Traditionally the most Western-oriented of the Baltic states, Estonia is bordered by Latvia and the Russian Federation. Its terrain is flat, boggy, and partly wooded, and includes more than 1500 islands. Estonia formally regained its independence as a multiparty democracy in 1991. In contrast to the peoples of Latvia and Lithuania, Estonians are Finno-Ugric, speaking a language related to Finnish.

After the decades of Soviet rule, the relationship between Estonians and the Russian minority was a problem. Rules on citizenship, introduced in 1992 and 1995, excluded many ethnic Russians who could not meet the Estonian language and minimum residency requirements. Over 100,000 took Russian rather than Estonian citizenship. A 2000 language law met international demands for an end to discrimination against the Russian-speaking minority. Estonians are predominantly Protestant. Families are small; divorce rates are high.

Strengths

Improved productivity and stable currency pegged to euro. Simplicity of tax regime. More advantage being taken of natural resources, including timber and oil shale. Transportation infrastructure has been upgraded. Exports growing.

Weaknesses

Poor raw materials base. Dependence on imported energy supplies.

Coalition government has been the norm since the end of communist rule. In elections in 1999 the Center Party won the most seats, on a platform of graduated income tax to help overcome wealth disparities. However, Mart Laar, who had led the government in power from 1992 to 1995, became prime minister, leading a center-right coalition of the PPU, the Reform, and the Moderate parties. Although hindered by a slim majority, Laar's efforts to pursue free-market reforms became easier as the economy grew strongly from the beginning of 2000. However, cracks in the coalition led to his resignation in January 2002. The new government led by Siim Kallas included the Center Party.

Estonia's trade with the West has been growing, and "fast track" negotiations on full EU membership began in 1998. Ties with other Baltic countries and with Scandinavia have been particularly emphasized. Integration with the EU and NATO is the top priority.

Estonia has now accepted the de facto border with Russia, having effectively ceded territory during the Soviet period.

The government agreed in July 2000 to shorten compulsory military service from 12 to eight months. Initial US opposition to full membership of NATO has now been changed to support for the Baltic states' entry into the organization.

The chief energy resource is oil shale. Phosphorite mining has been stopped. Timber is processed to make paper.

Industrial pollution comes especially from power plants burning oil shale. Danger of radioactive leaks from former Soviet bases remains. Water supply and sewage treatment have improved.

Railroads have improved and buses are reliable. Baltic ferries link Tallinn with Finland, Sweden, and Germany.

The health system, improved since the collapse of communism, is better than that of most former Soviet republics.

Education is becoming increasingly Westernized. There are two main universities, in Tallinn and Tartu.

Robbery and narcotics are the main crime problems. Generally, however, crime levels are still relatively low.

Market reforms have led to increased prosperity. A few have become very rich. Average wages are higher than in other Baltic states.

Estonia is particularly popular with Finns. Water sports, winter sports, folk and architectural heritage, and nature tours, are the main attractions. Tallinn's medieval center is a major draw for tourists on short visits.

After Swedish and then Russian rule, Estonia briefly enjoyed independence from 1921 until its incorporation into the Soviet Union in 1940.

• 1990 Unilateral declaration of independence; achieved in 1991.
• 1992 First multiparty elections: election of center-right government.
• 1996 President Lennart Meri wins second term of office.
• 1998 EU opens membership negotiations.
• 1999 Elections result in new center-right government.
• 2001 Communist-era leader Arnold Ruutel elected president.