Wayzata World Factbook 1996/The World Factbook - 1996 Edition - Wayzata Technology (3079) (1996).iso/mac/TEXT/backgrd/ESTONIA.BKG

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BACKGROUND NOTES:  ESTONIA
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
U.S. DEPARTMENT OF STATE

Official Name:
Republic of Estonia

PROFILE

Geography
Area:  45,226 sq. km. (18,086 sq. miles); about the size of New
Hampshire and Vermont.

Cities:  Capital--Tallinn (1991 pop. 481,500).  Other
cities--Tartu (115,400); Narva (82,300); Kohtla-Jarve (76,800);
Parnu (54,200); Sillamae (20,700); Rakvere (20,100).

Terrain:  Flat, with an average elevation of 50 m.  Elevation is
slightly higher in the east and southeast.  Steep limestone banks
and 1,520 islands mark the coastline.

Climate:  Temperate, with four seasons of near-equal length.


People
Nationality:  Noun and adjective--Estonian(s).

Population:  1.6 million.  Annual growth rate--0.7%.

Ethnic groups:  Estonians 62%, Russians 30%, Ukrainians 3%,
Belorussians 2%.

Religions:  Lutheran, Russian Orthodox, Baptist.

Language:  Estonian (official).  Most people also speak Russian.

Education:  Years compulsory--11.  By 1989, 12% of the adult
populace completed college.  Attendance--214,000 students at 561
schools, plus 24,000 university students.  Literacy--99%.

Health:  Infant mortality rate--12/1,000 births. Life
expectancy--65 years for males, 74 for females.

Work force (785,500 people):  Industry--32%.  Agriculture--12%.
Education, Culture--12%.  Construction--10%.  Trade--9%.
Transport--8%.  Health care--6%.  Housing--5%.  Other--4%.
Government--2%.


Government
Type:  Parliamentary democracy.

Constitution:  On June 28, 1992, Estonians ratified a
constitution based on the 1938 model, offering legal continuity
to the Republic of Estonia prior to Soviet occupation.

Branches:  Executive--president (chief of state), elected by
parliament every five years; prime minister (head of government).
Legislative--Riigikogu (parliament:  101 members, 5-year term);
Judicial--Supreme Court.

Administrative regions:  15 counties and 6 independent towns.

Political parties/coalitions: Pro Patria ("Fatherland")--30 seats
in Parliament; National Independence Party (ENIP)--11 seats;
Moderates (Social Democrats)--12 seats; Secure Home
(Technocrats)--17 seats; Popular Front--15 seats; Monarchists
(independent)--8 seats; Estonian Citizen (nationalist)--6 seats;
Green Movement--1 seat; Entrepreneurs--1 seat; Communists--0
seats.

Suffrage:  Universal at 18; non-citizen residents may vote in
municipal elections.


Economy
GDP (1992 est):  $834 million.

1994 growth rate:  6.4%.

Per capita income:  $540.

Natural resources:  Oil shale, phosphorite, limestone, blue clay.

Agriculture/forestry (20% of 1991 GDP):  Milk and dairy products,
meat, cereals, potatoes.  Cultivable land--1.36 million hectares
(60% arable, 18% meadow, 13% pasture).

Industry (42% of GDP):  Electricity, oil shale, chemical
products, electric motors, textiles, furniture, cellulose/paper
products, building materials, processed foods.

Trade:  Exports--$827 million:  Foodstuffs; textiles and
footware; metals and jewelry; minerals; glassware; stones;
wood/wood products; furniture; machinery and equipment.
Partners--Finland (22%), Russia (20%), Sweden (10%), Germany
(9%), Latvia (8%), Netherlands (5%), U.S. (2%).  Imports--$902
million, 1993 est.:  Food, fuel, raw materials, and machinery.
Partners--Finland (26%), Russia (19%), Germany (11%), Sweden
(9%), Lithuania (4%), U.S. (2%).

Exchange rate (July 1994):  13 kroon (EEK)=U.S. $ 1.





PEOPLE
The name "Eesti," or Estonia, is derived from the word "Aisti,"
the name given by the ancient Germans to the peoples living
northeast of the Vistula River.  The Roman historian Tacitus in
the first century A.D. was the first to mention the Aisti, and
early Scandinavians called the land south of the Gulf of Finland
"Eistland," and the people "aistr."  Estonians belong to the
Baltic-Finnic group of the Finno-Ugric peoples, as do the Finns
and Hungarians.  Archaeological finds show  human activity in the
region as early as 8000 B.C.  The ancestors of the Estonians
appear to have arrived from the east about 5,000 years ago.

