Northeast gets much-needed attention

  • 2001-11-01
  • Aleksei Gunter
TALLINN - The Estonian government has launched a long-term development program to increase economic competitiveness in the deprived county of Ida-Viru, a northeastern region infamous for its high levels of unemployment and crime. It coincides with Start Aid, a nationwide business start-up program launched this week.

A total of 36.7 million kroons ($2.16 million) are to be allocated to Ida-Viru from the national budget and EU aid for the coming year.

The government approved the program in April. The release of the financial aid has just been confirmed, and a system of beginner business support is already up and running, according to the Ministry of Economy.

The energy sector provides most of the region's employment. But as it faces prolonged restructuring, many jobs are being lost.

Henrik Hololei, Estonia's new minister of economy who took over from Mihkel Parnoja three weeks ago, said the aid program was developed in cooperation with the ministries of Social Affairs and Education. "Education is the key to creating a competitive labor force," he said.

Hololei mentioned, along with typical social problems, a lack of the tradition of doing business and a deficiency of entrepreneurially spirited business people as being reasons behind the dilemmas facing the region.

According to the Ministry of Economy, there were about 20,000 unemployed, mostly poorly educated, ethnic Russians of every age in Ida-Viru as of the end of October. But in the next few years the ambitious program alone could help create in excess of 5,000 jobs.

"The positive features of the county are a clear presence of industrial traditions, low real estate prices, huge tourism potential and advantageous transport connections with Tallinn and Saint Petersburg," said an upbeat Hololei.

Raul Malmstein, deputy chancellor of the ministry, said the priorities in Ida-Viru's development are training for new careers and additional courses to boost the current professional level of employees.

The Start Aid program, which is accessible all over Estonia except the more developed Tallinn and Harju county, is also part of the government's attempt to help develop the often forgotten areas of the country that lie outside the capital.

Under Start Aid, businesses under two years old can borrow cash (up to 100,000 kroons) to buy equipment, arrange marketing campaigns and train employees. The state guarantees the loans, and their period is not limited.

Lauri Jalonen, director of the Ida-Viru branch of Enterprise Estonia, the organization implementing the program, said not many Start Aid projects have yet been filed, but "five to eight business people come to our office every day. We tell them all that we need to see a business plan first."

Two serious projects have been submitted to his branch so far, but he refused to reveal details. "One is related to infrastructure development, and the other is connected to exports," he said.

Another idea aimed at stimulating a positive image for the northeast will be launching a Russian version of aktiva.ee business information portal, opened by Enterprise Estonia in September. The Russian portal opens on Jan. 1, 2002 and according to Malmstein this will help boost Ida-Viru's struggling economy.

The Estonian version of the portal is in its early stages, with about 200 visitors a day. According to Liie Strenze, the manager of aktiva.ee, the popularity of the portal is on the rise, but feedback from entrepreneurs is so far not especially dynamic.