The representatives of Estonia's main investors, Sweden and Finland, are not the type of people who attract a lot of attention.
These glazed-over northern neighbors are usually polite at all times, even when they vehemently disagree with something. Recently, though, the ambassadors of Estonia's Nordic investment class have begun to speak up. What is their central message? It's time to build a modern Estonia.
The dream of Estonia's Nokia, a wonder product that would lift all boats, is dead and gone say the northerners. Instead, Estonia should invest on building the infrastructure and investment environment to attract small- and medium-sized enterprises(SMEs) from its most reliable partners, Sverige and Suomi.
Two channels of information from this interest group come via the Swedish Chamber of Commerce in Estonia and the Foreign Investor's Council in Estonia.
Depending on the year, Swedish foreign direct investments usually make up around a half of all FDIs in this country. SCCE puts out a quarterly magazine called In Focus. In the latest In Focus, SCCE Chairman Anders Hedman pops the question, "Is it right to criticize Estonia?"
"I think it is very painful indeed for many Swedish-Estonians when their friends in Sweden read about the bad Estonian economy and the possible devaluation of the Estonian currency," writes Hedman. "It was for sure funnier three years ago, when you heard people with similar background describing the Estonian success story," he writes. "Even funnier today was the statement by Ansip that Estonia was soon going to be the richest country in Europe!"
That was Estonia in 2007, but what to do in 2009? Point A: Be receptive to criticism. "What are the usual reactions to criticism here on the street? I have always met two reactions here. First is; Go home if you do not like it here! Second one; You must be working for KGB!" Point B: Take responsibility. "If someone is in charge, which I think it is difficult to say that [Prime Minister Andrus Ansip] is not, the PM has to take his responsibility and the consequences of his mismanagement." Finally, Hedman makes Point C: It's time to build. "This time not based on luxury consumption and real estate bubble based on borrowed Swedish money, but on high productivity, competitive salaries, qualitative production, investments in infrastructure and exports!"
Meantime in a June 10 letter to Ansip, FICE Chairman Martin Breuer, of the Holland Business Club in Estonia, declares Estonia's elusive Nokia dream moribund. "We suggest that we no longer hunt for the iconic Estonian Nokia, it’s a rare species that once in a while happens to evolve," Breuer writes. "A large and thriving SME community is in our opinion the ‘industrial’ base that a relative small and open country as Estonia suits best."
How to accomplish this? Better air connections with less landing and service fees and more state investment in Estonian Air as a "strategic national carrier." Increase the talent pool by making it easier for talented multinationals to live and work in Estonia. Improve support for foreign investors by providing them with more English-language support. (Note: In Focus, despite being the language of the Swedish Chamber, is not published in their national language). Invest more in vocational education. Relax state and educational language requirements to encourage multinational talent to relocate to Estonia.
Hmm. I understand why multinationals, who hop from job to job around the world, would prefer to benefit from Estonia's tax system and IT infrastructure while not letting too much of its Estonianness interfere with their lives. But what I don't get, from the Swedish perspective, is why they have no national pride. Estonian Swedes or "Swedish-Estonians" once were and, now obviously are again a national minority. Why are they demanding services in English, when they could be clammoring for them på svenska?
Second, I am not sure I understand how exactly this new ideal Estonia would work. Nordic and multinational companies relocate to Estonia to take advantage of its hypothetically gifted workforce and business-friendly infrastructure while typically paying most of their taxes in their home countries, therefore depriving the state of money that could be used to fund investments in the airport, vocational education -- all the areas where the same investors claim attention is needed? Como?
Unless these SMEs actually incorporate in Estonia as their home country and pay the bulk of their taxes to the Estonian state, I see a lot of benefit for them, but less for the country. But maybe that is the model they are after: More "Swedish-Estonian" managers plus better qualified work force = one of the five richest countries in Europe and Eesti Nokia all in one? That just might work. But I am not an expert on these things. Your opinions are very much invited.