A strong Nordic influence is evident, the result of  cultural and
religious influences gained over centuries of Germanic and
Scandinavian colonization and settlement.  This highly literate
society places strong emphasis upon education, which is free and
compulsory until age 16.  Most Estonians belong to the
Evangelical Lutheran Church, but a sizable minority are Russian
Orthodox.

From 1945 to 1989 the percentage of ethnic Estonians in Estonia
dropped from 94% to 61%, caused primarily by the Soviet program
promoting mass immigration of urban industrial workers from
Russia, Ukraine, and Belarus as well as by wartime emigration and
Stalin's mass deportations and executions.  Estonia's citizenship
law and constitution meet international and Conference on
Security and Cooperation in Europe (CSCE) standards, guaranteeing
universal human and civil rights.

Written with the Latin alphabet, Estonian is the language of the
Estonian people and the official language of the country.
One-third of the standard vocabulary is derived from adding
suffixes to root words.  The oldest known examples of written
Estonian originate in 13th-century chronicles.  The Soviet era
had imposed the official use of Russian, so most Estonians speak
Russian as a second language, while the resident Slavic populace
speaks Russian as a first language.


HISTORY
Estonians are one of the longest-settled European peoples, whose
forebears, known to archaeologists as the "comb pottery" people,
lived on the southeastern shores of the Baltic Sea more than
5,000 years ago.  Like other early agricultural societies,
Estonians were organized into economically self-sufficient,
male-dominated clans with few differences in wealth or social
power.  By the early Middle Ages most Estonians were small
landholders, with farmsteads primarily organized by village.
Estonian government remained decentralized, with local political
and administrative subdivisions emerging only during the first
century A.D.  By then, Estonia had a population of more than
150,000 people and remained the last corner of medieval Europe to
be Christianized.  Estonia also managed to remain nominally
independent from the Vikings to the west and Kievan Rus to the
east, subject only to occasional forced tribute collections.

However, the Danes conquered Toompea, the hilled fortress at what
is now the center of Tallinn, and in 1227 the German crusading
order of the Sword Brethren defeated the last Estonian
stronghold; the people were Christianized, colonized, and
enserfed.  Despite attempts to restore independence, Estonia was
divided among three domains, and small states were formed.
Tallinn joined the Hanseatic League in 1248.

By 1236, the Sword Brethren allied with the Order of the Teutonic
Knights and became known as the Livonian Order of the Teutonic
Knights.  Finding upkeep of the distant colony too costly, the
Danes in 1346 sold their part of Estonia to the Livonian Order.
Despite successful Russian raids and invasions in 1481 and 1558,
the local German barons continued to rule Estonia and preserved
Estonian commitment to the Protestant Reformation.  Northern
Estonia submitted to Swedish control in 1561 during the Livonian
Wars, and southern Estonia (Livonia) became part of Lithuania's
Duchy of Courland.  In 1631, Swedish King Gustav II Adolf granted
the peasantry some measure of greater autonomy, opened the first
school in Tallinn, where Estonian was taught, and in the
following year established a printing press and university in the
city of Tartu.  The Swedish defeat resulting in the 1721 Treaty
of Nystad imposed Russian rule in the territory that became
modern Estonia, uniting it under on!
e rule.

By 1819 the Baltic provinces were the first in the Russian empire
in which serfdom was abolished, spurring the peasants to own
their own land or move to the cities.  These moves created the
economic foundation for the Estonian national cultural awakening
that had lain dormant for some 600 years of foreign rule.
Estonia was caught in a current of national awakening that began
sweeping through Europe in the mid-1800s.

A cultural movement evolved to adopt the use of Estonian as the
language of instruction in schools, all-Estonian song festivals
were held regularly after 1869, and a national literature
developed.  Kalevipoeg, Estonia's epic national poem, was
published in 1861 in both Estonian and German.  More importantly,
activists who agitated for a modern national culture also
agitated for a modern national state.  As the 1905 revolution
swept the country, Estonians called for freedom of the press and
assembly, for universal franchise, and for national autonomy.
The 1905 uprisings were brutally suppressed, and Estonian gains
were minimal, but the tense stability that prevailed between 1905
and 1917 allowed Estonians to advance the aspiration of national
statehood.

