The Riigikogu’s Economic Affairs Commission decided on Tuesday to close down the Estonian Development Fund. It also decided to reorganize development oversight activities by founding a development monitoring unit at the Riigikogu.
Toomas Kivimägi (Reform), chairman of the commission, said that the decision to terminate the activities of the Development Fund had been long coming. “It’s important to note that before the decision about the Development Fund, the Economic Affairs Committee made the decision to make oversight activities more effective and establish a relevant structural unit at the Riigikogu,” Kivimägi said.
He called the decision the logical next step after the investment activities of the Development Fund had been transferred to KredEx. Considering that in ten years Estonia’s working population would be 80,000 smaller, it wasn’t thinkable that the state could continue with the same number of structural units and government agencies, Kivimäe added.
The Economic Affairs Committee will prepare a bill in April that will make it possible to adopt all of its suggested reforms by the end of the spring session of the Riigikogu.
Committee member Maris Lauri (Reform) said that an independent unit with its own budget and decision-making competence would involve the different parties and the country’s best specialists in the field. She hoped that business organizations, universities, and also the wider public would be ready to help them get a clearer picture of the long-term development possibilities of Estonia, Lauri said.
Lauri explained that all state support for entrepreneurs would be brought together in KredEx. “This is the first larger step towards consolidating different organizations that support entrepreneurship, and reorganising the whole system,” she said.
Minister: Closing the Development Fund will reduce duplicate efforts
Minister of Entrepreneurship Liisa Oviir (SDE) welcomed the decision. Oviir told the Baltic News Service on Tuesday that the new arrangement would make defining the agencies’ tasks easier and bring monitoring closer to the decision-making level.
The move would also reduce duplicate efforts, Oviir added. About the Development Fund’s history, Oviir said that it had played a “catalytic role” in the Estonian venture capital market, but that this market had entered a phase of development where it was able to function without the Development Fund's powerful interference.
Manager of the Development Fund, Annika Lentso, highlighted the importance of ensuring the independence of monitoring. Its integrity was important, she said, as a very small economy like Estonia had to identify the areas that it wanted develop as a priority in the future. The country couldn't be the best at everything, she said.
The Riigikogu established the Estonian Development Fund ten years ago to contribute to the development of the Estonian economy through investment, oversight, and growth programmes.
KredEx offers loans and loan guarantees to individuals as well as companies. While businesses can apply for start-up, technology, capital and export loans, private citizens can apply for a housing loan guarantee. KredEx is a state-owned public limited company.