three Baltic countries are very close in that index. Finland shows where the Baltic States would be now if not for the implementation of the Stalin-Hitler pact of 1939 on them. Finland, which was considered a Baltic State before WWII, was also supposed to be incorporated into the USSR, according to the Stalin-Hitler pact, but the Finnish army managed to stop the Soviets at the beginning of WWII. Finland is No. 1 in the index by Newsweek at the head of a top 10 of Switzerland, Sweden, Australia, Luxembourg, Norway, Canada, the Netherlands, Japan, and Denmark (the U.S. is No. 11) while Russia, for comparison, is No 51.