With the collapse of the Russian empire in World War I, Russia's
provisional government granted national autonomy to Estonia.  An
autonomous Estonian government (Maapaev) was formed but was
quickly forced underground by opposing extremist political
forces.  The Committee of Elders of the underground Maapaev
announced the establishment of the Republic of Estonia on
February 24, 1918, one day before German troops invaded.  After
the withdrawal of German troops in November 1918, fighting broke
out between Bolshevik troops and Estonian partisans.  On February
2, 1920, the Treaty of Tartu--the Soviet Union's first foreign
peace treaty--was signed by the Republic of Estonia and the
Soviet Union.  The terms of the treaty stated that the Soviet
Union renounced in perpetuity all rights to the territory of
Estonia.

Independence lasted 22 years.  Estonia underwent a number of
economic, social, and political reforms necessary to come to
terms with its new status as a sovereign state.  Economically and
socially, land reform in 1919 was the most important step.  Large
estate holdings belonging to the Baltic nobility were
redistributed among the peasants and especially among volunteers
in what they called the war of independence.  Loss of markets in
the east led to considerable hardships until Estonia developed an
export-based economy and domestic industries.  Estonia's
principal markets became Scandinavia, Great Britain, and Western
Europe, with some exports to the United States and Soviet Union.

During its early independence, Estonia operated under a liberal
democratic constitution patterned on the Swiss model.  However,
with between 9 and 14 politically divergent parties, Estonia
experienced 20 different parliamentary governments between 1919
and 1933.  The Great Depression spawned the growth of powerful,
far-rightist parties which successfully pushed popular support in
1933 for a new constitution granting much stronger executive
powers.  In a preemptive move against the far right, Estonia's
President, Konstantin Pats, dissolved parliament and governed the
country by decree.  By 1938, Estonia ratified a third, more
balanced, and very liberal constitution and elected a new
parliament the following year.

The independence period was one of great cultural advancement.
Estonian language schools were established, and artistic life of
all kinds flourished.  One of the more notable cultural acts of
this time was a guarantee of cultural autonomy to minority
groups.

Estonia had pursued a policy of neutrality, but the signing of
the Molotov-Ribbentrop non-aggression pact on August 23, 1939,
signaled the end of independence.  The agreement provided for the
Soviet occupation of Estonia, Latvia, part of Finland, and,
later, Lithuania in return for Nazi Germany's assuming control
over most of Poland.  The Estonian Soviet Socialist Republic was
proclaimed on July 21, 1940, and was incorporated into the Soviet
Union on August 6.

Soviet occupation was accompanied by expropriation of property,
Sovietization of cultural life, and the installation of Stalinist
communism in political life.  Deportations also quickly followed,
beginning on the night of June 14, 1941, when more than 10,000
people--most of them women, children, and the elderly--were taken
from their homes and sent to Siberia in cattle cars.  When Nazi
Germany attacked the Soviet Union on June 22, most Estonians
greeted the Germans with relatively open arms.

During two-and-a-half years of Nazi occupation, Estonia became a
part of the German Ostland, and about 5,500 Estonians died in
concentration camps.  However, few Estonians welcomed the Red
Army's push through the Baltics in January 1944.  Some 10% of the
population fled to the West between 1940 and 1944.  By late
September, Soviet forces expelled the last German troops from
Estonia, ushering in a second phase of Soviet rule.  That year,
Moscow also moved to transfer the Estonian Narva and Petseri
border districts, which had  large percentages of ethnic
Russians, to Russian control.

For the next decade, an anti-Soviet guerrilla movement known as
"the Forest Brethren" operated in the countryside.  Composed of
formerly conscripted Estonian soldiers from the German army,
fugitives from the Soviet military draft or security police
arrest, and those seeking revenge for mass deportations, the
Forest Brethren used abandoned German and Soviet equipment and
worked in groups or alone.  In the hope that protracted
resistance would encourage Allied intervention for the
restoration of Estonian independence, the movement reached its
zenith in 1946-48 with an estimated 5,000 followers and held
effective military control in some rural areas.

After the war, the Estonian Communist Party (ECP) became the
pre-eminent organization in the republic.  Most of the new
members were Russified Estonians who had spent most of their
lives in the Soviet Union.  Not surprisingly, Estonians were
reluctant to join the ECP and thus take part in the Sovietization
of their own country.  The ethnic Estonian share in ECP
membership went from 90% in 1941 to 48% in 1952.

