Fear of war impacting Estonia's investors, tourism and education sectors

Tallinn. Source: Siim Lõvi /ERR

Estonia's international investors, tourism market and international education sector are feeling the effects of the war in Ukraine amid concerns the conflict could spread to neighboring countries. While the government stresses the need for more security guarantees from NATO, industry must find a balance.

"Today, we are not in danger of a direct military attack," Deputy Commander of the Estonian Defense Forces Veiko-Vello Palm stressed at a press conference on Wednesday.

However, Russia's attack on Ukraine has raised concerns outside of the region that the war could move to the Baltic states.

One area where this seems to have had an impact is on international education and student applications for master's degree programs.

"Compared to last year, the number of applications decreased by 40 percent. The war in Ukraine has obviously affected our international reception," Tuuli Kaldma, head of the Reception Service at the University of Tartu, told ERR on Wednesday.

The university has also blocked new applications from Russian and Belarusian students to its programs this year which may impact application numbers.

An impact can also be seen on foreign investment, the director-general of the Estonian Chamber of Commerce and Industry Mait Palts told ERR.

Many companies are looking to replace business from Russia, Belarus and Ukraine but are encountering problems. New partners are "very much sought after today".

"Estonian entrepreneurs are viewed with distrust as to what is happening there [in the region]. It is also quite common to be asked for an advance payment or some kind of additional guarantee," he said.

The tourism sector, still recovering from the effects of the coronavirus pandemic, has also been hit. Enterprise Estonia board member Sigrid Harjo said tourists and travel operators have been canceling trips to the region.

"We already know that the largest tour operators in Germany have taken the Baltics, not just Estonia, out of their offers," said Harjo. "Another example is that the number of cruise ships is declining because we share a tour route with St. Petersburg."

Work is now underway to try and highlight Estonia's safety and the agency is trying to focus on positive examples. This includes Estonia's recent inclusion in the Michelin Guide.

"It shows that it is a high-quality destination and certainly increases the credibility of our region," Harjo said.

Industry, entrepreneurs and marketers are currently trying to find a balance with the government's statements that say if Ukraine loses the war, Russia will strike elsewhere. But there is also no will to downplay the sentiment.

Last month, business newspaper Äripäev called for balance and wrote: "The messages must be precise: not to diminish Russia's threat, but also not to give the West a false impression of our situation."


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Editor: Helen Wright

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