Included are two financial times articles about Estonia.
FT.COM SITE: BALTICS SEE LIGHT AND THE END OF THE TUNNEL
match; FT.com site ; 11-Feb-2000 12:00:00 am ; 646 words
With Y2K fears proving unfounded and the markets back on track after the Christmas slowdown, the Estonian bourse shot up 12.77 per cent, while Latvia's increased 3.25 per cent on the strength of the leading share, Swedish-owned Unibanka.
"2000 is going to be a good year for the Baltics," says Aivaras Abramavicius, head of equities trading at Hansa Bank.
With the Baltics having been invited to join EU accession negotiations at the December Helsinki summit, and Nordic investment on the rise, many believe that their economies are going to show strong growth this year.
With critical privatisations expected to be completed this year raising between 500m kroons and 3bn kroons ($32.7m-$196m), and a balanced budget passed late December which slashes spending by 1bn kroons, Estonia's GDP is expected to increase by four per cent this year.
Having reduced its current account deficit to a manageable five per cent, the centre-right government of Mart Laar hopes to encourage foreign investment and corporate growth. In a controversial move, it scrapped the 26 per cent corporate profit tax in the hope that it might stimulate further investment.
Latvia has also pushed down the budget deficit to two per cent and passed a new and more simplified tax code. Its new governing coalition is determined to lessen the Baltic nation's dependence on Russia.
Latvia is expected to join the EU by 2005 or 2006. It hopes to privatise companies such as the Latvian Shipping Company this year, thus raising revenues. With almost 50 per cent of its trade now directed at EU countries, GDP is also expected to grow by 2.5 per cent, say the Economist Intelligence Unit, or 3-4 per cent, according to economists from the Swedish SEB Bank.
Lithuania is the laggard. It has been battered by a controversial oil privatisation which saw the government almost bust the budget to fulfil the terms of the agreement with Williams International of the US.
Lithuania is to provide $350m in financing as part of the sale of Mazheiku oil refinery to an American concern. This has led to a 2000 budget deficit of almost five per cent, and cuts of $200m. Yesterday, the government announced it expected to raise at least $250m from the IPO of up to 35 per cent of its national telecommunications operator.
GDP shrunk five per cent last year. With exports to Russia down two-thirds, the manufacturing sector has seen its exports shrink.
However, with a stable government and strong growth in the Nordic region, even Lithuania is expected to come out of its doldrums.
"The worst is now over," says Aidas Galubickas, managing director of Suprema Securities.
The economy is expected to grow between 1-2 per cent this year. The bad news is that the government might be forced to devalue the litas in spring.
But this might not be so bad: It could help balance the budget, and will stimulate exports to the European Union.
Small nations like the Baltics are more dependent on their neighbours than others. With the Russian crisis now coming to an end and the political situation stabilising, the economies are poised to benefit. Transit trade with Russia, especially in the oil sector, is growing again. Increased investor confidence in Russia also trickles to the Baltic states, boosting their bourses.
In spring this year, the countries are planning to join the Norex trading alliance. This means that Scandinavian capital will have an easier time penetrating the Baltic markets. It could bolster the equities sector and also help bring down high interest rates in Latvia and Lithuania.
Estonia is expected to be the first to begin recovering. It has pushed through critical market reforms and is the most favoured Baltic state to join the European Union, as early as 2003, according to some. Latvia, which is also pushing through critical legislation and aggressively scouring for foreign investment, is to follow soon.
Given their imminent EU accession and recent entrances into other alliances like the WTO, their economies are becoming increasingly synchronised with their Western neighbours. Were things to go as planned, the Baltic Sea region is expected to be one of the fastest growing economies in Europe this year.
Copyright © Financial Times group
match; Financial Times ; 21-Jul-2000 12:00:00 am ; 403 words
Sipping a Coke at a sun-dappled cafe behind the gabled Estonia Theatre in Tallinn, Mikola Patschuk, head of Ukraine's Department of State Veterinary Inspection, shakes his head in disbelief.
"It's hard to believe Estonia was once a Soviet republic. It is already Europe. You can feel it everywhere that this is not the Soviet Union."
Reflecting on this for a second, he adds, a tone of regret in his voice. "Estonia has made far fewer mistakes than our nation of 52 million." Having been flown into Tallinn for a seminar on veterinary and food certification, Mr Patschuk hopes to get help in standardising Ukraine's certification procedure with that of the EU. "Here they've had much more experience dealing with these issues," he says.
As the Baltic republic of Estonia, the first post-Soviet state to be invited to join EU accession negotiations, gains confidence, it embraces a more global approach.
Through a series of joint initiatives Estonia is trying to use its own reformist experiences to help guide its less-successful cousins from the former Soviet bloc. "Estonia has more credibility than Jeffrey Sachs (of Harvard University)," says Estonia's foreign minister Toomas Ilves. "At least they know we're speaking from experience."
The idea of a small nation of just 1.5m hoping to change entrenched post-Soviet nations as large as Ukraine or Kazakhstan might seem preposterous to outside observers. But Estonia has had some success. It has advised Ukraine on currency reform and privatisation and helped push the government in February this year into pegging its hryvnia currency within a narrower trading band. It has also given Ukraine advice on the prickly issue of dealing with Russia over their joint border.
"We helped them with maps and other technical issues and also shared our experiences dealing with the Russians," says Rein Oidekivi, who worked in the Estonian embassy in Kiev.
Tallinn's other initiatives have included sponsoring Ukraine's participation at a conference in Tallinn on the future of the European Union later this year. The Estonians have also brought Uzbeks, Kazakhs and other Central Asians to Estonia for seminars on specialist topics like veterinary certification or public administration reform, with support from the UK and other European governments. "We do think that Estonia has a useful role to play in helping these countries," says Timothy Craddock, the British ambassador to Estonia.
The approach reflects Estonia's strategic interests. Estonia - still fearing Russian influence and is keen to join Nato - hopes through the initiatives to bring other former Soviet republics closer to the west and out of Russia's orbit. "You look at the map of Russia without Ukraine and it's one picture. With Ukraine it's a different scenario altogether," says Mr Ilves.