After Stalin's death, party membership vastly expanded its social
base to include more ethnic Estonians.  By the mid-1960s, ethnic
Estonian membership stabilized near 50%.  On the eve of
perestroika, the ECP claimed about 100,000 members; less than
half were ethnic Estonians and they comprised less than 2% of the
country's population.  Russians or Russified Estonians continued
to dominate the party's upper echelons.

A positive aspect of the post-Stalin era in Estonia was a
reopening of citizens' contacts with foreign countries late in
the 1950s.  Ties were also restored with Finland, boosting a
flourishing black market.  In the mid-1960s, Estonians began
watching Finnish television.  This electronic "window on the
West" afforded Estonians more information on current affairs and
more access to Western culture and thought than any other group
in the Soviet Union.  This expanded media environment was
important in preparing Estonians for their vanguard role in
extending perestroika during the Gorbachev era.

By the 1970s, national concerns--including worries about
ecological ruin--became the major theme of dissent in Estonia.
Estonian society grew increasingly concerned about the threat of
cultural Russification to the Estonian language and national
identity.  By 1981, Russian was taught in the first grade of
Estonian-language schools and was also introduced into Estonian
pre-schools.  These acts had prompted 40 established
intellectuals to write a letter to Moscow and the republic
authorities.  This "Letter of the Forty" spoke out against the
use of force against protestors and the increasing threat to the
Estonian language and culture.

By the beginning of the Gorbachev era, concern over the cultural
survival of the Estonian people had reached a critical point.
Although these complaints were first couched in environmental
terms, they quickly became the vehicles for expressing
straightforward political national feelings.  Estonian
nationalists drew upon the two decades of independence after
World War I as inspiration for their struggle.

The ECP remained stable in the early perestroika years and
appeared strong at its 19th Congress in 1986.  By 1988, however,
the ECP's weakness became clear when it was unable to assume more
than a passive role and was relegated to a reactive position in
government.

Praising the 1980 "Letter of the Forty," Vaino Valjas replaced
Karl Vaino as party chief and thereby temporarily enhanced the
ECP's reputation.  Nevertheless, the party continued its downward
spiral of influence in 1989 and 1990.  In November 1989, the
Writers' Union Party Organization voted to suspend its activity,
and the Estonian Komsomol disbanded.

In February 1990, Estonia's Supreme Soviet eliminated paragraph 6
of the republic's constitution, which had guaranteed the Party's
leading role in society.  The final blow came at the ECP's 20th
congress in March 1990 when it voted to break with the Communist
Party of the Soviet Union (CPSU).  The party splintered into
three branches, then consolidated into a pro-CPSU (Moscow) party
and an independent ECP.

As the ECP waned, other political movements, groupings, and
parties moved to fill the vacuum.  The first and most important
was the Estonian Popular Front, established in April 1988 with
its own platform, leadership, and broad constituency.   The
Greens and the dissident-led Estonian National Independence Party
soon followed.  By 1989, the political spectrum widened and new
parties were formed and reformed almost daily.

A number of changes in the republic's government brought about by
political advances late in the 1980s played a major role in
forming a legal framework for political change.  This involved
the republic's Supreme Soviet being transformed into an authentic
regional law-making body.  This relatively conservative
legislature managed to pass a number of laws, notably a package
of laws that addressed the most sensitive ethnic concerns.  These
laws included the early declaration of sovereignty (November
1988); a law on economic independence (May 1989) confirmed by the
U.S.S.R. Supreme Soviet that November; a language law making
Estonian the official language (January 1989); and local and
republic election laws stipulating residency requirements for
voting and candidacy (August, November 1989).

Although not all non-Estonians supported full independence, they
were divided in their goals for the republic.  In March 1990,
some 18% of Russian speakers supported the idea of a fully
independent Estonia, up from 7% the previous autumn, and only a
small group of Estonians were opposed to full independence early
in 1990.  Estonia held free elections for the 105-member Supreme
Council on March 18, 1990.  All residents of Estonia were
eligible to participate in the elections, including the
approximately 50,000 Soviet troops stationed there.  The Popular
Front coalition, composed of leftist and centrist parties and led
by former teacher Edgar Savisaar, won a parliamentary majority.

Despite the emergence of the new lawmaking body, an alternative
legislature developed in Estonia.  In February 1990, a body known
as the Congress of Estonia was elected in unauthorized,
unofficial elections.  Supporters of the Congress argued that the
interwar republic continued to exist, since Estonia was forcibly
annexed by the U.S.S.R., so only citizens of that republic and
their descendants could decide the future of Estonia.

