ECONOMY
Economic autonomy was a key demand from Estonia during the negotiations that led to its independence. The Baltic states were the most prosperous areas of the former Soviet Union and they were keen to develop economic links with their Western neighbors outside the straitjacket of central planning. Other than oil-shale, which is present in significant quantities and provides the basis of the country’s power generation, Estonia has few raw materials of its own and relies mostly on imported commodities to produce finished goods. Light machinery, electrical and electronic equipment and consumer goods are the main products. Fishing, forestry and dairy farming dominate the agricultural sector. Estonia’s infrastructure, particularly the road network, is well-developed by regional standards. Post-Soviet economic policy has followed a customary pattern of deregulation and privatization. In June 1992, Estonia became the first former Soviet Republic to introduce its own currency, the Kroon, which is the legal tender and is now fixed in value to the Euro. Estonia’s service sector was the most developed in the former USSR, and has since expanded further with increased tourism and Western investment. There is also a thriving financial services industry. Overall, trade with the West has increased dramatically, particularly with Scandinavia; Finland, Sweden and Germany are important trading partners. Despite this, Estonia still has fundamental economic links with the Russian Federation, and the 1998 Russian economic crisis led to a recession in Estonia the following year. Growth in 2004, however, was around 5 per cent.
In 1999, Estonia joined the World Trade Organization, adding to its previous membership of the IMF, World Bank and the European Bank for Reconstruction and Development. In May 2004, Estonia, along with its Baltic neighbors and seven other countries, achieved a long - cherished ambition when it joined the European Union.
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