In the run-up to an April 11 "vision conference" on what life in Estonia will be like 18 years from now, uudised.err.ee asked Tartu macroeconomics professor Raul Eamets what resources could be transformative in the Estonia of 2032.
More on the vision conference here.
What resource could lead Estonia into the ranks of the richest countries in Euroope?
Our people are the most important resource. Innovative manufacturing, smart specialization, an education system that takes into account the labor market, cooperation between research and the private sector.
But we also have natural resources that may have risen in price by that time. Unless there's been been a breakthrough in mineral fertilizer production by that time, there will be high demand for phosphorus-based fertilizers.
Our phosphate rock (phosphorite) reserves are the biggest in Europe. We now have technologies for using the reserves that don't hurt the environment. This will be politically a very sensitive topic, but the problem will resolve with the generational shift. Of course, the current generation in power remembers the Soviet-era protests against expansion of mining, so it's a taboo topic.
As the shortage of phosphate rock keeps on growing worldwide, it will become so expensive that it could become an important source of income for Estonia.
Our part of the earth's crust isn't as poor as people sometimes think it is. Underlying the phosphate deposits are uranium deposits. We have oil shale and the chemistry for harnessing it, which can become something that is worth it. Did we know that we also have a considerable amount of iron ore?
We're used to saying that our only resource is our people, but we actually have much more. Plus clean water per capita, something that is a serious problem elsewhere.
We have other natural resources but the question is whether it's wise to start mining them. […] The price pressure is not high enough yet.
Estonia has a very small external debt. How big will it be in 2032?
If it were possible to run the economy without debt, it might be non-existent. But it's true that we could have finished some projects on credit a long time ago. Take the Tallinn-Tartu road. We'd also probably need to take on debt for building a Helsinki-Tallinn tunnel. But taking debt just to pay pensions is not a good idea.
Does Estonia need an socioeconomic New Deal type of project that would give people work for many years to come?
Two projects will likely materialize. The bridge to Saaremaa Island and the tunnel to Helsinki. But it will take time. The tunnel won't come about by 2032, but the Saaremaa bridge might.
Then there's Tallinn-Tartu highway, Rail Baltic. Estonia's construction sector will not be starved for things to do.
What will change in foreign trade?
We will move from being a subcontracting country to an exporter.
Our export figures are nice looking, but it actually reflects the goods that Finnish and Swedish companies produce here and which then travel to third countries via the parent offices. That's not export in the classical sense where the product is made here, sold abroad and the profit comes back to Estonia. I hope that by 2032, Estonia will have moved on in its value chain and […] no longer just a cheap labor country.
Export of services should grow significantly. Why couldn't Estonian be a health care or social welfare provider for the affluent Nordics? We will all grow old at some point. This will require the growth of domestic trained workers, it won't be enough to import caregivers from third countries.