Through a strict, non-confrontational policy in pursuing
independence, Estonia managed to avoid the violence which Latvia
and Lithuania incurred in the bloody January 1991 crackdowns and
in the border customs-post guard murders that summer.  During the
August coup in the U.S.S.R., Estonia was able to maintain
constant operation and control of its telecommunications
facilities, thereby offering the West a clear view into the
latest coup developments and serving as a conduit for swift
Western support and recognition of Estonia's redeclaration of
independence on August 21.  Following Europe's lead, the U.S.
formally reestablished diplomatic relations with Estonia on
September 2, and the U.S.S.R. Supreme Soviet offered recognition
on September 6.

During the subsequent cold winter which compounded Estonia's
economic restructuring problems, Prime Minister Edgar Savisaar
demanded emergency powers to deal with the economic and fuel
crises.  A subsequent no-confidence vote by the Supreme Council
caused the Popular Front leader to resign, and a new government
led by former Transportation Minister Tiit Vahi took office.

On July 26, Estonian President Meri and Russian President Yeltsin
signed an agreement in Moscow calling for the withdrawal of
Russian troops by August 31, 1994.  Slightly more than 2,000 such
troops remain in Estonia.  An agreement was also signed regarding
social guarantees of Russian military pensioners.  Disposition of
the inactive nuclear submarine training reactor facility at
Paldiski remains to be resolved within the near future.


GOVERNMENT AND POLITICAL CONDITIONS
On June 28, 1992, Estonian voters approved the constitutional
assembly's draft constitution and implementation act, which
established a parliamentary government with a president as chief
of state and with a government headed by a prime minister.

The Riigikogu, a unicameral legislative body, is the highest
organ of state authority.  It initiates and approves legislation
sponsored by the prime minister.  The prime minister has full
responsibility and control over his cabinet.

Free and fair parliamentary and presidential elections were held
on September 20, 1992, the first in Estonia in more than 50
years.  Approximately 68% of the country's 637,000 registered
voters cast ballots, and 10% of the Russian population also were
eligible to vote.  The leading presidential contenders, President
Ruutel (43% of the popular vote) and former Foreign Minister
Lennart Meri (29% of the vote), faced a secret parliamentary vote
to determine the winner.  Ruutel's former association with the
ruling Communist Party probably helped Meri win on the first
ballot.  Meri chose 32-year- old historian and Christian
Democratic Party founder Mart Laar as Prime Minister.

In February 1992, parliament renewed Estonia's liberal 1938
citizenship law, which also provides equal civil protection to
resident aliens.  Dual citizenship is allowed for Estonians and
their families who fled the Soviet occupation.  Accordingly,
those who were citizens in 1940 are citizens now.  Those who
arrived after the occupation began can become citizens following
a two-year residence retroactive to March 30, 1990, and
demonstration of a 1500-word comprehension of Estonian.  Most
non-citizen ethnic Slavs (35% of the populace) became eligible
for naturalization in March 1993, and the government funds
Estonian language training.  In nationwide municipal elections
held on October 17, 1993, opposition party and ethnic Russian
candidates gained a majority in most areas, especially in Tallinn
and the northeast.

National Security
Estonia's defense system is based upon the Swedish-Finnish
concept of a rapid response force composed of a mobilization base
and a small group of career professionals.  The army consists of
three battalions of 714 troops each, and there is a mandatory
one-year draft period of active duty.  Alternative conscription
for 18 months for conscientious objectors is available.  There
are no plans for a navy, and Estonia is as yet financially unable
to fulfill plans for an air force.

Border guards fall under the interior ministry's supervision.
Comprised of 250-300 troops each, the seven border guard
districts, including a "coast guard," are responsible for border
protection and passport and customs duties, as well as smuggling
and drug trafficking interdiction.  A volunteer paramilitary
organization (Kaitseliit) serves as a type of national guard.

Principal Government Officials
President--Lennart Meri
Prime Minister--Mart Laar
Minister of Foreign Affairs--Juri Luik

Estonia maintains an embassy in the United States at 1030 15th
Street, NW, Suite 1000, Washington, DC  20005 (tel:
202-789-0320).  It operates a consulate at 630 Fifth Ave., Suite
2415, New York, NY 10020 (tel:  [phone]).


ECONOMY
Until 1920, Estonian agriculture consisted of native peasants
working large feudal-type estates held by ethnic German
landlords.  In previous decades, centralized czarist rule had
contributed a rather large industrial sector dominated by the
world's largest cotton mill, then a ruined postwar economy and an
inflated ruble currency.

