Estonia

Estonia First to Vote Over the Web

TALLINN, Feb 28 - About one in 30 Estonian voters cast ballots via the Internet this week when the country became the first in the world to allow Web voting for national parliamentary elections, officials said on Wednesday.

Voters in the Baltic country were given the chance to vote via the Internet from Feb. 26-28 before the actual polling day on March 4.

A total of 30,275 out of 940,000 registered voters cast their ballots via the Web, said the officials.

"We are happy with this number. I personally would not have expected so many electronic voters," said Epp Maaten, deputy head of the national electoral commission.

Estonia used Web voting for elections once before but that was in more limited local polls in 2005 when nearly 10,000 voted through the Internet. It is a new sign of Estonia's strong embrace of technology since it quit the Soviet Union in 1991.

To cast ballots via the Internet, voters had to use their state-issued ID cards and enter two passwords.

Pollsters expect the present two main coalition parties, the centre-right Reform Party and left-leaning Centre Party, to both do well in the elections, but it is not clear which will be the biggest.

Reform leader Andrus Ansip is the current prime minister.

Copyright 2007 Reuters.

Up Up and Away

(RTTNews) - Estonia average monthly gross wages and salaries grew 17.5% on yearly basis in the fourth quarter, the statistical office said Thursday. Average monthly earnings totaled 10, 212 kroons (approx. 850 USD) versus 9, 068 kroons (approx. 750 USD) in the third quarter. Average hourly gross wages and salaries climbed 19.2% annually.

Estonia Producer Price Index - PPI climbed 1.6% on month in January, the Statistics Estonia said Tuesday. The index rose 0.5% in December. On an annual basis, producer prices expanded 6.4%,larger than 5.9% recorded prior month.        

Export price index gained 1.7% on monthly basis and moved up 5.9% annually. Meanwhile, import prices fell 0.1% on month and advanced 3.4% on year.

Estonia set for world's first Internet election

Coming up on March 4th, Estonians will hold the world's first vote over the internet.  According to Reuters, E-voting will be introduced for a parliamentary election for the first time after it was used in more limited local elections in 2005. It is a fresh sign of Estonia's strong embrace of technology since it quit the Soviet Union in 1991 and another example of its innovative culture. 

Estonia pioneered a flat tax in 1992, is paying women to have babies in order to stem its declining population and built the world's first free city-wide wifi network in its capital city Tallinn.  Estonians were some of the first to use online banking 10 years ago even though many of its residents didn't have ready access to the internet or much money. 

The tiny Baltic country's infrastructure was decrepit after its independence in the early 1990's. Even today, outside the glitzy new skyscrapers of Tallinn city center, buildings look battered, roads are potholed and Soviet-era trolley buses still whirr around town.

"One of the most common explanations as to why Estonians have taken to new IT technology is that everything had to be done new here," said Jaan Tallinn, a senior programmer involved in the development of Skype.

"There were no legacies to deal with, like with bank cheques, which were already obsolete. So companies could create new systems and people just used them," he added.

Security Concerns Could Dampen Boom

Given the recent foiled terrorist plot at London Heathrow, airports across the European Continent are tightening security.  Estonia, however, is tryinig not to. 

Much of the boom taking place in Eastern Europe these days has been fueled by the proliferation of cheap flights originating from western European capitals like London and Dublin.  Tourists and investors alike are streaming into these countries and yet the friction caused by terrorism fears could grind tourism to a screeching halt. 

According to an August 22nd article from the Baltic Times,  Estonia's Interior Minister Kalle Laanet says the "emphasis on stopping terrorist attacks should lie in intelligence gathering."  He explained futher that "security checks must be stepped up in accordance with risk evaluation.  There should not be permanent safeguards in place."

The UK's Home Secretary John Reid, ont the other hand, has said Europe faces a "persistent and very real" threat from terrorism and that stricter airport security measures should be introduced by all EU members.

If small countries like Estonia can remain off terrorist radar and thus avoid a mandatory ramp up in airport security, these countries may attract more tourists than they do currently not only because of easier travel, but also because of perceived safety. 

Estonia July CPI up 4.5 pct

According to FXStreet.com, "The price of goods and services in Estonia were up an average of 4.5 pct in July on a year earlier, BNS newswire reported citing the country's Statistical Office."

"The hike in administratively-regulated prices of goods and services was by 5.7 pct and in non-regulated prices by 4.1 pct. Compared with June, the consumer price index was 0.5 pct higher. Compared with the prior month, the index was affected the most by a rise in the price of motor fuel, housing, vegetables as well as discounts in clothing and footware." 

