Economy: Plenty of ideas, no drive to see them through
ETV’s political talk show “Foorum” discussed on Wednesday how the forecast 2% economic growth could be improved, and what needed to be changed to make Estonia more competitive. Finance Minister Sven Sester joined, along with several members of the Riigikogu.
Finance Minister Sven Sester (IRL) said that it was necessary to reduce red tape, in particular bureaucratic obstacles facing businesses in their everyday work. Beyond that, Sester pointed to tax measures, support, legislative changes, and fostering science and other related areas as important factors.
Sester pointed out that entrepreneurs didn’t expect support, but wanted an attractive environment, and that various support mechanisms had done more damage than good. He added that a way needed to be found to make the environment more attractive for pension funds.
Chairwoman of the Center Party’s parliamentary group Kadri Simson said that Estonians generally liked to compare themselves to their neighbors, and to think that they weren’t looking so bad at all. She added that last year’s economic growth wasn’t impressive enough to just forget about it and move on.
The current model hadn’t brought in any more investors, but created a situation where Latvia and Lithuania had overtaken Estonia, Simson said. The revenue services weren’t even collecting enough money to finance the state’s fulfilment of its duties.
Continuous decline thus wasn’t something Estonia could live with for long, and trying to make it more attractive for Estonians to stay was much more important than convincing people abroad to come here, Simson added.
Chairman of the Free Party’s parliamentary group Andres Ammas opined that the problem wasn’t a lack of ideas, but a lack of determination to see them through. Prime Minister Taavi Rõivas (Reform) wasn’t looking actively for new markets, Ammas said, and the coalition busy with infighting.
Ammas added that an intelligent migration policy was very important, and that Estonia had to be able to compete for talent. About its good results in international rankings like the PISA tests, Ammas said that Estonia scored high because it knew what to prepare for, but that life in general asked for more than that, for instance teamwork, and the resources to retrain and educate further.
Chairman of the Riigikogu’s Finance Committee Remo Holsmer (Reform) said that the government and business were constantly looking for new ideas, and that there was exchange. Holsmer brought up the sharing economy and the current ride sharing bill as an example and pointed towards the enormous expectations there were about this new economic sector.
In terms of the labor force, Estonia needed to concentrate on vocational education, retraining, and attracting the kind of skills abroad that brought the most added value, Holsmer said, and added that Estonia needed to continue to bet on the things it had proven to be good at.
Deputy Secretary General of the Ministry of Economic Affairs and Communications, Keit Kasemets pointed out that there were promising beginnings, but asked if that would be enough. Investors expected a favorable environment, and to get to this point entrepreneurship needed more support than just words.
Kasemets also stressed that one of the advantages of the Estonian economic environment was its openness, and that the country couldn’t shut itself off.
Economist Heido Vitsur of LHV agreed that there wasn’t a lack of ideas, but that the weaknesses were on the side of actually seeing them through. The government could get rid of obstacles, but if the drive was lacking to actually move forward, this wouldn’t help much.
What Vitsur found was missing is concentrated and determined action towards a set goal. Not everything depended on the environment, he said, entrepreneurs needed to work based on their own backgrounds.
Generally what was necessary was action, Vitsur said. Estonia’s problem was just the fact that it had become the most successful former Soviet republic - which led to the wrong conclusion that everything was all right, as this position was actually the most difficult.
What became apparent in the discussion was once again the eerie absence of economic substance in the discussion. With the exception of Vitsur, who at the very least represented the thinking and opinions of a local bank, the debate seems to be with the planners and the theorists once again.