By the 1930s, however, Estonia entirely transformed its economy,
despite considerable hardship, dislocation, and unemployment.
Compensating the German landowners for their holdings, the
government confiscated the estates and divided them into small
farms which subsequently formed the basis of Estonian prosperity.
By 1929, a stable currency, the kroon (or crown), was
established, and by 1939, Estonia's living standard compared well
with Sweden's.  Trade focused on the local market and the West,
particularly Germany and the United Kingdom.  Only 3% of all
commerce was with the U.S.S.R.

The U.S.S.R.'s forcible annexation of Estonia in 1940 and the
ensuing Nazi and Soviet destruction during World War II crippled
the Estonian economy.  Postwar Sovietization of life continued
with the integration of Estonia's economy and industry into the
U.S.S.R.'s centrally planned structure.  More than 56% of
Estonian farms were collectivized in April 1949 alone.  Moscow
expanded on those Estonian industries which had locally available
raw materials, such as oil-shale mining and phosphorites.  As a
laboratory for economic experiments, especially in industrial
management techniques, Estonia enjoyed more success and greater
prosperity than other regions under Soviet rule.

As the author of the then-radical "Self-Accounting Estonia" plan
in 1988, Prime Minister Savisaar succeeded by early 1992 in
freeing most prices and encouraging privatization and foreign
investment far earlier than other former Soviet bloc countries.
This experimentation with Western capitalism has promoted
Estonia's clear advantage in reorienting to Western markets and
business practice.

With independence, the transitional government styled Estonia as
the gateway between East and West and aggressively pursued trade
reform and economic integration with the West.  Estonia has
passed bankruptcy, trademark, copyright, and investment laws and
has negotiated trade and investment agreements with many Western
countries to attract foreign businesses and joint ventures, which
now number more than 2,000 in Estonia.  Estonia's major trading
partners are the Nordic countries, while Russia now accounts for
only one-fourth of all trade.

Estonia is reliant on an inefficient, over-industrialized
economy.  The country supplies 60% of its own energy converted
from peat, wood, hydroelectric plants, and environmentally
polluting oil shale.  Estonia has no domestic capacity to refine
crude oil and depends heavily on Russian and Belarusian petroleum
exports.  Fishing and shipbuilding are key industries, while the
agricultural sector is small but largely self-sufficient.  The
ice-free port of Muuga, near Tallinn, is an underused modern
facility with good transshipment capability, a high-capacity
grain elevator, chilled/frozen storage, and newly completed oil
tanker off-loading capabilities.  As a new member, Estonia
received critical restructuring loans from the International
Monetary Fund (IMF) and World Bank, as well as from G-24 nations,
in order to remedy critical energy, medicinal, and feed grain
shortages and financial shortfalls caused by the disruption of
traditional Soviet markets.  By spring 1992, Estonia !
basically decontrolled prices; tha
t year, industrial production fell 40%.

Spurred by an acute ruble shortage, high inflation, and a desire
for national financial independence, Estonia reintroduced the
kroon in June 1992.  Pegged to the German mark and freely
convertible, the kroon is backed by more than $262 million in
gold and timber reserves.  Projected 1994 inflation is 30%.

Fear of massive unemployment among the largely urban Russian work
force had delayed privatization of inefficient factories, and the
issue of compensation or restitution to pre-1940 property owners
remains contentious.  However, the Laar administration is showing
much toughness and promise on economic reform and privatization.
Nearly 42,000 private businesses are now registered in Estonia,
and another 10,000 businesses are expected in 1994.  GDP growth
has reached 6.4% in 1994--the first positive growth rate in one
of the former Soviet bloc countries and one of the world's
highest rates.  A national privatization agency, patterned after
Germany's Treuhandan-stalt, handles privatization/reorganization
of state property.  Eighty percent of small to medium-sized
enterprises are now privately owned, and nearly 80,000 new jobs
have been created.  Nearly one-third of the present budget, $81
million, remains frozen in the defunct Soviet foreign trade bank,
which has contributed to!
 the insolvency of several banks.
 With a balanced budget for the past two years, the government
refuses to weaken its strong fiscal reputation and has allowed
the banks to fold or be merged into the national bank.  Estonia
plans GATT membership in 1994 and, with practically no
agricultural subsidies and few trade restrictions, it actively
seeks EU membership by the year 2000.  Estonia ratified a free
trade agreement with the EU in July.