Executive: Industry packing suitcases as government looks on in amusement
The processing industry and export are the cornerstones of every economy. Suggesting that a weak industry does not have to be subsidized and that strong modern companies will take its place in time is both irresponsible and harebrained, Raul Saks writes.
I have been anxiously watching manufacturing businesses going under and industry moving out of the country that has now reached an acute phase but seems to worry no one at all. Society is busy sticking its nose in and euphorically expressing its opinion on pictures of someone's children (Marko Mihkelson's images scandal – ed.), while simply allowing irreversible change to happen.
It is considered normal when the national energy giant rakes in massive profits in the wake of soaring energy prices, while industry fading away and massive job loss is considered acceptable. A few years ago, textile manufacturers were closing shop one after the other, while it now seems to be the turn of the rest of traditional industry, with the Estonian society and rulers looking on as if it's entertainment.
Some top private sector executives are also suggesting that those who cannot afford their electricity bills or to raise salaries are meant to fade away. Unfortunately, the coronavirus pandemic vividly demonstrated that local industry is not just a matter of taxes and consumption security but also security.
It is naive to hope that a container will be shipped out from China as soon as we need something. Even the inability to manufacture simple T-shirts could prove fatal, as it is all Ukrainian president Volodymyr Zelenskyy has been wearing since the war started. Economic policy is the foundation of security policy, not an over-the-top decoration.
Those who cannot produce do not have to consume
What will Estonia's future look like should recent trends continue? The processing industry and export are the cornerstones of every economy in my view. Suggesting that a weak industry does not have to be subsidized and that strong modern companies will take its place in time is both irresponsible and harebrained. Instead, we will see astronomical prices, supply insecurity and deficit economy, which we have already sampled in the Covid crisis.
Does Estonia plan to become a stock market investor, naively hoping that every foreign share and bond will just continue to grow. Let us admit that local tycoons are investing in Latvia instead of Estonia because there's less red tape there. Shall we be content to praise the Latvians for being more successful, hardworking and ambitious than we are?
The textile industry was suffocated, saying that foreign labor cannot be brought to our highly developed and national country as it would take away our people's jobs. Now, those jobs and the industry have disappeared altogether.
Sangar and Marat are forced to manufacture their products outside Estonia, with a part of value added landing in the budgets of other countries. It is sad to see this being considered normal. Taxi drivers and couriers may earn a living wage but their work does not generate wealth with which to maintain and develop our society.
Nature and availability of work decided by the market, not employees
I recently visited a Sangar production facility in Macedonia where life is developing rapidly and light industry is booming. Like in many other countries, Macedonians do not want to work evenings and nights, while seamstresses from, for example, Sri Lanka are allowed in the country under certain conditions who are content to work when it is necessary and have no problem working for Macedonians who used to do their job.
Macedonians receive higher salaries, the country sees more investment and production moved there from states that have not taken care to retain industry. It is too late to save the light industry in Estonia, while we might try and refrain from suffocating the sectors still left.
It is said that every third Estonian youth wants to become a software developer, presumably because the high salary level in the field. There have been other fashionable lines of work before. Business executives, public administrators, doctors, biotechnologists etc.
But no sector is bulletproof. As soon as we settle for the status quo, there will always be a leaner, more hardworking and hungrier competitor to turn it all upside down. The IT boom will also end one day and the high-paid developer become an ordinary citizen again.
We tend to forget the main prerequisites for success and development. They are striving for a common goal, supporting one another, recognizing and helping our own. Not mudslinging, worshipping a single trending sector and feeling superior while wearing blinders.
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Editor: Marcus Turovski