'Rahva teenrid': Economy a party in one 'room', a funeral in the other
The current, apparent inequality in Estonia's economic situation – with some doing very well and other struggling amid soaring energy prices as winter deepens – was the topic of Saturday's edition of Vikerraadio's politics discussion show, 'Rahva Teenrid'.
While state support is being provided for energy consumers, this appears to be misdirected more towards those who don't really need it and away from those that do, the panel found, also identifying the two underlying, different worldviews of the two coalition partners, the classically laissez-faire, budget-balancing Reform Party and the more social market economy-leaning Center Party.
ERR's Mirko Ojakivi said that: "I can see now how one ruling party thinks the money should be distributed to everyone, while the other sees it as a case of there really not being much which is needed to be done at all," referring to Center and Reform respectively.
"Now the point of discussion is whether both are right, or neither is right. Or what can still be done in this situation?" Ojakivi went on.
Editor-in-chief of Eesti Naine magazine Heidit Kaio, also appearing, said that help should still be given to those who are doing badly, and not to those who are doing well in the current situation. "I say there seems to be a party in one room, and a funeral in the other – whereas there is really some help needed in the funeral parlor," she said.
Ojakivi concurred, but said the money was going the other way.
"Now it's also being given to the festivities. Where the party is going on, is the same destination where electricity bill compensation is being granted. But maybe this shouldn't be given to the party room? I think the IT sector, which is booming, will not see anyone particularly happy about the reduction of the network fee to five or six euros," Ojakivi said, referring to a package approved last month which compensates energy providers for 50 percent of their fee, in order to pass on the discount to consumers.
Kaio also noted that the situation with support was quite a complex one, though nonetheless the winter was likely to be a tough one, energy bills-wise.
"I think a lot of people are worried about their bills coming in December. /.../ It looks like the energy bills are coming up," she said.
Also appearing on Saturday's "Rahva Teenrid", Eesti Päevaleht (EPL) journalist Urmas Jaagant said that it could really turn out to be the case that Estonia is entering a new phase, where nothing is really getting any worse, the economy is simply growing, average wages are rising while at the same time inflation continues.
The average wage can be a misleading indicator in this sense, however, he said, in that it is likely that wages have increased in sectors where they already were higher than average.
Jaagant said: "We have also heard from analysts now that this growth is still in those sectors where wages have already been high and where there are labor shortages. Wages have gone up even more as result, which in turn raises the average further."
He also spoke of: "Such an unhealthy suspicion where the formerly average wage earner has not received anything significantly larger, but at the same time the bills and inflation are reaching everyone. In this way, I am afraid that inequality will still increase significantly further."
Ojakivi said that while, according to state agency Statistics Estonia, the economy grew by 8.6 percent in the third quarter and growth is expected to continue in future, as will average wages, at the same time high heating bills and other price increases are causing the greatest concern.
Kaio said she was amazed by the rate of economic growth in recent months, though qualified this by saying: "Common sense dictates that there are people somewhere who are still doing badly. We have had the Covid wave, we've seen and heard how businesses have had to close their doors, especially when it comes to restaurants, catering, entertainment, training, gyms. There is a party in one room, and a funeral in another," she said.
Ojakivi said that since the current rise in energy prices has not been a natural part of the economic cycle, the government should do something about it.
"I don't think this would really be a problem if it were part of a natural economic cycle. But the point is, we are dealing with some kind of failure which is the result of some kind of management decision."
"The key question is whether these effects are desired or undesirable effects and if they are undesirable effects and lead to negative aspects in socio - economic terms, then something could and should be done," Ojakivi went on.
Ojakivi cited recent stories of rail operator Elron's plans to raise ticket prices, the price of district heating in Tartu seeing its first rise in a decade, meat supplier Rakvere hiking its meat price products in time for Christmas, quadrupling natural gas prices through 2021 (link in Estonian) and electricity grid distributor Elektrilevi's price rises, in line with the NordPool energy prices.
"Rahva Teenrid" was broadcast on Saturday, December 4 2021 and featured Mirko Ojakivi, Heidit Kaio and Urmas Jaagant.
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Editor: Andrew Whyte