Unless the average inflation rate in the EU rises to at least 3% in 2007 it looks like Estonia may be shut out of the Euro again in 2008 due to Maastricht Treaty requirements, unless Estonia's economy cools during the same period. 

Developing Economies Power Boom

Recent front page article in the LA Times discusses the unprecedented boom of emerging economies.  Of the 60 or so tracked by investment firm Bridgewater  & Associates, not one is in recession.   The last time developing nations' economies outpaced those of the developed world was in the early 1970s. 

A number of issues arise as a result of this economic environment, namely increasing unemployment rates in developed countries like those in Western Europe, creation of new middle classes, greater demand for US goods (a more recent phenomenon), and of course a rise in real estate prices in new markets like Estonia.  Some say the ballooning US trade deficit kick-started the boom in  emerging markets, likening US top heavy demand for imports over the last decade to the post-WW II Marshall Plan. 

Estonia's GDP Continues to Outperform

The EU cut growth targets for the 12 euro-zone countries for the first three quarters of 2006.  It is unclear why the revision downwards since the EU appears to be expanding at rates faster than expected.  Last year, Euro-zone economies grew at 2% overall, besting predictions of 1.8%. 

The Baltic Tigers led the EU with stellar performances, with Estonia shining the brightest.  On an annualized basis, Estonia's economy grew at 11.5% during the last quarter of 2005.  Accordingly, Latvia's economy grew at 10.5%, while Lithuania's at 8.7% -- all higher than expected.

EU's trimmed forward expectations likely mean that the European Central Bank will not raise short-term interest rates when the board meets again in May.  "With interest rates across the whole maturity spectrum still at very low levels in both nominal and real terms, and monetary and credit growth remaining strong and liquidity ample, monetary policy remains accommodative," the ECB said in its April monthly bulletin. 

Furthermore, according to the AP, "The bulletin reinforces comments made by ECB President Jean-Claude Trichet last week after the bank left its key rate unchanged at 2.5 percent. Trichet followed the decision by discouraging market speculation that an increase was likely in May."  Full store...>>

This is great news for Estonian real estate investors like myself because it means that money will continue to be cheap for the foreseeable future.

Ansip Annoyed at Schroeder & Gazprom

Former German Chancellor Gerhard Schroeder made public his involvement in Gazprom's pipeline project into Germany.  The pipeline is scheduled to be finished in 2010 and will cross territorial waters of the Baltic States.  Estonian Prime Minister Ansip expressed his objection to the project on both economic and environmental terms. 

According to the Guardian newspaper "The Northern European Gas Pipeline will deliver cheap gas to Germany, and possibly Britain, when it is extended. It will travel from the Russian port of Vyborg to Greifswald in Germany via the Baltic Sea, bypassing the Baltic states and Poland, which used to receive fees for the fuel's passage." 

Additionally, Ansip complained that insufficient environmental impact studies have been performed.  "I hope German Chancellor Angela Merkel will involve us more in the pipeline project in the future," Ansip said, adding that Estonia was "annoyed by the way the pipeline project has been run so far".

BIH on the Move

On March 21, 2006, Sorainen Law Offices completed the set-up of Broadgate Capital's first investment vehicle - Baltic Investment Holdings OÜ, based in Tallinn, Estonia.

Congrats to Directors Tyrone Tranmer and James Canning-Cooke who run BIH.  I met Tyrone in San Francisco last fall and James at a Baltic real estate investment forum in Vilnius, Lithuania in September 2005.

I also met Sorainen partner Aku Sorainen, a Finnish attorney, while in Vilnius as well.  He is a sharp, friendly guy and runs one of the top firms serving the Baltic States.

US Trade Mission to Balts / Estonia

American firms along with Uncle Sam will gather in Riga, Latvia on a trade mission scheduled for May 24-26, 2006.  Trips to Estonia and Lithuania are also on the agenda.

The mission of the event is to "bring U.S. business representatives to the Baltic States to gain a first hand introduction to this fast growing and business friendly region located within the newly expanded EU and at the frontier of the emerging Russian and Commonwealth of Independent States (CIS) markets. This event is a follow-on to the successful conferences in London, England (December 2004) and Washington D.C., USA (March 2005) attended by more than 250 U.S. company executives."

The event will prmote networking opportunities and a chance for American firms and investors to see first hand the extensive business opportunites available.  Sounds like a good time -- special field trips will take participants to companies throughout the region.  Types of companies include high-tech, energy, biotech, logistics and others. 

More....>>