IT experts speculate impact of accession

  • 2003-09-04
  • Justin Petrone
TALLINN - As the Sept. 14 EU referendum rapidly approaches, there has been plenty of
speculation about what exactly will happen to the national economy if voters
say "yes" to joining the union.
A conference organized by international IT giant Oracle and The Economist
Group entitled Estonia and its Economy After EU Accession was held Aug. 29
at the Sakala Center in downtown Tallinn to try and answer some of the
questions private sector interests had about EU membership.
Several hundred members of the Estonian Chamber of Commerce were invited to
listen to remarks from Prime Minister Juhan Parts and to view presentations
from Oracle, The Economist Group, Estonia's IT College and the chairman of
the Chamber of commerce.
Nenad Pacek, the director for the Economist Corporate Network in
Central-Eastern Europe, the Middle East and Africa, spelled out some of the
challenges that Estonia would face if it joined the EU.
"EU laws are not likely to be implemented and followed in Estonia. It took
many of the existing EU members 10 years to implement all this legislation,"
Pacek said.
"There will be more mergers and acquisitions domestically and Europe-wide
with accession," he added.
Euroskeptics argue that such swift changes could scare away investors who
are attracted by Estonia's liberalized economic environment and that EU
membership could transform the country from a "Baltic tiger" into a Baltic
Pacek agreed that the state might have to take a few steps back by
implementing the EU legislation.
"Estonia is on the top of the list when it comes to having a quality
corporate environment, so some of the EU legislation actually could be a
hindrance to economic development," he said.
"However, we at The Economist agree that the benefits of joining the EU
basically outweigh the disadvantages," he said.
Some of the advantages include EU Aid in the amount of approximately $1
billion between 2007 and 2013, according to Pacek.
Much of Estonia's success depends on its ability to "absorb" EU money, to be
diligent in its domestic policies, to keep government operations clean of
corruption and to adhere to "prudent" fiscal policy.
Pacek cited Ireland's ability to absorb 95 percent of its EU money over the
years and its strong rise in GDP over the years. He predicted that Estonia
could follow in this example and escape the fate of countries like Greece,
where poor planning and corruption allowed much of the EU's aid to that
country to be misspent and "pocketed."
As the vice president of Oracle Europe, Middle East and Africa, Sergio
Giacoletto oversees the operation of the world's largest software company
enterprise in many EU and accession countries. In recent years, Oracle has
provided services to the governments of Iceland, the United Kingdom, the
Netherlands and others.
According to Giacolleto, Estonia is the best equipped of all the accession
countries when it comes to information technology.
"In terms of Internet technology, Estonia is state of the art, the best in
class," Giacoletto said.
"I don't think you can rest on your success though," he added.
"The key is to go to the next level. Where should you invest and direct your
resources?" he asked.
According to other representatives from Oracle, Estonia still has a long way
to go in implementing effective e-government, or having government services
that facilitate communication between different ministries, as well as
between the government, the private sector and the public.
"Governments are responsible for driving the transformation of their
societies. Decisions need to be made from the top down when it comes to IT
standards," said Margareta Telliskivi, business development manager for
Oracle in Estonia.
"A little more coordination is needed. We have achieved a lot in a short
amount of time. A lot has been done to allow government to save money,"
Telliskivi said.
An example of effective e-government has been the creation of the
opportunity for Estonians to file their tax declarations online.
"Now, 70 percent of Estonians declare their taxes via the Internet. There
are no typing costs for the government, no errors. It saves so much money
for the government," said Telliskivi.
Increased data consolidation is also of importance to the country.
Telliskivi cited the intelligence failures in the United States prior to the
Sept. 11 attacks that could have been avoided with better e-government.
"The information was there. It's just a matter of getting the information to
the right people," she said.
Public access to the Internet was also a concern for Oracle. Currently they
are working with the private sector on a program that will teach 100,000
Estonians how to use the Internet.
In his remarks, Pacek also stressed that effective e-government could help
avoid problems in the future.
"Those governments that miss the boat on e-government will have a hard time
addressing some issues," he said.